WHAT ARE THE BUSINESS BENEFITS OF ALTERNATIVE DISPUTE RESOLUTION(ADR)?

Alternative Dispute Resolution relates to the alternative method of resolving disputes that is aside from litigation.

8/1/2022 3 min read

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WHAT ARE THE BUSINESS BENEFITS OF ALTERNATIVE DISPUTE RESOLUTION(ADR)?

Disputes in the workplace are bound to happen with different projects, teams, management styles, and other factors at play. However, business is business thus, most complicated commercial issues can be resolved with the use of alternative dispute resolution (ADR) without the need for court appearances.

WHAT IS ALTERNATIVE DISPUTE RESOLUTION

Alternative Dispute Resolution relates to the alternative method of resolving disputes that is aside from litigation. In other words, ADR often provides a less formal or intimidating setting for resolving workplace conflicts.

COMMON TYPES OF ALTERNATIVE DISPUTE RESOLUTION

Generally, the most common types of alternative dispute resolution used in business are arbitration and mediation.

MEDIATION: In the mediation process, parties involve an impartial third-party, known as a mediator, to help facilitate discussion. A mediator is a trained facilitator who understands negotiation techniques, human dynamics, and effective listening. The ultimate objective of the mediator is to assist both parties in reaching a mutually agreeable conclusion. The final decisions are up to the parties, but the mediator will provide knowledgeable counsel and suggestions for original options for solutions to the issue. After parties agree to the terms, they sign and date the outcome as witnessed upon by their lawyers.

ARBITRATION: Arbitration is the most formal of all ADR processes. In arbitration, a third person neutrally known as the "arbitrator" hears arguments and examines the evidence put forth by either side of a dispute before making a decision. An arbitrator, like a judge who sits as an umpire, weighs the arguments and the evidence before deciding the outcome of the dispute. Although the arbitrator determines the result, arbitration is less formal than a trial and shares certain similarities with the litigation process.

WHY IS IT ALTERNATIVE DISPUTE RESOLUTION ESSENTIAL?

Alternative dispute resolution is essential to any business organisation in the following way:

COST-EFFECTIVE: Alternative dispute resolution is less costly than commercial litigation. In alternative dispute resolution, all expenses are borne by the parties involved.

TIME-EFFECTIVE: Business owners need to resolve conflicts as quickly as possible so they can continue to operate efficiently.

PRESERVE CORPORATE RELATIONSHIPS: Business is commercial, and using alternative dispute resolution (ADR) may be able to keep any ongoing business relationships between the parties to a dispute intact, whereas litigation and court processes may very likely sever the professional relationship.

PRIVACY OF PARTIES: Unlike litigation and courtroom records which are usually open to the public, alternative dispute resolution ensures the privacy of parties. This helps small business owners to work through complex problems without fear of tarnishing their brand or reputation.

FLEXIBILITY: Alternative dispute resolution gives business owners the flexibility to determine when and where meetings take place. Parties reserve the right to determine the mediator or arbitrator.

IT IS LESS FORMAL: The courtroom where litigation is carried out is alway tense. However, in alternative dispute resolution sessions, it is more of a business meeting where parties come together to reach agreement amicably.

ENCOURAGES THE USE OF EXPERTS: For the purpose of reaching a resolution, many forms of ADR make use of experts and reputable individuals. Generally speaking, this is preferred to having a jury selected at random who may not be well-versed in the particularities of your case.

In conclusion, an Alternative Dispute Resolution (ADR) consultation with a business law lawyer can help you understand the benefits and potential drawbacks for every method of ADR as they pertain to the context of your case.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

TEL: 08065553671, 08024230080