Alternative Dispute Resolution (ADR) is the umbrella term for ways of resolving disputes without a full court trial. In England and Wales, ADR is now a central part of the justice system, courts actively encourage it, and parties who unreasonably refuse to try it can face costs penalties. Here is a plain-English guide.
Why ADR matters
Court litigation is public, slow and expensive, and it can destroy commercial and personal relationships. ADR offers faster, cheaper, private routes that often produce better, more flexible outcomes, which is why the Civil Procedure Rules expect parties to consider it before and during proceedings. Important: ADR discussions do not by themselves stop limitation periods or procedural deadlines; parties should protect their position by issuing proceedings in time or agreeing a written standstill agreement before the deadline expires.
The main types of ADR
Mediation
An independent, trained mediator helps the parties reach their own settlement. The mediator does not decide the dispute. Mediation is:
- confidential and "without prejudice";
- non-binding as to outcome until a settlement is signed; participation may be required by a court order, contractual clause, or specific scheme, though parties cannot be forced to settle;
- highly flexible and with a strong success rate.
It is the most widely used form of ADR.
Arbitration
The parties agree to have the dispute decided privately by one or more arbitrators, whose award is binding and enforceable, under the Arbitration Act 1996 (as updated by the Arbitration Act 2025). It is private and (for cross-border disputes) internationally enforceable under the New York Convention, but can be as formal and costly as litigation, with only limited rights of appeal.
Conciliation
Similar to mediation, but the conciliator may actively suggest terms of settlement. Common in employment disputes through Acas, whose early conciliation is generally a required step before most Employment Tribunal claims.
Early Neutral Evaluation (ENE)
An independent expert (sometimes a judge) gives a non-binding assessment of the likely outcome, helping the parties settle realistically. The court can order ENE.
Expert determination
The parties refer a specific (often technical) issue (like a valuation) to an expert whose decision is usually binding.
Adjudication
A fast procedure giving an interim-binding decision, standard in construction disputes.
Negotiation
The simplest ADR of all, the parties (or their lawyers) negotiate a settlement directly. Most disputes settle this way at some stage.
Binding vs non-binding
- Non-binding (mediation, conciliation, ENE, negotiation), the parties keep control; nothing is imposed unless they agree and sign.
- Binding (arbitration, expert determination, adjudication on an interim basis), a third party decides the outcome.
How the courts encourage ADR
- The Civil Procedure Rules require parties to consider ADR, and pre-action protocols expect attempts to settle.
- Unreasonable refusal to engage in ADR can lead to costs sanctions, even for a winning party.
- Courts can stay (pause) proceedings for ADR, and in some cases order parties to attempt it.
Choosing the right ADR
Consider the value and complexity of the dispute, whether you need a binding decision, the importance of confidentiality and the relationship, and any dispute-resolution clause in your contract (which may require a particular route, such as mediation then arbitration).
Key takeaways
- ADR resolves disputes outside a full trial, including mediation, arbitration, conciliation, early neutral evaluation, expert determination, adjudication and negotiation.
- Some are non-binding (you keep control); others (notably arbitration) produce a binding result.
- Courts expect parties to consider ADR; unreasonable refusal can mean costs penalties.
- Choose by value, need for a binding outcome, confidentiality, relationship and any contractual dispute-resolution clause.
Sources
- Civil Procedure Rules (encouragement of ADR; costs consequences of unreasonable refusal)
- Arbitration Act 1996 (as amended by the Arbitration Act 2025); New York Convention (enforcement of awards)
- Acas early conciliation (employment); construction adjudication (Housing Grants, Construction and Regeneration Act 1996)
--- 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.