Alternative dispute resolution is best defined as practices or processes designed to resolve disputes confidentially and informally outside of the court litigation process.

Instead of filing a lawsuit in Court, for example, where hearings, judgments and court opinions are public, the parties may elect to resolve their disputes in settlement negotiations held before an impartial third party such as a mediator, or to have a neutral third party decide their dispute such as an arbitrator or an insurance umpire.

On a construction project, the parties may decide to have the architect or record or a dispute neutral decide their disputes.  Alternative dispute resolution is also used in conjunction with the litigation process.  Courts, for example, will typically order the parties to attend mediation to see if they can resolve their disputes short of trial.