Alternative dispute resolution (ADR) are schemes and processes that can enable parties to a dispute to resolve a matter outside of the Court system.
A Court would usually have expected the parties involved in a civil dispute to have at the very least considered a form of ADR before issuing court proceedings, or as part of pre-trial negotiations. ADR can be a fantastic way for parties to settle some or all of the dispute without facing the costs, time constraints and pressure that arise from formal Court proceedings.
Indeed, it is a significant part of the Pre-Action Protocol that parties consider some form of ADR in the life of a dispute.
There are several forms of ADR and some of those are specific to certain types of disputes. However, broadly, some of the common forms are:
Negotiation – the least formal of the ADR processes and can typically involve without prejudice and open discussions about potential resolutions. Negotiations are typically not binding but can become binding in certain circumstances.
Mediation – the instruction of an independent third party to mediate between the partiesto reach a mutually acceptable outcome. A mediator does not form judgement, nor impose solutions. Mediation is not usually binding unless formally documented by settlement agreement or otherwise.
Adjudication – an adjudicator provides a decision on disputes as they arise during the course of a contract. This is an interim binding process.
Arbitration – the instruction of an independent third party to form a judgement and make a decision on behalf of the parties. Arbitration decisions are usually legally binding.
Pros and Cons of ADR
| Pros | Cons |
| Cost effective – usually cheaper than resolving through the court system | Costs – where unsuccessful it results in wasted costs for the parties |
| Time saving – usually faster than resolving through the court system | Delay – where unsuccessful it results in wasted time for the parties, or a delay to the trial |
| Flexibility and compromise – largely resulting in a ‘win/win’ and good for maintaining relationships if applicable | Unenforceable – some of the ADR processes are not enforceable until formally documented in an agreement giving parties time to change their mind |
| Likelihood of settlement – a significant number of ADR’s result in settlement, or at the very least narrows this number of issues significantly | Unsuitability – some disputes simply will not suit ADR (for example, urgent injunctive relief or where it would not be proportionate) |
| Confidentiality – freedom to discuss sensitive issues enabling full and frank negotiations | Exposing your hand/ weakness – inevitably some forms of ADR force parties to expose their hand (and whilst the information is privileged, parties will be unlikely to forget concessions made) |
If you have a dispute and are considering whether ADR could be beneficial to your case, get in contact with our specialist Dispute Resolution team at info@bhwsolicitors.com or alternatively on 0116 289 7000.
Categorised in: Dispute Resolution, News
Tags: Business Disputes, Commercial Mediation, Dispute Resolution, Litigation and Arbitration