Blog

By Purple Fox Legal

February 8, 2023

Alternative Dispute Resolution (ADR) is a term that refers to a wide range of methods for resolving disputes outside of traditional court litigation. These methods include arbitration, case evaluation, collaborative law, cooperative practice, divorce coaching, early neutral evaluation, facilitation, family group conference, mediation, mini-trial, multi-door program, negotiation, neutral fact-finding, ombuds, parenting coordinator, pro tem trial, private judging, settlement conferences, special master, summary jury trial and unbundled legal services. Each of these methods has its own unique advantages and disadvantages, and the best choice will depend on the specific needs of the dispute at hand.

Arbitration vs. Mediation

Mediation and arbitration are both popular alternatives to traditional litigation that involve a neutral third party to oversee the process. However, the main difference between the two is the process used to solve the conflict. 

Mediation is a non-binding process that is generally conducted with a single mediator who facilitates discussion and helps the parties come to a resolution. The mediator does not make a decision or judge the case. 

On the other hand, arbitration is often a binding process that replaces the full trial process with a panel of multiple arbitrators who take on a role similar to that of a judge. The arbitrators make decisions about evidence and give written opinions, which can be binding or non-binding. Decisions are made by majority vote. 

The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations that is dedicated to promoting the protection of intellectual property rights around the world. One of the key services offered by WIPO is its arbitration and mediation center, which provides a neutral and confidential forum for resolving disputes related to intellectual property.

The WIPO Arbitration and Mediation Center has administered some 1,350 mediation, arbitration and expert determination (together, WIPO ADR) cases. Patent disputes are the most common type of WIPO ADR cases as the table below shows.

Source: WIPO

Both arbitration and mediation can be used in conjunction with litigation, as parties may first try to negotiate before moving forward to trial.

Advantages of ADR

One of the key advantages of ADR is that it is often faster and less expensive than litigation. Mediation, for example, is typically less formal and less adversarial than a trial, and can often be resolved in a matter of weeks or months. Arbitration, on the other hand, is a more formal process, but it is still often quicker and less expensive than a trial. Additionally, ADR can often be more confidential than litigation, which can be important for parties who want to keep the details of their dispute private.

Another advantage of ADR is that it can provide parties with more control over the outcome of their dispute. In mediation, for example, the parties are able to come to a mutually agreed-upon resolution, rather than having a judge or jury impose a decision on them. In arbitration, the parties are able to choose the arbitrator, which can help ensure that the person deciding the dispute has the necessary expertise and experience. Additionally, ADR can often provide parties with more flexibility in terms of the resolution of their dispute. For example, in mediation, parties may be able to come to a creative solution that would not be possible in a courtroom.

Another advantage of ADR is that it can promote a more positive and cooperative relationship between the parties involved. In traditional litigation, the focus is often on winning and proving one’s case, which can lead to a more hostile and adversarial relationship between the parties. ADR, on the other hand, encourages parties to come to a mutually beneficial solution and can foster a more collaborative and cooperative relationship. This can be particularly useful in cases where the parties will continue to have a business or personal relationship after the dispute is resolved.

Furthermore, ADR can provide a more tailored and specialized resolution to disputes. In traditional litigation, the court may not have the specific knowledge or expertise to fully understand the nuances of a particular dispute. In ADR, the parties can choose a mediator or arbitrator who has specialized knowledge in the relevant field, which can result in a more informed and fair resolution.

Lastly, ADR can also be more accessible to parties who may not have the resources to engage in traditional litigation. Mediation and arbitration can often be more affordable and accessible to individuals and small businesses who may not have the financial resources to pursue a trial. This can help level the playing field and ensure that disputes are resolved fairly, regardless of the parties’ financial resources.

Disadvantages of ADR

Although alternative dispute resolution (ADR) methods have become increasingly popular in recent years as an alternative to traditional litigation due to the advantages discussed above, there are several disadvantages to using ADR compared to traditional litigation.

First, ADR can be less formal and less structured than traditional litigation. This can lead to a less predictable outcome, as the process is not as strictly regulated as it is in traditional litigation. Additionally, ADR can be less adversarial than traditional litigation, leading to a less robust examination of the facts and evidence in a case.

Second, ADR can be less transparent than traditional litigation. In traditional litigation, court proceedings are open to the public, and the outcome is a matter of public record. In contrast, ADR proceedings are often confidential, and the outcome is not publicized. This lack of transparency can make it difficult for parties to understand the reasons behind the outcome and can make it more difficult for parties to hold each other accountable.

Finally, ADR can be less binding (especially in the case of mediation) than traditional litigation. In traditional litigation, the outcome is determined by a judge or jury and is binding on the parties. In contrast, the outcome of some ADR proceedings is non-binding, and the parties can walk away from the process if they are not satisfied with the outcome. This can lead to a lack of finality in disputes, as parties may not be willing to accept the outcome and may seek to litigate the matter further.

The Role of Legal Counsel

Legal counsel is crucial in helping clients understand the pros and cons of going to court versus using alternative dispute resolution (ADR) methods. They can provide guidance and advice on the best course of action based on the specific circumstances of the case and the client’s goals.

When advising clients on whether to go to court or use ADR, legal counsel may consider factors such as the potential cost and time involved, the likelihood of success, and the client’s desire for privacy or public resolution. They may also consider the type of dispute and the parties involved, as some disputes may be more suited to ADR methods such as mediation or arbitration.

In addition, legal counsel can assist clients in selecting an appropriate ADR provider and in preparing for and participating in the ADR process. They can also help clients understand the legal implications of any settlement or agreement reached through ADR and can advise them on whether to accept or reject the proposed resolution.

Overall, legal counsel plays a vital role in helping clients understand the different options available and in guiding them through the process of deciding whether to go to court or use ADR. Their guidance and advice can ensure that clients make informed decisions and can help them achieve their desired outcomes.