Alternative dispute resolution

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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.^[1] 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.^[2][3]

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.^[when?] 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).^[4] Additionally, parties to merger and acquisition transactions are increasingly turning to ADR to resolve post-acquisition disputes.^[5] 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^[6] 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^[7]) 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.^[8] 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.^[9][10] Since the 1990s many American courts have also increasingly advocated for the use of ADR to settle disputes.^[11] 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.^[12]