Generally, ADR is significantly less expensive than litigation. However, the cost of ADR can quickly increase as ADR providers tack on additional fees and hourly charges. It may seem like there is no option but to pay these extra expenses, but online ADR provides the parties with more options to control and reduce their costs.
Types of Fees
Most ADR providers charge a myriad of fees for using their services. The amount varies depending on the size of the claim and the provider. These fees include:
- Initial filing fee
- Additional filing fees for responses, motions, hearing room rentals, postponements, etc.
- Hourly charges for arbitrator/mediator compensation
ADR costs often rise because many ADR providers give arbitrators significant discretion in asking for additional documentation. This can allow arbitrators to bill for the extra time they put in above and beyond the hearing.
Other expenses typically associated with ADR include attorneys’ fees and travel (i.e., in-person hearings may require parties, witnesses and attorneys to travel). These costs may vary but can’t be eliminated with most ADR providers.
Complete Online ADR Solution
Online ADR can offer many advantages over traditional ADR. For instance, ARS’ Complete Online ADR (C-ODR) solution provides the parties with more flexibility in conducting their arbitration, including the ability to:
- Eliminate hearings. ARS provides an option for arbitrations to be decided on the contentions and evidence submitted with no formal hearing. In those situations, the only fee is the initial filing fee.
- Avoid in-person hearing travel. Where a hearing is requested by any party, the hearing may be conducted telephonically or by video-conference.
- Reduce hearing costs. Where a hearing is requested, there is an hourly fee associated with the hearing time and nothing else. ARS rules do not provide the arbitrators with the authority or ability to engage in ongoing and billable activities.
- Represent themselves. ARS does not require companies to be represented by counsel, which eliminates attorney fees for small businesses who may want to handle the matter themselves.
Parties considering ADR for their disputes should have a clear understanding of the costs and fees associated with the provider they are using. A provider should be completely transparent in its fee structure, giving parties the predictability and low cost they want. Read more about ARS’ fees or contact us for a consultation.