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Employing ADR To Resolve Business Disputes

With the significant expenditure of time and costs associated with litigation, individuals are increasingly looking to alternative methods to settle conflicts. One broad category that has gained attention over the years in business circles is Alternative Dispute Resolution (ADR). ADR is a mechanism used to resolve conflicts amicably, without going to court. Two possible avenues of ADR are mediation and arbitration.

Mediation

Mediation is a process in which individuals or businesses meet with a neutral third party in an effort to reach a compromise.

The role of the mediator does not involve making a judgement or decision. Instead, a mediator facilitates the discussion by listening to both sides of the dispute, encouraging communication between the parties, and assisting them to consider options and solutions that neither may have previously conceived.

At the conclusion, the parties may find a solution and sign an agreement to that effect. If no consensus is reached, they may decide to attend another mediation session or pursue another dispute resolution method.

Arbitration

Similar to mediation, arbitration also brings in a neutral third party to settle the dispute. However, arbitration does not simply involve discussion. Rather it functions similar to a court trial, in which the parties present their case before the arbitrator.

Afterwards, unlike mediation, an arbitrator's decision is legally binding and enforceable by a judge if the matter later progresses to court.

Employing ADR Could Mean Shorter Resolution Time

ADR is not always the solution to every business dispute, especially in high-conflict situations. When the parties are willing to meet to discuss a mutually beneficial compromise, ADR can be very effective.

For instance, disputes involving a simple commercial contract can often be resolved more expeditiously using ADR, sometimes within a manner of days or weeks, rather than months or even years as with litigation.

ADR Allows Proceedings To Remain Confidential

Another benefit of ADR is that these proceedings are typically confidential and out of the realm of public knowledge. In contrast, going to court makes a dispute a matter of public record. Through ADR, the parties can resolve the dispute between themselves without a judgment being officially recorded and available for public inspection.

When entering into mediation or arbitration, it is beneficial to have experienced counsel present. A legal representative can ensure to protect the business' interests and help facilitate an amicable solution.

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