Using alternative dispute resolution (ADR) mechanisms to resolve commercial disputes

ADR-mechanisms-to-resolve-commercial-disputes.jpg.jpg

Alternative Dispute Resolution (ADR) is typically used when a business faces a dispute with a customer or supplier that cannot be resolved internally. In such cases, third-party support is sought to reach a resolution outside of court.

Sara Beaumont, a director at WHN’s Bury office and a specialist in commercial dispute resolution, explains what ADR is and how businesses can benefit from using ADR to settle commercial disputes.

Recent amendments to the Civil Procedure Rules (CPR), effective from October 1, 2024, marked a pivotal moment in the promotion and utilisation of alternative dispute resolution (ADR) mechanisms.

These amendments aim to integrate ADR more intensely into the civil justice system, and reflect a broader trend towards encouraging more efficient, cost-effective and amicable resolutions to commercial disputes. Subsequently this also aims to reduce the number of commercial disputes seeking resolution through the courts and relieve the burden on the justice system.

What is Alternative Dispute Resolution?

Alternative Dispute Resolution encompasses various methods of resolving disputes outside traditional court proceedings.

The main types of ADR include:

Mediation: A neutral third party (mediator facilitates discussions between the disputing parties to help them reach a mutually acceptable agreement. Mediation is non-binding unless an agreement is reached and formalised.
Arbitration: In arbitration, a neutral third party, the arbitrator, hears evidence and arguments from the parties and makes a binding decision. Arbitration is often used in commercial contracts and can be faster and more flexible than court proceedings.
Negotiation: This is a direct discussion between the parties involved in the dispute, with the aim of reaching a settlement without the involvement of third parties. Negotiation is the most informal and flexible form of ADR.
Conciliation: Similar to mediation, conciliation involves a neutral third party who helps the disputing parties to resolve their issues. However, the conciliator may take a more active role in suggesting solutions and terms of settlement.
Expert determination: This process involves appointing an independent expert with specialised knowledge in the subject matter of the dispute. The expert evaluates the evidence and provides a binding or non-binding decision, depending on the parties’ agreement.
Early Neutral Evaluation (ENE): ENE involves an independent evaluator, often a judge or experienced lawyer, who assesses the merits of the case early in the dispute. The evaluator provides a non-binding opinion, which can help the parties understand the strengths and weaknesses of their positions and facilitate settlement.
Ombudsman schemes: Ombudsman schemes are independent bodies that investigate and resolve complaints between consumers and businesses. They provide a free, impartial service and their decisions are usually binding on the business if the consumer accepts the decision.

The benefits of resolving commercial disputes using ADR

Using Alternative Dispute Resolution to resolve commercial disputes can be beneficial to business for several reasons, including saving time and money and seeking more satisfactory and flexible solutions for the parties involved. Here is a breakdown of these benefits:

Efficiency and cost-effectiveness: ADR methods, particularly mediation and arbitration, are often quicker and less costly than traditional litigation. By encouraging or mandating ADR, the courts aim to reduce the time and expense associated with resolving commercial disputes, benefiting businesses and the judicial system alike.
Preservation of business relationships: ADR processes are generally less adversarial than court proceedings, which can help preserve business relationships. This is particularly important in commercial disputes where ongoing business interactions are common.
Flexibility and control: ADR offers parties greater flexibility and control over the resolution process. Unlike court judgments, which are typically binary, ADR allows for creative solutions that can be tailored to the specific needs and interests of the parties involved.
Increased compliance: With the courts now having the power to mandate ADR, parties are more likely to comply with ADR processes. This can lead to higher settlement rates and more satisfactory outcomes for all parties involved.

By actively managing cases and mandating ADR where appropriate, the courts are fostering a more efficient, cost-effective, and amicable dispute resolution environment. As solicitors, we will always advise clients on these benefits and the opportunities presented by ADR.

Not only does ADR align with the courts’ objectives, it serves the best interests of our clients by providing a more effective and satisfactory resolutions to their disputes.

Sara specialises in resolving commercial disputes at all levels – both before and after the issue of court proceedings – and is experienced in the use of alternative dispute resolution, particularly mediation.

For further advice on dealing with a commercial dispute call Sara Beaumont on 0161 761 4611 or email her at [email protected]

Enjoyed this? Read more from Woodcocks Haworth & Nuttall Solicitors

Latest news

1

MHA lists on AIM for £271m Rakesh Shaunak MHA Retouch

MHA lists on AIM for £271m

15 Apr 2025

2

164-home golf course development drives ahead Ingol plans by Northern Trust

164-home golf course development drives ahead

14 Apr 2025

3

Green light for £24m village development Applethwaite Grimsargh site

Green light for £24m village development

14 Apr 2025

4

Homebuilder unveils Clayton-le-Woods development Wain Homes site

Homebuilder unveils Clayton-le-Woods development

14 Apr 2025

5

Blackpool Grand’s restoration project is a triumph Blackpool Grand exterior

Blackpool Grand’s restoration project is a triumph

14 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Pure Leisure Group to Host Job Fair as Part of Recruitment Drive
sllv ext 66.jpg.jpg
LBV Hub Exhibitions
23 Apr 2025 - 23 Apr 2025

Pure Leisure Group to Host Job Fair as Part of Recruitment Drive

South Lakeland Leisure Village, Carnforth, LA5 9RN

09:00 - 17:00

The Business Network Central & East Lancashire
LBV Hub Networking
24 Apr 2025 - 24 Apr 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Preston Freelancer Meet-Up: April
1.png.png
LBV Hub Networking
25 Apr 2025 - 25 Apr 2025

Preston Freelancer Meet-Up: April

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

People Power: Exclusive Event Series
Stay ahead in 2025.jpg.jpg
LBV Hub Seminars
29 Apr 2025 - 29 Apr 2025

People Power: Exclusive Event Series

People's History Museum, Manchester, M3 3ER

17:00 - 21:00

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin