Arizona Adjuster Practice Exam

Why might parties choose alternative dispute resolution instead of litigation?

1. It guarantees a fair outcome

2. It is legally required in all cases

3. It usually saves time and money

4. It involves a jury trial

The correct answer is: It usually saves time and money

Parties often opt for alternative dispute resolution (ADR) because it typically saves time and money compared to traditional litigation. The ADR process, which can include methods such as mediation and arbitration, tends to be more streamlined, reducing the lengthy timelines associated with court cases. Court proceedings can be protracted due to scheduling conflicts, extensive discovery processes, and the possibility of appeals, which can prolong resolution for months or even years. In contrast, ADR can often lead to quicker settlements, allowing parties to resolve their disputes efficiently. Additionally, the cost associated with litigation—such as attorney fees, court fees, and the potential costs of a protracted trial—can be significantly higher than those incurred during ADR processes. By choosing ADR, parties can often circumvent some of these expenses, making it a more appealing option for many involved in a dispute. The other potential choices do not accurately reflect the dynamics of ADR. While fairness is an important goal, there is no absolute guarantee of a fair outcome in either ADR or litigation. There are also no legal mandates that require ADR in all cases; some disputes may still proceed to litigation if parties cannot agree on resolving their issues through alternative methods. Lastly, ADR typically does not involve a jury trial, which is a hallmark of litigation.