ADR 101 Overview
This section presents a practical introduction to Commercial alternative dispute resolution. This guide focuses on the two most widely used procedures, mediation and arbitration. However, CPR offers tools, resources and services that relate to every stage along the continuum of commercial dispute resolution.
For more information, please refer to our Resources for Navigating Complex Business Disputes.
ADR Definition: Alternative Dispute Resolution (ADR) is a collection of procedures used for the purpose of resolving disputes out of court. When utilizing ADR methods, corporations can resolve disputes more efficiently and at a lower cost by achieving earlier, better settlement and avoiding expensive and time consuming trials. ADR encourages creativity, helps parties find practical business centric solutions, and avoids the unpredictability involved with traditional litigation. The process usually results in improved communication between parties and is, therefore, better for ongoing business relationships.
For definitions of other ADR terms, please access our ADR Primer.
ADR Proceedings: Getting Started
In deciding which process to use, parties should consider whether they want a binding (arbitration) or non-binding (mediation process, or perhaps, some combination of both approaches. In addition, parties should take into account the amount of support necessary for the matter and how much they or their client is willing to spend on administrative elements of the case. CPR has developed an ADR Suitability Screen tool to assist lawyers and clients in determining whether a particular dispute is suitable for resolution through ADR. The Screen consists of a questionnaire and accompanying commentary that is applicable to a wide range of disputes.
Mediation is a flexible, nonbinding dispute resolution process that uses a neutral third party- the mediator - to facilitate negotiation and resolution between parties. A mediator has no power to impose a solution on the parties but rather provides a framework within which parties can resolve their dispute.
A voluntary binding dispute resolution process in which an independent, impartial and neutral third party (an arbitrator or arbitral panel) considers arguments and evidence from disputing parties, then renders a decision or award. Generally, arbitration decisions are subject to only very limited forms of appeal.