John Szepietowski discusses the benefits and disadvantages of ADR

Alternative Dispute Resolution, also known as ADR, is a way of settling disputes outside of the courtroom. They are commonly thought to be confined to ‘pre-action’ or before a claim is issued, however, courts expect the parties to try and settle their disputes even while litigation is ongoing. This is because of the ‘Overriding Objective’ as set out in CPR 1.1, which states that litigation should be run as to ‘enable the court to deal with cases justly and at proportionate cost’.

There are many different forms of ADR. The most common one is mediation, whereby a third party is the mediator. They liaise with both parties to find ground of common agreement and to try and narrow the issues in dispute between them. This is not legally binding. Other forms of ADR include early neutral evaluation, where an independent and impartial evaluation (usually a retired judge) will give their view on the merits of each sides’ case, and expert determination, where an independent technical expert makes a binding decision on a technical issue in dispute (unless the parties agree beforehand that it will not be binding).

Advantages of ADR

Time: Litigation can be heavily procedural. The claim form and particulars of claim must be filed, then the acknowledge of service on the defence, and then the defence itself. The Claimant may also want to issue a reply and the Defendant may want to apply for extensions of time. That is all before the case is even listed for further directions!

From there, there could be a further timetable for disclosure, witness statements and expert reports. Depending on the complexity of the case, the matter could last from between 6 months to 2 years. Even if the Claimant is successful in their case, the issue of costs recovery may last for a further few months and, if the Defendant is uncooperative, then enforcement proceedings would be required.

ADR can be useful in either bringing the claim to a swift end or at least narrowing down the issues in the case, which would mean that further down the line in the case, less time must be spent at conferences and hearings.

Cost: As set out above, litigation can be a lengthy process. In turn, this incurs legal fees which can run into the tens of thousands. On top of this, clients would be expected to cover disbursements, such as barrister’s fees, upfront. This can be daunting to both Claimants and Defendants.

Agree your own terms: You can agree terms by consent that a court would not otherwise be able to order. There is therefore greater room for flexibility.

Privacy: The terms of settlement agreements do not have to be on the court record, and therefore it protects the confidentiality of the parties.

Not necessarily binding: Mediation and negotiations between solicitors are not binding on the parties as they are often on a ‘without prejudice’ or ‘without prejudice save as to costs’ basis. In the former, neither party may raise the settlement negotiations in front of a judge, and in the latter, such negotiations may only be raised on the costs recovery side of the case, not in the substance of the case itself.

Disadvantages of ADR

Waste of time: Where both parties are at opposite ends, ADR may be pointless if neither side chooses to engage with one another. It would therefore be a waste of the parties’, their legal representatives’ and any third party’s time to carry on with discussions when neither side is willing to compromise. ADR can therefore also be used as a ‘stalling tactic’.

Not binding: In cases where an expert or a third party thinks your case is stronger, you may feel encouraged at first, and then disappointed, as their verdict is not legally enforceable.

Time and cost: Some methods of ADR such as arbitration or mediation, can still be expensive. Arbitration in particular, where a specialist in the field is appointed by both parties to resolve the issues, can take longer than litigation in some extreme cases.

For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email or visit our Linkedin page


Alina Dewshi

November 2021

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