Alternative dispute resolution (ADR), or external dispute resolution (EDR), typically denotes a wide range of dispute resolution processes and techniques that parties can use to settle disputes with the help of a third party.Australian Securities and Investments Commission - Complaints resolution schemes . Asic.gov.au. Retrieved on 14 July 2013. They are used for disagreeing parties who cannot come to an agreement short of litigation. However, ADR is also increasingly being adopted as a tool to help settle disputes within the court system."Islam, Sharia and Alternative Dispute Resolution: Mechanisms for Legal Redress in the Muslim Community", published 30 June 2013, London, UK: IB Tauris & Co.
Despite historic resistance to ADR by many popular parties and their advocates, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In 2008, some courts required some parties to resort to ADR of some type, like mediation, before permitting the parties' cases to be tried (the European Mediation Directive (2008) expressly contemplates so-called "compulsory" mediation). This means that attendance is compulsory, not that settlement must be reached through mediation). Additionally, parties to merger and acquisition transactions are increasingly turning to ADR to resolve post-acquisition disputes. In England and Wales, ADR is now more commonly referred to as ‘NCDR’ (Non Court Dispute Resolution), in an effort to promote this as the normal (rather than alternative) way to resolve disputes. A 2023 judgment of the Court of Appeal called Churchill v Merthyr EWCA Civ 1416 confirmed that in the right case the Court can order (i) the parties to engage in NCDR and / or (ii) stay the proceedings to allow for NCDR to take place. This overturns the previous orthodoxy (the 2004 Court of Appeal decision of Halsey v. Milton Keynes General NHS Trust EWCA Civ 576) which was that unwilling parties could not be obliged to participate in NCDR.
The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR imposes fewer costs than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute.Totaro, Gianna., "Avoid court at all costs" The Australian Financial Review 14 November 2008. (19 April 2010) Some of the senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly in favour of this use of mediation and other NCDR processes to settle disputes. Since the 1990s many American courts have also increasingly advocated for the use of ADR to settle disputes. However, it is not clear as to whether litigants can properly identify and then use the ADR programmes available to them, thereby potentially limiting their effectiveness.
History The term "alternative dispute resolution" arose from Frank Sander's paper, "Varieties of Dispute Processing".
Traditional arbitration involved heads of trade guilds or other dominant authorities settling disputes. The modern innovation was to have commercial vendors of arbitrators, often ones with little or no social or political dominance over the parties. The advantage was that such persons were much more readily available. The disadvantage is that it does not involve the community of the parties. When wool contract arbitration was conducted by senior guild officials, the arbitrator combined a seasoned expert on the subject matter with a socially dominant individual whose patronage, goodwill and opinion were important.
ADR can increasingly be conducted online, which is known as online dispute resolution (ODR, which is mostly a buzzword and an attempt to create a distinctive product). ODR services can be provided by government entities, and as such may form part of the litigation process. Moreover, they can be provided on a global scale, where no effective domestic remedies are available to disputing parties, as in the case of the UDRP and domain name disputes. In this respect, ODR might not satisfy the "alternative" element of ADR. In England and Wales, the Online Procedure Rule Committee was set up under the Judicial Review and Courts Act 2022 to make rules governing the practice and procedure for specific types of online court and tribunal proceedings across the Civil, Family and Tribunal jurisdictions. OPRC is an advisory non-departmental public body, sponsored by the Ministry of Justice. The committee is chaired by the Master of the Rolls, Head of Civil Justice.
Definition ADR has historically been divided between methods of resolving disputes outside of official judicial mechanisms and informal methods attached to official judicial mechanisms. Regardless of whether they are part of an overarching proceeding, the mechanisms are generally similar. There are four general classes of ADR: negotiation, mediation, collaborative law, and arbitration. In some contexts, such as in the settlement of investment disputes, arbitration is not considered as a form of ADR, since it is the principal means of settling these disputes. Some academics include conciliation as a fifth category, but others include this within the definition of mediation.
Conflict resolution is one major goal of all the ADR processes. If a process leads to resolution, it is a dispute resolution process.Taken with permission from a presentation by Stephen R. Marsh of "Alternative" dispute resolution is usually considered to be alternative to litigation. For example, corporate dispute resolution can involve a customer service department handling disputes about its own products, addressing concerns between consumers and independent, third-party sellers, and participating in a reputation-based enforcement mechanism. It also can be used as a colloquialism for allowing a dispute to drop or as an alternative to violence.
In recent years, there has been more discussion about taking a systems approach in order to offer different kinds of options to people who are in conflict and to foster "appropriate" dispute resolution.Lynch, J. "ADR and Beyond: A Systems Approach to Conflict Management", Negotiation Journal, Volume 17, Number 3, July 2001, Volume, p. 213. That is, some cases and some complaints, in fact, ought to go to a formal grievance, to a court, to the police, to a compliance officer, or to a government IG. Other conflicts could be settled by the parties if they had enough support and coaching, and yet other cases need mediation or arbitration. Thus, "alternative" dispute resolution usually means a method that is not the courts. "Appropriate" dispute resolution considers all the possible responsible options for conflict resolution that are relevant to a given issue.
Negotiation
In negotiation, participation is voluntary and there is no third party who facilitates the resolution process or imposes a resolution. (NB – a third party like a chaplain or organizational ombudsperson or social worker or a skilled friend may be coaching one or both of the parties behind the scenes, a process called "Helping People Help Themselves" – see Helping People Help Themselves, in Negotiation Journal July 1990, pp. 239–248, which includes a section on helping someone draft a letter to someone who is perceived to have wronged them.)
Mediation
In mediation, there is a third party, a mediator, who facilitates the resolution process (and may even suggest a resolution, typically known as a "mediator's proposal") but does not impose a resolution on the parties. In some countries (for example, the United Kingdom), ADR is synonymous with what is generally referred to as mediation in other countries. Structured transformative mediation as used by the U.S. Postal Service is a formal process.
Traditional people's mediation has always involved the parties remaining in contact for most or all of the mediation sessions. The innovation of separating the parties after (or sometimes before) a joint session and conducting the rest of the process without the parties in the same area was a major innovation and one that dramatically improved mediation's success rate.
Lawyer-supported mediation
Lawyer-supported mediation is a "non-adversarial method of alternative dispute resolution to resolve disputes, such as settling family issues at a time of divorce or separation, including child support, custody issues, and division of property".
Party-directed mediation
Party-directed mediation (PDM) is an approach to mediation that seeks to empower each party in a dispute, enabling each party to have a more direct influence upon the resolution of a conflict, by offering both means and processes for enhancing the negotiation skills of contenders. The intended prospect of party-directed mediation is to improve upon the ability and willingness of disputants to deal with subsequent differences.
Collaborative law
In collaborative law or collaborative divorce, each party has an attorney who facilitates the resolution process within specifically contracted terms. The parties reach an agreement with the support of the attorneys (who are trained in the process) and mutually agreed experts. No one imposes a resolution on the parties.
Arbitration
In arbitration, participation is typically voluntary, and there is a third party who, as a private judge, imposes a resolution. Arbitrations often occur because parties to contracts agree that any future dispute concerning the agreement will be resolved by arbitration. This is known as a 'Scott Avery Clause'.. In recent years, the enforceability of arbitration clauses, particularly in the context of consumer agreements (e.g., credit card agreements), has drawn scrutiny from courts.Schwartz, David S., "Mandatory Arbitration and Fairness." 84 Notre Dame L. Rev. 1247 (19 April 2010) Although parties may appeal arbitration outcomes to courts, such appeals face an exacting standard of review.International Institute for Conflict Prevention & Resolution. "Arbitration Appeal Procedure."
Conciliation
Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, encouraging parties to explore potential solutions, and assisting parties in finding a mutually acceptable outcome.
Other methods Beyond the basic types of alternative dispute resolutions, there are other different forms of ADR.
Case evaluation Case evaluation is a non-binding process in which parties present the facts and the issues to a neutral case evaluator who advises the parties on the strengths and weaknesses of their respective positions, and assesses how the dispute is likely to be decided by a jury or other adjudicator.
Early neutral evaluation Early neutral evaluation is a process that takes place soon after a case has been filed in court. The case is referred to an expert who is asked to provide a balanced and neutral evaluation of the dispute. The evaluation of the expert can assist the parties in assessing their case and may influence them towards a settlement.
One Couple One Lawyer One Couple One Lawyer, or Single Lawyer, is a family law process developed in England and Wales where a separating couple shares one lawyer who advises them both, impartially and together, as to how a judge would view their case, and the likely outcome were they to litigate, thus enabling them to reach a fair settlement on separation or divorce. This differs from early neutral evaluation as it is designed so that parties never require separate representation, are assisted throughout by one legal team and the process has no adversarial features at all, either at the financial disclosure or advice stages.