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(ADR) - Alternative Dispute Resolution

There are three basic types of ADR: negotiation, mediation, and arbitration.

Describe each type of ADR and answer the following questions:

What is the process for each type of ADR, and how can a corporate manager prepare for it?
What are the advantages and disadvantages of each type of ADR?
Discuss each type of ADR in the context of the enforceability of the decisions made.

Solution Preview

Negotiations are the most common method of dispute resolution and should be the first step in the settlement process.

1. "Negotiations" - polarized discussions, refers to negotiations for dispute resolution purposes—i.e., settlement negotiations.
a. Voluntary: Settlement negotiations are almost always voluntary. However, some dispute resolution agreements may require negotiations before litigation or other ADR procedures may be invoked
b. Nonbinding: An agreement to negotiate does not assure settlement. It demonstrates only the parties' willingness to exchange views on settlement.

Steps in Negotiation Process: The process of negotiations involves these basic steps:
• Agreeing to negotiate
• Preparing for negotiations
• Conducting negotiations
• Wrapping up the settlement

The key to successful settlements is thorough preparation. This involves, among other things:

—obtaining accurate information;

—competently valuing the claim with estimates of the range of likely outcomes (but not discussing ranges during negotiations, consider both supportive and critical information—this will refine your estimations and also will preview your reality checks;

—determining each party's goals and obtaining settlement authority; and

—planning the conduct of the negotiations so far as possible.

Mediation
Background: Mediation in one form or another has been around since the dawn of civilization, and is widely used for dispute resolution in many cultures. However, mediation was not a part of the common law process and, until recently, was utilized only for certain types of ...

Solution Summary

Alternative dispute resolutions are analyzed. The advantages and disadvantages of each type of ADR are provided.

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