Disputes are part of business life, but going straight to court is rarely the best first move. In England and Wales there is a spectrum of dispute-resolution methods, from an informal phone call to a full trial. Choosing the right one saves time, money and relationships. Here is a plain-English guide.
1. Negotiation
The simplest and cheapest route: the parties (or their solicitors) talk and try to settle. Most disputes settle this way at some point. Negotiation is private, flexible and preserves the commercial relationship, and you can try it at any stage, even after proceedings have started.
2. Mediation
In mediation, an independent, trained mediator helps the parties reach their own settlement. The mediator does not decide the dispute or impose an outcome. It is:
- Confidential and "without prejudice" (what is said cannot generally be used later in court);
- Voluntary and non-binding until a settlement is signed;
- Fast and relatively cheap, with a high success rate.
Courts strongly encourage mediation, and a party that unreasonably refuses to consider it can face costs penalties. Bodies such as CEDR provide mediators.
3. Other "ADR": expert determination, adjudication, conciliation
- Expert determination, a technical expert decides a specific issue (e.g. a valuation); usually binding.
- Adjudication, fast, interim-binding decisions, standard in construction disputes.
- Conciliation, like mediation but the conciliator may suggest terms; common in employment disputes (via Acas, whose "early conciliation" is a required step before most tribunal claims).
4. Arbitration
In arbitration, the parties agree to have the dispute decided privately by one or more arbitrators, whose decision (the "award") is binding and enforceable. Governed by the Arbitration Act 1996 (as updated by the Arbitration Act 2025), it offers:
- Privacy and confidentiality;
- Choice of arbitrator and procedure;
- International enforceability of awards in many countries under the New York Convention, a major advantage for cross-border deals.
The trade-offs: it can be as costly as litigation, and there are only limited rights of appeal. Institutions such as the LCIA administer arbitrations.
5. Litigation (court)
If all else fails, court proceedings under the Civil Procedure Rules (CPR) lead to a binding, enforceable judgment. Litigation is:
- Public (most hearings and judgments are open);
- Structured with strict rules and deadlines;
- Backed by powerful enforcement tools;
- But often the slowest and most expensive option, and harder on relationships.
Claims are allocated to a track (small claims, fast, intermediate or multi-track) by value and complexity, and the losing party usually pays much of the winner's costs.
How to choose
Consider:
- Value and complexity, small claims suit the small claims track; complex/high-value matters may justify arbitration or full litigation.
- Relationship, to preserve it, prefer negotiation/mediation.
- Confidentiality, arbitration and mediation are private; litigation is public.
- Speed and cost, ADR is usually faster and cheaper.
- Enforcement, for cross-border disputes, arbitration awards travel well.
- Your contract, many contracts contain a dispute-resolution clause (e.g. mediation then arbitration) that you must follow.
A common, sensible approach is escalation: negotiate, then mediate, and only arbitrate or litigate if needed.
Key takeaways
- Options run from negotiation and mediation (cheap, private, relationship-friendly) through arbitration (private, binding, internationally enforceable) to litigation (public, binding, powerful but slow and costly).
- Courts expect parties to consider mediation, unreasonable refusal can mean costs penalties.
- For employment disputes, Acas early conciliation is a required first step.
- Check your contract's dispute-resolution clause, and match the method to value, relationship, confidentiality and enforcement needs.
Sources
- Civil Procedure Rules (litigation; tracks; costs; encouragement of ADR)
- Arbitration Act 1996 (as amended by the Arbitration Act 2025); New York Convention (enforcement of awards)
- Acas early conciliation (employment disputes); mediation/ADR providers such as CEDR and arbitral institutions such as the LCIA
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.