ADR: Why It Works And Why It Doesn’t Work

No civil litigation matter is complete without a consideration of alternative dispute resolution, or ADR. That’s because most civil cases will settle outside of court, due in many instances to the successful use of an ADR procedure. However, ADR is not the solution to every civil dispute. There are some cases in which employing ADR would be unwise and potentially wasteful compared to traditional litigation. Do you have a pending civil matter and want to know if ADR is right for your case? Let SederLaw help.

Whether ADR is suitable will depend largely on the individual facts of the case at hand. However, these are a few general guidelines for when it will likely work – and when it probably won’t:

When ADR Might Work

There is a serious commitment to ADR among the parties involved. If the respective parties to a lawsuit have made ADR a goal – meaning they desire to avoid litigation where possible by selecting mediation, arbitration, negotiation, or other methods – ADR is much more likely to succeed. The problem is that while some litigants pay lip service to ADR, many of them actually prize-winning at all costs.

There is a desire to preserve relationships. If the parties involved in litigation actually value their relationships with one another, they will seek ADR as a means of ending the dispute. For example, two businesses with a long history of productive and mutually beneficial cooperation will naturally want that relationship to continue. Keeping parties on good terms with one another is one of the primary goals of ADR.

Objective analysis of the feasibility of ADR. It’s not a good idea to refer every civil dispute to ADR and hope for the best. Before a case can be sent to ADR, the facts and circumstances of the civil matter must be considered. Objective analysis should be used to evaluate the nature of the allegations, the potential risks of litigation (including damages and other financial exposure), the potential benefits of ADR, and other factors.

When ADR Might Not Work

Abuse and imbalance of power. Certain cases – such as those involving divorce and sexual harassment – invoke issues of abuse and power imbalance. For example, if there are allegations of domestic violence in a family law matter, ADR may not be feasible. ADR works best when the parties involved are roughly on the same page. Litigation is generally more desirable when they are not.

Issues of substantial public interest are involved. Let’s assume a civil lawsuit in which an investment advisor is accused of serious fraud to the tune of tens of millions of dollars. Let’s assume further that the victims were elderly or financially vulnerable individuals and the scandal made national news. Cases like these involve a degree of moral outrage that necessarily touches on the public’s interest in holding certain parties accountable. The benefit of successful litigation is that it sends a message that such actions will not be tolerated. Therefore, ADR might not be a good idea.

Incompetence and inexperience. ADR is only as effective as the third-party neutral (arbitrator or mediator, for instance) chosen to help resolve the matter. As an example, a family law mediator who isn’t experienced with equitable distribution might not be the best fit to broker a deal in a divorce involving complex assets. Likewise, an arbitrator with insufficient expertise in a particular industry may not be the right person to handle a breach of contract lawsuit.

Contact SederLaw Today For A Consultation

The attorneys of SederLaw not only represent parties in ADR, but we also serve as mediators and arbitrators in a number of different kinds of cases. Our wealth of experience enables us to competently advise clients on whether ADR is a promising choice for them. To get started and to learn more, schedule your confidential consultation with us today.