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Alternative Dispute Resolution (ADR) is the procedure for settling disputes without litigation. Both parties can go to ADR at the beginning of dispute resolution or after case file, even if both parties agree to resolve their dispute outside the court they can go to ADR during a case.
ADR is in the three forms. All are the dispute resolution process outside the court.
Negotiation is the most popular form of ADR. It is an informal dispute resolution process where both parties agree to finish their dispute in a win-win situation. When both parties have some weak point, they go to negotiation. Besides, parties agree in Negotiation to avoid complexity and if they have no enough time. Also, if there have any confidential issues, negotiation is the best way.
Benefits of Negotiation:
- It is time-consuming
- Less cost
- Highly confidential
- If any party dissatisfied they can exit from the process any time
- The main problem of Negotiation is bargaining power. If one party has high bargaining power, the party tries to dominate others. So, if you have less bargaining power it does not wise to go to through negotiation.
Remember: It not always wise to ignore negotiation even if you have less bargaining power. If the opposit party is your potential customer and who will be beneficial for you in the future, you should compromise with the party. Furthermore, If there has the possibility to harm your future relation, you should go to negotiation even there has power imbalance.
Mediation is another ADR tool where a neutral third party plays the role of intermediaries to resolve the dispute. The intermediaries called mediator. Here, the mediator does not make the decision. Parties are take decision about the dispute, and the mediator just explains the situation to the parties. He or she guided the parties to resolve the dispute. It is usually a non-binding process.
Benefits of Mediation:
- A neutral, experience third party explain the situation, guided the parties to find out a better solution.
- Both parties mutually selected the mediator. So, there is no chance of higher bargaining power.
- You can continue the process or stop the process in the middle of the procedure if you feel uncomfortable.
- Mediator has the restriction to disclose the dispute to others. Therefore, it is also a confidential process.
- The mediator can be unethical or partial
- The mediator must need to expert in the mediation
- The mediation will not free of cost. There need to pay to the mediator. As a result, it is costly rather than negotiation.
Remember: When there is no power balance, mediation is a better choice.
It is another form of alternative dispute resolution (ADR). It is more structured than other ADR tools. Generally, arbitration is binding (parties bind to follow the decision), but if parties agree in non-binding arbitration, they can do it. Hence, if there is no instruction about binding or non-binding arbitration, it will be binding in general.
Advantages of Arbitration:
- The parties appoint arbitrators. If the parties fail to select the arbitrator, district judge (in case of the domestic case) select the arbitrators.
- Parties are binding to follow decision (if they have no agreement about non-binding arbitration).
- There is no way to show dissatisfaction on the decision.
- Parties say which law and procedure the arbitrator will follow in the time of arbitration.
- It is faster than litigation in court.
- You cannot dissatisfied with the decision of the arbitrator
- Decisions made by the arbitrator, not by the parties.
- Less confidential then negotiation and mediation
Remember: You cannot show dissatisfaction about the decision of the arbitrator. You can go to court only if the arbitrator does not follow the law and procedure that parties select.
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