Why Would Litigation be More Expensive?
Generally speaking, litigation uses formal procedures and rules of evidence to ensure that only reliable, probative, and relevant evidence reaches the judge or jury. This is important; a rights-based process that uses the power of the government to impose a decision on the losing party should only rely on well-tested information. Aside from the procedures to test the information, litigation is also a teaching process whereby parties must help the judge or jury learn about the underlying facts, relevant law, and the parties’ positions in order to render a decision. The testing of evidence and the education process in trial takes time, effort, and expense. While these procedures cost money, the rights of individuals need to be preserved.
How Does Mediation or Other Forms of Assisted Negotiation Save Money?
ADR can save money because the parties require less background education about a case than a judge, and they can use their own judgment as to whether they have sufficiently reliable information to settle their own case. It is very common to have little or no document discovery, depositions, audits, or other formal processes prior to a mediation. Instead, the parties ask each other for information during their joint sessions and have their documents readily available if needed. By simplifying and speeding the exchange of relevant information, the parties save procedural expenses. In fact, the earlier the parties start their ADR process, the more opportunity they have for saving procedural costs.