Alternative Dispute Resolution is a means for resolving disputes outside of court. Alternative Dispute Resolution is a great money-saving alternative to litigation and trial proceedings, and is often used by Canadian businesses to resolve commercial law disputes. Alternative Dispute Resolution is often a less stressful, less expensive, faster and more private way to settle business conflicts.
The term ADR actually applies to a lot of different means by which parties can settle their disputes. For example, under the umbrella of ADR, you will find settlement strategies such as mediation, arbitration and negotiation.
Mediation involves the utilization of a neutral party — often a professional who is trained in the art of dispute resolution — who attempts to facilitate communication and negotiation between the parties in order to arrive at a compromise or settlement. Mediators, however, cannot offer a legally binding solution. The mediation process requires the agreement of all parties in order to settle the matter.
Arbitration is not that different from mediation; however, with arbitration a neutral party will actually render a decision in the case and that decision will be binding. Prior to entering into the arbitration process, the parties will agree to abide by whatever the arbitrator decides.
Finally, we have negotiation, which is the most basic form of ADR. Negotiation is a discussion among the parties involved in the dispute and it may or may not involve lawyers. The ultimate goal of negotiation is to find a resolution and settlement. Because no third parties are involved, each side will have free reign to decide the outcome of the proceedings.
There are other types of ADR, which businesses and companies may wish to employ in a business law dispute. By consulting with a business law lawyer, parties can decide which type of ADR is right for them.
Source: FindLaw, "What is alternative dispute resolution?," accessed March 18, 2016