Alternative dispute resolution (ADR)
Alternative dispute resolution is a process used in many countries to resolve the dispute outside the courtroom with the help of impartial third party. ADR is being used on large scale nowadays as compared to litigations. It is fast and flexible process, attracting the dispute parties other than courtroom. ADR resolves any kind of dispute including family, business, contract, neighborhood, employment, consumer and environmental dispute. The parties in dispute can seek ADR to avoid long and hectic process of courts.
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How alternative dispute resolution works.
There are many types of ADR, but the three most commonly used ADR in USA is negotiation, mediation, arbitration.
Negotiation-This type of ADR is used less as compared to other two. In this process the parties are made to sit together and resolve the issue. No third party interferes here. The outcome of this process is non-binding and non-enforceable.
Mediation- This type of ADR is more formal than negotiation but less formal than arbitration. Mediation is used widely in case types ranging from juvenile felonies to federal government negotiation, and also used by investors and their stock brokers. Here, the disputed parties are introduced to third impartial party namely, mediator. Mediator will listen and come up will a decree which both parties have to imply on. The outcome is non-binding, so if the partis aren’t satisfied with the outcome then they can move to arbitration process or court too.
Arbitration- Most formal type of ADR. Here, the third party is referred as arbitrators. The remedy provided by the tribunal is known as award and the outcome of arbitration is binding, unless the court finds out any kind of violation of the arbitration agreement. Arbitration is enforceable under both state law and federal law.
USA have a statue for arbitration known as Federal Arbitration Act. This act was enacted by the 68th united states congress and came into effect from January 1st, 1926. This act applies both in federal courts and state courts.
According to FAA awards given by the arbitrator or arbitration panel, must be confirmed in court of law; after the awards gets confirmed, the award is reduced to enforceable judgment, which a winning party can enforce in court. The time duration for the confirmation of an award is one year, within one year the award should be confirmed in court of law, and in case of any objection regarding the award to any of the parties it must be challenged in court within three months.
Advantages of ADR
· Cheaper and faster process.
· Less formal and flexible rule process.
· Confidential
· Not long-time taking process.
Disadvantages of ADR
· Does not deliver on its promise
· Can be expensive sometimes.
· Not always straight forward.
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