Alternative dispute resolution
Alternative Dispute Resolution (ADR), refers to a way of solving disputes outside the courtroom. ADR involves neutral evaluation, negotiation, conciliation, mediation, and arbitration. While the two most common forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. It is the preeminent mode of dispute resolution. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution. Mediation is also an informal alternative and is carried out by mediators who are individuals trained in negotiations, who bring opposing parties together and attempt to work out a settlement or agreement that both parties accept or reject. Mediation is not binding and has become a significant method for resolving disputes between investors and their stock brokers.