Any method of resolving disputes without litigation. Abbreviated as ADR. Public courts may be asked to review the validity of ADR methods, but they will rarely overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them. Arbitration and mediation are the two major forms of ADR.
Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory.
While the two most common forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. It is the preeminent mode of dispute resolution. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution.
Mediation is also an informal alternative to litigation. Mediators are individuals trained in negotiations, who bring opposing parties together and attempt to work out a settlement or agreement that both parties accept or reject. Mediation is not binding. Mediation is used for a wide gamut of case-types ranging from juvenile felonies to federal government negotiations with Native American Indian tribes. Mediation has also become a significant method for resolving disputes between investors and their stock brokers. See Securities Dispute Resolution.
Arbitration is more formal than Mediation and resembles a simplified version of a trial involving limited discovery and simplified rules of evidence (ex.hearsay is usually admissible in arbitration). Prior to the dispute occurring, parties usually enter into a binding arbitration agreement or any other form of agreement with an arbitration clause, that allows them to lay out major terms for the arbitration process (number of arbitrators, arbitration forum; arbitration rules; fees etc.). If parties still have disputes about certain terms before entering into an arbitration they can petition to a court to resolve a dispute. Arbitration can be held ad hoc or with the administrative support from one of the institutional providers like American Arbitration Association (AAA) or JAMS. The arbitration is headed and decided by an arbitral panel or a single arbitrator, depending on the agreement of the parties. Arbitrators do not have to be lawyers, parties can select arbitrators from other fields that they consider more suitable for the resolution of the dispute. For example, parties can choose an arbitrator with an engineering background to arbitrate a construction dispute. To comprise a panel, either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third. Arbitration hearings usually last between a few days to a week, and the panel only meets for a few hours per day. The panel or a single arbitrator then deliberates and issues a written binding decision or arbitral award. Opinions are not public record. Arbitration has long been used in labor, construction, and securities regulation, but is now gaining popularity in other business disputes. Title 9 of the U.S. Code establishes federal law supporting arbitration. It is based on Congress's plenary power over interstate commerce. Where Title 9 applies, its terms prevail over state law. There are, however, numerous state laws on ADR. Forty-nine states have adopted the 1956 version of the Uniform Arbitration Act as state law. The act was revised in 2000 and subsequently adopted by twelve states. The arbitration agreement and award is now enforceable under both state and federal law.
In 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, or the "New York Convention", was drafted to aid in the enforcement in domestic courts of awards granted in foreign countries. In 1970, the United States joined and, as of June 2017, there are 157 countries participating in the convention.
Last Updated in June of 2017 by Tala Esmaili
Last Updated June 8, 2017 by Krystyna Blokhina Gilkis
Menu of Sources
U.S. Constitution and Federal Statutes
- U.S. Code:
- CRS Annotated Constitution
Federal Judicial Decisions
- Recent U.S. Supreme Court Decisions on Arbitration
- LII Supreme Court Bulletin Oral Argument Previews
State Judicial Decisions
- UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards
- UNCITRAL Texts
- NAFTA Ch. 20 Institutional Arrangements and Dispute Settlement Procedures
Key Internet Sources
- Mediation, Arbitration, and Collaborative Law (Nolo)
- U.S. Department of Justice - Office of Dispute Resolution
- American Arbitration Association
- Cornell/PERC Institute of Conflict Resolution
- Harvard Law School - Program on Negotiation
- Conflict Information Consortium (Univ. of Colo.)
- International Commercial Arbitration (Univ. of Chicago)
- International Chamber of Commerce Alternative Dispute Resolution Services - Arbitration
- Federal Judicial Center Publications
- International ADR
- Mediation Information and Resource Center
- Securities Arbitration Center
- LII ADR Search
Useful Offnet (or Subscription - $) Sources
- Good Starting Point in Print: Federal Judicial Center Alternative Dispute Resolution Publications - including: