Introduction

Because of the significant and rising costs involved in civil litigation, many business organizations are turning increasingly to Alternative Dispute Resolution (“ADR”) as the preferred way of settling conflicts that arise either from contractual agreements or in operations. ADR has become popular because of its focus on fair and reasonable outcomes that are arrived at expeditiously, at less cost than through litigation and in a more cordial, less confrontational atmosphere. Best practice legal departments in well-managed business organizations understand the economic and non-economic benefits of effective conflict management through ADR. And while hospitality may have been slower to embrace the concept than other industries, it is surely now time to bring this important process to bear on the growing burden of litigation on the industry.

Effective risk management calls for the resolution of issues before they become full-fledged disputes. The International Society of Hospitality Consultants (ISHC) encourages organizations with stakes in the hospitality sector to use ADR. An ADR plan that provides for issue review, mediation and arbitration brings not only financial and economic benefits but also intangible ones including the preservation and improvement of important business relationships.

In order to benefit from an ADR plan, organizations need to agree upon the forum, the procedures to be used and the so-called “providers” who will administer the process before entering into contracts. But even if such a plan is not memorialized in a contract, this should not prevent parties to a relationship from agreeing to a defined ADR process in order to resolve a dispute.

Alternative approaches to ADR may be viewed from the perspective of the increasing use of time and commitment to the outcome, from the preemptive (Issue Review Boards), to the facilitated (mediation) and on to the final and binding (arbitration). There are thus three principal approaches to ADR:

• The Issue Review Board – (an informal forum that recommends non-binding solutions to issues before they become disputes).

• Mediation – (a facilitative or evaluative process to resolve disputes with agreement reached by the parties and enforceable through arbitration or litigation).

• Arbitration – (the final, binding and enforceable resolution of disputes, although, occasionally arbitration may be defined as non-binding, with the prior agreement of the parties).

		Introduction		ISHC's Role in Hospitality ADR