What is “Alternative Dispute Resolution” and How Does it Work?

“Alternative Dispute Resolution” (ADR) includes methods designed to resolve a legal matter without having a full-blown trial in a courtroom. The purpose is to save parties time and money in resolving disputes. One type of ADR also allows parties a voice in the result, rather than hearing a decision rendered. When I was in law school, ADR was barely thought of; cases were either settled by the lawyers or tried in court. In my 17 years of practice, the importance of ADR has risen dramatically. Now, most courts have rules requiring a formal dispute resolution attempt before trial.

Mediation is a very popular and successful type of ADR. In mediation, the parties and attorneys meet with a mediator to try to reach a settlement. The mediator does not make a decision like a judge. The mediator helps both sides recognize the strengths, weaknesses and risks in their case, and aids in communication. Because settlement is the goal, the parties have control in crafting the solution to their case, rather than having a decision handed to them. Depending on the type of case, court-mandated mediation settles about 70-75% of cases. Mediators can be free (e.g., the Orange County Child Custody Mediator, Judicial Settlement Conference in property division cases) or available at a nominal charge (e.g., the County Dispute Settlement Center). Mediators in some cases can be more expensive, e.g., $125-150/hour for attorney mediators for superior court or workers’ comp cases.

Arbitration is another form of ADR. In arbitration, the lawyers and parties hold a “mini-trial” before the arbitrator, who serves like a judge. Arbitration can be binding (final) or non-binding (subject to further hearing or appeal). The “mini-trial” is shorter and less formal than a regular trial. If the court orders arbitration, the arbitrator may be paid by the parties jointly, or by one party, depending on the case, at rates usually $125-150/hour. In district and superior court non-binding arbitration, if a party is unsatisfied with the decision, he/she can still demand a judge trial. If that happens, unfortunately, arbitration has only increased the parties’ expense, since their lawyers have to try the case twice. If the parties arbitrate because a contract requires it, arbitration with a private agency like the American Arbitration Association can be very expensive. By comparison, filing and court fees for using a courtroom trial are minimal since that system is funded with tax dollars. Thus, depending on the details of arbitration, it may or may not save expense compared to going to court.

With the parties’ consent, judges may allow trial procedures that save time and money. For example, the parties and the judge might agree on a time limit for each side to present evidence.

ADR is here to stay. With a few exceptions, ADR has proven beneficial to parties with legal disputes. With more cases being resolved in ADR, lawyers, judges and parties appreciate the benefit of less crowded court dockets, meaning they are able to hear sooner those cases that really do need a trial.

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