What is Alternative Dispute Resolution and how can it benefit my business?

As part of our newly launched ‘Escalate Guide to…’ series, we’re exploring the legal terminology around dispute resolution, with the aim of making the law easier to understand. This week, we’re looking at Alternative Dispute Resolution in more detail.

Alternative Dispute Resolution (ADR) covers a wide range of techniques which help parties involved in a dispute to reach a negotiated settlement, without resorting to Court proceedings.

The most common methods of ADR include:

• Mediation
• Adjudication
• Expert opinion
• Mini trial

There are other types of ADR, but Escalate will always advise you on the best procedure based on your circumstances.

Mediation

Mediation is the most common form of ADR, with an independent third party mediator that meets the parties separately, and shuttles between them, trying to establish common ground and proposing ways of resolving the dispute. The mediation process is non-binding and both parties are free to walk away, should an agreement not be reached.

Adjudication

Adjudication is a statutory procedure, which is designed to be quicker and more cost effective that litigation or arbitration. Each party has a right to have a dispute decided by an adjudicator, who must generally decide the dispute in less than 42 days. This method is normally used to ensure payment, and any decision is binding and usually upheld by the Courts.

Expert opinion

The parties appoint an agreed expert and ask them to consider particular points of dispute between the parties, usually of a technical nature. The parties can either agree in advance to be bound by the expert’s conclusions, or simply to use the expert’s conclusions as a guide for further negotiation, discussion or further expert analysis.

Mini trial

A mini trial, or ‘executive tribunal’, is a more formal type of mediation hearing. Presentations are made to a panel which would typically comprise the mediator and a senior executive from each party. Following the presentations, the executives will attempt to settle the case with the assistance of the mediator if necessary.

Alternative Dispute Resolution and remote hearings

Post lockdown in the UK, courts have been busy dealing with a backlog of cases, resulting in long waiting times for hearing dates being issued. Whilst the courts have remained open, they have limited capacity at the moment due to social distancing measures, which has slowed down the whole process.

The number of remote hearings has therefore increased, and ADR has become an even more viable solution for resolving disputes. Remote mediation has been taking place via video call using Zoom, Skype or even WhatsApp, and whilst there are some disadvantages to this with potential technical issues and building trust with mediators virtually, this is generally outweighed by cases being resolved quicker.

The Cabinet Office also issued guidance back in May 2020 encouraging parties to resolve their disputes through negotiation, mediation or other alternative dispute resolution methods during the pandemic, without resorting to Court proceedings.

Benefits of Alternative Dispute Resolution

The most obvious benefit of ADR is that it often saves time and cost, compared to the traditional Court route.

It also affords both parties more flexibility, choice and control in resolving a dispute. For example in mediation, the parties agree the mediator or expert, the venue, timetable, procedure and the agenda. Each party is able to determine what information is disclosed to the other side.

The entire ADR process is private, so potentially unwelcome publicity can be avoided, and any agreed settlement will not set a precedent. It can also be arranged within days or weeks, rather than the months or years that can be involved in litigation or arbitration. Typically, the average case is resolved in less than a day – far less time than the average of 18 months that it normally takes to settle a litigation case.

Finally, ADR promotes creative, flexible solutions to a dispute, and is particularly beneficial when traditional negotiation techniques are not producing a result.

Escalate has successfully resolved numerous wide-ranging disputes and recovered money owed to our clients, by using ADR techniques. To find out more, download the Escalate Guide to Alternative Dispute Resolution.

If you’d like to get in touch with one of the Escalate team to discuss using Alternative Dispute Resolution to resolve a commercial dispute, please contact us on 0207 039 1950 or email us.