Alternative Dispute Resolution (ADR) has become widely popular due to the inundated national court systems and high cost of litigation. It is especially popular in international disputes when the parties do not wish to be in domestic courts. With the growth of e-commerce transactions, Online Dispute Resolution (ODR) is becoming an alternative method to resolve disputes.
What is traditional ADR and how is ODR different?
Traditional ADR includes arbitration, mediation, and negotiation. Arbitration involves a third- party arbiter who sets forth a binding award. The arbitrating parties select a set of rules, which will control the arbitration procedure. Mediation is conducted by a third-party facilitator, who helps the parties come to a mutual agreement without making binding judgment. Mediators can be more or less involved in the discussion and decision-making process. Negotiation may involve legal representation, but there is usually no third party involved in the process. ADR is known for being more efficient, neutral, cost effective, and confidential than litigation, but these virtues can depend on the cost of legal counsel, complexity, and whether there are international parties.