ALTERNATIVE DISPUTE RESOLUTION (ADR)

This document tells you the following:

• What is ADR?
• Why use ADR?
• Where are ADR sessions held?

When parties are in a dispute, they may be tempted to take their case to court. However, there are alternatives to going to court that are quicker, less expensive, and more confidential than a public trial. Some of the advantages and disadvantages of the different forms of alternative dispute resolution (ADR) are discussed below.

What Is ADR?

The most common forms of settling disputes peacefully without going to court are negotiation, mediation, and arbitration. In negotiation, each disputing party, or someone acting for each party (such as an attorney), talks directly with the other party or attorney to reach a settlement. This method has been used for centuries, but it sometimes breaks down, and no settlement is reached.

In mediation, one or more persons (or mediators) help the disputing parties reach an agreement on how to handle their problem. The mediator does not judge or take sides; he or she merely guides the parties to a settlement that is agreeable to both sides. As in negotiation, the final decision is voluntary. Both sides must agree for it to be legally binding.

In arbitration, one or more persons (or arbitrators) hear the arguments and facts of both sides. Then they make a decision as to what to do. Arbitration is like a private trial but less formal. Unlike a mediator, an arbitrator does judge and take sides. Unlike a trial, arbitration does not usually include all of the detailed, complex rules of a court. As in mediation, the disputants must agree to enter into the process for it to be legal. However, in arbitration, the disputants agree in advance to be bound by whatever decision the arbitrator reaches. This way, they can't back out afterwards.

ADR is still very new and continues to develop in different forms and combinations. These hybrids can be created to satisfy the disputing parties. For example, "medarb" combines mediation with arbitration. First, a mediator tries to get the disputing parties to reach an agreement of their own choosing. If they don't come to an agreement, another arbitrator steps in and arbitrates a decision.

Why Use ADR?

The best method of ADR, or even the decision to use one at all, depends on the circumstances and parties in each case. ADR does not solve all problems. In fact, its use is not permitted in some cases. Here are some of the advantages and disadvantages of ADR:

• No jury: ADR eliminates the worry of what a jury might decide. However, a party who wants a jury of peers to judge a case would have to seek a court trial instead.
• Decision making by experts: Some cases can be very complex. In ADR, the disputing parties may be able to pick a mediator, arbitrator, or evaluator who is knowledgeable in the particular field that the case involves.
• Confidentiality: While most court proceedings are open to the public, most ADR proceedings are private. Confidentiality may be an important consideration for the parties.
• Finality: Most ADR proceedings end with a decision or settlement agreement that is binding on all parties. Court trials, on the other hand, can be followed by years of appeals. A party wanting the right to appeal would probably choose to use the court system. 
• Timeliness: ADR is usually, but not always, faster than the court system. Courts can be heavily backlogged with cases.
• Costs: ADR is often less expensive than the court system. It is faster and has fewer appeals. The use of fewer documents in the process also cuts time and costs. However, keeping costs down also depends on how the process is set up and customized. ADR does have some costs that courts do not. For instance, disputing parties pay for the ADR service provider. In the court system, the parties do not pay for the judge or for court administrative services. (These costs are paid by tax dollars.)
• Adversarial climate: Supporters of ADR argue that it encourages less angry interaction between parties. Opponents say that atmosphere and interaction really depend on the disputing parties.
• Venting: Often all that disputing parties really need is to vent their frustrations to an impartial third party. In these cases, mediation and other ADR forms may be more efficient than going to court.

When to use ADR, and which form to use, is a very personal decision. Would ADR be appropriate in the following situations?

SITUATION 6 Jim was fired from his job and claims he wasn't given proper notice. He also feels that he is entitled to severance and back pay equal to $2,000. His employer, WallTon Cement Manufacturers, says that it is not legally required to give him notice. There was no written contract. Further, his severance and back pay were used to cover the repair bill for a machine he broke at work.

SITUATION 7 Wylie bought a package of fireworks from ACME Explosives Inc. He was seriously injured by an explosion when he used them. Wylie claims that his injuries were caused by a defect in the product. ACME asserts that Wylie used the fireworks improperly; that is, not in the manner as clearly stated in a warning label. Wylie's injuries include total and permanent blindness. ACME is concerned that if it pays Wylie anything, others will also seek payments and the company would be forced to recall its product.

SITUATION 8 Wanda and Betty have been neighbors for years. Betty has a teenage son who recently started riding his dirt bike at night in the open field next door. Wanda and her husband, Fred, have complained to Betty that the noise is distracting and annoying. Betty has asked her son to stop. At the same time, she has also told Wanda and Fred that the field is not theirs. She also points out that the biking is not that loud and it does not occur late at night. Wanda is considering calling the police or suing in court.

SITUATION 9 Amy and Sarah are high school juniors. They have been friends since the fourth grade, but lately their relationship has become strained. First, Amy made the cheerleading squad and Sarah didn't. Then, Sarah started dating Nick, whom Amy had a crush on. In fact, she had hoped Nick would ask her to the prom this year. Last week, Amy couldn't find one of her textbooks and accused Sarah of stealing it. The girls had a loud argument in the hallway in front of their lockers and were sent to the principal's office.

ADR could be used in all four situations if all the parties agreed to try it. It would be very appropriate for situations 6 and 8. The injuries in both are minor, but the cost of suing would be high. Mediation would be a very good alternative in situation 8. Wanda and Betty have been neighbors for years and will likely remain so. Mediation generally helps people stay in their former personal and business relationships after a dispute is resolved, largely because the disputing parties themselves help reach the decision.

Situation 7 may not be best solved by ADR because the injury and issues are so great. On the other hand, ADR might offer a more private setting than would an open court. Also, costs would probably be lower for all parties.

Situation 9 is unique in that no lawsuit might even be possible. What exactly would a lawsuit solve? The problems that Amy and Sarah are having go a lot deeper than the textbook incident. ADR includes peer mediation, and many schools have set up such programs. In this form of mediation, disputes between students are handled by fellow classmates. The student mediators have been trained by teachers and others who understand ADR techniques. Do you think "venting" by Sarah and Amy in such a setting would help?

Where Are ADR Sessions Held?

Where disputing parties go to use these alternatives to court depends on the case. For example, say the dispute is the result of a broken contract. The contract may have an ADR clause specifying how the problem will be resolved and by whom.

On the other hand, a great number of judicial systems now offer ADR programs. The programs have been set up and are supported by the government. In systems that have these programs, judges may urge the parties to try ADR before going to trial. The cost of these programs can be very low, even free. If these two avenues are not available and both parties want to try ADR, they will have to agree on a particular ADR provider.

* Excerpted from An Introduction to Law in Georgia, Fourth Edition, published by the Carl Vinson Institute of Government, 1998 (updated 2004).  The Vinson Institute is not responsible for errors in the online text.  Content is for information only; in no way should the information in the book be considered legal advice to anyone on any matter for which there are legal implications.  Any such matter should be specifically addressed with an attorney. The book is available for purchase at or by contacting the Publications Program, Carl Vinson Institute of Government, University of Georgia, 201 M. Milledge Avenue, Athens, GA 30602; telephone 706-542-6377; fax 706-542-6239.