Business disputes may arise for several different reasons including breach of contract, shareholder disagreement, fraud, discrimination and premises liability, to name a few. Regardless of the reason for the dispute, it is not uncommon for the issue to go before a judge — at least, it was not unusual until Texas lawmakers passed the Alternative Dispute Resolution Act in 1987.

According to the Texas Judicial Branch, the purpose of the Alternative Dispute Resolution Act is to encourage the peaceable resolution of disputes and the early settlements of pending litigation via voluntary efforts. Though the ADR Act in no way makes ADR mandatory, it does grant judges the right to sua sponte or, in plain English, to refer a pending case to alternative dispute resolution.

ADR offers several potential benefits to both parties. For one, it encourages the increased participation of both parties in the legal process. This increased participation often results in increased satisfaction with the outcomes of cases.

Two, ADR offers both parties access to immediate, fair and appropriate means to resolve a dispute. Three, ADR reduces the need for the court’s involvement, which saves the court and both parties the time and money they would have spent on litigation. Finally, ADR helps keeps the courts’ docket light and to reserve space for more pressing matters.

Mediators oversee disputes that the courts refer to ADR. Each mediator must have completed at least 40 hours of alternative dispute resolution training.

You should not use this article as legal advice. It is for your educational purposes only.