ADR is an efficient method of settling disputes.

However, some companies

underestimate its effectiveness that ADR is often applied only in less important disputes treating
its nature as a method of choice and not an alternative.

ADR is generally designed as a way of settling disputes at a lower cost. Chevron, for
example, saved over $675,000 by applying an ADR-based mediation to settle a single dispute.
This shows huge difference when companies should resort to ADR rather than costly litigation.
Not only does ADR saves money but it also saves time spent of big numbers of disputes faced by
companies. Toyota’s US Subsidiary, for example, made a huge decline of cases from 178 cases
in 1985 to only 3 in 1992. With its efficiency in saving time and money, ADR is most effective
in saving relationships between opponents.

However, ADR is not always applied as it should be. Many companies treat ADR as a
form of litigation. Such improper application renders the resolution like any other mode of
settling dispute where costs and time spent made no difference. Contending parties reverts to the
habits of litigation.They pursue discovery, file motions, and rely excessively on expert witnesses.

The article specifically points out why ADR does not work in some cases. One of which
is that ADR is not adopted wholeheartedly to effectively settle the dispute. One’s level of
commitment to such resolution is most essential to its successful application. Another is that it is
often applied as the traditional mode of settling dispute which, in its general sense, affects its
overall efficiency. Though it may seem that the method works on settling dispute, without
commitment, these issues will not be totally extinguished but will just be laid to rest only to
wake up one with more disputes behind. It is similar when the method is not applied the way it
was supposed to be applied. One wrong move will affect the outcome of the entire procedure.

The article also illustrated an ADR that works. It showed for an example NCR’s method
of settling disagreements should one arise. First, the company established its commitment to
ADR which is most important. Then it ensures that the method is really an arbitration and not a
litigation-in-disguise. Finally, after its successful application, the company continuously
monitors and improve the resolution for its long-term time, money, and relationship-saving
outcome.

ADR, as a fact, renders great help in settling dispute. With commitment to the process
and proper application, ADR-based methods will surely cut costs and save time in the long run.
As a result, lots of companies will surely benefit from it.