As parties are preparing for trials or hearings, they may be wondering how to settle a dispute without going to court. A trial can be costly, and the outcome of a trial is never guaranteed, even with some great evidence and a fantastic lawyer. Resolving a dispute outside of court can give the parties control over the outcome of the dispute and not leave their future up to a judge or a trial. This can be achieved through negotiation for settlement between the parties; however, some parties will not be able to negotiate between themselves and would benefit from a neutral third party guiding the discussions and helping the parties move toward a settlement. When a trial is looming and the parties are starting to see an option that may help both parties feel like they have some relief, they may begin to examine the possibilities to resolve their dispute.
This article will explore the ways that a dispute can be resolved without going to court and will function as a resource for people looking for options other than court. It will walk through the styles of alternative dispute resolution from the least formal and binding option to the most binding and formal. Understanding what the options are and what kind of disputes each one works best for will help parties make the right choice to help solve their dispute. Choosing the best method to resolve your dispute can make all the difference between a settlement or a trial. If you are interested in one of these methods, I recommend reading articles specifically about that style on ADR Times to get a fuller picture of the process and determine if it is the best option. But using this article will be helpful to understand what options might be best.
The first option for parties looking to resolve a dispute is to negotiate directly with each other. This is the least formal process because it can take place at any point and there is not a third party leading the discussion. If the parties are represented, this will usually take place between the lawyers, but if the parties are not represented, they may deal directly with each other. The negotiation may happen at any point from the instigating point of the dispute, up to the days leading up to trial. Many other options will have periods where the parties negotiate and send offers and counteroffers back and forth. Understanding the basics of negotiation will get a party far when looking at the other options. A negotiation will often involve the following characteristics:
- Offers: Negotiation will begin with an offer from one of the parties to the other with an option to settle the dispute. This often involves terms that will be beneficial for both parties and will help the parties consider resolving the dispute without court.
- Counteroffer: The party that receives an offer may give a counteroffer, changing some of the terms to better fit what this party needs to settle the dispute. Counters will continue to move back and forth as the parties continue to work toward an agreement.
- Stops and Starts: Informal negotiations may stop when the parties believe that they cannot reach an agreement and start again when something pushes the parties toward a settlement agreement.
- Written and Signed Agreement: If the parties reach an agreement, they will write and sign an agreement to submit to the court that will be put into an order.
Negotiation works well in situations where the parties can communicate with each other and can come up with options to solve the dispute. It also works well for parties who are unable or unwilling to pay for other types of mediation and gives the parties the freedom to agree to whatever they would like. It is not good for unrepresented parties with a power imbalance, because it could allow the more powerful party to overwhelm the weaker party. If parties are looking for slightly more structure, they can try facilitation.
Facilitation is not binding on the parties and is more about the dynamic of the group that has a dispute than it is about the outcome. This type of dispute resolution tends to be more popular outside of legal disputes and finds its home in business and intragroup disputes. However, if the parties are not able to settle because they are struggling to communicate or the parties need help identifying the underlying problems in the dispute, facilitation may be a great option. Facilitation does not aim to settle but will welcome one if found. Instead, facilitation focuses on the communication between the parties and identifying the issues within the dispute. It encourages the parties to find ways to communicate better with each other and talk about possible solutions. The facilitator is only there to create and structure the conversation; the parties drive the conversation and agreement. Facilitations will often have the following characteristics:
- Identifying Problems: The facilitator will help the parties identify what the problems in the dispute are. This may be the issues in the legal case, but it may include issues that are not addressed in the legal case but are driving the case forward. The facilitator will help the parties identify the root of the issue.
- Moves Toward Agreement: Sometimes a facilitator may help the parties move into a negotiation-type phase. This will consist of developing options and considering the alternatives until an agreement can be reached.
- Free and Informed Choice: Facilitation seeks to give the parties all the information they need to make decisions about the future, so one of the pillars is the presence of choice that is informed, but not restrained.
- Internal Commitment to Choice: Facilitation only works if the parties are committed to their choices and the outcomes of those choices. It does not work when people are agreeing to agree.
Facilitation works well in situations that have a lot of excess issues and problems that the parties are choosing to ignore or are missing. It gives the parties a chance to communicate and address any communication errors that they are facing. It can also be helpful when the parties are facing chronic conflict because it helps to identify the underlying source of the conflict. It may not work in situations that involve complex legal issues because the law may have more of a say in the conversation that the parties may realize. If the parties need a space to negotiate toward a solution, they can try mediation.
Mediation is not a binding process, but it tends to be more formal than negotiation and facilitation. Mediation involves the use of a third-party neutral known as a mediator that leads the parties through discussions and into a potential settlement. The process of conciliation allows the parties to find creative ways to settle their cases. The parties can settle the case during the mediation or walk away without a settlement, which means that mediation is not binding on the parties. Similar to facilitation, it seeks to find the deeper issues and address all the problems; however, unlike facilitation, it does encourage the parties to find a possible solution and to negotiate for their position. Mediation will often involve the following characteristics:
- Solutions: The mediator will encourage the parties to come up with their own solutions to the problems. This separates it from conciliation and arbitration, discussed later, which include suggestions or decisions from the neutral.
- Neutral: The mediator will be a third-party person who is neutral in the situation. This is important so that all the parties feel comfortable speaking freely and sharing their ideas.
- Bargaining: The parties will eventually make their way to bargaining—either separately through the mediator or in a joint session and will move toward a solution.
- Formal: The parties will hire a mediator who will sit down with the parties and lead them through the process of coming to a solution.
Mediation is often helpful when the parties need a structured place to talk through negotiation and space to devote the time only to the dispute. It can also be helpful if the parties would like to avoid a public record of the dispute because the whole process is confidential. Mediation may not be helpful if there is a power imbalance, because the structure is party-driven, so the one with more power could overtake the other party. It also does not work well if the parties have not been able to come up with workable solutions to the issue because the communication may stall and the parties may not be able to come to a resolution. If the parties need help finding a solution, they can try conciliation.
Conciliation is conducted similarly to mediation. It involves the use of a third-party neutral who guides the parties through negotiations. However, unlike mediation, the conciliator can provide suggestions for the parties to resolve their dispute. The process seeks to encourage the parties to be conciliatory and work together to create a solution. The goal of conciliation is to provide a space for the parties to preserve their relationship. It allows the parties to take pressure off themselves to create a solution and allows the parties to work with the conciliator instead of each other. Conciliation will encourage the parties to find a place where they can agree. Conciliation often includes the following characteristics:
- Statement: An important part of the conciliation is the statement where the parties have the opportunity to share their view of the case and what they would like to see moving forward.
- Suggestions: The conciliator will listen to the parties and offer suggestions for the parties to settle the case. If the parties like the suggestion, they will sign an agreement and leave. If the parties do not like the suggestion, they engage in a conversation with the conciliator until the conciliator can create another suggestion.
- Restorative: The goal of conciliation is to preserve the relationship between the parties, so the whole process is often very focused on the relationship and where it may have gone wrong so that the parties are may restore the relationship.
Conciliation is great for disputes where the parties are hoping to restore their relationship and where the relationship between the parties is important. It can also be helpful when the parties are unable to come up with solutions on their own or where a dispute needs a specific creative touch. Conciliation will not work when the parties are uncooperative with the processor are particularly adversarial without a relationship to preserve. If the parties are not able to reach a conclusion and need a decision, they can consider arbitration.
Arbitration is the most formal and binding of the alternative dispute resolution options. Arbitration again uses a third-party neutral to settle the dispute, except instead of allowing the parties to create their solution, the arbitrator will decide the dispute for the parties and issue an award. The case may be decided by one arbitrator or a panel of arbitrators, but the parties must follow the decision unless there was a breach of neutrality in the decision or other extremely limited grounds for appeal. It is also formal, as the parties will present their case to the panel, rather than each other. Like facilitation to conciliation, arbitration is confidential and allows the parties to resolve a dispute without having to go on record publicly. Some common characteristics of arbitration are:
- Voluntary: Arbitration may only take place if the parties have agreed to submit their dispute to arbitration, which can happen before a dispute arises in a contract or after the dispute arises.
- Formal Presentation: An arbitration often involves some sort of evidentiary presentation that is more similar to litigation than the other options to resolve the dispute. However, the parties are not bound by the same rules of evidence as the parties in litigation.
- Award: After the parties have presented evidence, the arbitrator will issue an award that is similar to an order in court. The parties are required to comply with this award.
Arbitration is great for disputes that need specialized knowledge because most arbitrators have knowledge in one area of law and can follow the dispute without much evidence from the parties to show all the technical details. It also works well for disputes that need the structure that arbitration provides. It gives the parties the ability to present their case but saves them time and money compared to litigation. Arbitration is not great for disputes where one or both parties need interim relief, because the arbitrators have very limited interim power. Finally, if the parties need the ability to appeal, arbitration is not the best choice because it is very difficult to appeal an arbitration award.
Finding the right mechanism to resolve a dispute is important to help the parties leave a dispute in the best way. Settling a dispute without going to court can give the parties the peace of mind to know that they will be able to continue with their lives. However, each party needs to know what they could achieve in court so they can judge if the settlement is the best option or if the party should move forward with the court. Seeking legal advice on the best possible outcomes will help the parties better under their case. And fully understanding the ins and outs of the case will allow the parties to make the best decision and end up with the best conclusion. A dispute can be resolved without going to court, but the parties need to be prepared and find the best option for their dispute.