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Basics of ADR

Timothy R. Hughes, Esq.
Hughes & Associates, P.L.L.C.

ADR stands for “alternative dispute resolution.”  The two basic forms of ADR are arbitration and mediation.  These dispute resolution mechanisms were created as an alternative to traditional litigation in court.  Understanding the advantages and disadvantages of ADR are important to all people in the Construction industry in general and design professionals in particular. 

Mediation

Mediation involves an attempt by the parties to discuss resolution of a dispute outside of court.  Mediation is entirely voluntary in that unless the parties mutually agree to resolve the dispute, no resolution happens.  Mediation generally involves retention of an independent third party to act as mediator.

In almost all cases, I strongly support using mediation to settle cases.  I particularly support attempting mediation as early as possible in a case to avoid potentially unnecessary legal fees and expenses.  I would note that, in the words of one very well respected mediator, “A good mediation results in a settlement that nobody likes.”  This is a good fact to understand prior to coming to the mediation table.

 Arbitration

Arbitration involves trying a case before an arbitrator.  Arbitration is similar to a court case in that the case is actually tried and the arbitrator issues a finding that is legally binding upon the parties.  In concept, arbitration is geared to streamlining the discovery process and trial process to save time, legal expenses and costs.

Arbitration comes with its drawbacks.  The streamlined discovery process can make arbitration riskier.  It may be more difficult to see all the cards in the opponent’s hand prior to trying the case.  Arbitration tends to result in almost anything coming in as evidence.  Evidence that would clearly be excluded in court routinely is admitted in arbitration.  This may be a plus or a minus depending on the evidence in your specific case.

Arbitrator tends to ignore legal defenses such a statute of limitations or statute of repose.  Given Virginia law as to design professionals, this can be a significant drawback for design professionals.  Arbitration permits virtually no appellate review.  Again, as with evidence in arbitration, this can be a good thing or a bad thing depending on the result.  Finally, arbitrators are often known for “splitting the baby” and issuing an arbitrary result rather than making a tough call.

Conclusion

The expensive and time consuming nature of litigation may make DAR an attractive option for resolution of a dispute.  Mediation is generally a very attractive option.  Arbitration comes with both benefits and draw backs.  It makes sense to carefully consider your options rather than blindly signing an agreement in contains ADR provision.