Alternative dispute resolution (ADR) consists of a number of different approaches to early intervention of resolving conflict. ADR increases the parties' opportunities to resolve disputes prior to or during the use of formal administrative procedures. ADR typically is not intended to replace the more traditional approaches but it can provide long term solutions to conflicts through stake holders' participation and buy-in.
In the normal course of our daily affairs disputes are inevitable, this can lead to delayed shipments, complaints about quality of goods and services and more. The resolution of such disputes, however, doesn't need to be costly and acrimonious. Two of the more obvious forms of ADR are below, there is no one correct technique or process.
What is Mediation?
Mediation is a process in which an impartial third party facilitates communication and negotiation and promotes voluntary decision making by the paries to the dispute. Mediation is a completely voluntary process agreed upon by the parties. The mediator intervenes at the request of the parties, and likewise maybe removed at anytime by the parties. Mediation involves the efforts of a neutral person to help the parties reach their own agreement. A mediator is a catalyst who facilitates an agreement between the parties but has no authority to impose a settlement. A mediator can only translate, suggest, advise, cajole, persuade, or, at times, recommend possible ways of resolving the dispute.
Mediation usually consist of five stages and they usually occur in sequence one right after the other. The five (5) stages of a typical mediation are as follows: 1. Introductory 2. Information gathering 3. Framing 4. Negotiating 5. Concluding.
Some mediations have a life of their own where it's hard to discern any stages at all. Most mediations take several sessions to complete all five stages because of the different issues.
Mediation is informal, fast and effective for resolving disputes prior to arbitration or litigation.
What is Arbitration?
Arbitration is the submission of a dispute to an impartial person for a final and binding decision, known as an "award." It's a form of ADR that can be used to resolve disputes faster, and is a more cost-effective alternative to litigation. Arbitration is for those times when you just can't reach an agreement even with the help of a mediator. It is private and informal, designed for quick, practical and inexpensive settlement. But at the same time arbitration is an orderly proceeding, governed by rules of procedure and standards of conduct prescribed by law. Any dispute that can be litigated can be arbitrated.
In an arbitration proceeding the rules of evidence are relaxed, which makes it easier to get to the heart of the matter.
Its not unusual for the parties to resume their normal business relationship after their dispute has been arbitrated. The more you know and find out the less likely it will be for conflict to take time away from your business.
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