What is Alternative Dispute Resolution?

What is Alternative Dispute Resolution?

What is Alternative Dispute Resolution?

Do you know that disputes between individuals or organizations can be settled without going to national courts?

Alternative Dispute Resolution (ADR) is a method that allows the parties to dispute reaching an amicable settlement without recourse to litigation. However, the following are the methods of ADR that are widely accepted: Negotiation, Mediation or Conciliation, and Arbitration.

Negotiation

Negotiation is how a dispute between individuals or groups is settled amicably without the third person bringing the parties to a settlement. The primary aim of Negotiation is to reach an agreement that the parties engage in the dispute with each other until they reach a desirable outcome for all involved.

Advantages of Negotiation:

• Flexible
• Cost-saving
• Preserve parties’ relationship
• Confidential

Disadvantages of Negotiation:

• Not always successful
• Weak legal protection for parties
• A potential difference in negotiation power between parties

Mediation or Conciliation

Mediation is very similar to Negotiation, the main difference is the presence of a third person, called Mediator that assists parties in reaching an agreement. Disputing parties can choose the mediator and/or qualifications and expertise the mediator shall have.

However, the mediator has limited power in the proceeding, he can only assist parties without the possibility to suggest possible solutions.

Advantages of mediation:

• Flexible
• Preserve parties’ relationship
• Stronger legal protection for parties compared to negotiation
• Confidential
• Cost-saving

Disadvantages of mediation:

• Not always successful
• Not easily enforceable
• Limited power of the mediator

Arbitration

Arbitration is completely different from other methods. In this proceeding, the third person, called Arbitrator, is appointed by the disputing parties to decide the dispute. The disputing parties can choose the arbitrator and/or qualifications and expertise the arbitrator shall have.

The arbitrator is bound by the arbitration agreement and shall follow the procedure and the rules agreed by the parties. Contrary to the previous methods, arbitration always leads to a decision due to the decisive power of the arbitrator.

Advantages of arbitration:

• Flexible
• Time-saving compared to litigation
• Confidential
• Always finally decided
• The award is easily enforceable

Disadvantages of arbitration:

• Court intervention is required for different purposes
• Parties’ relationship is not preserved