Even when it seems like you’ve done everything right, sometimes disputes crop up. Settling them in courts is generally long, messy, and expensive. Alternative dispute resolution methods (ADR), such as mediation or arbitration, are often considered an easier route. In fact, they can be included in agreements as the preferred method of dispute resolution. Whether you’re considering signing a contract with an ADR clause like this, or you’re facing a dispute and you’re looking for alternatives to going to court, here’s an overview on ADR methods to help you move forward.

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What Is Mediation?

Mediation is the conciliatory variant of alternate dispute resolution. The core element of this kind of ADR is the mediator, a neutral third party chosen by both parties in a mutual agreement or even selected in advance. The mediator negotiates with both sides in order to reach a compromise that will satisfy the claims of each. The exact method of mediation varies from mediator to mediator, but is always focused on finding the middle ground that will serve both parties and settle a dispute.

What Is Arbitration?

Now that you know the definition of mediation, arbitration may be a little surprising. While it also relies on a neutral party chosen by both sides, the arbiter has a wholly different assignment. Simply put, they review the case as presented to them by both parties and then issue a decision as to which side is right. Arbitration can be binding or nonbinding. In the former case, a party cannot appeal the decision, unless they can prove the arbiter was biased towards the opposition. In the latter, either party can disregard the arbiter and litigate.

What Needs to Be Considered Before Using ADR?

Alternate dispute resolutions have many advantages. They're much faster, cheaper and typically very successful. However, they should be used carefully. Mandatory arbitration in an agreement can effectively rob you of the right to present your case in a court if the agreement states that the arbiter's decision is binding for both parties. As such, you should carefully consider any such clause in the agreement you sign, especially how arbiters and mediators are appointed.

What Qualifies Arbiters and Mediators?

There is no requirement for a mediator or arbiter to be a legally trained professional such as an attorney. However, this is not to say that arbiters and/or mediators are without training. Most of the time, they are highly experienced and qualified experts in the field in which they offer their services. For example, in disputes arising between landlords and tenants, a real estate agent or property manager with years of experience—a person who knows the nooks and crannies of the real estate market and the intricacies of landlord-tenant relationships—may be selected to arbitrate or mediate such cases.

Should You Use ADR?

ADR can be an essential tool for solving disputes, but before you commit to it or a contract that enumerates this method as the primary resolution tool, you should always consider the above factors. When in doubt, ask a lawyer for personalized guidance.

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