Business Law: Alternative Dispute Resolution

Introduction

Despite certain challenges, the practice of alternative dispute resolution (ADR) has gained widespread popularity among the general public and lawyers over recent years. This tendency is a result of various factors, such as the high workload of traditional courts and the relatively low cost compared to the litigation procedure. Besides, the confidential nature of the process and the desire of the conflict parties to have more control over dispute resolution play an important role in the increased use of ADR. This essay aims to discuss the advantages and disadvantages of alternative dispute resolution, as well as the challenges associated with the procedure.

The Advantages of ADR

To begin with, it is necessary to define the term ADR and explore the advantages associated with this practice. Alternative dispute resolution refers to several processes and methods designed to settle disputes and conflicts without the use of litigation (Schmitz, 2012). For instance, they include mediation, independent negotiation, conciliation, arbitration, or any other process that is effective in resolving a conflict. According to Murray (2021), ADR “has become an increasingly attractive route for dispute resolution as it maintains privacy, which is ideal for people … to keep a dispute out of the public courts” (para. 5). There are various strategies to choose from, which provide flexibility for the parties involved.

People that turn to the ADR procedure tend to be more satisfied since they can participate more actively in setting the terms of the conflict settlement. Besides, they have more control over the process and outcomes of the dispute resolution. This method is cost-efficient and time-effective, which contributes to a productive achievement of results and a consideration of the needs of all people involved (Schmitz, 2012). Furthermore, ADR allows for preserving goodwill and can help avoid the escalation of the conflict.

The Disadvantages of ADR

Nevertheless, there are several disadvantages associated with the use of alternative dispute resolution procedures. For instance, not all cases are a good fit for this method, and no guarantee can be provided that a conflict will be resolved, except for arbitration (Murray, 2021). In turn, in the case of arbitration, the decision is final and cannot be appealed. Besides, parties involved are not bound to continue the mediation or negotiations or can have limited bargaining power (Schmitz, 2012). There is little evaluation of the power imbalances, which implies that alternative dispute resolution may not protect the rights of the people involved.

Challenges for ADR

There are several challenges associated with the use of practices outside of the courtroom. They include a lack of confidence and awareness of the parties or cooperation among lawyers, discrepancies between the reality and rules, as well as a shortage of effective mediators (Schmitz, 2012). Furthermore, Bachar and Hensler (2017) report that it is still unclear whether alternative dispute resolution can “facilitate prejudice and bias” (p. 817). It is necessary to ensure that all interested stakeholders are included in the procedure.

Conclusion

To conclude, alternative dispute resolution continues to grow in popularity since the advantages of this procedure seem to outweigh the disadvantages and challenges of conflict resolution through litigation. At the same time, ADR may not be suitable for all cases, and awareness of the parties involved is necessary to come to an effective solution. Alternative dispute resolution can become a useful method to achieve agreement and preserve good relationships.

References

Bachar, G. J., & Hensler, D. R. (2017). Does alternative dispute resolution facilitate prejudice and bias: We still don’t know. S.M.U.L. Rev., 70, 817. Web.

Murray, P. (2021). What are the four types of alternative dispute resolution (ADR)? Britton Time. Web.

Schmitz, A. (2012). The legal and ethical environment of business. Saylor Academy.

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StudyCorgi. 2022. "Business Law: Alternative Dispute Resolution." August 28, 2022. https://studycorgi.com/business-law-alternative-dispute-resolution/.

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