Types of Dispute Resolution

 

Should you adopt alternative types of dispute resolution as routine requirements of your rules, regulations, and contracts?

 

Many of our clients are unclear about the meaning of " Alternative Dispute Resolution," " Mediation," and " Arbitration." 

 

Alternative Dispute Resolution generally refers to a method for resolving disagreements that does not involve the costs, delays, and publicity of going to court.

 

Many clients prefer an "alternative" to a lawsuit and court involvement.One alternative is  mediation, which generally means a process to resolve a disagreement by using someone independent, not aligned with any side in a dispute, and who usually acts only as a facilitator in an effort to get the disputing parties to agree. Mandatory mediation may be stated in a company's rules, policies, and its contracts.

 

Arbitration is a process for reaching a determination of a dispute, without directly including courts.  Arbitration can take many forms, and follow differing rules, but generally allows for disputing parties to present their sides, and an individual or group of arbitrators decide an outcome.

 

Like mediation, mandatory arbitration may be stated in rules, policies, and contracts. Arbitrations are often quicker and less expensive than trials in a courthouse, but not always. There are also drawbacks, unless the parties expressly agree otherwise. For example, arbitrators do not have to follow the law, and arbitration decisions are usually not subject to appeal.

 

You should consider consulting with your attorneys to decide whether mediation and arbitration are advantageous to your company when it formulates rules and regulations and enters contracts.