Arizona Adjuster Practice Exam

What is typically NOT a characteristic of alternative dispute resolution?

1. It is less formal than litigation

2. It can lead to quicker resolutions

3. It guarantees a legally binding outcome

4. It encourages collaboration between parties

The correct answer is: It guarantees a legally binding outcome

The characteristic that is typically not associated with alternative dispute resolution is that it guarantees a legally binding outcome. In alternative dispute resolution (ADR), parties often have the option to pursue non-binding arbitration or mediation, where the decisions made may not necessarily be enforceable unless both parties agree to them. This flexibility is a significant aspect of ADR, allowing for more amicable solutions that may not involve the same level of formality or rigidity found in traditional litigation. On the other hand, options like being less formal, leading to quicker resolutions, and encouraging collaboration are indeed hallmarks of ADR. It is specifically designed to provide a more relaxed environment for resolving disputes, which often results in faster outcomes and a cooperative atmosphere that seeks to address the interests of all involved.