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Is there any alternative to proceedings in national courts? A word about ADR methods.

As the saying goes, a bad settlement is better than a good judgement. Especially nowadays, Alternative Dispute Resolution methods (ADR methods) have been largely promoted in the legal industry. There are plenty of advantages, the ones that are most typically mentioned include the lack of high trial costs, lengthy court proceedings and issues with enforcement of judgements. It also allows for confidentiality as well as greater control over the proceedings since the parties may freely tailor the procedure to suit their particular interest. So what are ADR methods?

Alterative Dispute Resolution consists in out-of-court proceedings conducted to resolve a dispute between the parties in a dispute. As its name suggests, the main purpose of this mechanism is to provide an efficient alternative to long-lasting and, in most cases, costly lawsuits, carried out in a neutral and private forum, with the assistance of a qualified expert of their choice. The methods are generally classified into three distinctive types: negotiation, mediation and arbitration.

Negotiations

Negotiations are the most instinctive form of a dispute resolution mechanism which existed since the beginning of time. They occur when the parties in a dispute attempt to reach an agreement on their own to satisfy each of the parties’ needs. Simple though it sounds, in practice it turns out to be the least efficient tool as usually the conflicted parties are not capable of reaching any decision. It requires the parties to make concessions in order to find an amicable solution to their problem without a third party present that would facilitate the whole process.

Mediation

Mediation is an ADR method which consists in having a neutral third party help the disputants reach an agreement on their own. Mediator does not impose a solution but rather works with the parties in order to achieve a non-binding and voluntary consensus. Mediation is known for its less confrontational character and thus is quite common in family-law disputes.

Arbitration

Arbitration, similarly to mediation, involves a third party acting as a judge. As opposed to mediation, in arbitration the involved third party imposes a binding resolution to the problem. Arbitrators hear both of the disputants, analyse relevant evidence, and, at the end of the day, render a decision. As a general rule, arbitral awards are final and cannot be appealed. There are however situations in which arbitral award can be set aside by the national court.

Choosing an alternative to litigation in a national court carries a lot of advantages. Once a dispute arises, the parties should take a step back and before getting into the merits of their dispute should discuss how to solve their problem. After all, cost-efficient, professional and rapid solutions are in everybody’s interest!