Alternative Dispute Resolution: Mandatory or Optional?

 What is ADR?

You may find yourself subject to a party’s wrath, whereby litigation seems like the only path that they will stubbornly take. Such a circumstance can inflict undue stress, time and costs – things we universally want to avoid. Although alternative dispute resolution (ADR) is often a viable option, many avoid this in the tenacious hope that the court will take their side.

ADR is a method in which parties can resolve their legal disputes outside the remit of the court. 

ADR encompasses:

• Mediation: whereby an independent mediator helps conflicting parties reach an amicable solution without the formalities and painstaking process that is court litigation.

• Conciliation: as above, enlists a conciliator who seeks to help parties reach an agreement often relating to employment disputes, as opposed to commercial disputes.

• Arbitration: which takes a more formal approach to dispute resolution, as it runs as a tribunal and is often likened to the actual court process. An arbitrator will consider both procedural and evidential matters and will provide a legally binding decision (appealable on very limited grounds). 

How is ADR Currently Practiced?

Parties currently have the option to participate in ADR (unless it is a requirement stated in a binding contract). Often, lip service is paid to ADR, and although parties are encouraged to do so, many refuse to take this pre-action step seriously. This, therefore, leads to claims being issued before an attempt at an amicable resolution is made. Such a refusal often places great stress and financial hinderance on individuals, particularly when the opposing party is financially sound.

Although, the court will take into consideration, when issuing a judgement, the ways in which the parties have attempted to resolve the dispute prior to attending court, it is currently not a legal obligation to participate in ADR. 

ADR Reform

Following the July 2021 report by the Civil Justice Council, it has been concluded that parties subject to a dispute can be ‘lawfully compelled to participate in ADR’. This means that the court can make it an obligation for parties to participate in mediation before taking the matter to court. 

The report further pointed out that this obligation does not necessarily conflict with Article 6 of the European Convention on Human Rights, which states that everybody has the right to a fair trial. 

However, this is not a blanket requirement. The following must be taken into consideration before parties are compelled to participate in ADR: 

1. Costs and time burden on the parties 

2. Whether ADR is suitable for the particular area of law in question 

3. Confidence in the provider of ADR 

4. Whether the parties have access to legal advice 

5. The stage of the dispute  

6. Whether the terms of ADR have been communicated and are sufficiently clear

The Future? 

Although parties may be required to participate in ADR relatively soon, there is still no hard and fast legal requirement to do so. This is due to the lack of procedural and regulatory guidance. 

Please note that the rules regarding ADR in relation to construction disputes differ from that of commercial, employment, negligence, nuisance, property, debt, insurance and landlord and tenant disputes

Stay tuned for updates on these proposals by visiting our blog page. 

Alternatively, if you have any questions regarding a dispute you are facing to find out what your options are, contact a member of our team today for a consultation.

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Sources: 

Civil Justice Council – Compulsory ADR report: 

https://www.judiciary.uk/wp-content/uploads/2021/07/Civil-Justice-Council-Compulsory-ADR-report.pdf 

Lexology – Mandatory Mediation – A new wave of ADR?

https://www.lexology.com/library/detail.aspx?g=2c695e66-20c7-4a02-a4f6-eaca90f7ba82