Alternative Means of Dispute Resolution is known by the initials ADR. What is ADR? First, ADR deals with disputes. If you have no dispute, you do not need ADR. Second, ADR also deals with the resolution of disputes. And third, ADR deals with alternatives to the traditional means of dispute resolution.
What are the traditional means of dispute resolution? Basically, there are two, negotiation and litigation. Negotiation involves the two parties who are having the dispute trying to resolve the dispute by working things out between themselves. But if the parties are unable to resolve this dispute between themselves, then the only other traditional alternative left to them is litigation. The business community has been trying to institute ways of resolving disputes without litigation. The result of these efforts is ADR which can be defined as those processes and procedures used to resolve disputes without litigation. Because of the rising cost and delay of litigation, business people are beginning to more and more seek to resolve disputes out of Court.
We live in a very litigious society. People will file suit at the drop of a hat. It is not uncommon for suit to be filed by a person without even bothering to enter into serious negotiations. Advertising by personal injury lawyers have not helped matters either. Litigation is a serious matter, and should be seriously and soberly considered before being commenced. Lawsuits are often based on such things as anger, bitterness, greed, pride, and materialism. Once litigation is commenced, the parties can rapidly lose control over the process because other entities become involved, such as lawyers and the courts. Litigation will ultimately lead to a decision but it may or may not be a just decision. Litigation is not designed to produce reconciliation but rather a victory for one side and a loss for another. In litigation there is a winner and a loser. Sometimes neither party is happy at the end. ADR offers people, who have disputes where all communication has broken down, ways to resolve their disputes without having to resort to lawsuits.
ADR is usually much less expensive than litigation. Litigation is very expensive. Even a simple lawsuit can cost several thousands of dollars. A complicated lawsuit can cost tens of thousands of dollars to each party, and complicated lawsuits can run quickly run into six figures.
Many lawyer advertisements say that no charge will be made unless they collect for you, in other words, win the case and recover damages. That is basically true. But they receive anywhere from one-third to one-half of the amount recovered if suit is filed. The defendant usually has to pay an attorney on an hourly basis to defend him. This can range anywhere from $75 to $200 per hour in Mississippi. Therefore, even if the defendant wins, he’s still out substantial, and frequently, tremendous legal expenses. If he loses, then he has to pay a judgment in addition to the legal expenses. What if it is a small dispute involving, say $5,000? Does it make any sense to pay $5,000 or more in legal fees and expenses, if you are lucky, to win $5,000? An ADR process can cost only hundreds instead of thousands of dollars.
ADR usually offers a quick resolution to a dispute. A typical lawsuit will last one to two years, and can drag on for four or five years. It drains the time, energies and emotions of the litigants. Frequently, they feel helpless about their ability to control the litigation, and they feel helpless because they usually are helpless. Our courts are so clogged with civil cases that it sometimes takes years to resolve a typical case. Not only are there too many civil suits, there are a huge number of criminal cases which can take priority over civil cases. An ADR process can resolve a dispute in a single day that could take two years to litigate. Even in a complex case, the time savings are substantial. The parties are able to set their own time frame, within their own schedules, and move the proceedings along as rapidly, or as deliberately, as they wish. ADR procedures are much more flexible than litigation procedures and the parties can dispense with a lot of the pre-trial procedures done in a litigation situation. The result is that the dispute is much more efficiently and quickly resolved with an ADR procedure than it is with litigation.
One of the greatest advantages of ADR procedures is that it offers the possibility of a mutually acceptable resolution. In mediation proceedings the parties are actively involved in the process. They are able to talk to each other, either directly or through a neutral third party. They are able to express their grievances and frustrations and state their positions directly to the other party, without everything being filtered through a set of attorneys. ADR does rest upon willingness of the parties involved to seek to resolve their differences, and if they are dealing in good faith, they will have to consider the merits and arguments of the other side. But by doing nothing more than talking the matter out, with some assistance from a neutral third party, often the parties can find a solution that is mutually acceptable.
Another strong advantage of ADR is that it provides a means whereby a broken relationship can be restored, or a strained relationship to be preserved. Litigation usually produces permanent alienation, and we should be concerned with finding ways that will lead to reconciliation.
There are other advantages to ADR. These would include a desire to keep the dispute private, and the results of the dispute confidential. Also, if the dispute involves a very complex or technical factual issue, the parties may prefer to have the dispute mediated or decided by experts, rather than entrusting the dispute to a judge or a jury who don’t have the expertise necessary to deal with the dispute. If there is great uncertainty on both sides about the outcome of the dispute, ADR would provide them an opportunity to hammer out among themselves a certain result than to trust in an uncertain result at the hands of a judge and jury.
The main two types of are mediation and arbitration. Mediation is the ADR procedure closest to direct negotiations. Of all of the types of ADR procedures, mediation is the most flexible, informal, and provides the greatest hope of reconciliation. In the past, it has not been used as much as arbitration, but arbitration is so much like litigation that disillusionment with litigation has had an effect on arbitration. Today, mediation is the new kid on the block. In fact, mediation has been called the sleeping giant of ADR which is now awakening.
Mediation is nothing more than a process by which parties in a dispute negotiate a settlement of their claims against each other through the assistance of a trained, neutral mediator. It is a non-adversarial process. Mediation is entirely voluntary and non-binding. The mediator has no power to render a decision nor force the parties to accept a settlement. The mediator generally does not give an opinion or render an award. The mediator typically does not even have any knowledge of the case prior to mediation. On first glance, mediation would seem to be a very weak procedure, but its apparent weakness is in realty its strength.
Because it is voluntary and non-binding, it is attractive to parties who do not want to litigate, yet who cannot negotiate directly. It is considered to be non-threatening, and most people take a what have I got to lose attitude with mediation. Also, mediation gives significance to values such as trust, respect, patience and tolerance. A unique attribute of mediation is that it affords each party the opportunity to communicate confidentially to the mediator about what his or her true feelings and expectations are when the parties are unable or unwilling to communicate these things directly to the other party. The mediator acts as a go-between for the two parties. The parties retain full control of the outcome and may drop out of the proceeding at any time. In mediation, the participants attack the problem as joint problem solvers rather than attacking one another. It is adaptable to most any situation. Although the parties who enter mediation do not have to commit to finding a solution, they do have to commit to dealing with each other in good faith in an effort to try to find a solution.
Mediation can be very successful, depending a good deal on the ability of the mediator and the desire of the parties to reach an agreement out of court. However, it is not uncommon for parties to enter mediation believing that it will not work, only to emerge with a solution. One of the reasons for this is that the parties become involved in a search for a mutually acceptable outcome without having to determine which party’s position is correct. I believe that mediation should always be the first ADR procedure considered.
Arbitration is an entirely different animal. Arbitration is a process in which the disputing parties choose a neutral third person, or arbitrator, who hears both sides of the dispute and then renders a decision. The big difference between mediation and arbitration is that a mediator helps the parties to fashion their own settlement, while an arbitrator decides the issue. An arbitrator is more like a judge than a mediator. The parties go into arbitration knowing that they will be bound by the decision. The parties go into mediation knowing that nothing will be decided unless and until they agree to it. Arbitration, however, is unlike litigation in that the parties choose the arbitrator, the proceedings are conducted in a private manner, and the rules of evidence and procedure are informal. Also, in arbitration, the arbitrators tend to be experts in the issues they are called on to decide. Arbitration has been the widest used ADR process in the business world, and would be especially desirable where the parties do not want to litigate an issue, but do want a binding decision. They can go into arbitration knowing that they can get a quick, and relatively inexpensive decision, which they agree they will be bound by. Mediation offers no guarantee of a decision. It is not uncommon to find arbitration provisions in business contracts.
Most arbitration is binding. However, it can be non-binding if that is what the parties desire. That kind of defeats the purpose of arbitration though. In any event, in both binding and non-binding arbitration, the arbitrator renders a decision much like a judge.
You can agree to a combination of mediation and arbitration where the parties agree in advance to try to resolve their differences through mediation if possible, but if no agreement is reached, they automatically go to arbitration. The mediator then becomes the arbitrator and renders a binding decision.
Sample Mediation. First you have to choose a mediator. There are several sources you can contact to get a mediator. The mediator is paid for his services.
Once the mediator has been retained, he or she will control the process. Typically, both parties will meet in a joint session with the mediator. If they are represented by attorneys, the attorneys can also come to the meeting, and the attorneys can, if the parties desire, speak for their clients. However, it is essential that the parties themselves get involved in the mediation process.
The mediator will begin by introducing himself, and he may ask the parties to introduce themselves. He will then begin the process of mediation. Typically, he should explain that he has no interest in the outcome, that he is neutral, that he is undertaking the mediation based on the understanding that the parties are sincerely interested in trying to resolve their dispute, and that they will deal in good faith with each other. He should tell the parties that he is not a judge, that he cannot force a decision, that he cannot order anything. He should tell them that they are not in a court of law, they will not be cross-examined, they will not be put under oath, and that they are not limited to traditional legal remedies. He might wish to tell them also that it is not necessary to establish right and wrong in this mediation, or to decide the truth. Finally, the parties should understand that during mediation they should use good manners, be civil and avoid offending one another. What is important is to find a solution to the dispute that is mutually agreeable to both sides, not to decide who is right and who is wrong.
Once the mediator has made his comments, then typically he will invite one side to state his case. Different mediators have different styles, but if I were mediating the case I would always suggest that the party speak to me and not to the other party. The other party will hear what is being said but all comments should be directed to me. Once the party has stated his case, then the mediator will ask the other party to state his case. If during the course of this opening session, the parties want to talk directly across the table to each other, I would permit it. But it is best to let one party fully state his case without interruption, and then the other party state his case.
Once the opening session is concluded, then the mediator goes into private sessions with the parties. The parties will be placed in different rooms and the mediator will shuttle back and forth between the parties. At these private sessions he will encourage the parties to state those things which they felt they could not say in open session, and he needs to assure them that what they say in these private sessions will be held confidential, unless they authorize him to release the information. This is where the real work of mediation is done. It is in these sessions that the mediator may have to be creative. Generally, he functions by asking questions, and he refrains from offering opinions, but he can offer suggestions. The balance of the mediation then is taken up with the mediator going back and forth and each time trying to narrow the issues and to find a common solution. The parties are guided by the mediator in fashioning their own solution. This is where compromise comes in, and give and take. This is where the mediator must identify the expectations of the parties, and try to find solutions that deal with their true grievances or their true interests. Money may not be important. It may be something else, such as offended feelings, or embarrassment or some other non-material need. If mediation is going to work, it will work during these private sessions that the mediator has with the parties. The longer the mediation lasts, the greater the risk that it will fail. The mediator might have to remind the parties of the consequences of an impasse, namely litigation.
If a solution is found, then the mediator should then bring the parties back into a closing session and bring the matter to a close by securing an agreement between the parties as to what has been decided. Typically this will first be an informal memorandum, and then followed by a formal agreement which is signed by the parties.
