ADR Explained

teachlawhub
Mar 21
3 min read

Updated: Mar 22

Alternative Dispute Resolution (ADR) means solving disputes without going through the formal court system. Courts often expect parties to consider ADR before going to trial. This is part of the Civil Procedure Rules 1998, which control how civil cases are handled. The rules encourage parties to try to settle disputes without court where possible. ADR is usually cheaper, quicker, and less formal than court.

The four main types of ADR are:

Negotiation
Mediation
Conciliation
Arbitration

Negotiation

Negotiation is the simplest form of ADR. The two parties talk directly to each other to try to reach an agreement. There is no third party involved, although lawyers can be used if a party wants advice. Negotiation is completely private and flexible and can happen at any time, even before court action begins. Commonly used in consumer disputes, neighbour disputes, and small contract disagreements between individuals.

Key points

No third party involved
Parties discuss the problem themselves
Lawyers discouraged but allowed
Private and informal
Can take place before court

Advantages of negotiation

Cheaper than court
- No court fees
- Avoids expensive legal action
Flexible
- Parties decide when and how to negotiate
Control stays with the parties
- The claimant can accept or reject offers
- Outcome agreed by both sides

Disadvantages of negotiation

Not legally binding
- Hard to enforce the agreement
Power imbalance
- One side may have more knowledge or legal help
- Could pressure the weaker party
No guarantee of success
- One party may refuse to agree
- Case may still go to court

Mediation

Mediation is when the parties agree to use a neutral third party called a mediator. The mediator helps the discussion but does not decide the outcome. They stay impartial and act as a go-between, encouraging the parties to reach their own agreement. The mediator does not give legal advice and does not take sides. often used in family disputes, neighbour disputes, and workplace conflicts where the parties want to keep a good relationship.

Key points

Independent mediator involved
Mediator stays neutral
Mediator does not decide the case
Parties must agree the outcome themselves
Informal and private

Advantages of mediation

Quick and informal
- Faster than court
- Less stressful
Cheaper than court
- Must pay mediator, but still cheaper than trial
Preserves relationships
- Cooperative process
- Useful in family or workplace disputes

Disadvantages of mediation

Not legally binding
- Agreement cannot easily be enforced
May not succeed
- If one party refuses to cooperate
Power imbalance
- One side may feel pressured
- Could lead to unfair settlement

Conciliation

Conciliation is similar to mediation, but the third party has a more active role. A conciliator helps the parties reach an agreement and can suggest solutions or give advice. Conciliation is often used in employment disputes, pay and working condition disagreements, and workplace complaints before tribunal using ACAS.

Key points

Third party = conciliator
Conciliator can suggest solutions
Often used in employment law
Conciliator may have legal expertise
Less formal than court

Advantages of conciliation

Cheaper than court
- Lower fees than a trial
Expert help
- Conciliators understand the law
Faster than court
- Saves time and stress
Fair settlements more likely
- Conciliator suggests compromises

Disadvantages of conciliation

Not legally binding
- May still need court to enforce
Power imbalance risk
- Stronger party may influence outcome
No guaranteed settlement
- Cannot go ahead if one side refuses

Arbitration

Arbitration is the most formal type of ADR. Both parties agree to let an independent arbitrator hear the case and make a decision. The arbitrator is usually an expert in the relevant area of law, and the decision is legally binding. Arbitration is often used in business disputes, especially when contracts include a Scott v Avery clause, which requires the parties to use arbitration before going to court. The process is governed by the Arbitration Act 1996, which sets out rules for how arbitrations should be conducted, ensures fairness, and confirms that arbitrators’ decisions are enforceable.

Key points