Alternative dispute resolution is an approach used to settle legal complaints with the assistance of an impartial dispute resolution body, without the need for a court case. In many cases, this will be an easier, faster and less expensive way to resolve disputes.

There are a number of different alternative dispute resolution methods:

• Mediation: mediation involves a neutral third party, known as a mediator, who helps disputing parties find a mutually acceptable resolution. The mediator facilitates communication, promotes understanding, and assists the parties in identifying their priorities and options. However, they do not make a decision; the resolution is reached voluntarily by the parties.
• Arbitration: in arbitration, a neutral third party, the arbitrator, listens to the evidence and arguments presented by each side, and then makes a decision that is binding on the parties. It's similar to a court proceeding but generally more flexible, less formal, and can be kept confidential.
• Conciliation: this process is similar to mediation, but the conciliator plays a more active role in suggesting possible solutions or compromises to the parties. The conciliator may have more expertise on the particular subject matter than a mediator. The process remains voluntary, and the parties retain control over the decision to agree on the conciliator's suggestions.
• Negotiation: this is the most informal form of alternative dispute resolution. It involves direct discussions between the parties involved in the dispute, intending to reach a mutually satisfactory agreement. It can be undertaken with or without the assistance of legal representatives, and does not involve a third party.

Each method offers distinct advantages and can be chosen based on the specific needs and dynamics of the dispute, with the common goal of achieving a resolution in a more private, efficient and potentially less adversarial manner than traditional litigation.

In most cases, alternative dispute resolution will be seen as a preferable option compared to a potentially protracted court case. However, there may be some instances in which traditional litigation will achieve a better result.

Here, we break down the advantages and disadvantages of alternative dispute resolution:

Advantages

• Cost-effective: methods such as mediation or arbitration generally incur lower costs compared to litigation
• Time-saving: these processes are usually quicker, with resolutions potentially reached in a matter of months or even weeks.
• Confidentiality: alternative dispute resolution proceedings are private, keeping sensitive information and the dispute itself out of the public eye.
• Preserves relationships: this approach focuses on cooperation, and can preserve business or personal relationships post-resolution.

Disadvantages

• Lack of formality: the informal nature of alternative dispute resolution might not be suitable for all types of disputes, especially those requiring rigorous legal procedures.
• Non-binding decisions (in some cases): decisions in mediation are not legally binding unless a contract is formed post-resolution, potentially leading to further disputes.
• Limited scope for appeal: in arbitration, the opportunity for appeal is significantly limited compared to litigation.
• May not resolve power imbalances: in situations where there is a significant power imbalance between the parties, alternative dispute resolution may not adequately address the interests of the weaker party.

As a means of dispute resolution, litigation cannot be discounted as an option. The pros and cons of this approach are as follows:

Advantages

• Formal and structured: litigation provides a structured legal framework, offering a formal setting for dispute resolution.
• Legally binding: decisions made through litigation are enforceable by law, providing a definitive resolution.
• Public record: litigation proceedings and judgments are matters of public record, which can be beneficial for precedent-setting or public interest cases.

Disadvantages

• Cost: litigation can be expensive, with costs escalating quickly due to legal fees, court costs and other expenses.
• Time-consuming: the process can be lengthy, sometimes taking years to reach a final resolution.
• Public exposure: as a matter of public record, litigation can expose sensitive information or harm reputations.

Due to these considerations, the choice between litigation and ADR should be made based on the specific circumstances and needs of the dispute. This is why it is vital to seek practical legal advice from dispute resolution solicitors with expertise in this area, in order to determine which approach will be best for your specific circumstances.