Man is a social animal. He interacts with his kin on a daily basis. These interactions can be on a personal or business level. Everyone thinks differently, and when interacting or communicating, disputes may arise between people, whether on a personal level or a business level. 

Settling disputes is necessary to attain peace and harmony among individuals or firms. Courts offer to settle disputes according to the law. However, parties can also solve their disputes without the services of a court and avoid costly litigations. This alternative method of settling disputes is called Alternative Dispute Resolution or ADR for short.

Definition of Alternative Dispute Resolution

Definition of Alternative Dispute Resolution (ADR) is the dispute settling procedure that is less costly than litigation. This procedure is used these days very commonly due to its immediate results. Some common disputes settled through Alternative Dispute Resolution are divorce cases, labor disputes, property disputes, injury claims, etc. 

The popularity of Alternative Dispute Resolution permits parties to understand each others’ viewpoints in a compassionate way, keeping the settlement humane. Both parties can collaborate and come to a mutual decision that could benefit both. Alternative Dispute Resolution allows parties to come up with creative solutions that a court might not deem permissible by law. 

For the authentication of the ADR, parties can always ask public courts to review the ADR settlement’s validity. Both parties are liable to abide by a mutually consented resolution. 

Specifications of Alternative Dispute Resolution

There are specific terms that would be beneficial for you to know before indulging in Alternative Dispute Resolution. They are:


Arbitration is a process that resembles an informal trial. In this process, an impartial third party is involved who acts as a judge. Both parties have to give their consent on the authenticity of the third party and it is important that both sides trust the third party not to favour one over another. The decision made by the impartial third party can be binding or non-binding. 


The impartial third party involved and given the authority to make a decision is called the arbitrator. 


An informal meeting where both parties along with the arbitrator are present. Both sides present their arguments and evidence for the arbitrator to decide upon.


A person elected by both parties to help them reach a solution agreeable to both. Mediator’s decision is a non-binding decision.


A process where both parties try to understand each other’s viewpoint in the presence of a mediator to reach a mutually agreed resolution. It is usually a non-binding settlement. 


A decision after the hearing which both parties must abide by is a binding decision. It is not important that the settlement is in their favour or not, they cannot ignore it.


A settlement reached at the hearing which one or both parties may not abide by anf ignore is called a Non-Binding decision. 

Importance of Alternative Dispute Resolution

The Early 1980s was the time when Alternative Dispute Resolution gained momentum in the corporate world. People wanted to find alternate methods to resolve their conflicts, which were as effective as litigation but did not have their cons. There was a drastic increase in the number of cases settled through Alternative Dispute Resolution, and the methods of arbitration and mediation were adopted widely by communities around America. 

Statistics show that as Alternative Dispute Resolution was increasingly adopted by people to settle their disputes, there has been a 76% decrease in the number of cases turning up at the civil court through litigation. This also proves that people tend to avoid the court. They search for alternative means due to the crumbling justice administration these days. Democracy tends to delay justice and people try to find alternative methods for immediate results. Here are some reasons which highlight the importance of Alternative Dispute Resolution.

Avoidance of Pending Cases

The judicial system is overworked with more cases than they can handle. Moreover, there are innumerable pending cases in the courts today. Many people turn to Alternative Dispute Resolution to avoid pending cases.

Avoidance of Repeated Adjournments

Courts tend to adjourn cases for further hearings which can lead to chaos and annoyance at unsettled issues. Cases get prolonged due to repeated adjournments. Alternative Dispute Resolution solves this problem and people get instant resolutions.

Concentration of Litigation

Alternative Dispute Resolution is pursued to avoid the concentration of litigation cases on a particular advocate that might affect his or her functioning. 

Privacy and Confidentiality

Parties looking for privacy usually opt for Alternative Dispute Resolution. The proceedings are strictly confidential and not open to the public eye like litigation.

Control and Flexibility

Alternative Dispute Resolution gives more control to the parties over rules and regulations, choosing the arbitrator, time limitations, etc. They can schedule hearing at their convenience rather than at the convenience of the court.