Pros and Cons of ADR
When you are trying to decide whether or not to try ADR, what should you think about? What are the most important factors?
If you want to know more about how a particular type of ADR works, such as mediation, have a look at the Types of ADR menu on this site.
If you want to know what ADR options are available to deal with a specific problem, such as an employment dispute, have a look at the Types of Problem menu on this site.
This page gives an overview of the advantages which using ADR might offer, and also the risks that might be involved. It has four sections:
What are your alternatives?
Reasons for using ADR
Risks in using ADR
The cost of ADR
What are your alternatives?
When you think about whether to use ADR to sort out a particular dispute, it’s helpful to think about your other options. Are you considering ADR because you think it will be better than the court process? Or are you wondering whether to try ADR because you don’t seem to have any other choices?
- ADR may be an alternative to going to court or to a tribunal. If this is the case, you should think about which process might be cheaper, which might be quicker, which you would find less stressful, and what outcome you might end up with.
- ADR may also be an option for trying to resolve a problem where there are no formal alternatives. In neighbour disputes, for example, there may not be an easily available legal remedy. If this is the case, you should think about whether attempting ADR is better than an informal chat with your neighbours, or in fact doing nothing at all
- You might not have a choice about using ADR. If you re going to court to deal with divorce or separation, for example, you are required to meet with a mediator first and consider mediation. In future this might also be true if you are going to court with a non-family dispute, such as a consumer claim.
Either way, here are some of the commonly agreed pros and cons of different types of ADR.
Reasons for using ADR
There are ongoing debates about the advantages and disadvantages of different ADR options. When thinking about the claims that are made for any dispute resolution option, do bear in mind who is making the claim, and why.
Mediators, for example, will commonly claim that mediation is quicker and cheaper than going to court. However, the 2007 Central London County Court research published by the government showed that this is not always the case. As you might expect, when mediation ended in a settlement, people thought it was quicker and cheaper than going to a full court hearing. When the parties didn’t settle at mediation, they thought it just added time and costs to the process. And don’t forget that most court cases end in a settlement negotiated by your solicitor. This, too, is likely to be quicker and cheaper than a full court hearing. So a more realistic choice might be between allowing your solicitor to negotiate a settlement on your behalf, and choosing to go to a mediation session where you can tell your own story, and try to negotiate face to face.
Here are some of the commonly agreed benefits of ADR:
- Going to court can risk making a bad situation worse. Using mediation, where you talk to each other to find a solution you can both live with, can help preserve an ongoing relationship. This might be useful if you have a dispute with your neighbour, your ex-partner, your child’s school, or your landlord.
- There is a much wider range of outcomes with ADR than with courts. Mediation or an ombudsman investigation may well be more appropriate than court if your main aim is an apology, an explanation, or a change in policy or practice by an organisation.
- ADR processes are more flexible than the court process. Most ombudsmen will investigate your complaint through letters and documents, without a formal hearing. Mediators will usually bring both parties together for a face to face discussion. Acas will try to negotiate a deal through a series of phone calls.
- When it works, mediation can produce a solution that satisfies both sides. Mediators try to generate creative discussions about a range of options. Rather than just aiming for an acceptable compromise, they will try to end up with an agreement which reflects the best possible outcome for all involved. This can have an effect on what happens afterwards. Research on family mediation indicates that agreements reached through mediation are more likely to work out in practice, and to last longer, than those imposed by a court. Virtually all of the mediated agreements made in small claims cases are complied with - hardly any need enforcement action by bailiffs. This is not true of court orders, which often require the winning party to take action, and pay extra costs, to enforce them.
- Ombudsmen have the power to investigate problems in depth, and, like courts, can require information to be provided by the organisation complained about. Unlike courts, they are free to the user. Poorly performing local authorities and government departments can be identified by the public services ombudsmen. If your problem is a symptom of much wider problems with a particular council or public body, then the ombudsman can investigate one complaint, and suggest wide-ranging changes in practice to make things better for everyone.
- Some ADR options provide a remedy where there are few other practical, affordable options; this could include issues such as neighbour disputes about noise or low-level anti-social behaviour, or complaints to the Financial Ombudsman Service about financial service providers.
If you are thinking about ADR as an alternative to court action, have a look at ADR and the courts for more information.
top
Risks in using ADR
There are some situations when ADR may not be appropriate, and may even carry a degree of risk for one of the parties. It is a good idea to get some independent legal advice about this. It is important for solicitors and legal advisers to use their professional judgement in each case, but these are some of the factors you should think about:
- There may be an imbalance of power between the parties, which could make face-to-face mediation unfair. This could include family or neighbour mediation where there has been violence or the threat of violence; or mediation between an individual and a large organisation such as a local authority, where the size and resources of the organisation could put the individual at a disadvantage.
- There may be an urgent need (for example to prevent eviction) which requires an immediate legal remedy.
- Mediation and ombudsmen do not provide a legally binding, enforceable outcome, so if the aim of court action is to force a debtor to pay up, or to compel a local authority to meet its obligations, then court may be a better option.
- Agreements reached in mediation do not act as precedents in future cases. They are private, confidential, and not open to public scrutiny. If you need to establish a point of law that other people can rely on, you may need to go to court.
- You cannot rely on legal rights and human rights in ADR processes.
- Ombudsmen investigations can be very slow.
- Although ombudsmen can make compensation awards, they are often lower than is likely to be achieved in court. If you need a significant sum of money in compensation, then you are likely to get a higher award through the court.
- Arbitration, and often adjudication, are processes that result in legally binding decisions. This means that you cannot reject the decision if you don't like it, and you can't take the claim to court instead.
- There are no consistent quality standards or regulation for ADR providers, so it can be hard for advisers or their clients to know how to choose a good service.
top
The cost of ADR
The cost of different ADR options varies from free to extremely expensive.
Arbitration
Most arbitration schemes charge a fee. An experienced arbitrator in a commercial dispute can be very costly. However, consumer arbitration schemes run for a trade association are usually relatively low-cost. For example, most claims under the ABTA arbitration scheme for holiday disputes currently have a registration fee of £108.
Mediation
Mediation costs vary depending on the type of mediation involved.
- Community mediation is usually free to users, although some services charge a small fee.
- With family mediation, it can be hard to work out how much it's going to cost at the start. The total cost depends on lots of different things: the number of issues to be decided, how complicated they are, how long it takes to reach an agreement, which service you use, and whether you can get legal aid. If you are on legal aid, it is definitely cheaper to use mediation than to get a solicitor to negotiate for you. Legal aid for mediation (and the legal advice you get alongside it) does not need to be paid back. But legal aid to pay for a solicitor to negotiate for you or take the matter to court may have to be. If you're paying for mediation yourself, you could end up paying anything between £100 and £1000 per person. Have a look at the ‘What is mediation?’ leaflet on the Advicenow website for more information about costs – there is a link at the bottom of the page.
- Civil/commercial mediation costs can be high; the Centre for Effective Dispute Resolution (CEDR), for example, says that for most mediations the cost will be between £1,500 and £3,000 per party. Under its Mediation 125 scheme, the mediation fee for claims up to £75,000 is £1,000 plus VAT.
- Fixed-rate mediation is available from providers listed on the government's Civil Mediation Directory (which replaced the National Mediation Helpline in October 2011). This is an online tool that helps you to locate a local mediation provider; all providers listed are accredited by the Civil Mediation Council. Mediations are provided at a fixed, subsidised rate, which starts from £50 + VAT per party for a one-hour session for small claims (of less than £5,000), increasing to £425 + VAT per party for a four-hour session (for claims up to £50,000). When contacting a provider, it is important to mention that you located them via the Directory, in order to obtain the fixed-fee rate.
- Don’t forget that in court cases, the loser usually pays the costs of the winning side, except in the small claims process. Unless it is agreed otherwise, in mediation the usual arrangement is that each side pays their own costs. Remember that clients eligible for Legal Aid can claim the cost of mediation as a disbursement under the funding code.
- Mediation is now free in all small claims cases – there is a mediation officer, paid by the government, in every court area. The small claims mediation officer will offer free telephone or face-to-face mediation in small claims disputes, if both parties are willing.
Ombudsmen
Ombudsman schemes are free to use, but it’s worth thinking about the cost of copying and sending documents and letters. If your complaint is upheld, you can usually claim back reasonable expenses but any compensation you receive will not reflect your time in terms of lost earnings, nor will it usually cover professional fees.
top
January 2012
