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Mediation, Arbitration, Negotiation: What are they?

When facing a business dispute, you may want to consider an alternative dispute resolution (ADR). This type of resolution includes mediation, arbitration and negotiation. All ADR methods avoid court litigation.

Avoiding litigation by ADR methods may be beneficial for companies that want to save time and money. Alternative dispute resolution meetings are informal and privately held. Businesses may be able to avoid public scrutiny through ADR.

All three methods of ADR have differences and should be chosen based on the dispute.

Mediation

  • Involves a neutral third-party intermediary
  • Intermediary helps facilitate discussion but does not resolve the dispute
  • Both parties come to an agreement on their own

Arbitration

  • Involves a panel of neutral third-party intermediaries or one intermediary chosen by each party and a third, neutral intermediary
  • These intermediaries give opinions
  • The intermediaries may judge the evidence and vote on a resolution

Negation

  • May or may not involve a third-party
  • The two parties will discuss possible solutions
  • One or both parties may try to persuade the other party, instead of coming to a mutual agreement

Mediation, arbitration and negotiation are all effective ADR strategies, but they may not be effective for all disputes.

If any of these alternative dispute resolutions do not settle the dispute, the parties may go to court. If litigation occurs, each party will need an attorney to represent their case.

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