Alternative dispute resolution (ADR) is a popular concept in today’s high stakes, competitive, and expensive commercial litigation industry. I use the word industry purposefully because in some sectors, litigation is a form of business, conducted with profit and loss statements with attorneys generally on the winning side no matter what the outcome in court.
ADR is meant to provide a more cost effective, and equally fair, method of resolving disputes. ADR can take the form of mediation, arbitration, binding arbitration, and a variety of mixtures of those approaches.
In a general sense a mediation is a conference between opposing parties with an experience person (often a lawyer or a retired judge) acting as a moderator. The mediator will ask both parties to submit documents and other information so she can be as well versed in the subject matter before the conference begins. Then, as the meeting progresses, a mediator will shuttle between the parties looking for common ground, pointing out weaknesses in positions or arguments, and generally attempting to bring the parties close enough that they can actually reach a settlement.
Arbitration is more formal and feel more like a courtroom setting. An arbitrator is typically governed by the rules of the American Arbitration Association. This person will ask for papers and other evidence before the arbitration, and then will listen to testimony and statements by both sides before making a final judgment, typically after a period of days or weeks considering each sides argument.