Mediation and Arbitration in Georgia: How Alternative Dispute Resolution Can Save Time and Money

Litigation is costly, time-consuming, and public. For many Georgia businesses, Alternative Dispute Resolution (ADR)—specifically mediation or arbitration—offers a faster and more efficient path to resolve legal disputes.

Whether you're already in a dispute or looking to avoid one, understanding ADR can help you choose the right forum and protect your interests while saving time and money.

What Is Alternative Dispute Resolution?

ADR refers to methods of resolving disputes outside of a traditional courtroom. The most common ADR options in Georgia are:

• Mediation – A facilitated negotiation led by a neutral third-party mediator

• Arbitration – A private hearing where a neutral arbitrator (or panel) issues a binding or non-binding decision

ADR can be voluntary or court-ordered, and it is often written into contracts before disputes even arise.

When Is Mediation a Good Option?

Mediation is non-binding, which means no one can force a settlement. But it’s highly effective in business disputes where relationships matter, or where both parties want control over the outcome.

Common scenarios for mediation include:

• Contract disputes between vendors or partners

• IP licensing disagreements

• Employment-related claims

• Commercial lease or franchise disputes

Mediators do not decide the case—they help the parties explore settlement and often suggest practical compromises. The process is confidential and informal.

Benefits of Mediation

• Speed – Often resolved in a single day

• Cost-effective – Avoids prolonged discovery and trial preparation

• Flexible – Parties control the resolution terms

• Preserves relationships – Useful in ongoing business dealings

When to Use Arbitration in Georgia

Unlike mediation, arbitration results in a decision by the arbitrator—similar to a judge—who hears evidence and arguments. Depending on the contract or agreement between parties, arbitration can be binding or non-binding.

Arbitration is common in:

• Commercial contracts

• Construction disputes

• Franchise agreements

• IP and tech licensing matters

Many Georgia businesses use the American Arbitration Association (AAA) or JAMS to administer these proceedings.

Pros and Cons of Arbitration

Advantages:

• Private and confidential – Unlike court proceedings, there’s no public record

• Faster than court – Hearings are typically scheduled within months

• Expert arbitrators – Especially valuable in technical or specialized disputes

Disadvantages:

• Limited appeal rights – Mistakes by the arbitrator are usually final

• May cost more than mediation – Arbitrators charge hourly, and some proceedings mimic full litigation

Do Georgia Courts Encourage ADR?

Yes. Georgia courts often require parties to attempt mediation before trial, especially in complex civil and commercial cases. Many judges strongly encourage settlement through ADR and will refer cases to court-annexed or private mediation.

Should You Add ADR Clauses to Your Contracts?

Absolutely. An effective ADR clause can:

• Require mediation before litigation

• Mandate arbitration for certain disputes

• Limit discovery or damages

• Choose location and rules for arbitration

A well-drafted ADR clause gives you leverage before problems arise. Without it, you may find yourself stuck in costly litigation.

Work With Counsel to Choose the Right Path

Whether you’re drafting a contract or facing a dispute, ADR is not one-size-fits-all. Poorly written clauses or wrong forum selection can cost your business leverage.

Our firm regularly advises businesses on strategic use of ADR—both in contract drafting and dispute resolution.

Contact us today to learn how mediation or arbitration can help you resolve disputes on your terms.