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What Are The Four Types Of Alternative Dispute Resolution (ADR)?

Feb 5 2021 | Litigation

by Patrick Murray

by Patrick Murray

Trainee Solicitor

In this article

The four types of alternative dispute resolution (ADR).

In the UK, there are four main types of ADR, which are negotiation, mediation, arbitration and conciliation.

Some forms of ADR aren’t legally binding. If an agreement isn’t legally binding, there is no legal enforcement on the agreement if one party decides to later change their mind. In this instance, the case will have to be brought back to court for a judge to make a legally binding decision.

Independent negotiation.

Negotiation is often the first option for those wishing to resolve a dispute. Simply because, in some cases, both parties can solve arguments by taking a ‘cards on the table’ approach and attempting to negotiate a compromise. If required, dispute resolution specialists can take instructions and negotiate on behalf of the parties.

This form of ADR is often overlooked because of how obvious it is. There is no impartial third party in negotiation to assist the parties with their negotiation, so the parties must work together to reach an agreement.

 

Positives Negatives
Can maintain a good relationship Not legally binding
Inexpensive Can be used as a stalling tactic
Fastest ADR process No guarantee of a resolution
Allows privacy No expert third party opinion
Remember...

Independent negotiation is not legally binding.

Mediation.

A mediator is a jointly instructed neutral party. Their role is to assist with communication between the two parties having the dispute to achieve a settlement or resolution. The mediator will discuss the issues openly and try to help the parties reach an agreement, but will generally not offer their own opinions or assessment.

In some cases, the courts will insist that the parties will need to explore the mediation route before bringing a case in front of a judge. Furthermore, suppose a party refuses to seek mediation. In that case, the courts will take a lower view of that party and may penalise them with a costs order. A costs order is an instruction given by the court or tribunal regarding the payment of the costs. With a costs order, the court may issue that one party will pay part or all of the other party’s claim.

 

Positives Negatives
Parties can jointly choose a mediator Not legally binding
Less expensive and faster than litigation An incompetent mediator can hinder a resolution.
A neutral third party can help parties reach a fair agreement. More expensive than negotiation
Allows privacy To be legally binding, court enforcement is required.
Demonstrates a willingness to negotiate Can become expensive

Remember...

Mediation is not legally binding.

Conciliation.

Conciliation is a common form of ADR used for employment disputes. Furthermore, conciliation is a compulsory process before an employee wishes to bring a claim to the Employment Tribunal. The conciliator will discuss the issues and try to help the parties reach an agreement, often providing their own opinion after assessing the situation and the different arguments.

The conciliator’s opinion is used to help parties recognise their positions in the dispute and come to an agreement.

Positives Negatives
The conciliator is usually an expert in their disputed field. Not legally binding
More cost-effective than taking a dispute to court No resolution guaranteed
Maintains privacy Parties may not take the process seriously
Remember...

Conciliation is not legally binding.

Arbitration.

An arbitrator is a neutral third party who the parties have appointed to resolve the dispute. The arbitrator will be a specialist in the field where the dispute arises, for example, civil engineering.

Before an arbitrator makes a final decision, they will hear from both parties. However, in arbitration, you may not simply choose to have one arbitrator, as you can choose to have a panel of arbitrators presided over by a chairman.

When an arbitrator/s has come to a final decision that decision is legally binding, meaning the court can legally enforce it.

 

Positives Negatives
Legally binding A judge won’t address unfair outcomes.
Faster and sometimes cheaper than litigation Can be very expensive in some circumstances
Confidential process Arbitration can take longer than litigation in some extreme instances.
Parties can jointly choose an expert to be an arbitrator.

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