There are several forms of alternative dispute resolution, mediation, arbitration, negotiation, conciliation, mini-trial, fact-finding and utilizing a judicial referee. Arbitration and mediation are similar to where it is a form of negotiation and a neutral party settles the dispute. Negotiation is where the two parties negotiate to settle the dispute. A mini-trial is a shortened version of a traditional litigation trial. Fact-finding situations call for the parties to employ a third party to investigate the facts to come to a resolution.
Lastly, a judicial referee is much like a mini-trial but both parties reserve the right to appeal. Ninety percent of cases are resolved through alternative dispute resolution (Harms, 2011). The next several paragraphs will identify risks associated with traditional litigation and the advantages of the alternative dispute resolution in reducing those risks. A Formal Process In a traditional litigation the process is very structured. Usually a lawyer is needed to represent then the process will proceed through the judicial system.
A judge and jury will render an unpredictable ruling based on the law rather than justice.
An alternative dispute resolution is much more flexible. In the alternative dispute resolution parties can select a neutral decision maker with specific expertise pertaining to the dispute. The procedure and format also can be agreed upon by both parties. Full Disclosure The traditional litigation system is opened up to the media and public. The risk of proprietary confidential information from the organization can get out to the public and may hurt the organizations reputation.
Competitors can obtain the information and use it to their advantage.
Also others may become privy to the dispute and jump on the band wagon. The alternative dispute resolution is a private confidential process. The parties can specify that neither party will disclose details about the dispute or its resolution (American Management Association, 2011). Time-Consuming Each step of the traditional litigation can take so much time where it results in years before the judge and jury rule on a case. The answer phase is where the defendant provides an answer to the plaintiff can be lengthy.
The discovery part of the process is where each party engages in various activities to discover facts of the case from the other party and witnesses prior to trial can be exhausting and time consuming (Cheeseman, 2010). Of course the trial can drag on for years. The alternative dispute resolution processes have realistic options to resolve disputes expeditiously. Cost Traditional litigation can become very expensive. The lawyers are expensive and depending on the length and the investigative work behind the scenes it will only increase the cost.
Mediation, arbitrations and other forms of alternative dispute resolutions are not as pricey. The cost to the organization can affect the bottom-line. In addition with aspects of the disputes consuming much of the managers time, less time is spent doing their day-to-day duties. Reducing Risk Involved with Litigation Process There are steps managers can take to reduce the risk of litigation. Managers can ensure proper insurance is maintained and terms and conditions are understood among the workforce.
Code of ethics training should be given regularly to explain risk associated. Management must remain cognizant of the environment and rules and regulation of the organization. A risk analysis can be developed by using internal and external influences, which would cause potential lawsuits on the company and how those risks can be mitigated. Traditional litigation can be protracted, costly and vexatious. Unfortunate for organizations some individuals want to expose the company and want their day in court. The process cost can affect the bottom-line and disrupt the business.
With the alternative dispute resolution processes, it can be less expensive, confidential, less time-consuming and more informal. This way the company spends less time consumed with reactive litigations and more time doing what they do best.
American Management Association (AMA). (2011). What is ADR? Retrieved from http://wwwocc. treas. gov Cheeseman, H. R. (2010). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues (7th ed. ). Upper Saddle River, NJ: Prentice Hall. Harms, S. (April 26, 2011). Traditional Litigation vs. ADR. Retrieved from http://www. jdsupra. com