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Understand the Benefits of Alternative Dispute Resolution (ADR) - A Growing Trend

published March 29, 2023

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Alternative dispute resolution (ADR) is quickly becoming a preferred option to traditional litigation, as it often proves to be faster, more cost effective and more satisfactory for all parties involved.

ADR is a non-traditional form of conflict resolution, which helps parties to reach a mutually satisfactory agreement outside of court. It consists of a range of different methods such as mediation, arbitration, negotiation, early neutral evaluation and mini-trials.

ADR is increasingly being used by businesses, couples divorcing, and individuals pursuing civil claims. By utilizing the methods of ADR, the parties in the dispute can often settle their conflict without the need for expensive and lengthy litigation. With mediation, each party has the opportunity to explain their side of the dispute and a skilled third-party mediator can facilitate the discussion and help to reach an agreement.

ADR has been gaining in popularity over the last two decades, particularly due to its efficacy and cost savings associated with it. The growing trend is also due to the increasing pressure on courts to reduce their backlogs of cases.

ADR can also help to maintain professional relationships between the parties if they decide to work together again in the future. This is particularly true in cases where the dispute involves a business transaction, such as a contract negotiation, or involves multiple parties, such as a family dispute.

Advantages of ADR over traditional litigation include privacy; lower cost; faster resolution; improved communication between parties; and allowance to customize a resolution that works for everyone.

ADR is becoming more popular due to its cost effectiveness and the ability to reach an agreement with the help of a third-party mediator. It is often more satisfactory for all parties involved, as the parties are able to settle their dispute outside of court and the result is often more suitable to their needs and the interests of all involved. ADR can also help to maintain professional relationships between the parties, further reducing the tension associated with conflict.

The Growing Trend of ADR

ADR (Alternative Dispute Resolution) is a growing trend in the legal sector. ADR is a way to settle disputes between parties without going to court. This method is often cheaper, faster, and less time consuming than litigation.

ADR has become more popular since the early 1990s, as it has grown in acceptance in the legal community and among court systems. This trend is driven by public recognition of the need for a more efficient and accessible way to resolve disputes. Attorneys, judges, and court systems are relying more on ADR to settle cases.

ADR is founded on the principles of mediation, arbitration, and negotiation. Mediation involves a neutral third party who helps both sides reach a mutually acceptable resolution. Arbitration is the process of settling a dispute outside of court through a binding arbitration agreement. Negotiation is a process of communication and bargaining between two or more parties to achieve a resolution.

The types of disputes that can be resolved through ADR include civil disputes such as contract disputes, family law and divorce, bankruptcy, and employment law. ADR is also being used to settle criminal cases, including cases of corporate fraud and other white collar crimes.

The trend of ADR is expected to continue as the legal sector seeks more efficient and cost- effective ways to settle cases. As the cost of litigation continues to rise, more attorneys, courts and law firms are turning to ADR as an alternative to resolve disputes. Additionally, the introduction of online dispute resolution tools has further facilitated the accessibility of ADR.

<<>>Mediators are trained in negotiation and bring together opposing sides to create some type of settlement or agreement to both sides. Mediation is used for a wide range of cases and is considered a viable alternative to expensive litigation and long delays. Even if a settlement is not reached during the mediation, the process often helps narrow issues and shorten future litigation time.

Suzanne J. Schmitz, Associate Clinical Professor at Southern Illinois University School of Law, specializes in alternative dispute resolution, particularly mediation. She supervises the school's Alternative Dispute Resolution Clinic. Ms. Schmitz said that in general, mediation as practiced in the U.S. has been successful overall but that it depends on how one defines success. ''It [can] mean reaching an agreement, sowing the seeds of reaching an agreement, educating the parties about each other even if no agreement is reached, or improving respect or understanding even if no agreement [is reached].''

She said success can be measured in terms of agreement rate. Community or neighborhood programs report settlement rates in the range of 50-70%, she explained, and so do mediation programs focused on major civil cases already in the court system. ''Family programs have similar rates. Some programs, mainly major civil cases and family, also report increased savings in time to resolution and in cost of resolution. These savings are another way to measure success.''

Gregory Hunt, Head of Business Relationships at the London-based Chartered Institute of Arbitrators (CIArb), which promotes and facilitates the resolution of disputes by arbitration and alternative dispute resolution, says there are many differences between the U.S. and U.K. approaches to ADR. ''In the U.S., it is a much more mature market, and many more people know what ADR is and how it can be used to resolve disputes than in the U.K.,'' Mr. Hunt said. ''In the U.S., ADR includes arbitration, whilst in the U.K., arbitration is often placed next to litigation in the dispute-resolution mix, whilst ADR consists of the other settlement and determinative dispute-resolution techniques, excluding arbitration and litigation, for example, mediation, conciliation, expert determination, early neutral evaluation, and so on.''

Mr. Hunt also pointed out that arbitration clauses can be entered into with consumers in the U.S. more freely than in the U.K. ''For example, if a consumer buys a product from a U.S. retailer, then the contract can automatically include a mandatory arbitration clause, but if a similar purchase is made in the EC, then the clause would be non-binding on the consumer up to a limited value; for example, in the U.K. this is £5,000, the small claims court limit.''

Mr. Hunt said in this type of situation, arbitration can only be used as an alternative to litigation but that the consumer can reject the offer to use arbitration and go through small claims court instead. He said in commercial disputes, however, ADR is becoming much more widely used and promoted where mediation is often considered by a business prior to litigation.

While U.K. courts can encourage mediation, U.S. courts can require it. Mandatory mediation has been a practice in use for some time in the U.S. One of the reasons courts may encourage mandatory mediation is increasing the percentage of cases that settle; this means fewer that go to trial, which in turn means judges are able to devote more time to other cases, according to Stephen J. Ware, Professor of Law at the University of Kansas (Alternative Dispute Resolution section 259-61 West Group 2001). Mr. Ware explained that another rationale for requiring mediation is that mediation can bring about not more settlements, rather better settlements and earlier settlements. He said earlier settlements are better settlements because they can benefit the parties in terms of saving time, money, and aggravation. He said courts have these reasons to encourage or require mediation because by doing so it can ''produce a slightly higher settlement rate and seems to produce settlements that are faster and better than they would otherwise be.''

Mr. Hunt said that according to their research in their own panel of mediators, close to 80% of mediations held were settled on the day of the mediation or within three days. He said this demonstrates how mediation can result in ''quicker, less expensive, and more amicable resolution of disputes.'' He noted, however, that in the Central London County Court, the success rate is much lower-around 40%. Some of the reasons for this deviation were due to the fact that the mediator was often only allowed to mediate often complex disputes, many of which have been going through the court system for years, and could only mediate for a maximum of three hours, at which time the court is closed and the parties and the mediator must leave the premises.

''Another reason why success rates in the courts are lower is that the parties have either been pressured into mediation when they don't want to mediate, or they have entered into mediation without really knowing what it is,'' said Mr. Hunt. ''These issues are being addressed by the many courts in the U.K. now using the CIArb and others to mediate disputes. This does show, however, that there is a higher likelihood that a dispute will settle if the parties have volunteered to go to mediation.''

Ms. Schmitz said that mandatory mediation has raised many issues in the U.S. too. She said cost is a factor…more specifically, who pays for the mediation when the court and not the parties require it. She said it raises the question of should it be free; and, if not free, who should pay and how to provide it for those who cannot afford it. ''Another is quality of services. If courts require or push mediation, should the courts have responsibility for ensuring the quality of the mediators and the process?'' Ms. Schmitz said. ''If so, how to do this? In most U.S. states, mediators are not licensed. What standards are there to ensure quality?''

She said a third issue is the ''subtle pressure'' to settle when courts mandate mediation, which she says is supposed to be a voluntary process made by the parties involved. ''When courts require or push mediation, parties may perceive that they are required to settle.''

Ms. Schimtz said that another important issue to be considered is how to select cases and parties that belong in mediation from those that do not. In a case were there is a strong imbalance of power because of threats or violence, she said a party perhaps should not belong in mediation, which brings the question of how the court goes about screening cases before sending them to mediation. The final point, she said, is the need to educate judges about all of the above-mentioned points, adding, ''And even more so, that they [judges] make intelligent choices as to when and how to push mediation and to educate attorneys as to how to behave in mediation and how to prepare their clients for mediation.''