Adr_Techniques

In the current business environment, litigation and litigation costs have become major problems for many businesses and professions. Defending a serious lawsuit can mean tens or even hundreds of thousands of dollars in legal costs, even when the suit is eventually dismissed. Many large companies are realizing substantial cost savings by using Alternative Dispute Resolution (ADR) techniques in place of traditional litigation. ADR techniques offer a means of controlling upwardly spiraling legal costs, while resolving the underlying legal problems. Professionals who use ADR techniques enjoy a competitive advantage. All business owners and managers need to understand how these techniques can help them save time and substantial sums in legal costs. The primary goal of ADR is the resolution of disputes without the need for litigation. Most alternative dispute resolution techniques are entered into voluntarily. Although ADR agreements are nonbinding and can be appealed in court, attorneys who specialize in ADR report that very few end up in court. This demonstrates that the parties in ADR proceedings almost always come away satisfied with the results. Although the goal of ADR is not a fifty-fifty split, in fact most ADR proceedings do result in some sort of compromise reached through a structured negotiation process. The satisfaction rate is a product not only of the final decision but of the fairness of the process itself. ADR enjoys a number of advantages over litigation. Some of these advantages include lower cost, quick resolution to the dispute, and confidentiality. Lower Cost ADR almost always costs only a fraction of traditional litigation. ADR procedures are streamlined and cost effective. Litigation is costly and even small disputes can grow into very expensive legal battles. The longer the court case drags on, the higher the legal costs. Besides the out-of-pocket expenses for outside counsel, managers need to consider the opportunity costs involved in resolving the dispute. Litigation usually takes over a year, during which time managers must give depositions, educate the attorneys about the dispute, and deal with other time-consuming tasks related to the case. The time devoted to the lawsuit is time taken away from the managers’ regular duties. Furthermore, because managers must devote so much of their time to solving an old problem, they can’t focus on managing the business for the future. Although difficult to measure, this lost time is an opportunity cost that needs to be managed. Quick Resolution Speed is a primary advantage of ADR. While a dispute brought to court may take over a year to resolve, the same dispute could be disposed of in a few months using ADR techniques. All court systems have to abide by speedy trial rules, which require that criminal cases be heard first. Accordingly, business disputes, which tend to deal with civil rather than criminal matters, have to wait. In most states this means that the lawsuit will not reach a courtroom for at least a year, and in some states the wait is much longer. If the parties really want to resolve their dispute expeditiously, mediation or other ADR techniques are the only realistic alternatives. Confidentiality Unlike legal proceedings that are open to the public, ADR is a private confidential proceeding. Lawsuits are a matter of public record. This means that everyone, including reporters, has access to the documents. These court documents may contain allegations unsupported by evidence as well as unpleasant facts that may be taken out of context. These court documents remain in the public record for a number of years, and damage to the firm’s reputation may be permanent. Companies spend thousands and even millions of dollars in public relations efforts each year. These expensive efforts can be undermined by bad publicity generated by a lawsuit, whether or not the allegations have substance. ADR techniques are a method for resolving serious business disputes in an efficient and effective manner. Although ADR is a substitute for traditional litigation, lawyers are sometimes involved in the process. However, they generally need to abandon their adversarial role in favor of a problem-solving role.