Conflict between business partners can sometimes seem inevitable. However, taking these conflicts into the courtroom is not. Many business owners understand the benefits of using alternative dispute resolution (ADR) to settle disputes. For those finding themselves facing potential litigation, ADR might be a better option.
ADR is a legally binding alternative to courtroom litigation that enables entities or individuals to settle disputes through compromise. ADR also keeps information private, is generally cheaper and often provides much faster results than through the courts.
Types of ADR
There are five primary types of alternative dispute resolution:
- Arbitration: Like trying a case in a courtroom, arbitration includes a ruling third party or panel who hears arguments and determines an outcome. All parties must agree on the arbitrator and their potential outcome before the process begins.
- Mediation: In mediation, a neutral party facilitates voluntary discussion with the goal of compromise. Mediators do not impose rulings but suggest courses of action and encourage parties to listen, empathize and collaborate. Mediation works best for parties seeking to preserve long-term relationships.
- Minitrial: Often used by businesses to settle large disputes, minitrials mimic the lawsuit process. Attorneys present arguments in brief to a panel of officials consisting of clients and company management, representing both sides of the dispute. The purpose is to ascertain the likely ruling of an actual trial then negotiate a settlement from there.
- Summary jury trials: Used primarily in federal courts, summary trials involve an advisory panel of jurors. A judge or arbitrator will discuss each jurors’ opinions on the arguments and determine the likely results of a jury trial. The purpose of summary jury trials is to quickly identify a realistic starting point for negotiations and establish a speedy timetable.
- Early neutral evaluation: Sometimes court-ordered, this process employs an objective third party to quickly assess the strengths and weaknesses of each side’s arguments. Negotiation and mediation may follow, but that depends on each party’s willingness to compromise.
Discover a compromise that maintains business operations
Those facing a potential lawsuit or small claims case might pursue alternative dispute resolution for a solution. A local lawyer with experience in business litigation can advise on options, draw up ADR contracts and schedule the necessary personnel.