Alternative dispute resolution (ADR) refers to a broad range of structured processes for dispute resolution, such as mediation, adjudication, and conciliation. All modes of ADR have, as a common factor, the involvement of an impartial third party to help parties in dispute to come to an agreement, without having to resort to court-based litigation. Although arbitration can be included as a type of ADR, it is equally often distinguished on the basis that the result arrived at through arbitration is, like a court order, legally binding on the parties to the arbitration; the same is not true of other ADR variants. Both arbitration and ADR are widely accepted by both the public and the courts as effective and beneficial forms of resolving disputes.
ADR mechanisms have several potential advantages to the parties, when compared to litigation:
Arbitration provides parties with a framework for resolving their dispute which results in a legally binding determination. Although often used in the context international commercial disputes, the arbitral process can be applied to a diverse range of areas and provides a legally enforceable alternative to litigation. In Ireland, arbitral proceedings are provided with a statutory basis under the Arbitration Act 2010, which incorporates current international best practice into Irish domestic law. There are a number of reasons why parties might choose arbitration as the means to settle their differences, including:
Efficiency. In arbitral proceedings, the parties can move at their own pace. Proceeding through the courts system can be extremely time-consuming, and thus not best suited to time sensitive disputes.
Control. In arbitral proceedings, the parties can agree in advance the arbitrator who will rule on the dispute). Similarly, the parties may agree the rules to be used in the arbitration and the location of the arbitration.
Privacy. The general rule is that justice is done in public. Arbitration offers parties a way to resolve their dispute in private, away from the public exposure of open court.