Why Alternative Dispute Resolution Is More Important Than Ever

For many years, litigation was viewed as the primary route to resolving disputes. However, the courts have increasingly encouraged parties to consider Alternative Dispute Resolution (“ADR”). More recently, ADR has become a central feature of the civil justice system rather than merely an optional alternative.

What is ADR?

ADR refers to a range of processes used to resolve disputes without the need for a court trial. Common forms of ADR include mediation, negotiation, arbitration and early neutral evaluation. Although the various forms of ADR differ in approach, they all seek to resolve disputes more quickly, efficiently and economically than traditional court proceedings.

What Are the Benefits of ADR?

  • Cost-effective – ADR is generally less expensive than court proceedings, reducing legal fees, expert costs and court fees.
  • Faster resolution – Court timetables can be lengthy, particularly in complex disputes ADR processes can often be arranged within weeks allowing parties to resolve matters far sooner.
  • Confidential – Unlike court proceedings, ADR processes such as mediation are conducted privately.
  • Greater control over the outcome – Parties can negotiate practical and creative solutions which a court may not have the power to order.
  • Preserves relationships – ADR is less adversarial than litigation and can help maintain commercial, professional or personal relationships

The Courts’ Changing Approach to ADR

Historically, there was uncertainty regarding the extent to which courts could compel parties to engage in ADR.

For many years, the case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 was widely understood as authority that parties could not be forced to mediate as this was thought to interfere with the right to a fair trial.

That position changed significantly following the Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 141. In that case, the Court of Appeal confirmed that courts do have the power to order parties to engage in a non-court-based dispute resolution process, provided that this does not prevent them from obtaining a judicial determination if settlement cannot be reached.  

The Civil Procedural Rules also make clear that a party’s conduct regarding ADR can be relevant when costs are considered. Unreasonably refusing to engage in ADR may result in adverse cost consequences, even for a party that is otherwise successful in the litigation.

What Does This Mean for Litigants?

The courts’ approach makes clear that parties should give serious consideration to ADR at an early stage of a dispute. Refusing to participate in ADR without good reason may be viewed unfavourably and could have cost implications.

This does not mean that every dispute should settle. Cases involving significant points of law, for example, may require judicial determination. For more information on the litigation process, see our Guide to the Litigation Process. 

Where ADR is appropriate, parties should be prepared to explain any decision not to participate.

Conclusion

ADR has become an integral part of the modern civil justice system rather than simply being an alternative to litigation.

The courts increasingly recognise its potential to deliver fair, proportionate and cost-effective outcomes. Litigants should approach ADR with an open mind and with a willingness to explore settlement opportunities wherever appropriate.

A well-managed ADR process can save substantial time, cost and stress, while giving parties greater control over the outcome of their dispute.

Need Advice?

At Wellers, we advise individuals, organisations and businesses on all aspects of ADR. If you think that your dispute could benefit from ADR, please contact Jigna Varsani at Jigna.varsani@wellerslawgroup.com or on 020 7481 2422,or another member of the Dispute Resolution team for a no-obligation initial discussion.

Please note: This article was correct at the time of writing. The law may have since changed, which could affect the information and advice provided.