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What Is Alternative Dispute Resolution (ADR) – Mediation & Arbitration


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When you are involved in a conflict that causes you to consider going to court, you are confronted with a range of questions. Should you sue? Do you need to hire a lawyer? How much will it cost? How long will it take? What if you lose or don’t get what you want?

Even conflicts that appear straightforward can become complicated, time-consuming, and expensive when you try to resolve them through the courts. Compounding these problems is the often-cumbersome legal process itself – a system that imposes strict rules, requirements, time-frames, and procedures for even seemingly straightforward disputes.

However, there are other options. In many situations, alternative dispute resolution is available for people who have conflicts or need to resolve a legal problem, but don’t want to go through the court system to do it.

Alternative Dispute Resolution – The Alternative to Litigation

Alternative dispute resolution (ADR) is a process, or a collection of processes, that affords people the opportunity to resolve legal disputes without having to resort to litigation. ADR is designed to be an alternative to (though not necessarily a substitute for) resolving a legal dispute through the civil litigation process. There are several different types of ADR.

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Arbitration is the most formal type of alternative dispute resolution. In arbitration, the disputing sides bring their disagreement before a neural third-party arbitrator. The arbitrator acts very much like a judge does in court, presiding over the dispute and imposing decisions in much the same way a judge would impose a ruling or a judgment. In arbitration, each side is there to try to persuade or convince the arbitrator, who is responsible for evaluating each side’s position and making a ruling or decision.

Like lawsuits, the arbitration process involves rules and procedures, though these are usually less restrictive than the rules that govern the litigation process. Further, arbitration often allows the sides to come to an agreement about what kinds of rules will be used during the process, or to decide how formal or informal they want that process to be. For example, before presenting their arguments to the arbitrator, the two sides might come to an agreement about how long they have to gather evidence, what kind of evidence they do or do not wish to allow, and whether they want the arbitrator to issue a detailed opinion when issuing a ruling.

Arbitration can be binding or nonbinding. In nonbinding arbitration, the arbitrator typically issues a ruling or recommendation that both sides are free to either adopt or reject. In binding arbitration, the arbitrator’s ruling ends the dispute in much the same way a judge’s ruling would, though appeals are possible in some situations. State rules determine who can be an arbitrator, and typically require that an arbitrator have either legal or professional experience. For example, in Maine, arbitrators must have either eight years of legal experience or eight years of recent experience with the subject matter of the case, or be part of a professional arbitration organization and have six hours of arbitration process training and the ability to conduct an evidentiary hearing.


Mediation is an ADR process in which a neutral third party, called a mediator, meets with the disputing parties in an attempt to help them reach an agreement that ends their conflict. Mediators are typically trained professionals – often attorneys – who provide the disputing sides a neutral place in which to meet, discuss their problem, and try to resolve their differences. As with arbitrators, state rules determine who can serve as a mediator.

Mediators may arrange joint meetings, meet with the disputing parties individually, suggest potential solutions, provide a structured way to negotiate a settlement, or give advice and guidance – but they do not impose solutions or forcibly resolve the conflict. In mediation, you and the other party are responsible for reaching an agreement. Unlike arbitration, your role in mediation is not to try to persuade the mediator, but to try to reach an outcome you and the other disputing party find acceptable.

Mediation is less formal than litigation or arbitration. While there are often basic rules or procedures involved in mediation, you and the other party are allowed to reach your own agreements. Also, mediation, unlike arbitration, is always nonbinding. This means that the disputing parties, even though they agree to attend mediation, do not have to agree to any proposed solution, nor do they have to agree to continue mediation if they do not want to. So if you agree to mediation, your mediator might suggest a solution or offer opinions on what you should or should not do – but you cannot be forced to continue to attend the mediation process, or to agree to any resolution.

Mediation Adr Process

Collaborative Law

A relatively new form of ADR, collaborative law is a process that is a kind of hybrid between litigation and mediation. In a collaborative law setting there is no third-party mediator or arbitrator. Instead, you and the other party voluntarily agree to try to settle your differences without filing a lawsuit.

At the same time, both sides hire lawyers to represent them in their negotiations in much the same way you would hire lawyers to represent you in settlement negotiations. However, unlike litigation, your lawyers are not there to argue your case before a judge or jury. Instead, the attorneys are there to try to find a mutually agreeable solution to the common problems or issues you both face.

When you agree to a collaborative law process you also have to agree that the lawyer you hire is only there to represent you through the negotiation process, as well as agree to try to secure a settlement or agreement. The process can also involve other professionals, such as psychologists, family counselors, or anyone who might allow you to reach a mutually agreeable settlement.

Like mediation, collaborative law is a voluntary process – therefore, you do not have to resolve your dispute if you go through a collaborative law process, and no one involved in the process can impose a ruling or judgment.

Should you and the other party fail to reach an agreement, the attorney you hired to represent you is not allowed to represent you in any litigation that might follow. So if you fail to reach a settlement or agreement through collaborative law and want to file a lawsuit, you must hire a different attorney.


Alternative dispute resolution is not always as formal as involving a mediator or arbitrator, or agreeing to a collaborative law process. ADR can be as simple as the disputing parties meeting to discuss their problems. Negotiation is one of the most commonly used forms of ADR, and can include everything from picking up the phone to talk to your spouse about your divorce, to your company scheduling formal meetings involving executives, attorneys, experts, and anyone else with an interest in resolving the disagreement.

Areas in Which ADR Is Commonly Used

Alternative dispute resolution processes are used in a wide range of legal disputes, but are more common in some areas than they are in others. Many ADR issues arise out of contractual relationships between different companies, between individuals and a company, or even between individuals, while other disagreements are resolved through ADR upon the mutual agreement of the parties involved. In other situations, courts or government agencies might use ADR as an alternative to litigation.

Here are some of the most common areas in which ADR is used:

Family Law

Family law is one of the legal areas in which ADR methods are most commonly used. When people face a family law dispute, such as a couple disagreeing about divorce details or child support, they might first go through a mediation or collaborative law process in an attempt to resolve the problems without having to fight it out in a courtroom. Many states provide family law mediation or collaborative law options for these kinds of issues.

For example, if you are having a child custody dispute with your ex-spouse in New York, you can seek out a private mediator to help you. On the other hand, if you’ve already filed your case with the court but want to try mediation, you can ask a judge to refer your case to a mediator. Further, even if you don’t ask for mediation, the judge in your case might recommend that you first try to settle your dispute through a mediator, and schedule a session for you.

Employment Law

Employers who use employment contracts with their workers often include alternative dispute resolution clauses. When workers have a problem with the employer, such as an issue with promotions or compensation, the contract clause might require that the employee first attempt to resolve the dispute through an ADR process before going to court.

Consumer Law

If you’ve ever signed a lease agreement, credit card agreement, car loan document, or other form of consumer contract, there is a decent chance you’ve signed a contract with an ADR clause. Consumer contract ADR clauses can require you to first take any disagreement or dispute you might have with, for example, your cellular phone company or Internet provider, to a third-party arbitrator instead of going to court.

For example, Discover credit card agreements typically have an arbitration clause that allows either Discover or the cardholder to choose to take any dispute arising from the terms of the agreement to binding arbitration instead of court. Other agreements may use different language, and may even require ADR before either party can take the dispute before a court.

Construction Law

The relationships between architects, engineers, builders, and other parties involved in construction projects can be complicated, and ADR is commonly used to resolve issues arising out of the construction process. Many construction industry contracts include alternative dispute resolution clauses to ensure that any disputes that arise do not unduly delay the project.

Engineer Builders Construction Law


When companies from different countries interact with each other, they often include alternative dispute resolution clauses in their contractual relationships. ADR allows these companies to avoid problems that might arise from one party needing to attend court in a foreign country.


ADR is sometimes used in tax cases. The Internal Revenue Service uses a variety of mediation processes for different kinds of tax situations.

For example, let’s say that you are a small-business owner and the IRS informs you that you owe more taxes than you have paid. If you disagree with the IRS’s assessment and want to challenge the amount they say you owe, you might be able to resolve the dispute through the IRS’s Fast Track Settlement process. The program allows taxpayers and the IRS to take their disputes to a trained mediator who helps them resolve the issues as quickly as possible. Both the IRS and the taxpayer can accept or refuse the mediator’s proposed settlement.

Beyond the IRS, some state governments also use ADR for some tax disputes. For example, the Massachusetts Department of Revenue has an Early Mediation Program. Through this program, audited taxpayers who have an assessed tax bill of $250,000 or more can participate in mediation to try to resolve any disputed taxes without having to go through the more time-consuming audit appeals process.

Advantages of ADR

1. Reduced Expense

One of the primary benefits provided by the various types of ADR is its cost-effectiveness. The cost of hiring a mediator or an arbitrator to resolve a conflict is often much less than the costs of going through the court system. For example, let’s say you and your spouse want to get divorced but you cannot agree on several issues. Should you decide to try to solve the disagreements through the litigation process, you can both quickly incur significant legal expenses. According to the Women’s Empowerment Center, hourly attorney’s fees can range from $200 to $1,000, and the average contested divorce can require between about 27 and 60 billable attorney’s hours.

On the other hand, if you and your spouse agree to mediation, the fees can be substantially less. Couples in mediation don’t hire their own attorneys, and will typically agree to a single meeting or series of meetings. Not only do these meetings typically cost less than the cost of an equivalent amount of time spent meeting with an attorney, but the spouses don’t each have to pay attorney’s fees for the time they spend in mediation because they do not have attorneys accompany them.

For example, though costs differ widely, a mediated two-hour divorce session can cost about $500, while day-long sessions may cost about $1,000. Once the mediator helps you and your spouse reach an agreement, you would then only have to pay an attorney an additional fee to draft the divorce documents. (Only courts can approve a divorce, and even if you resolve your differences through mediation you still must have a court issue a divorce decree in order to be legally divorced.)

According to Viewpoint, studies have shown that ADR costs can save litigants, on average, from $500 to $6,000 per case. In cases where the ADR process avoided lengthy or costly litigation, the savings can be even greater.

2. Speed

Similar to expenses, alternative dispute resolution processes do not typically last nearly as long as the litigation process. What someone files a lawsuit, the amount of time it takes for each side to gather evidence, file documents, and go through the litigation process can take months or years depending on the complexity of the case and court schedules. Alternative dispute resolution is designed to allow parties to resolve their differences much more quickly, as it allows them to meet on their own time.

3. Broader Access for Those With Less Time and Fewer Resources

Because of the time and expenses often involved with litigation, a lot of people are simply unable to afford the money and time commitment required. This is effectively a limitation on your access to the judicial system. In other words, if you can’t afford to spend the money required for litigation, or don’t have time to go to court, you may not be able to use the court system to seek the justice you want. Alternative dispute resolution is cheaper and takes less time than litigation, making it a path more people can take advantage of to settle their disputes.

4. Less Stress

Most people have very little experience filing a lawsuit, going to court, or participating in the legal process. Even the prospect of having to go to trial or sue someone can fill many folks with dread and anxiety. The alternative dispute resolution process can be less stressful as it does not involve formal court appearances.

5. Confidentiality

Many, but not all, ADR processes are conducted privately and confidentially – so when the disputing parties meet, the terms and solutions they discuss are not necessarily open to public inspection.

This is not always true with litigation. As soon as you file a lawsuit, that document becomes a public record. Anyone who wants to can go to the courthouse and review the documents filed with the court, effectively making your dispute public knowledge.

6. Constructiveness

Unlike litigation, the parties involved in the alternative dispute resolution process can use the process as a collaborative or constructive one, rather than the adversarial nature of the litigation process. For example, if you have a legal dispute with someone else and your case goes to trial, each side presents its version of the case to a judge or jury, and lets the judge or jury decide what actually happened.

On the other hand, the mediation process does not involve presenting evidence to a jury, but is focused on you and the other party trying to come to an agreement that satisfies both sides. In this way, alternative dispute resolution processes are often better able to maintain relationships between parties who might otherwise see their relationship suffer if their dispute rises to the level of litigation.

Alternative Dispute Resolution Advantages

7. Lack of Restriction

When parties enter the alternative dispute resolution process they are often able to agree to rules or procedures that are not allowed in the litigation process. For example, a mediator might allow each side to present its arguments without the restrictive rules of evidence that courts impose upon litigants. This freedom often makes it much easier for both of you to present your grievances, understand the other side’s concerns, and come to a solution.

8. Mediator Expertise

In many ADR situations, the disputing parties take their disagreement in front of a mediator or arbitrator who has years (if not decades) of experience handling similar issues. This expertise is often helpful in complicated situations where a jury, or even a judge, not experienced in the field might have a hard time arriving at a fair outcome simply because the requisite knowledge or experience is not there. With ADR, both sides can be sure that the neutral third party is experienced enough to discuss the details of their dispute with them, and arrive at a decision based on an in-depth understanding of the relevant facts and issues.

Disadvantages of ADR

1. No Guaranteed Outcome

ADR does not always come with a guaranteed solution or outcome to any legal dispute. For example, it is entirely possible for a divorcing couple to go through a mediation process and not make any progress or come to any final agreement.

Litigation, on the other hand, involves a judge who has the legal authority to issue a judgment that binds both parties. Once a judge makes a decision, that decision is (usually) the end of the dispute.

2. Lack of Consistency

ADR is designed to be flexible, with fewer restrictions and limitations than litigation. However, with flexibility comes the possibility of inconsistency. For example, mediators may employ very different processes. If you use one mediator to resolve a dispute, the next mediator you hire may work entirely differently. This inconsistency can mean that even people who have used ADR before may not know exactly what to expect the next time.

3. Limited Scope

ADR is not designed as a substitute for litigation, and there are limits to what ADR can do. Some types of legal issues, such as those involving child custody or legally incapacitated people, are not solely up to individuals to decide.

For example, it’s quite common for divorcing couples to try to settle their child custody concerns through mediation instead of fighting it out in court. However, the court still retains the right to approve of the terms the parents have come to. Therefore, even if the parents are in agreement, the court may still decide that a different arrangement is preferable to ensure that the needs of the children are protected.

4. Limited Judicial Involvement

ADR is designed to give disputing parties a venue to settle their disagreements outside of litigation. While the flexibility of not having to comply with all the rules and procedures involved in filing a lawsuit can be freeing, the litigation process comes with powers and abilities that ADR does not.

For example, when you file a lawsuit you can subpoena witnesses and compel them to testify. Because subpoenas are a part of the litigation process, they are backed by the power of the court. So, anyone who refuses to comply with a subpoena, or who does not have a legally recognized reason that allows them to refuse to testify, violates the court’s orders and can face contempt of court charges. Alternative dispute resolution processes do not involve the courts, so subpoena powers do not apply.

5. Unequal Parties

Not every ADR situation takes place between parties of equal power or abilities. In many situations where, for example, a large company includes an ADR clause in its consumer contracts, the company is typically responsible for hiring the mediator or arbitrator used to settle disputes. If the company does not like the outcome provided by the ADR organization it has hired, the company can find a new organization.

These kinds of ADR situations have been criticized for not being fair to consumers because the hired mediator or arbitrator has a financial incentive to rule in the company’s favor, not the consumer’s. Because the consumer does not always have the ability to challenge the ADR contract clause or use the civil litigation process – and because the ADR provider might be biased against the consumer – these types of situations can be stacked in favor of the wealthier party in any ADR situation.

Alternative Dispute Resolution Disadvantages

6. It Is Voluntary

Let’s say you have a problem with a neighbor or business partner and wish to resolve it through ADR instead of going to court. While the benefits of ADR might seem clear to you, that doesn’t necessarily mean the other person or opposing party thinks the same. Many ADR processes are entirely voluntary, and you cannot force people to participate if they don’t want to.

Also, because it is voluntary, it’s possible that some people could try to misuse the process by, for example, participating in mediation sessions only to waste time or delay possible litigation.

Final Word

Alternative dispute resolution is not a single process, and it is not something that is available – or desirable – in every situation where you have a legal dispute or problem. Also, evaluating its positive and negative characteristics and determining whether it is right for you and your needs is not always easy to do.

Regardless of your individual circumstances, talking to an experienced attorney before making any decisions is a good idea. Even if you decide not to pursue litigation, or do not want to hire a lawyer to represent you, a good attorney can often provide you with the answers you need to make the right choice. Beyond that, only an experienced attorney can advise you through the process of taking your legal dispute to court, or give you advice about the options you have if you are not happy with the results of any ADR processes you use.

Have you gone through ADR? What was your experience like?


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Mark Theoharis is a former attorney who writes about the intersection of law and daily life, covering everything from crime to credit cards. He mostly writes for legal publishers, marketing agencies, and law firms, but gets the occasional chance to publish fiction. When he is not writing, Mark restores vintage and antique typewriters, though his editors have made it quite clear that typed submissions are strictly prohibited.