The Benefits Of ADR
There are obviously many advantages to bypassing the courts and
settling a matter prior to trial. A few pitfalls too – which this chapter will help you prepare for – but since
settlement talks can break out at any time up to and throughout the day of trial, you, as the well-prepared
would be litigant, should be fully versed and ready should they erupt out of nowhere in your
As innovative as our system of justice is, it simply doesn’t
work well for every dispute. For some conflicts that may require nothing more than the opinion of a neutral
third party, the court system can be a rather inefficient, heavy-handed arbiter, more of an instrument of blunt
force where a tool of more precision would work better.
All this has overtaxed our legal system, stretching and
contorting it and forcing it into every social nook and crevice in a desperate bid to smother every dispute,
from landmark civil rights issues all the way down to mild disagreements and differences-of-opinion. The results
have left the system frayed, expensive, and fraught with delays and confusion, while we – the frustrated
citizens that system was designed to serve – are left feeling both intimidated and disillusioned by the inner
workings of American justice.
Alternative dispute techniques allow disagreeing parties to find
a new forum to resolve their differences while preserving access to the courts. Sometimes it helps to see the
realm of conflict resolution in terms of degrees marked along a spectrum. At one end of the spectrum, there
would be no conflicts of any sort and society would live and work together in perfect harmony. At the other end
of the extreme the courts would impose solutions upon the parties in conflict, like what our system is today.
ADR then, occupies every degree in between these two extremes.
So, in addition to the benefit of a non-trial forum, what are
some of the other advantages ADR offers disputants?
Time: Time for one.
As America becomes an ever more litigious culture, increasing numbers of civil and criminal cases compete for a
cut of the justice system pie. Extensions, delays, motions, appeals, all these and much more work together to
extend docket lengths by months and even years in many jurisdictions.
ADR can bypass those delays and get to a solution in much less
time. The American Arbitration Association reports that most mediated disputes take just a few weeks to resolve
and most arbitration claims are decided within a few months of filing. Additionally, dispute resolution can be
sped up in circumstances where there is a compelling “need for speed.” Most courts are frustratingly unable to
accelerate time-is-of-the-essence claims.
Choice of Methods, Neutrals: You and your opponent can often choose your method of resolution and any third-party
neutrals you want to preside over the dispute. Sometimes, as in the case of contract mandated or court-ordered
arbitration the range of choices can narrow somewhat, but there still is usually far more decisive input from
the disputants with ADR than in most courtrooms.
This flexibility becomes a huge benefit in situations that allow
you, for example, to select an expert from your industry to help decide your dispute. Judges by definition are
impartial neutrals, but they usually are not expert neutrals, which may be critical to
obtaining a fair solution to your dispute.
In most arbitration settings, the impartial neutrals are
selected with input from the parties. In some cases the parties may appoint representatives to a panel which
then selects the neutral[s] decision-maker, or as in the case of the American Arbitration Association and other
ADR facilitators, the parties may choose neutrals or delete the names of neutrals from a panel of registered
Minimizing Associated Costs: ADR can reduce or eliminate nearly all the costs associated with taking a case to trial
including, lawyer’s fees, court costs, lost time and wages and other less-tangible costs associated with the
emotional toll and hassle of litigation.
Mediation and arbitration fees can range from about $200 to $600
for small and medium-sized disputes like personal injury, property damage and negligence claims, and
landlord-tenant and individual contract disputes.
Business contract and damage award disputes can be much more
expensive to mediate-arbitrate. Nolo reports that business parties in a multi-million dollar contract dispute
that takes four eight-hour days to iron out will probably shell out around $8,000.
In divorce mediation cases where the couple has a house and cars
and bank accounts to divide up and child support and custody questions to clear up, parties can expect to pay
about $1,200 each.
Many organizations exist to facilitate alternative dispute
techniques and are less interested in making a buck than they are in working out an agreement. If your dispute
is not too complicated you can probably find an organization to help mediate your claims for a nominal
Private and Confidential: One major benefit of ADR is that hearings and meetings and proceedings and decisions are
usually always kept private and confidential. This can keep the terms of any agreement behind closed doors and
away from prying eyes and can facilitate total candor among the parties and help reach the common ground
necessary to settlement.
Conclusion and Finality: ADR brings closure to disputes that can drag out for months or even years and most
settlements result in binding agreements – particularly with arbitrated settlements -- that carry the weight of
legally enforceable contracts between the parties.
Pitfalls of ADR:
Alongside the benefits of ADR, there are also some serious pitfalls to watch out for. Any of the benefits
mentioned above can become a liability in the wrong set of circumstances. The decisions of non-binding
arbitration and mediation, for example, are often much less final than parties might like. Really, they amount
to agreements that may or may not be enforceable.
The choice of neutrals, as another example, carries the flipside
possibility that you may not be able to find out much about your decision-maker before the day of the hearing,
and neutrals are generally much-less accountable than judges who are public officials and subject to ethics
rules and laws that govern their profession.
The confidentiality and privacy of ADR can have its dark
underside too, as when you want others to know of the behavior of your opponent. Settled disputes often require
parties to stay hush-hush as to the outcome. Also, there are no records or transcripts of ADR proceedings that
can be used by you for any potential appeal, which brings us to perhaps the chief difficulty of ADR.
An arbitrated decision may carry a very limited or even no
rights to appeal. Courts are taking an increasingly strong view of the merits of arbitration, enforcing
decisions whether the parties necessarily agree with them or not.
Steven K. Ludwig describes that trend in an article outlining
the growing practice among employers to require binding arbitration for all statutory conflicts as a condition
Ludwig notes the United States Supreme Court ruling that upheld
a decision in Gilmer v. Interstate/Johnson Lane Corp., (500 U.S. 20, 1991) in which the court held that there
was no absolute right of access to the courts by a plaintiff pursuing an age-discrimination action against an
employer, if the employer has a solid arbitration agreement with its employees.
Ludwig adds, “The court found that an agreement to arbitrate was
governed by the Federal Arbitration Act which provides that ‘a written provision in any … contract … to settle
by arbitration a controversy thereafter arising out of such contract … shall be valid, irrevocable, and
enforceable.’ The court also noted that it had regularly held that federal statutory claims can be the subject
of enforceable arbitration agreements”
You should weigh each of these benefits against the possible
pitfalls to help determine if ADR is for you.
ARBITRATION, MEDIATION, NEUTRAL CASE EVALAUTION