What is Alternative Dispute Resolution (ADR)? California Explained
Alternative Dispute Resolution (ADR) describes a range of legal options for resolving disagreements without going to court. In California, ADR is governed by specific state laws that encourage people to settle disputes quickly, efficiently, and privately. ADR includes processes like mediation, arbitration, and negotiation, and can often reduce costs and time compared to a traditional lawsuit (Cal. Civ. Code § 5925; Cal. Evid. Code §§ 1115–1129; Cal. Civ. Proc. Code §§ 1280–1294.2).
What Are the Main Types of ADR in California?
Mediation
Mediation is a process where you and the other party work with a neutral third party, called a mediator, to find a solution you both can agree on. The mediator does not decide the outcome—instead, he or she helps both sides talk things out. In California, everything discussed during mediation is confidential and cannot be used in court later (Cal. Evid. Code §§ 1115–1129). If you have a lawyer, he or she must inform you about these confidentiality protections (Cal. Evid. Code § 1129).
Arbitration
Arbitration is more formal than mediation but still happens outside of court. Instead of a judge, a neutral arbitrator listens to both sides and makes a decision. This decision can be binding (final) or non-binding, depending on your prior agreement. California law establishes clear rules and deadlines for arbitration—especially for paying fees (Cal. Civ. Proc. Code §§ 1280–1294.2, § 1281.98).
Negotiation
Negotiation means both sides try to work out a solution themselves, with or without lawyers. Often, negotiation is the first step before moving to mediation or arbitration. Many contracts in California require parties to try negotiation or another form of ADR before filing a lawsuit.
Why Might You Have to Use ADR in California?
California law sometimes requires you to try ADR before you can file a lawsuit. For example, many contracts—especially in real estate, business, and with homeowners associations—have clauses that require mediation or arbitration before a case goes to court (Cal. Civ. Code § 5925). Many courts also require parties to try mediation or a settlement conference before scheduling a trial.
How Does the Mediation Process Work?
Both sides agree to mediate, or the court orders it.
A mediator is chosen (sometimes from a court-approved list).
You attend the mediation session, where the mediator leads discussion.
Sometimes private meetings (caucuses) with the mediator are used to talk about issues confidentially.
If there’s agreement, it is written down and signed. Most mediation settlements are enforceable—ask about this when you sign.
All mediation communications are confidential and cannot be used in court if you do not settle (Cal. Evid. Code §§ 1115–1129).
What About Arbitration?
The process starts when both parties agree to arbitrate, either in a contract or after a dispute arises. In California:
An arbitrator is picked to hear the evidence and arguments.
The process can involve some evidence and witness testimony but is less formal than court.
The arbitrator issues a decision (award), which can usually be enforced in court.
There are new California statutes requiring both sides to pay arbitration fees promptly. Missing a deadline can cause you to lose the right to arbitrate and possibly face penalties (Cal. Civ. Proc. Code § 1281.98).
Advantages of ADR for Clients
Less Expensive and Faster: ADR usually costs less and is resolved faster than a lawsuit.
Privacy: Mediation and arbitrations are private, so your issues are kept confidential.
Control: You help shape the process and the outcome.
Relationships: ADR helps preserve personal, business, and community relationships.
Flexibility: Settlements and solutions can be more creative and better tailored to your needs.
Tips for Individuals and Businesses Considering ADR in California
Check your contracts before starting a lawsuit—there may be a clause requiring mediation or arbitration.
Understand that everything said in mediation is private and ask questions about confidentiality (Cal. Evid. Code §§ 1115–1129).
Be aware of important deadlines for paperwork and fees in arbitration—missing them can hurt your case (Cal. Civ. Proc. Code § 1281.98).
Explore court mediation and settlement programs, which might be required before trial.
Keep records of settlement efforts, including emails, mediation certificates, and offers.
If unsure about your options, your rights, or ADR processes, talk to your attorney or the court’s ADR office. If you have a lawyer, he or she can explain everything you need to know (Cal. Evid. Code § 1129).
Frequently Asked Questions
Q: Is mediation or arbitration required before suing in California?
A: Not always, but many contracts and laws require you to try ADR first, especially in business, employment, real estate, or HOA disputes (Cal. Civ. Code § 5925).
Q: Are mediation discussions private?
A: Yes. California law provides that mediation communications are confidential and cannot be used in court (Cal. Evid. Code §§ 1115–1129).
Q: What happens if someone does not pay arbitration fees on time?
A: Missing a payment deadline can result in losing your right to arbitrate and may allow the other party to take the case to court (Cal. Civ. Proc. Code § 1281.98).
Conclusion
ADR in California offers cost-effective, private, and flexible solutions for dispute resolution. Knowing the basics of mediation, arbitration, and negotiation—and understanding your rights and obligations under both contracts and state law—can help you make the best decision when resolving a legal conflict. If you are unsure whether ADR applies to your dispute, an attorney can explain your options in plain English. If you have a lawyer, he or she is required to keep you informed about your rights, especially regarding confidentiality and ADR alternatives (Cal. Evid. Code § 1129).
Key California Statutes Governing ADR
Cal. Civ. Code § 5925
Cal. Evid. Code § 1129
Cal. Civ. Proc. Code § 1281.98
Cal. Civ. Proc. Code §§ 1280–1294.2
