Recent years have seen growing pressures for parties to civil disputes to resolve their

differences through alternative dispute resolution. The calls for greater use to be made of
alternative dispute resolution are to be welcomed.’ Discuss.

Answer plan

 Explain briefly what alternative dispute resolution (ADR) is and the main forms which it takes.
 Make reference to the increased cost of civil litigation and illustrate some of the key initiatives
taken to encourage or compel recourse to ADR.
 Discuss the strengths of ADR.
 Discuss the drawbacks of ADR.
 Conclude by evaluating the extent to which increased pressures for parties to make use of ADR
are to be welcomed.

Alternative dispute resolution (ADR) refers to the use of techniques for the resolution of disputes which do not
involve recourse to the courts.
There are three main forms of ADR.
Arbitration involves the appointment of a third party empowered to make a legally binding decision in relation
to the issue in dispute. Arbitration is particularly relevant in the commercial context, where it is governed by the
Arbitration Act 1996.

Mediation involves the intervention of a third party to assist the parties to a dispute to resolve their differences,
and is commonly used in divorce cases, while conciliation is a form of mediation which involves a more
interventionist role being played by the third party mediator/conciliator. One of the best-known examples of
conciliation is found with its use in unfair dismissal cases under the auspices of ACAS.

The cost of civil litigation has increased significantly over the past three decades, while at the same time the
availability of civil legal aid has plummeted, being available in only very limited circumstances. This provides
some of the impetus for efforts to encourage greater use of ADR, which can be identified in a number of
developments pioneered by the courts and government.

Rule 1.4 of the Civil Procedure Rules requires courts to encourage the parties’ use of ADR where appropriate.
While it was established in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 that the courts
have no power to force the use of ADR, the Court of Appeal has nonetheless demonstrated a willingness to
punish parties who fail to make use of it when making decisions over the award of costs (Dunnett v Railtrackplc
[2002] EWCA Civ 302). The courts have also ruled that the refusal to mediate may constitute unreasonable
behaviour, even where its success is unlikely (Rolf v De Guerin [2011] EWCA Civ 78). The Court of Appeal has a
voluntary mediation scheme, whereas the Commercial Court may issue orders for ADR to take place.

The Ministry of Justice established a small claims mediation scheme in 2005, for which engagement with in
most cases is compulsory, and in 2011 issued a consultation paper considering the case for making recourse to
mediation compulsory in all civil cases.
 In divorce proceedings, mediation must be engaged with preliminarily in many circumstances. Under EU law
provisions enacted in 2013, the availability of ADR bodies to resolve consumer complaints is mandated, marking
another step in the promotion of ADR mechanisms The encouragement of greater use of ADR should be
welcomed to the extent that it increases the ability of parties to resolve their disputes. Its main advantages
concern time and money.
As ADR relies on more informal processes it is generally much quicker than litigation. Furthermore, in the
absence of the formal and prolonged legal procedures that accompany litigation, parties to ADR can often avoid
the use of legal assistance, producing potentially considerable financial savings.

Research by Genn (2009) reinforces these apparent benefits of ADR, finding that huge costs are saved where
ADR is successful and that in 62 per cent of the cases surveyed settlement was reached at the appointment
stage. However, there is a note of caution, as she also observed that where ADR fails to resolve a dispute and
litigation ensues, the costs can actually be higher than they would ordinarily have been.

Unlike the courts, composed of judges with a generalist legal training, many providers of ADR services are
specialists in the kinds of issues with which they deal, allowing them to bring this expertise to bear on the
subject matter of the dispute.

For example, ACAS enjoys a reputation for its conciliation of employment disputes, there are a number of
specialist trade association arbitration schemes and, in the family law context, there are mediators skilled at
assisting with the resolution of disputes stemming from relationship breakdowns.

The nature of litigation is adversarial, encouraging confrontation between the parties in dispute. In
circumstances where the parties enjoy a sensitive relationship, or where confidential material is at stake, ADR
may therefore be regarded as a preferable method of dispute resolution.

Where the long-term interests of the parties require that they be conciliated – for example, in the case of a
divorcing couple with children – there may be sound reasons to avoid attempting to resolve their
disagreements in court. In commercial cases involving sensitive information, the parties may prefer to avoid any
damaging publicity by submitting their dispute to resolution by arbitration which takes place in private.

Although there are good reasons to encourage the use of ADR, it is not always preferable to litigation. The claim
has been made that ADR processes can perpetuate imbalances of power between parties, particularly in
relation to employment disputes where employers tend to be better represented than their employees.
However, this argument cannot be applied as strongly to most commercial or family disputes.8 It is also worth
noting that any imbalance between parties is just as likely, if not more so, to arise in litigation that takes place
before the courts. Recourse to ADR may also be seen to suffer from the lack of legal expertise which the parties
are assured of when they resort to litigation. However, the extent to which this is necessarily to be regarded as
a matter of concern will vary with the nature of the dispute that requires resolution.

While for some particularly complicated commercial disputes, legal expertise may be regarded as critical, this
may not be the case in respect of many other disputes, for example divorce-related matters, where the key
objective of the parties is to achieve conciliation through compromise.
One limitation of ADR-produced settlements lies in their lack of enforceability.10 While arbitration is a legally
binding process, mediation and conciliation are not. Should one party fail to fulfil their obligations under the
term of any settlement, it may be necessary for the other party to go to court in order to enforce it, thus
increasing the financial costs of having had recourse to ADR.

In conclusion, the increased pressures for parties to civil disputes to resort to ADR is understandable. In many
cases, its benefits are apparent, especially in relation to time, cost and the avoidance of damaging confrontation
encouraged by the adversarial process. It is necessary, however, to be wary of pushing parties into ADR without
full consideration of the circumstances. Where disputes are not best suited to its techniques and/or parties
enter it reluctantly, there is a danger that the overall costs of action and/or enforcement will be increased.

It is thus important that cases are subject to proper assessment for suitability before being referred to ADR.

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