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What are the benefits of ADR in resolving business issues?

On Behalf of | Sep 3, 2021 | Uncategorized

Differences of opinion crop up frequently in a professional setting, not only within an organization but also between entities that stand to benefit from a future transactional relationship. Whether over a contract, employment, or shareholder issue, or in a real estate or regulatory compliance matter, it can be preferable for the parties in a dispute to find resolution outside of the courtroom.

For entities based in Chicago and operating in many other locations, this is particularly important where all sides wish to preserve a relationship once the matter is settled. The availability and increasingly common use of alternative dispute resolution (ADR) methods to resolve issues have given the practice a reputation for being a reliable, efficient and cost-effective way to successfully manage conflict.

What are the financial benefits to ADR?

One important factor any business will consider is how much it will cost to resolve a conflict. In a litigated business dispute, the discovery process is often unwieldy and lengthy, and the longer it continues, the greater the expense will be. The price of settlement may eventually be greater than the benefit, in fact. ADR offers a quick and efficient process that leaves out most discovery and motions.

Along with the fees associated with numerous motions and discovery, other expenses in a litigated matter include attorney billings and other court filings and appearances. As litigation is by nature contentious, the probability that both sides will become entrenched in their positions is high, meaning that the process will go on longer. Not only will it keep getting more expensive, but the dispute may also compromise a future business relationship.

Are there other advantages to ADR?

One great advantage to ADR is that the process provides confidentiality. ADR offers a screen from the public eye that will allow sensitive corporate information from becoming public knowledge. This is a valuable consideration for companies that wish to minimize future claims, particularly in the arena of employment or discrimination issues.

Whether it is preserving business relationships or resolving a contractual or employment issue, ADR offers an efficient, effective and private way to resolve conflict within an organization. While litigation can lead to an aggressive zero-sum stance, ADR is an avenue for both sides to present their needs and wishes in a format that will lead to a settlement that is mutually beneficial for all.

 

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