The four most common types of ADR are mediation, conciliation, arbitration and adjudication.
1. Mediation – Mediation involves an independent trained mediator who facilitates communication between the two parties having the dispute to achieve a settlement or resolution. The mediator will discuss the issues and try to help the parties reach an agreement, but will generally not offer their own opinions or assessment.
2. Conciliation – Conciliation is generally used for employment situations rather than commercial disputes. Conciliation is a compulsory process 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.
3. Arbitration – This is more formal than mediation. It involves a process in which the dispute is resolved by an arbitrator’s decision (a nominated third party who is qualified to handle arbitration). Arbitration runs as a tribunal process. The decisions that are made are legally binding.
4. Adjudication – This form of ADR is generally reserved for disputes which arise out of construction contracts. The adjudication process involves: providing written notice of adjudication, appointing an agreed adjudicator, serving a referral notice, a response to this referral notice, and a legally binding decision by the adjudicator within 28 days of the referral notice.