Explaining the basics of Alternative Dispute Resolution and how it could help your business.
Author: Rachel McCulloch
Key contact: Aisha Wardell
Alternative Dispute Resolution (ADR) has been at the forefront of many minds recently with amendments to the Civil Procedure Rules coming into force last autumn. The court can now order parties to engage in ADR and the “overriding objective” has been updated to include promoting or using ADR. So, what is Alternative Dispute Resolution?
Alternative Dispute Resolution, or ADR, refers to methods of resolving disputes outside the court. It is already widely used in the UK and is likely to become even more prevalent in light of the recent legal updates.
Types of ADR
There are various forms of ADR available and choosing the right ADR method depends on a number of factors. These include the nature of the dispute itself, the parties’ relationships and what their objectives are.
- Mediation
One of the most popular and well-known forms of ADR, mediation involves a neutral third party who helps the parties reach a mutually agreeable solution to the dispute. You can find out more about what to expect at a mediation here.
- Negotiation
Parties can attempt to resolve the dispute by negotiating, through either written correspondence or at a meeting. This may involve the exchange of offers to settle or attempts to narrow the issues in dispute. Negotiations are usually done on a “without prejudice” basis, which means they can’t be used as evidence in court.
- Arbitration
This is a formal process where an arbitrator hears the evidence and makes a binding decision. Arbitration is usually used when the parties have included a term in the contract governing their relationship that disputes arising from the contract are to be determined by arbitration rather than court proceedings.
- Adjudication
This is another formal process primarily used in construction disputes following, for example, delays or other performance issues under the construction contract. It is a fast process, and an adjudicator usually makes a decision that is binding on the parties within 28 days.
- Expert determination
An independent expert can be appointed to resolve a specific technical issue, which is ideal for disputes that require specialised knowledge.
Benefits of using ADR
There are manage advantages to using ADR to attempt to resolve disputes: :
- ADR methods tend to be less expensive and faster than court proceedings. Parties can agree to resolve a dispute using ADR at any stage rather than following the lengthy court process and awaiting a final trial.
- ADR is usually confidential – unlike court cases, which are public. The use of ADR can protect the parties’ reputations and can be beneficial for commercial disputes where sensitive information or commercial information may be disclosed.
- ADR offers flexibility, as parties can choose the form they take. It can lead to more creative solutions to resolve the disputes, which may not be available in court proceedings.
Every situation and dispute is different, and if you are considering pursuing a dispute or considering ADR, please contact our Litigation team.
