An alternative dispute resolution program refers to a process that allows two or more parties to settle a disagreement without taking the matter to court. Two common examples of this are arbitration and mediation, which both include third-party intervention. There are several noted benefits to solving problems this way, such as reaching a solution more quickly and with less expense.
When parties disagree, there are two common options for solving the problem. First, some people attempt to reach a resolution among themselves. Second, people commonly file lawsuits and let a judge decide what is best. There is, however, a third option that is becoming increasingly popular — an alternative dispute resolution program.
This option generally involves the disputing parties agreeing to handle the matter with an impartial third party, such as a mediator or arbitrator. These individuals are often certified and recognized by associations that regulate and promote such programs. The prevalence and success of alternative dispute resolution programs is highlighted by the fact that an increasing number of contracts include clauses that indicate this as the preferred method to solve problems between parties within contractual relationships.
Although the matters that are addressed by an alternative dispute resolution program are commonly legal issues, the existence of this option allows them to be handled without going to court. There are several benefits in proceeding in this manner. Savings is one of the most commonly noted benefits because alternative resolutions can generally be reached for a fraction of the cost of a lawsuit.
Time is another consideration that motivates individuals to agree to this type of program. If people attempt to solve problems on their own, they may never reach an agreement. Even if the matter is taken to court, the process from filing a lawsuit to obtaining a verdict is often quite lengthy.
Although an alternative dispute resolution program is considered an informal process, it will still generally be subject to rules and regulations. When such a program is provided for in a contract, the parties to the contract may outline terms that must be adhered to. Furthermore, these programs are often regulated by national associations that impose regulations on the proceedings.
Generally, the outcome of an alternative dispute regulation program is binding. This means that the disputing parties are legally obligated to act accordingly. It is usually not permissible for one party to decide that he is not satisfied with the outcome and to then file a lawsuit.