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Austin TX Business Law Blog

Thursday, June 25, 2020

What Are the Benefits of Alternative Dispute Resolution?

Not all business disputes need to head straight to the courtroom for things to be resolved. In fact, there are a variety of other ways to resolve points of contention in your business dealings without having a full-blown trial. Parties to a business dispute may employ alternative dispute resolution (ADR) techniques in lieu of litigation to reach a mutually acceptable agreement. ADR methods include things such as mediation, negotiation, and arbitration. ADR has a variety of benefits to offer those who choose to forego litigation.

What are the Benefits of Alternative Dispute Resolution?

When businesses utilize ADR to resolve disputes, they are likely to save a significant amount of time and money. Litigation is costly. Court fees and costs quickly add up. The delays in the court system can be many and they can be frustrating. In business, time and money are two of the most valuable resources. ADR gives you back both. Parties do not need to be at the mercy of court scheduling when employing ADR. This alone will save a substantial amount of time and headaches.

The flexibility you gain when you forego litigation in favor of ADR is substantial. The parties are in power of the process. You are not at the mercy of the court. You are empowered to choose time and meeting places. You are not confined to normal business hours which means you do not have to interrupt the course of your business day in order to go to a court hearing.

Parties to ADR are not just empowered in the flexibility of scheduling when the dispute resolution will take place, but they are given vast amounts of control over the process and how it is resolved. Both parties have a chance to present their side of the story and are able to do so in a much less formal way. The parties have more input in the outcome of the dispute resolution. Having more control over the process will often empower the parties to feel more invested in reaching an agreement. It also fosters a deeper commitment in the agreement that is reached which increases the chances of compliance and reduction of further problems.

ADR also allows parties to forego the contentious nature of litigation. In litigation, it often feels as though the parties are pitted against each other and one will need to win out over the other. In ADR, the parties present each side to the story and work together to find mutually beneficial territory. This means that there is more of a likelihood that any existing goodwill between the parties is more likely to be preserved. This is especially beneficial when the parties will have or want to have a continuing business relationship.

Another benefit of ADR is that it is confidential. It stays between the parties involved. Litigation, on the other hand, becomes a matter of public record. Proceedings are open to the public. For multiple reasons, it is often best for businesses to keep their disputes private. Putting problems on display to the public can easily tarnish reputations in irreparable ways.

Business Law Attorney

At The Kumar Law Firm, we help businesses working through conflict. We are well versed in multiple ADR methods and are here to see you reap the many benefits that can come from finding common ground outside of a courtroom. Contact us today.


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