Alternative Dispute Resolution vs. Litigation: White Paper
When business disputes arise, resolution depends upon the nature of the dispute and the resolution method used. A typical business dispute would be a breach of contract; failing to fulfill any or all portions of a contract without legal justification ("Legal Dictionary", n.d.). When a breach of contract occurs without resolution, two types of resolution that the business parties can choose are Alternative Dispute Resolution or traditional legal action.
The least expensive and least time consuming methods of conflict resolution are Alternate Dispute Resolutions (ADR). ADR are methods of solving conflict between parties without litigation. A business dispute, such as a breach of contract can be settled through ADR or in the more expensive and time consuming state court systems. The methods of ADR, as presented by Cheeseman (2012), that would be the most appropriate because of their speed in resolution for a breach of contract would be (Chapter 3):
• Negotiation occurs when parties try to reach a voluntary settlement until an agreement is made; can occur at any point in a trial with or without attorney input.
• Arbitration occurs when a neutral third party listens to testimony and evidence to decide either a binding or non-binding ruling on the case.
• Mediation is using a neutral third party to listen to both parties and assist in a resolution. The mediator does not make judgment or issue an award.
When the use of ADR does not solve conflict, then the litigation process is the option that businesses will use. Litigation is the process of bringing about a lawsuit in order to resolve conflict. The state court system would have jurisdiction over a legal breach of contract. The state court is the organization of trial and appellate courts that have jurisdiction over violations of state laws ("Project Legal Glossary", n.d.) The nature of the contract in dispute will dictate which avenue of...