Demarcate the scope of application of alternative dispute resolution (ADR) in dispute settlement mechanism Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) (also known as external dispute resolution in some countries, such as Australia) comprises dispute resolution procedures and techniques that proceed as a means for disagreeing parties to come to an agreement short of court case. ADR basically is an substitute to a formal court hearing or litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party. ADR are ways and methods of resolving disputes outside the legal procedure[1].

If you have a disagreement over the supply of goods or services that you have been incapable to settle through negotiation, you may wish to believe using an alternative dispute resolution scheme rather than taking court action.  These schemes use a third party such as an arbitrator or an ombudsman to help you and the supplier to reach a solution.  You will usually have to complete the supplier’s internal complaints process beforehand and you may have to pay a fee for using the scheme.  This is usually refunded if you are successful.  Some schemes are legally obligatory, which means you cannot take court action if you aren’t pleased with the decision, except to enforce an award.  If your claim is over £5,000, you should discuss the option of ADR with your solicitor.  If your claim is less than this amount, you should look at the pros and cons of ADR and small claims actions and decide which would be the best course of action for you[2].

Regardless of significant resistance to ADR by many popular parties and their advocates, ADR has gained prevalent acceptance among both the general public and the legal profession in recent years. In fact, some courts now require some parties to resort to ADR of some type, usually arbitration, before permitting the parties’ cases to be tried (indeed the European Mediation Directive (2008) expressly contemplates supposed “compulsory” mediation; attendance that is, not settlement at mediation). The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR inflicts fewer costs than litigation, a fondness for privacy, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute. Some of the senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly in favor of the use of arbitration to settle disputes.

Alternative Dispute Resolution Methods

Level of Formality ADR Mechanisms
Least Formal


Most FormalNegotiation

Settlement Counsel



Early Neutral Evaluation

Neutral Fact Finding Expert



Dispute Review Board

Expert Determination





1. Litigation

Litigation Suitability Screening Matrix

  • Does not require party agreement and can be institute d unilaterally
  • Public forum that allows for a full airing of complaint
  • Public communications of procedural safeguards
  • temporary measures of defense available
  • Binding outcome
  • Enforceability of court’s decision
  • Possibility of application
  • The application and establishment of model
  • answerability of the decision-maker
  • Publicly funded decision-maker and facilities
  • Neutralizes power imbalances
  • Broad discovery often available
  • Parties subject to court’s authority can be compelled to appear


2. Alternatives to Litigation

  • No control over selection of decision-maker
  • Decision-maker typically lacks the required technical expertise
  • Not private
  • Lengthy delays
  • Time consuming
  • Expensive
  • Formal, rigid and multifaceted procedures
  • Limited range of cure
  • Broad discovery possibilities
  • Possibility of appeal
  • Polarizing and can destroy business relationships
  • In an international cross-border dispute, foreign laws, technical and evidentiary rules, language differences and possible local partiality
  • International enforcement limits






Commonly Used ADR Techniques

(i) Negotiation

Negotiation Suitability Screening Matrix

  • make the most of possibility of an early resolution
  • Cost savings
  • Privacy and solitude
  • Business relations can be preserved
  • Can help to narrow differences
  • No waiver of right to go to court or use other binding or non-binding dispute resolution process
  • Non-prejudicial to parties’ position in following proceedings
  • Natural progression of problem escalation procedures
  • May not give up an outcome



 (ii) Mediation

Mediation Suitability Screening Matrix

  • Based on party harmony
  • Maximizes likelihood of an early resolution
  • Non-binding
  • Business relationships can be sealed
  • Substantial cost-savings relative to adjudicatory ADR
  • Privacy and confidentiality
  • Procedural elasticity
  • Flexible and creative solutions
  • Parties select neutral(s)
  • Neutrals with expertise can be appointed
  • No waiver of right to have the dispute resolved by litigation or arbitration if mediation fails
  • Non-prejudicial to parties’ positions in ensuing dispute resolution proceedings
  • Requires party harmony
  • Third party neutral lacks power to impose settlement
  • Neutral lacks power to compel participation
  • No application or firm of precedent
  • No due process maintain
  • Lacks enforceability
  • Outcome not binding unless parties sign agreement





The Limitations of ADR

Although ADR programs can play an important role in many development efforts, they are ineffective, and perhaps even counterproductive, in serving some goals related to rule of law initiatives.  In particular, ADR is not an effective means to:

·Define, refine, establish and promote a legal framework. Redress pervasive injustice, discrimination, or human rights problems.

·Resolve disputes between parties who possess greatly different levels of poweror authority.

·Resolve cases that require public sanction.

·Resolve disputes involving disputants or interested parties who refuse to participate, or cannot participate, in the ADR process.

 A.  ADR programs do not set precedent, refine legal norms, or establish broad community or national standards, nor do they promote a consistent application of legal rules.

As noted earlier, ADR programs are tools of equity rather than tools of law.  They seek to resolve individual disputes on a case-by case basis, and may resolve similar cases in different ways if the surrounding conditions suggest that different results are fair or reasonable according to local norms. Furthermore, ADR results are private and rarely published.   As long as some other judicial mechanism exists to define, codify, and protect reasonable standards of justice, ADR programs can function well to resolve relatively minor, routine, and local disputes for which equity is a large measure of justice, and for which local and cultural norms may be more appropriate than national legal standards.  These types of disputes may include family disputes, neighbor disputes, and small claims, among others. In disputes for which no clear legal or normative standard has been established, ADR may not be able to overcome power imbalances or fundamental disagreements over norms among disputants.  On the other hand, in situations where there is no established legal process for dispute resolution, ADR may be the best possible alternative to violence.  For example, in South Africa, a variety of ADR processes used before and during the transition appear to have prevented violence to some degree and helped set the foundation for peaceful political change.

 B.  ADR programs cannot correct systemic injustice, discrimination, or violations of human rights.

As noted above, ADR systems often reflect the accepted norms of society.  These norms may include discrimination against certain groups and populations.  When this is true, ADR systems may hinder efforts to change the discriminatory norms and establish new22 The Limitations of ADR standards of group or individual rights.  In India, for example, the lok adalats were generally credited with resolving large numbers of cases efficiently and cheaply in the mid-1980s before the system was taken over by the government judiciary.  Women, however, did not like the system, especially for family disputes, because resolution of disputes was based on local norms, which were often discriminatory towards women, rather than on more recently defined legal rights.  The same was true for members of lower castes.

C.  ADR programs do not work well in the context of extreme power imbalance between parties.

These power imbalances are often the result of discriminatory norms in society, and may be reflected in ADR program results.  Even when the imbalance is not a reflection of discriminatory social norms, most ADR systems do not include legal or procedural protections for weaker parties.  A more powerful or wealthy party may press the weaker into accepting an unfair result, so that the settlement may appear consensual, but in fact result from coercion.  For the same reason, ADR programs may not work well when one party is the government. When the program design has been able to enhance the power or status of the weaker party, ADR has been effective in conditions of discrimination or power imbalance.  In Bangladesh, for example, women who have submitted cases of spousal abuse to mediation have found that the village mediation system, which includes women mediators, provides better results than the court system which is even more biased against women in these cases. (See Bangladesh Case Study.)  In general, however, ADR programs cannot substitute for stronger formal protections of group and class rights.

D.  ADR settlements do not have any educational, punitive, or deterrent effect on the population.

 Since the results of ADR programs are not public, ADR programs are not appropriate for cases which ought to result in some form of public sanction or punishment.  This is particularly true for cases involving violent and repeat offenders, such as in many cases of domestic violence.  Societal and individual interests may be better served by court sanctioned punishment, such as imprisonment. It is important to note, however, that victim offender mediation or conciliation may be useful in some cases to deal with issues unresolved by criminal process.

 E.  It is inappropriate to use ADR to resolve multi-party cases in which some of the parties or stakeholders do not participate.

This is true because the results of most ADR programs are not subject to standards of fairness other than the acceptance of all the participants.  When this happens, the absent stakeholders often bear an unfair burden when the participants shift responsibility and cost to them.  ADR is more able than courts to include all interested stakeholders in disputes involving issues that affect many groups, such as environmental disputes.  When all interested parties cannot be brought into the process, however, ADR may not be appropriate for multi-stakeholder public or private disputes. The Limitations of ADR 23

 F.  ADR may undermine other judicial reform efforts.

There is a concern that support for ADR may siphon money from needed court reforms, draw management and political attention from court reform efforts, or treat the symptoms rather than the underlying causes of problems. While these concerns are valid, they will rarely materialize if ADR programs are not designed to substitute for legal reform.  In most cases, ADR programs will be far less expensive to start and operate than broad-scale judicial reform efforts. In Ukraine, for example, the USAID mission considers the mediation program to be very inexpensive compared with other rule of law programs.  And, in Sri Lanka, the Mediation Boards resolve cases at a fraction of the cost the government would incur through the ordinary court system.  In general, ADR programs reduce costs for the state, and therefore for donors, at least as much as they reduce costs for disputants. In sum, ADR programs do not necessarily draw attention away from problems that can only be addressed through formal justice processes, as long as both development officers and government officials keep in mind the limitations of ADR programs.


Many ADR practitioners, both those who combine their ADR practice with legal practice and those who do not, expressed significant concern at techniques directed mainly at trading-off the probability of success in court. This was supposed as particularly prevalent in the Auckland region and was characterized by some ADR practitioners as a model which allowed disputants to be ‘bullied’. It was a model that some found opposing to what they believed to be the core philosophical values of mediation and the core elements which led to better quality solutions – the empowerment of the disputants, and the expectation that disputants should take responsibility for mutually generating and committing to consensual solutions.


1. American Bar Association Section of Dispute Resolution.   Summer 1997.  “Focus on the Rand Report,”

Dispute Resolution Magazine, vol. 3, no. 4.

2. Jaffe, Sanford M. and Stamato, Linda. 1997. “No Short Cuts to Justice,”   Alternatives,  vol. 15, p. 67.

3. Lind, E. Allan.  1990.   Arbitrating High-Stakes Cases, An Evaluation of Court-Annexed Arbitration in

a United States District Court,  RAND Institute for Civil Justice Report, R-3809-ICJ.

4. Press, Sharon and Filner, Judy.  March/April 1996.  “Getting to Excellence in Court System ADR,”

NIDR News.  Washington, DC: National Institute for Dispute Resolution.

5.  Center for Public Resources/CPR Legal Program.  1993.  Judge’s Deskbook on Court ADR..   New

York:  Federal Judicial Center.

6.  Elizabeth Plapinger and Donna Stienstra.   1996.  ADR and Settlements in the Federal District Courts:

A Sourcebook for Judges and Lawyers.  Washington, DC: Federal Judicial Center and CPR Institute for

Dispute Resolution.

7.  Frank E.A. Sander and Stephen B. Goldberg.   January 1994.  “Fitting the Forum to the Fuss: A UserFriendly Guide to Selecting an ADR Procedure,”  Negotiation Journal,   pp. 49-68.

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