The use of ADR (Alternative Dispute Resolution) is not new. ADR has been used by many groups for many years due to its effectiveness in resolving disputes. Each year more companies are choosing to use arbitration to resolve business disputes. With this being the case, the way that ADR is being used has also expanded. It is now more cost-effective and practical for managing various types of workplace conflicts. Each individual company’s reasons for opting for arbitration may vary.
Mediation and arbitration can both be effective forms of ADR. Mediation is a negotiation that a neutral third party will facilitate. The mediator will not make a decision; they help the interested parties come to an amicable agreement. Mediation helps the involved parties find common ground. In contrast, in Arbitrations the Arbitrator will make a decision for the parties as a judge would in court. There are a number of situations where Mediation is a more applicable form of ADR and situations where Arbitration is more applicable.
Advantages of Arbitration over Litigation
Litigation is formal, and usually a public process that helps resolve disputes in a courtroom setting with a judge or judge and jury. There are often strict rules, which the government imposes that dictate the conduct of how the process will be carried out. Arbitration can be private. The parties involved in the conflict will meet with a neutral third party so that both sides are heard and a final decision regarding the matter is made. This is done while using agreed-upon rules to govern the way the arbitration will take place. Arbitration is therefore often used as a more attractive alternative to litigation or appearing in court.
Parties looking for a practical way to resolve a dispute often use arbitration. In many ways it is a better prosses than litigation, which is why more and more businesses prefer it. Here are some reasons why it is better and additional advantages to arbitration:
• Control & Flexibility – The involved parties will set the terms, as to how the arbitration process is carried out. This involves establishing rules about hearings, discovery, and time limits. Arbitrations can be scheduled on any day and at a time that works for all parties involved.
• Speed – According to recent studies, U.S. District Court cases tool more than a year longer to even go to trial than arbitrations took to be resolved.
• Inexpensive – Arbitrations are significantly less expensive than court cases. The decreased amount of time that it takes to resolve a dispute has a big impact on the lower costs because of factors such as; lawyers fees, costs of witnesses, and days booked away from doing other work. Also, investigations and appeals are limited, which means that you also save with possible future expenses.
• Simple Rules of Investigation and Evidence – The parties can choose to make the arbitration process as simple or as complicated as they would like. This allows for rules such as time limits placed on how long an investigation into a matter can take, rules of evidence, time allotted to make legal arguments and many other factors to meet the parties needs.
• Privacy & Confidentiality – The arbitration process can be private and only designated parties are in the meeting. Proceedings are confidential, whereas litigation is public.
• Arbitrator – The involved parties have the right to choose an arbitrator. They will generally choose an arbitrator with experience in the subject matter that is being disputed who they both respect. This is especially seen as more favorable rather than leaving it up to a judge who may not know the subject matter and may not have a favorable reputation.
• Faster Resolution – Arbitrations usually take significantly less time to go through than a trial once it starts. This, combined with taking a lot less time to get started on a matter allows for expedited resolutions compared to court cases. Additionally arbitration usually doesn’t allow for many appeals, which means the disputes are resolved faster.