ADR can be a far less intrusive process than litigation. When you go to court, lawyers are determined that their client should win at any cost because not only is their client’s wishes at stake, but so are their own reputations. Consequently, the litigants can become quite aggressive in their approach and end up “airing out all their dirty laundry” so to speak, for the public to hear. With ADR, not only is it more amenable, but it is also attempted with the mindset of “win-win” for both parties. In litigation, you have one party who wins and the other who loses. There is usually no middle ground. When you are attempting to resolve a dispute where both parties aim to come out somewhat pleased or comfortable with the decision (at the very least), then your demeanour, your approach is automatically less aggressive, or defensive and it becomes more collaborative. Furthermore, ADR allows parties to preserve their relationships, which is imperative if the parties have entered into a long term relationship. Litigation can become contentious and thus, tends to burn bridges, whereas ADR can help build bridges or keep them intact.
Judges prefer parties to use a form of ADR to resolve their disputes because it then takes up less time of the courts. Judges have endless number of cases to decide, and if the parties are able to resolve the dispute amongst themselves, through the assistance of a third party, then that would free up their time to focus on the complex, more time-consuming cases where they are really needed. Judges are always trying to encourage the parties to use ADR as much as possible, even if the dispute is resolved right outside the courtroom, just before the parties are due to go into court. And this can happen, although the cost saving advantage is lost here, because if the parties and their lawyers agree to a resolution outside the courtroom prior to going in front of a judge, then the respective parties have already spent a huge amount of money on legal fees and it ends up making almost no difference to the parties from a cost perspective, whether they use ADR or litigation to resolve their dispute.
Which then brings me to the next advantage of ADR – cost savings. ADR can greatly reduce costs, although this is hugely dependent on when parties agree to use ADR – is it right at the outset of the dispute, halfway through the dispute, or at the tail end of the dispute? This all makes a huge difference to the cost element. Not only that, but the type of ADR method used can also have an impact on the cost. For example, two people negotiating with the assistance of a layman as a third party would be far cheaper than using formal arbitration or mediation where most likely, parties would need to engage an expert to obtain their opinion on the matter before the arbitrator could give their decision. Sometimes, parties may wish to have more than one arbitrator present at the meeting, and this can increase costs too. Nevertheless, ADR is most often, less costly than litigation.