Many people think when two parties don't agree on the legalities of something, whether it's a business or personal relationship, that their only recourse is to battle it out in the court system. This is far from the case, however. In addition to court being costly for both parties, neither usually ends up being happy with what the court decides. A better option — at least initially — is to go through an alternative dispute resolution service. Here is what you need to know about this valuable opportunity.
What Is Alternative Dispute Resolution?
In a nutshell, alternative dispute resolution simply means using any method other than litigation to settle a dispute.
Is Alternative Dispute Resolution Court-Mandated?
It can be, but not necessarily. For example, in a hostile or contested divorce in which children are involved, the two parties may not be able to come to a custody agreement that is satisfactory to both. A judge may then order the couple to attend mediation to work out their differences.
Mediation employs a neutral mediator to guide the couple through the process and come together, despite their differences and communication problems, to make decisions that are in the best interest of the child. If mediation attempts fail, the parties may find themselves in contempt of court or, more importantly, with the judge taking under advisement the mediator's recommendations and deciding for the parties what the agreement will be.
However, mediation may also be voluntarily chosen by the two parties. This is often the case when, returning to the example of the divorcing couple, they realize it is in everyone's best interest to not involve the courts in their family situation.
What Types of Alternative Dispute Resolution Are Commonly Used?
In addition to mediation, negotiation and arbitration are forms of dispute resolution. Negotiation is typically attempted first. This is an ideal method when each party doesn't have an impassioned or personal stake in the outcome, such as is often the case with family law. Negotiation doesn't encompass court involvement; it is simply the two parties meeting, each with their attorneys, and trying to come to an agreement that will work for each party. Sometimes, this back-and-forth negotiation process is handled strictly by the attorneys without the clients present. This can be a very successful road to dispute resolution when both parties desire to make a deal.
In arbitration, the process is similar to a court hearing, but rather than it being decided by a judge and going down as a matter of public record, as litigation would be, the dispute is decided by an arbitrator, who is typically mutually agreed upon. The privacy afforded by arbitration is often a major advantage, especially for publicly traded corporations whose stock could fall if they were involved in a lawsuit.