The majority of legal claims arising from business disputes do not reach
a courtroom. That is because there are other options available that are
less expensive than filing a lawsuit and going to trial, namely Alternative
Dispute Resolution or ADR.
ADR refers to a series of methods used by parties to resolve their legal
disputes outside of court.
Generally, people choose ADR over a formal court trial because they are
less time-consuming and more cost effective, which therefore makes them
a favorable alternative to individuals and entities who are engaged in
Methods of ADR include:
- Private Judge
- Pre-trial Settlement Conference
In Illinois, the two most common methods of ADR are arbitration and mediation.
Arbitration is a process where an arbitrator (a neutral third party), or
an arbitration panel, considers the arguments and facts presented by both
parties. Though arbitration is not as formal as a trial, there are procedures
that are followed, and the arbitrator’s decision is usually binding.
Mediation also involves an impartial third party, however, this method
is more flexible. The confidential process is informal, non-adversarial
With mediation, the mediator does not render a decision, nor do they make
a finding of fault or liability. Rather, he or she helps guide the parties
to a resolution and helps them explore their settlement options.
Why choose ADR over litigation?
Sometimes the reasons for choosing arbitration or mediation are cost-related
or because of the need to preserve a business relationship. While mediation
can be completed in one or two sessions, some parties will proceed to
litigation if the dispute failed to resolve.
Arbitration is similar to a trial, except there is no judge or jury and
the hearing is conducted in private. Since this procedure is simpler,
faster, and more cost-effective than a court trial, it’s an attractive
What are the chances that your case will be settled out of court? Relatively
high, however, without knowing the facts we cannot give a definitive answer.
We will need to review the merits of the case before we can determine
whether your dispute would be better served by ADR or litigation.
Contact Rifkind Patrick LLC to schedule a free consultation with a Chicago
business law attorney.