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Alternative dispute resolution (ADR) is a process designed to resolve disputes without going to court. The two most common types of ADR are mediation and arbitration.
Problems happen, even to the most well-meaning of non-profits. Problems with vendors, contractors, employees, clients, board members, donors… you get the idea. Sometimes an intermediary is necessary to help solve issues. A lawyer or court is not always necessary. Here are two popular alternatives: MediationMediation is a type of Alternative Dispute Resolution in which a neutral person (called the mediator) helps the people who have a dispute talk to each other. The mediator makes no binding decisions and the individuals themselves ultimately determine whether the process results in a resolution of the dispute. The mediator is only there to help the disputing parties communicate with each other in the hope that they can find a way to work out their disagreements. Mediation generally has the following traits:
ArbitrationArbitration is a type of Alternative Dispute Resolution in which a neutral person (called the arbitrator) listens to all sides of a dispute and then becomes the judge and jury. The decision of an arbitrator is usually final. The typical traits of arbitration are:
Mandatory ArbitrationMany types of contracts contain what are usually called “mandatory arbitration clauses”. These clauses state that if either party to the agreement has a complaint, then that dispute be resolved through arbitration. Mandatory arbitration clauses often also include provisions:
There is little a person can do about a mandatory arbitration clause – short of refusing to sign a contract. Courts generally refuse to overturn a mandatory arbitration clause, but exceptions are sometimes made if the clause seems to be “unconscionable”. A judge might find a clause unconscionable if:
Find out more about the advantages and disadvantages of ADR. Need an arbitrator or mediator? Look at options at the American Arbitration Association’s website.
The copyright of the article Mediation and Arbitration in Non-Profit Management is owned by Estela Kennen. Permission to republish Mediation and Arbitration in print or online must be granted by the author in writing.
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