Alternative Dispute Resolution (ADR) refers to methods and processes of resolving claims without litigation, such as arbitration, mediation, and small claims procedures. ADR can be formal or informal and provides a method to avoid the expense and inefficiency of litigation. Read More...
ADR is widely used in the U.S., where empirical studies demonstrate that it is cheaper, faster, and often offers more compensation for the consumer. There are also well-established ADR procedures in many of the EU member states and in other countries around the world.
Arbitration is an effective dispute resolution process where an independent third party reviews the facts of a case and applies the appropriate resolution, resulting in the avoidance of costly and time-consuming courtroom litigation. However, arbitration is now under attack by plaintiffs’ lawyers, who see it as a barrier to the expansion of profitable class action lawsuits. Class action lawsuits often lead to plaintiff lawyers pocketing millions of dollars in fees, while those they represent receive little or nothing of significant value from the settlement.
For many, arbitration is the better way to go as it produces resolutions much faster than class actions and other types of court-based litigation, which often last years. Arbitration also results in more money for employees and leads to decreased costs of legal fees for both sides. Eliminating arbitration will not only lead to litigation costs steadily increasing, but the courts demanding assignments will increase, leaving millions of Americans with very limited opportunities for restitution.
Legislative measures to limit the use of arbitration have largely been unsuccessful. Multiple bills and amendments that would have banned arbitration have been proposed and blocked since the early-2000s. Due to the clear advantages of arbitration over litigation in any number of situations, research shows that most Americans prefer arbitration as it puts money into the hands of individuals seeking just compensation, instead of feeding our nation’s excessive litigation monster.