The traditional method of resolving civil disputes is called litigation, in which a judge or jury hears evidence presented formally by the lawyers, witnesses and parties, and then reaches a judgment or verdict on the issues. Litigation is usually quite costly and can take a long time to reach an ultimate conclusion.
Alternative Dispute Resolution, or ADR, is a term given to forms other than litigation for resolving disputes. These alternative methods are becoming more and more popular as the costs and time involved in traditional litigation continue to soar. Importantly, all forms of ADR are confidential in nature; there is no public forum like a courtroom.
Mediation is a process through which a trained, neutral third party called a mediator helps the parties to a dispute resolve their differences. Sometimes the disputes begin as litigation, with mediation being the process selected to settle the case. Other times disputes can be mediated without starting in the court system. The mediator meets with the parties and their attorneys (if they have one) in a series of discussions and negotiation sessions. Unlike litigation, the mediator makes no decisions and the process requires no formal proof or legal arguments. The mediator works with the parties to help them reach a decision on their own. Studies have shown agreements reached by the parties themselves through mediation are far more likely to be followed than decisions rendered by a judge, jury or arbitrator.
Arbitration is similar to litigation, with some important differences. Like litigation, the parties usually (but not always) retain lawyers who present evidence and witnesses to a neutral third party called an arbitrator, who ultimately renders a decision. The arbitration takes place in a private office, not a public court, and the strict rules of evidence are typically relaxed. In many cases the ability to conduct discovery, or fact-finding, is also more limited than in traditional litigation. Arbitrations typically conclude much quicker than litigated matters, and provide more finality as the right to appeal from an arbitration award is severely limited. Arbitration can be mandatory, as in most real estate purchase contracts, or voluntary by agreement of the parties. Most arbitration decisions are binding on the parties.
All of the forms of Alternative Dispute Resolution have variations that may be suitable for a particular situation.