Alternative dispute resolution (ADR) describes processes used to resolve disputes outside the ordinary courts. For many commercial disputes, ADR can save time and money, preserve business relationships and offer outcomes that are tailored to the parties’ commercial needs. This guide explains the main ADR options commonly used in England and Wales, practical steps to consider and how the courts interact with ADR processes.

Main ADR methods

Arbitration

Arbitration is a private adjudicative process in which one or more independent arbitrators decide the dispute. In England and Wales, arbitration is primarily governed by the Arbitration Act 1996, which sets out the legal framework for how arbitrations proceed, the powers of tribunals and the limited grounds on which awards can be challenged. Arbitration awards are final and enforceable as judgments in most jurisdictions, subject to narrow statutory challenges or enforcement procedures.

Key features of arbitration include party autonomy over procedure and choice of decision‑maker, the possibility of agreed confidentiality, and limited rights of appeal. When agreeing an arbitration clause, parties should consider the seat of arbitration, governing law, the rules of the chosen institution (if any), emergency relief arrangements and any requirements for specialist arbitrators.

Mediation

Mediation is a voluntary, facilitative process in which an independent mediator helps the parties reach a negotiated settlement. The mediator does not impose a decision. Mediation is flexible, confidential and can be effective at any stage of a dispute. Courts in England and Wales recognise mediation as a legitimate route to settlement and routinely encourage parties to consider it; court lists and guidance explain how mediation fits with litigation timetables.

Mediation settlements are ordinarily recorded as contracts and are enforceable by the usual contract law remedies. Some mediations are conducted under institutional rules that provide additional procedural or confidentiality safeguards.

Negotiation and expert determination

Direct negotiation remains the most common form of ADR. Parties may also agree expert determination for discrete technical disputes (for example, valuation or technical performance questions). Negotiation and expert determination are attractive where speed, cost control and commercial pragmatism are priorities.

How the courts interact with ADR

Court procedures are designed to encourage proportionate dispute resolution. Judges may expect parties to have considered ADR options and can take parties’ conduct on ADR into account when making costs orders. In some contexts (for example, certain types of employment tribunal claims) particular pre‑claim conciliation schemes are mandatory; similarly, specialist sectors can have sectoral dispute resolution requirements.

If urgent interim relief is needed (for example, freezing assets or injunctions), courts remain the principal route. Arbitration awards may be given interim protection, but courts frequently provide emergency measures even where proceedings or arbitration are ongoing.

When ADR is most appropriate

Consider ADR where:

• the parties seek a quicker or less public route to resolution than court litigation;
• confidentiality is commercially important;
• there is a need for specialised decision‑makers (e.g. construction or technical disputes);
• preserving business relationships or achieving creative remedies (such as middle‑term commercial arrangements) is desirable.

Certain matters are generally unsuitable for ADR, including criminal allegations and some public law issues where the public interest requires judicial determination. Employment disputes have particular pre‑claim requirements (for example, ACAS early conciliation in tribunal claims in Great Britain).

Practical considerations

• Contract clauses: include clear ADR clauses (choice of arbitration seat, rules, mediator appointment method and timetables). Clauses should be drafted to reflect the commercial priorities of the parties.
• Seat and law: the legal seat of arbitration governs the supervisory role of local courts and the extent of challenge rights. Ensure the chosen seat aligns with expected enforcement jurisdictions.
• Confidentiality: many ADR processes are private, but confidentiality is a matter of contract — consider express clauses to protect sensitive information.
• Interim relief: preserve rights to urgent court relief in your agreement if you may need interim measures.
• Costs and funding: ADR may reduce time and fees, but costs vary by provider and complexity. Consider cost‑control measures (e.g. staged disclosure, limits on witness evidence).
• Evidence and procedure: arbitral procedure can be tailored; mediation typically requires less formal evidence. Choose the method suited to the factual complexity and commercial urgency.
• Enforceability: arbitral awards are generally enforceable internationally under the New York Convention where applicable; mediated settlement terms are enforceable as contracts but check jurisdictional enforcement mechanisms.
• Representation: parties can be represented by lawyers, but ADR also supports direct party participation; specialist advocacy skills are helpful in arbitration hearings.

Choosing between ADR processes

Start by identifying the objectives (speed, confidentiality, finality, technical expertise, cost). If final and internationally enforceable determination is needed, arbitration is often appropriate. If preserving a commercial relationship or finding flexible solutions matters, mediation or negotiated settlement may be better. Hybrid approaches (for example, med‑arb, expert determination followed by arbitration) are possible but require careful drafting to avoid unfairness or procedural traps.

About TRW UK

TRW’s UK practice assists commercial clients with ADR strategy, contract drafting for dispute resolution clauses and representation in mediation and arbitration. The UK branch is with the UK office team serving as UK office leadership. This article describes general principles and should not be taken as advice tailored to any specific case.

Jurisdiction note

This article is written with England and Wales as the default jurisdiction. Scotland and Northern Ireland operate different procedural and statutory frameworks in some respects; different rules or practice directions may apply there. Where disputes involve those jurisdictions, obtain advice from lawyers qualified in the relevant jurisdiction.

Checked 15 September 2026; verify current rules before relying on this article.

Sources and approvals

Primary sources and further reading:

• Arbitration Act 1996 (legislation.gov.uk)
• Courts and mediation (GOV.UK)

General information only; not legal advice and not a substitute for advice on a particular matter.