Types of ADR explained: the common forms of alternative dispute resolution

There is no single alternative dispute resolution ADR process. There is a family of them, and choosing the wrong ADR method wastes time and money. This guide sets out the common forms of ADR used in England and Wales, what each one does, and how to pick between them.

What are the main types of ADR?

1. Mediation

Mediation is the most widely used ADR method in civil, commercial, workplace and family disputes. An accredited mediator acts as a neutral third party. They have no power to impose an outcome. Instead they hold private, confidential sessions with each side, test the strengths and weaknesses of each position, and shuttle offers until the parties agree something mutually acceptable.

Most mediations run for a single day and settle on that day. The settlement is written up and signed before everyone leaves, which is the point at which it becomes legally binding. Mediation suits almost any money claim, any dispute where a commercial relationship needs to survive, and any case where the legal costs are starting to outrun the value in issue.

2. Arbitration

Arbitration is the closest thing to private litigation. The disputing parties appoint an arbitrator or a panel, usually under the Arbitration Act 1996, and the arbitration process follows an agreed procedure with written submissions, evidence and often a hearing. The arbitrator then issues an award.

That award is a binding decision. It can be enforced through the courts in the same way as a judgment, and internationally under the New York Convention, which is why arbitration dominates cross border commercial contracts. Grounds of appeal are deliberately narrow. Arbitration suits construction, shipping, energy, insurance and international supply contracts, and any case where the parties want a specialist decision maker and complete privacy.

3. Early neutral evaluation

In early neutral evaluation a senior barrister, retired judge or other experienced practitioner reads the papers and gives a reasoned view on the likely outcome. The evaluation is not binding, but it is often decisive. Once both sides have heard an independent assessment of their case, unrealistic positions tend to fall away and a negotiated settlement follows quickly.

Financial dispute resolution appointments in family financial remedy proceedings work on exactly this model, and judicial early neutral evaluation is now available in the Business and Property Courts.

4. Conciliation

Conciliation looks like mediation, but the conciliator is expected to be more interventionist and will often propose terms. It is the standard route in employment disputes, where Acas early conciliation is a compulsory step before most tribunal claims can be issued.

5. Adjudication

Adjudication gives a fast, temporarily binding decision, normally within 28 days. It is the statutory default in construction contracts under the Housing Grants, Construction and Regeneration Act 1996 and keeps cash flowing on live projects. The decision binds the parties until it is overturned by litigation or arbitration, which in practice happens rarely.

6. Expert determination

Here a technical expert, rather than a lawyer, decides a defined question: the value of a shareholding, a completion account adjustment, a rent review, a defect diagnosis. The parties agree in advance that the determination is final. It is quick and cheap but only works where the dispute really is technical rather than legal.

7. Ombudsman and ADR scheme routes

Consumers can often use a sector ADR scheme instead of a court. The Financial Ombudsman Service, the Energy Ombudsman, the Housing Ombudsman and various retail and travel schemes offer free or low cost adjudication. An ADR scheme decision is generally binding on the business if the consumer accepts it, and the consumer keeps the right to go to court if they do not.

Which ADR method should you choose?

Ask three questions.

First, do you need a binding decision or a deal? If the relationship is over and someone has to be told who is right, arbitration, adjudication or expert determination fits. If there is a commercial future, or if the real obstacle is that neither side will move first, mediation is usually better.

Second, is the sticking point legal, factual or technical? A legal disagreement responds well to neutral evaluation. A technical disagreement responds well to expert determination.

Third, what is proportionate? A low value consumer complaint belongs in an ADR scheme. A ten million pound shareholder dispute justifies a full day of mediation with counsel on both sides, and it will still cost a fraction of a trial.

Can you combine them?

Yes, and the best outcomes often do. A common sequence is early neutral evaluation on the key legal issue, followed by mediation with the benefit of that opinion. Many commercial contracts also contain tiered clauses requiring negotiation, then mediation, then arbitration before any court proceedings can be started.

Getting the right neutral

The quality of the neutral matters more than the label on the process. Clerk&Counsel maintains a mixed panel of CEDR and Civil Mediation Council accredited mediators and arbitrators alongside practising barristers who conduct ADR, so we can match the profile to the dispute rather than pushing every case at the same person.

Send us a short summary of the dispute and we will suggest suitable mediators and arbitrators, with availability and a fixed fee, within one working day. See our mediation services or read our comparison of mediation and arbitration.

Common questions about ADR

How long does ADR take?

Most mediations are booked within four to six weeks and settle in a single day. Early neutral evaluation usually takes two to three weeks from instruction. Arbitration takes months rather than years, but longer than mediation.

Do I need a lawyer for ADR?

No, but representation helps. Direct access counsel can prepare your position statement, attend the session and draft the settlement, often for a fixed fee well below the cost of a contested hearing.

Who pays for ADR?

The neutral's fee is normally split equally between the parties unless they agree otherwise. Each side usually bears its own preparation and representation costs.