What Is Alternative Dispute Resolution? (And Why Does the Association Use It?)
Community associations and their members dis
agree from time to time. When they do, the association board attempts to resolve problems by using a three-step, a problem-solving approach called alternative dispute resolution (ADR). It’s an effective and money-saving alternative to the traditional justice system; the three steps are negotiation, mediation, and arbitration.
In negotiation, we identify the issues, educate each other about our needs and interests, brainstorm settlement options and hammer out our final terms. It’s an informal, cooperative process in which we can focus objectively on our interests.
Because negotiation is informal, it requires the least amount of time and expense. The board believes that when reasonable people engage in honest negotiation, this is the only step needed. But, in those unfortunate situations where we can’t find a solution, we take the second step—mediation.
In mediation, a neutral, trained mediator resolves the conflict between two or more parties. Mediation is collaborative, but it does require a little more time and money. It tends to preserve relationships because the people involved create their own settlement agreements, which are not legally binding unless everyone agrees to formalize them. If mediation doesn’t work, there’s still one more step to take before we all head off to court—arbitration.
Arbitration is a formal process that can require considerable time and money—but usually less than lawsuits, which motivates the board to resolve disputes before we reach this final step.
Arbitrators are usually highly trained legal experts who render final, legal decisions based on evidence and testimony. Only under limited circumstances can the arbitrator’s decision be appealed to the courts.
The board subscribes to ADR to conserve your resources. Clearly, the more steps we take, the more we have to pay. Fees for negotiators, mediators or arbitrators would be paid out of your pocket—in the form of assessments—and we’d rather avoid that whenever possible.