What is ADR?

ADR is an umbrella term covering forms of dispute settlement which represent an alternative to national courts and arbitration. It encompasses mechanisms such as mediation, adjudication, expert determination, mini-trial, early neutral evaluation, neutral fact finding expert, mediation/arbitration and dispute review boards. Most of the ADR methods provide the basis for the parties to reach an agreement or settlement, but there are also those that impose a binding decision on the parties, notably adjudication and expert determination.

What the various ADR methods typically have in common is the aim to conclude disputes in a more satisfactory and mutually advantageous manner than litigation or arbitration either by providing an expedited formal process or by focusing on the parties’ interests and commercial objectives. Cost and time savings, confidentiality, party control, maintaining business relations and innovative solutions are amongst the main advantages of ADR. Mediation, the type of ADR most often used, has consistent annual success rates of in excess of 70 per cent and has experienced a substantial increase in popularity in recent years.

Already well established in the US and the UK, ADR is gaining momentum in Europe and other parts of the world. It is a fast developing growth area and clients need lawyers who are able to work with them to identify the most appropriate and advantageous method of dispute resolution at the contract drafting stage, as well as represent them effectively once a dispute arises.