Traditional Litigation versus Alternative Dispute Resolution (ADR): Which Way to Go?

An important decision must be made, assuming you feel you have a strong case for your client: should you go forward with traditional lawsuit that is tried in a court or opt for a more informal process called alternative dispute resolution?
The popularity of ADR has grown steadily over the years with almost 90% of all cases resolved through some form of ADR before trial. Typically, advantages of ADR over trial includes such things as:

* Less formal and therefore less intimidating. * Quicker resolution. * Less expensive. * Heard by an arbitrator or mediator. * At the end, you get an opinion. * After binding ADR, the opinion can usually be filed with a court and turned into a judgment.

Trial, by comparison, provides for:

* A more formal process. * Slower process (rules of evidence must be followed, jury trials can slow the process significantly, etc.) * More expensive (the longer the trial the more the attorney fees). * Heard before a judge (often times my clients insist that the cases be heard and decided by a judge, someone who wears a robe). * At the end you get a judgment, in a collection case, this is significant. You need to be able to enforce it once it’s over. * Judgments are enforceable through the court system.

Possible advantages of a lawsuit over ADR

* Simple forms of ADR usually provide a cost savings over litigation. Remember, you pay your decision maker by the hour however. Even if the cost of ADR is split with the other side, that cost can add up quickly. For more formal ADR, you might still end up engaged in a protractive discovery and depositions that make litigation costly. For a larger case, arbitration by the American Arbitration Association rules may cost the same or even exceed the cost of standard litigation. * Mediators and arbitrators are usually free to decide cases without regard to case precedence, making the outcome of your case somewhat unpredictable. Even when they are wrong, you may not be able to appeal. * In litigation, the rules of discovery allow you to get certain documents, testimony and other evidence out of an unwilling opponent. Those rules may or may not apply in ADR, so you may be giving up an opportunity to find out what’s hidden in your opponent’s files, and you may not know what your opponent is going to offer as evidence until you actually get to the hearing. * If the debtor has a counterclaim, it may be possible for the debtor to force you to litigate that counterclaim in court even if you have a binding contractual provision for arbitration of your own claims against the debtor. If you’re going to end up in court anyway, it is usually cheaper to resolve all claims in a single lawsuit. * If you chose non binding ADR, the final award is not enforceable as a judgment, and both sides may find the process is an expensive waste of time. * If your debtor has not agreed to ADR by contract, and won’t agree to submit your dispute to ADR, you must proceed with a lawsuit and a form of ADR may result as a result of the litigation process.

Collection Cases – If you have an adequate remedy through the court system, the debtor may have assets you can take as part of the judgment enforcement process through a sheriff or through garnishment. A claim and delivery is a situation where you would want to go to court with a standard litigation process and not through ADR. Part of claim and delivery allows you to gain possession of the secured property pending the final outcome of the case.

* Where the chances of winning the case are good, it’s a clear cut promissory note or other simple collection matter, where the documentation is adequate and you have good witnesses or where you anticipate getting a quick default judgment, litigation is the way to go. You can’t mediate or arbitrate with someone who