What is ADR Processing?

ADR processing is the system of placing disputes that have arisen between parties into alternative dispute resolution (ADR) processes that will help to resolve the dispute.  This process helps parties keep their disputes out of litigation and the public eye and allows them to have some control over the outcome of a case.  Several forms of ADR may help parties, but each one has distinct characteristics and is most helpful in certain situations.  Understanding the different processes of alternative dispute resolution and which type of dispute each type of resolution process can be useful for will help the parties choose the best form of ADR for their dispute.  ADR is a valuable tool for the parties in a dispute but it needs to be used correctly to ensure that the parties agree with the result.

This article will discuss the ADR process.  First, it will define ADR and explain what the common goals of alternative dispute resolution are.  Next, it will describe several types of alternative dispute resolution and what those processes look like.  After this, the article will present several scenarios and discuss what the best form of alternative dispute resolution for that dispute may be.  All of this will be done to ensure that parties have the best information possible when dealing with a dispute and attempting to use ADR.

Defining ADR:

Alternative dispute resolution is a mechanism created to aid parties in resolving disputes without litigation.  These processes often use third parties to help move the dispute closer to a settlement agreement; however, the parties can participate in the process on their own as well.  These procedures are usually voluntary processes elected by the parties, and they are often controlled by the parties in concert with the neutral.  Alternative dispute resolution allows the parties to choose how the dispute is resolved, and it gives agency back to the parties in the decision-making.  Alternative dispute resolution includes several processes that may be used for dispute resolution, including negotiation, mediation, arbitration, and summary jury trials.  There are many other forms of dispute resolution; however, these are the most commonly referenced and used.

Negotiation:

Negotiation is a process where parties interact directly with one another to try and create a solution that both parties agree will settle the dispute.  The parties will trade ideas back and forth until they reach an agreement and find something that works for them both.  This is the least formal of the options and happens concurrently with litigation, often resulting in a settlement just shortly before the parties face each other in court.  This process may be handled completely between the parties, but in many cases, the parties will have legal representation working to negotiate a deal on their behalf.  Negotiation is also a part of other forms of dispute resolution, particularly mediation, as the parties to those disputes will often negotiate as a part of the mediation.  However, negotiation on its own is still a form of dispute resolution and will have 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.  The opening offer will typically be best for the presenting party and will rarely be the final offer when the parties settle.  However, it opens the gates to the negotiation and lays the foundation for the discussion.
  • 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.  The initial counteroffer will likely be just as good for the party that offers it as the initial offer was for the first party.  These offers establish the boundaries that the parties will use to continue negotiating.
  • 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.  This often happens when the parties start very far apart and have an inflated sense of their position on the dispute.  Often, once the parties have time to evaluate their dispute, they will be able to reenter discussions with a clearer picture of the resolution.
  • 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.  This order will be binding on the parties and can usually result in contempt.  Occasionally, certain agreements will have consequences for not following the agreement built into the settlement.  However, creating an agreement will give the parties the ability to settle their dispute in a way that works for them.

Mediation

Mediation is a process where the parties work with a neutral third party who serves as a mediator between the two.  It allows the parties to discuss settlement in a forum that ensures neutrality and fairness.  The process is not usually binding, as the parties are still free to choose if they would like to settle and agree or move forward with the dispute.  Mediation often takes place in a formal setting arranged by the mediator or the parties and allows discussion of the dispute in a safe and free space.  Mediation seeks to find the root of the demands and problems to find creative solutions to the dispute.  This process usually happens voluntarily by the parties agreeing to mediate, but in some places, a court may mandate mediation if they believe it could help the parties.  The mediation process typically uses the following:

  • Solutions: The mediator will encourage the parties to come up with solutions to the problems.  This separates it from arbitration, which includes suggestions or decisions from the neutral.  Depending on the mediator’s style, they may suggest solutions to the parties, while other mediators will allow the parties to drive the discussions and solutions.  However, in all cases, solutions to the problems presented are sought.
  • 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.  Neutrality means that they are not tied to any party in a way that may influence their thinking and that they have no stake in the problem presented.
  • 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.  This will follow most of the steps of negotiation—offer, counteroffer, and agreements.  It is unlikely to have many stops and starts in a mediation.
  • 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. There will be a set of rules to be followed and an agreement between the parties and the mediator regarding the process.  It will also usually take place in a designated mediation spot for a day or two.

Arbitration

Arbitration is a form of dispute resolution and is one of the most formal.  Arbitration involves the use of a third-party neutral to decide the dispute.  It is very similar to court in that the parties will present their cases and an arbitrator or panel of arbitrators will issue a decision called an award that is almost always binding on the parties.  The process is confidential and allows the parties to present their case without a public record.  Many arbitrations are governed by international organizations that have established the rules for different types of arbitration.  In many cases, the arbitration will have the following characteristics:

  • 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.  This is an important characteristic because, without it, parties would be unlawfully giving up certain rights.
  • 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.  They have more freedom in presenting their case and the arbitrators will often not require the same standards as a judge.
  • 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. Parties are also often tasked with enforcing the award, which may require submitting it to court if they have an issue collecting.

Summary Jury Trials

Another form of ADR is a summary jury trial.  This is a process where the parties agree to present a condensed version of their case to a jury of six. Selected from the local jury pool  The jury will then create some sort of feedback for the parties to evaluate their position and what they see as the outcome in the case presented would be based on the evidence.  This process is formal and uses the rules of evidence and a courtroom to conduct the hearing.  The court will oversee the trial and the jury will get an accurate sense of what the case would feel like if it was in court.  Summary jury trials are often significantly shorter than a full trial would be, and the parties receive their feedback shortly after the case is finished.  Some other common characteristics of summary jury trials are:

  • Formal: The process of presenting at a summary jury trial will often feel as if the case is being presented in a traditional courtroom.  There will be a judge presiding over the process and jurors and the rules of court.
  • Unaware Jurors: The jurors in a summary jury trial are not informed that their verdict will be advisory until after the verdict is rendered.  This will help them pay full attention to the task and creates a true courtroom experience for the parties presenting their case.
  • Not Binding: The verdict reached at the end of a summary jury trial will be what is called an advisory opinion.  This opinion is not binding on the parties but allows them to evaluate where they are at with their case.  They will usually have a chance to speak to the jury and determine why they decided the case in the way that they did.

Which Process is the Right One?

Once a person has learned about the system of dispute resolution, they will be excited to implement them into their dispute resolution process.  However, there are instances where certain types of dispute resolution will be better suited than others.  ADR processing means that a party evaluates the options and picks the correct process for their dispute.  Some examples of how to choose are:

  • Overconfident Parties: When a case first begins, one or both parties may believe that they have a great case to present and a good chance of winning at trial.  However, this may not be the case, and hearing from the other party at trial can be shocking.  In a situation where a party is overconfident in their case, a summary jury trial may be helpful.  It will happen early on, and the parties will leave with an idea of how a jury may react to their case.  This can help bring overconfidence into check.
  • Need Structure: Sometimes, parties will be negotiating for a long time, but they cannot find the time to spend hammering out an agreement, or they are close on an agreement, but cannot find their way around the final hurdle.  This type of dispute is great for mediation because the parties are already demonstrating that they can work together, they just need the structure that a mediator provides.
  • Time Crunch: While any ADR process will likely be faster than others, negotiation is the easiest to use when the parties would like to settle but are approaching hearings or trials too quickly to arrange mediation, arbitration, or summary jury trials.  It allows the parties to work together whenever is convenient for them.
  • Specific Subject Matter: Certain types of subject matter, such as medical information or scientific studies, are difficult or judges without experience a matter.  When this is the case, it might be helpful for the parties to consider arbitration to be able to select an arbitrator who is familiar with the subject matter.

Knowing which process to use and how to use it is a practice that will develop over time.  However, considering a move to alternative dispute resolution can be helpful for any dispute.

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