What is ADR?
Alternative dispute resolution (ADR) is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party.
For resolving disputes, the three most common alternative dispute resolution (ADR) techniques are: mediation, arbitration, and med-arb
In mediation, a neutral third party tries to help disputants come to a consensus on their own. Rather than imposing a solution, a professional mediator seeks to assist the conflicting sides in exploring the interests underlying their positions.
In arbitration a neutral third party listens to each side of a conflict and then makes a binding decision about the dispute.
An often-overlooked ADR process is med-arb, a mediation-arbitration hybrid. In med-arb, disputants hire a neutral mediator. If the mediator is unable to resolve the dispute through mediation, she puts on her arbitration hat and renders a decision,
Unlike the public nature of litigation, mediation and arbitration typically give parties the freedom to hash out sensitive issues without the fear that their discussions and agreement will become public knowledge. But which type of ADR is best for a given situation?
When you are trying to generate solutions that will survive the test of time it is important to have buy-in from all parties. This can be achieved through mediation in which all parties are responsible for coming to a mutually agreeable solution.
While mediation may generate more creative solutions to a dispute, it can be very time-consuming. In cases where there is concern about time constraints, like when a deadline is looming, it may be best to utilize arbitration.
In short, one possible sequence of ADR would begin with mediation. If the mediation ends in impasse, or if issues remain unresolved, the parties can then move on to arbitration.
If a med-arbiter is handling the entire process, she would impose a binding decision based on her judgments about the case. If parties had reached agreement on some issues, the med-arbiter would rule only on the issues that remained.
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