What is alternative dispute resolution (ADR)?

Alternative dispute resolution, usually shortened to ADR, is the collective name for the processes that help disputing parties resolve a dispute without asking a judge to decide it at trial. It covers mediation, arbitration, conciliation, early neutral evaluation, adjudication, expert determination and ombudsman style ADR schemes. In every case a neutral third party is brought in to help the parties involved reach a settlement, or in some cases to make a binding decision of their own.

ADR is no longer a side road in the English and Welsh legal system. The Civil Procedure Rules expect parties to consider settlement at every stage, and the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 confirmed that a court can order parties into an ADR process. Refusing to engage without good reason now regularly leads to costs penalties, even for the party that eventually wins.

How does alternative dispute resolution work?

Most ADR follows the same shape. The parties agree on a neutral, agree a date and a fee split, exchange short position papers and any key documents, then meet for a session that usually lasts a day.

What happens in that session depends on the ADR method chosen. In mediation the neutral has no power to impose anything; the mediator moves between the rooms, tests each side privately and carries offers until the parties reach a mutually acceptable outcome. In arbitration the neutral hears the case and produces an award that binds both sides. In early neutral evaluation the neutral gives a reasoned, non binding opinion on the likely outcome, which very often unlocks a negotiation that had stalled.

The common thread is control. In court proceedings a judge decides, on the evidence in front of them, on a date the court chooses. In ADR the parties involved keep control of the timetable, the choice of neutral and, in most methods, the terms of the outcome.

What are the common forms of ADR?

The main types of ADR used in England and Wales are:

1. Mediation. A confidential, without prejudice negotiation led by an accredited mediator. Nothing is binding until the parties sign a settlement agreement.
2. Arbitration. A private determination by an arbitrator or tribunal under the Arbitration Act 1996. The arbitration process ends in an award which is enforceable in the same way as a court judgment.
3. Early neutral evaluation. A senior lawyer, often a barrister or a judge, gives a view on the merits. Financial dispute resolution hearings in family cases work on the same principle.
4. Conciliation. Similar to mediation but the conciliator will suggest terms. Acas conciliation in employment disputes is the best known example.
5. Adjudication. A fast, interim binding decision, standard in construction disputes under the Housing Grants, Construction and Regeneration Act 1996.
6. Expert determination. A technical expert decides a defined issue, such as a valuation or a completion account, and the parties agree in advance to be bound.
7. Ombudsman and ADR scheme routes. Sector schemes for consumers, energy, financial services and property, usually free to the consumer.

We look at each of these in more detail in our guide to the types of ADR.

Is ADR legally binding?

It depends on the method. Mediation only becomes legally binding when the parties sign heads of terms or a settlement agreement at the end of the day. An arbitration award, an adjudication decision and an expert determination are binding as soon as they are given, subject to very limited challenge. Our article on whether ADR is legally binding sets out how each outcome is enforced.

Why ADR resolves disputes more cost effectively

A one day mediation typically costs each side a fixed mediator fee plus preparation and representation. Taking the same dispute to trial can cost many multiples of that, take eighteen months to two years, and expose the loser to the other side's costs.

ADR also protects things litigation cannot. It is confidential, so commercially sensitive material stays out of a public judgment. It is flexible, so the parties agree remedies a court could never order, such as a revised supply contract, an apology, a payment schedule or a clean separation of a business. And it preserves relationships that a contested trial usually destroys.

When is ADR not the right answer?

ADR is not suitable where you need an injunction urgently, where a point of law needs an authoritative ruling, where one side will not engage at all, or where there is a genuine allegation of fraud that needs the court's fact finding powers. Even then, ADR often becomes appropriate later, once documents have been disclosed and both sides can see the shape of the case.

How Clerk&Counsel can help

Clerk&Counsel puts people in touch with the right neutral for their dispute. Our panel includes CEDR and Civil Mediation Council accredited mediators, arbitrators, and practising barristers who both represent clients at ADR and sit as mediators, evaluators and arbitrators themselves.

Tell us in two lines what the dispute is about, what is at stake and your preferred window. We will come back within one working day with two or three suitable names, their availability and a fixed fee. If you would prefer representation rather than a neutral, we can arrange direct access counsel to prepare your position statement and attend with you.

Start with our mediation services page, or send us a brief.