Alternative dispute resolution (ADR) is an increasingly popular alternative to litigation in the context of business disputes. ADR facilitates discussions around disputes and accusations involving businesses. Instead of focusing on court-based resolutions to disputes, where conditions can be stressful, toxic, and drawn-out, ADR tries to find an efficient way for all parties to come to a mutually beneficial agreement.
If you are a business owner currently involved in a dispute, you should consider whether ADR could be the right choice for you. The following is an overview of the four types of ADR methods.
The use of an ombudsman
An ombudsman is typically an in-house professional who is trained in conflict resolution. Having an ombudsman as part of your company can be a great way to resolve disputes within the company and to avoid involving third-parties when it is not necessary.
Neutral evaluation
Neutral evaluation, as the name suggests, involves a neutral person with training in ADR. This person listens to all sides of the story and gives their perspective on who is at fault. While their opinion is not legally binding, it can help all parties to see an objective view on the situation.
Mediation
Mediation is a collaborative method whereby a neutral third party helps those involved in a dispute to come to a mutual agreement.
Arbitration
Arbitration involves a neutral third party who considers all arguments and comes to a legally binding final decision based on the information they have.
ADR can be a great way for businesses to save time and finances when solving disputes, both internally and externally. Putting in place ADR policies can help to prevent costly litigation.