What is alternative dispute resolution?

Alternative dispute resolution (ADR) is defined as a method of resolving disputes outside of the traditional courtroom setting. This approach encompasses various techniques that allow parties to settle their disagreements without resorting to litigation. The most common forms of ADR include mediation and arbitration, which are designed to be more flexible, cost-effective, and efficient compared to the court system.

In the context of arbitration, for instance, a neutral third party reviews the case and makes a binding decision, while mediation involves a facilitator who helps both parties negotiate a mutually acceptable agreement. The overall goal of ADR is to promote a collaborative atmosphere for resolution, which can often preserve relationships that might be damaged by the adversarial nature of court proceedings. This distinction highlights why the correct option emphasizes the role of ADR in facilitating dispute resolution outside of formal legal actions taken in court.