Alternative Dispute Resolution
How frustrating! You buy a product and it breaks. You try to return it or have the company fix it, but don’t succeed. You talk with the salesperson, speak with the manager, and write letters to the company, and still you’re not satisfied with the company’s response.
Maybe it’s time to try an on-line alternative dispute resolution ("ADR") program – an option where a neutral third party assists in finding a solution. Dispute resolution programs can be quicker, cheaper, and less stressful than going to court. And with online ADR, you can resolve the entire dispute online and at a minimal cost.
Sometimes, when you buy certain products or services, the terms specify that you must use ADR before going to court, or that you waive your right to go to court. Before making a purchase, check the terms and conditions of the sale. Then, check with your local consumer protection agency to see if "mandatory" or "binding" ADR clauses are legal in your country. If you do not want to give up your immediate right to go to court, consider doing business elsewhere.
What types of ADR are available to you?
Read the terms and conditions of your purchase. Some merchants specify that only one particular form of ADR will be used if there is a dispute.
If the terms and conditions of your purchase do not limit your ADR options, you may be able to initiate the ADR proceeding yourself. Contact and compare several ADR programs to find the one that best suits your needs.
Popular types of ADR include mediation, arbitration, and automated negotiation.
- In mediation, a neutral third party—called a mediator—helps you and the other party try to resolve the problem through facilitated dialogue. However, it’s up to you and the party to reach an agreement. You will need to be actively involved by proposing compromises and finding solutions.
- Arbitration is less formal than court, though you and the other party may participate in hearings, present evidence, or call and question each other’s witnesses. These hearings may occur online, either through a web-conferencing program, or just through written submissions. Unlike mediation, an arbitrator or panel makes a decision or award once you’ve presented your case. The decision may be legally binding.
- Automated negotiation is a computerized process that allows you to settle disputes over monetary amounts, typically through a blind bidding system. Parties enter successive bids in an attempt to reach an agreement, and the process ends when the bids become close enough to one another. It is important to read the terms and conditions of an automated negotiation because the outcome generated by the computer can be a legally binding contract.
What questions should you ask before choosing a particular form of ADR?
Before choosing a program, you should ask the following questions:
- Have you tried to resolve the program directly with the business? Usually, the best first step is to contact the merchant directly. Businesses often will resolve your complaint quickly and efficiently.
- What remedy would satisfy you? Clearly identify what solution would be acceptable to you. Remember to be flexible. You may need to compromise.
- Does the provider adhere to a code of conduct or guidelines? An ADR provider may refer to a set of guidelines or a code of conduct. Usually this means that the ADR has voluntarily agreed to respect certain rules. Check the website of the ADR provider for details.
- What are the costs of the ADR program? Some programs are free. Others charge a flat fee or a rate based on your ability to pay.
- Can you go through the process in your own language? Ask whether you can use your own language during the process. Sometimes translation may be available. If it is, you should ask about the cost and availability of a translator.
- What is required and how long will it take? Read the specifics of the program to ensure you have the technology and time to comply with the program. Most ADR programs should be faster than a court proceeding. Depending on the form of ADR and the specific program you choose, the processes may range from exchanging emails to all parties being “present” through Web cams.
- How confidential is the program? Find out if the program guarantees confidentiality. Mediation generally is confidential; arbitration sometimes is. If confidentiality is important to you, make sure you get the specifics before committing to the program.
- Can I help select the mediator or arbitrator? Many programs offer lists of neutral third parties from which to choose. If this is important to you, find out how the mediator is selected.
- How neutral is the program? To get a sense of neutrality, ask who pays for it and whether it is administered by an independent agency.
- Are you willing to be bound by the outcome? Mediation generally is non-binding; arbitration may be binding on the company, both parties, or neither. If the outcome is binding, you will not be able to sue the company in court even if you are unhappy with the outcome. In some countries, consumers are not allowed to give up their right to go to court.
- Does the provider have a privacy statement? Consider whether the ADR provider has a privacy statement or otherwise indicates if and how your personal information will be used.
- Do you suspect fraud or some other unlawful conduct? If so, file a complaint through the econsumer.gov complaint form, and contact your national or local consumer protection or data protection authority.