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What is Informal Dispute Resolution?

By Daphne Mallory
Updated Feb 20, 2024
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Informal dispute resolution is a process that litigants and prospective litigants can engage in to avoid legal proceedings. The parties to a conflict meet with a third party who facilitates discussions and negotiations so that the parties can reach a resolution, or they negotiate alone. This type of resolution is often referred to as alternative dispute resolution, and it often costs less to resolve conflict this way than through a civil lawsuit. Some courts and regional statutes mandate that the parties go through an informal dispute resolution process prior to trial in order to reach a settlement. Court systems may have an office dedicated to alternative dispute resolution, and if not the parties often have to seek a private third party.

Individuals often choose informational dispute resolution because the process is much faster than legal proceedings. A court case might take more than a year, whereas alternative dispute resolution may take a month or two. The other reason why it’s so popular is that the parties feel as if they have more control over the outcome. Rather than leave it to jurors to decide who is credible or what evidence is reasonable, the parties often have a better chance at getting the outcome they want when they avoid legal proceedings. A written agreement is often made at the close of an informational dispute resolution and can be submitted to a court to make it a binding order upon a judge’s approval.

Mediation is a common form of informal dispute resolution. The mediator does not make the decision for the parties or decide on the case. The job of the mediator is often to identify what both sides want and to help them reach a win-win solution. For example, in an auto dealership dispute, the dealership representative and the consumer could work with a mediator to resolve the financial loss that both sides suffered. The consumer may or may not have filed a lawsuit, and some jurisdictions require that the parties attend mediation in those cases.

When parties don’t require the assistance of an unbiased third party, they often are able to reach an agreement through negotiations. Reaching an agreement this way is a form of informal dispute resolution, because the parties are able to resolve their conflict outside of the court system. Some judges during trial will encourage the parties to meet and try to negotiate a settlement, and in some cases the parties are able to do that. In other cases, individuals have avoided legal proceedings altogether by negotiating an agreement that benefits all of those involved.

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