The most common types of ADR are mediation and arbitration. Mediation involves using an independent third-party to help reach a mutually acceptable outcome, while arbitration has that third-party consider all the facts and make a legally-binding decision to resolve the dispute.
ADR is not compulsory, but it could be in future. Any decisions made through mediation are not legally binding, but where arbitration is used, the decisions are final and legally binding.
ADR is designed to settle disputes between companies, or between a company and a customer, without resorting to litigation. Where arbitration is used, the eventual decisions are legally binding, meaning the dispute is settled once-and-for-all, and failure to comply could have consequences.
The processes of ADR are usually less costly and more expeditious, taking collaborative approaches to help both parties understand one another positions and reach conciliation. ADR can even enable parties to come to more creative solutions which could not be legally imposed by a court.
