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...