Alternative Dispute Resolution: A 'How to' Guide

If you want to avoid litigation, you may consider entering into some kind of Alternative Dispute Resolution or ADR. ADR encompasses a wide range of procedures, such as Conciliation, Arbitration or appealing to an Ombudsman. Some are legally binding, which means that you must agree to abide by the intermediary’s decision. Others types of ADR only have the power to make recommendations, which means that the process requires some degree of good will between the parties. In yet other cases, the outcome may be binding on a trader but not on you, leaving you free to pursue litigation if you wish.

ADR is ideal for people who want to settle a dispute but who, for whatever reason, have been unable to do so through negotiation. It is a less formal procedure than having to go to court. The type of ADR that is available to you depends on what you are trying to resolve and with whom. ADR may be quicker and cheaper than going to court, but you should check fees of individual organisations before you decide. You should also ensure that you are happy to have your dispute decide on the papers only – i.e. you will not have your ‘day in court’. ADR is also confidential, which means that the details of the dispute and the resulting decision are not in the public domain (unlike court proceedings.)

Here is a useful checklist:

1. Check whether the person or organisation with whom you are in a dispute is a member of a trade organisation. If they are, contact the trade organisation directly and ask them about the best way to proceed.

2. If the person or organisation claims to be a member of a trade organisation and you find out that they are not, you should contact Consumer Direct immediately. Advertising yourself as having membership to a trade organisation is tantamount to fraud.

3. Check whether the outcome of the ADR is likely to be legally binding on you, on the other party, on both of you or on neither of you.

4. Check your contract – are you required to refer any disputes to arbitration? If not, are there any other stipulations such as mediation? If arbitration is cited as the way disputes should be settled in the first instance, you are very likely to be bound to this course of action (but may still litigate thereafter if necessary.) For more information on how to get started with arbitration, contact the Chartered Institute of Arbitrators.

5. If you are free contractually to choose how to proceed you may wish to consider conciliation, if it is available. This procedure is usually a preliminary type of ADR that is conducted by a member of the trade association involved. You will be required to supply written details of the dispute, producing relevant evidence, and the conciliator will then advise you as to the best way forwards. Conciliation is usually free, and if you disagree with the recommendation you can still pursue arbitration or court proceedings.

6. If you use a mediation scheme, you and the other party will be assisted to come to a mutually acceptable agreement. The mediator will act as a go-between if you do not want to have to meet face to face. Both parties need to agree to mediation and you are likely to have to meet with the mediator (although not necessarily with the other party.) Once an agreement is reached, it is legally binding unless otherwise stated. Bear in mind that mediation can be expensive, but you may be able to get help with legal costs for this kind of ADR. To find a suitable mediator, contact the Law Society and ask for them to assist you with their Civil and Commercial Mediation Panel. This is a specialist group of solicitors who are trained as mediators.

7. It may also be possible to use the Ombudsman scheme as a form of ADR. This will depend on the nature of your dispute. For example there is an Ombudsman for: Financial Services; Parliamentary and Health Services; Local Government services; Property; Housing; Energy; Telecommunications; an Ombudsman for Pensions and for Legal Services. Whether you use this service will depend on the type of dispute you have, and whether you are prepared for the outcome to be ‘recommendation only’ i.e. not legally binding.