What Is Alternative Dispute Resolution Process?
Alternative dispute resolution (ADR) process is a term used to describe a means of resolving controversies or disputes that do not involve traditional litigation. The terms usually used are either arbitration or mediation. Mediation is by far the most common means of ADR. It is used in almost every lawsuit in Harris County, Dallas County, Travis County, Bexar County, Jefferson County, and all the major counties in Texas where litigation takes place. But, it is up to a trial court to make a local rule as to whether or not they require ADR. ADR makes a lot of sense because it saves people time and money. However, ADR is not always effective. Depending on how the contract is structured or what the relationships are among the parties, there may not be any trust or motivation to engage in ADR. It depends on what the bargaining position is between the relative parties, and if you’re talking about auto accidents or lawsuits for personal injuries, ADR is something that a trial court would have to require.
Most attorneys understand that ADR is something that makes a lot of sense because it will result in the resolution of a case without having to go through the time and expense of the actual trial.
When Is It The Right Time To Use The ADR Process?
When both sides have clarified their positions on either liability, contentions, or defense positions, it can be helpful to use the ADR process. You want to be able to clearly articulate all of your claims or all of your defenses before you go into a mediation setting. Mediation is not free, and you’re only going to have a mediator for that day or two who will focus on your case just like the attorneys will. But, you don’t want to go into an ADR mediation or arbitration with any uncertainty.
Many major contracts and international contracts for either construction shipping or other cross-border transactions that may involve import exports of goods and services us ADR. Almost all of those contracts provide for arbitration, and if the arbitration is set to occur in a place like New York, London, or the Hague, then that contract will be very specific as to how to trigger an arbitration process. An arbitration process will be similar to litigation in that the parties develop their positions in writing and make those positions known to the arbitrator. When it comes to the other side, the arbitrator then evaluates their position papers. There may be a discovery that took place in developing their position. They can take depositions and interview third parties. All of that information rolls into the position papers so that the arbitrator can make a decision without any trial process. The parties don’t meet in front of an arbitrator and argue their case like they would in court, although that can be done in some settings, but typically, an arbitrator evaluates the positions, meets with the parties, and then issues a ruling. The arbitration can be binding or non-binding depending on the type of arbitration.
Should Formal Discovery Be Complete Before Participation In ADR?
Formal discovery should be completed before participating in ADR. Each party needs to be clear on their positions so that all of the relevant information can be given to the arbitrator or mediator, and so that the other side can fully understand the basis for their position. Parties don’t always agree. Otherwise, they wouldn’t be in that situation. But having an understanding of the other side’s basis is crucial to reaching a resolution.
What Are Different Resolutions Generally Used Under ADR?
A resolution will typically involve an agreed settlement in the case of mediation. The mediator will go back and forth between each side after an opening session. Each side will explain their position to the mediator, and he or she will filter that information and convey it to the other side over the course of a day or two. Each side then negotiates from their initial position to their final settlement position. It’s commonly mentioned among people who mediate often that when both sides walk away equally unhappy then there was probably a good scenario. The person who’s making a claim probably gets paid less than what they wanted, and the one who’s having to resolve the case by payment is usually paying more than they wanted. But as long as both sides can walk away, then they will sign a settlement agreement, money will get paid, and then they’ll go their separate ways.
In an arbitration situation, the arbitrator will issue a ruling, and it’s similar to a judge’s opinion in a lawsuit. Arbitration, because of its outcome, is similar to a trial. But, you do not have the benefit of a jury, and you don’t have the same presentation of evidence as you would at a trial.
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