ADR, as alternative dispute resolution is commonly referred to, is increasing in popularity among employers looking to cut litigation costs when legal disputes arise. Many organizations now require employees and other companies they conduct business with to agree in advance to use ADR procedures in the event of a business-related dispute (see article on p. 41). The ADR umbrella covers various forms of dispute resolution, the most common of which are arbitration, mediation and negotiation.
Arbitration cases are decided based on evidence presented by the parties in a procedure that is less formal, time-consuming and expensive than a trial. The evidentiary rules used in trial courts do not have to be followed and an arbitrator has more freedom than a judge in choosing a remedy. Arbitration panels are often made up of three impartial individuals whose decisions are binding.
Mediation is the process in which two (or more) disputing parties meet and, with the help of a neutral mediator, negotiate a resolution that is acceptable to all. The mediator's role is advisory, and resolution of the dispute rests with the parties.
Negotiation is a method of conciliation where disputing parties meet and use discussion and compromise to resolve their differences.
Other forms of ADR include fact-finding, ombuds, mini-trials, private judging, partnering and elections. The World Wide Web is home to many sites with detailed information on ADR, its components and practitioners, and descriptions of ADR forms and methods. The following are just a handful of the various offerings:
The American Arbitration Association is perhaps the most widely recognized authority on ADR and a pioneer in the field. Located at www.adr.org, AAA's home page gives visitors access to the full text of the United States Arbitration Act and the Administrative Dispute Resolution Act of 1996. The "Rules and Procedures" section outlines the ethical standards for arbitrators and mediators set by the AAA and the American Bar Association and offers a download of a package that includes rule guides and forms to file for assistance with ADR.
The CPR Institute for Dispute Resolution is a leading proponent of "self-administered" ADR, a dispute resolution method managed by the parties with little or no institutional involvement. At www.cpradr.org, risk managers can learn which insurance companies have agreed to resolve coverage disputes through ADR and find a list of signatories to the CPR Future Major Disaster Pledge, where insurance companies have promised to process claims quickly and fairly and to meet with CPR and other insurers to set up ADR systems to resolve disputes in the event of disaster. …