Alternative dispute resolution (ADR) is a term that refers to methods of resolving disputes other than traditional litigation. The primary advantages of alternative dispute resolution are: speed, cost and privacy.
ADER may also allow the parties to avoid a protracted, adversarial legal battle, which may be advantageous if the parties have to work with one another after the dispute is resolved. This can occur in intellectual property cases when an accused infringer decides to settle the case by taking a license from the party that owns the intellectual property rights at issue.
The three most popular forms of ADR are mediation, arbitration and early neutral evaluation.
Mediation is essentially assisted negotiations. The two parties will meet with a mediator who will try to facilitate a resolution to the dispute. The parties may meet with the mediator separately, in a joint session or in a combination of both.
Arbitration is essentially a mini-trial. Each side presents their evidence, and one or more arbitrators will render a decision. The decision may be binding or non-binding.
Early neutral evaluation is very similar to mediation. However, the primary goal in the process is for an evaluator to provide each party with an assessment of their case. This will allow them to decide whether it makes sense to proceed or to enter into settlement negotiations.
Many districts courts have rules that require the parties to engage in one or more alternative dispute-resolution methods at an early stage in the litigation.