We’re here with practical legal information for your business. Learn about employment law, company law and more.

Setting up a business involves complying with a range of legal requirements. Find out which ones apply to you and your new enterprise.

While poor governance can bring serious legal consequences, the law can also protect business owners and managers and help to prevent conflict.

Whether you want to raise finance, join forces with someone else, buy or sell a business, it pays to be aware of the legal implications.

From pay, hours and time off to discipline, grievance and hiring and firing employees, find out about your legal responsibilities as an employer.

Marketing matters. Marketing drives sales for businesses of all sizes by ensuring that customers think of their brand when they want to buy.

Commercial disputes can prove time-consuming, stressful and expensive, but having robust legal agreements can help to prevent them from occurring.

Whether your business owns or rents premises, your legal liabilities can be substantial. Commercial property law is complex, but you can avoid common pitfalls.

With information and sound advice, living up to your legal responsibilities to safeguard your employees, customers and visitors need not be difficult or costly.

As information technology continues to evolve, legislation must also change. It affects everything from data protection and online selling to internet policies for employees.

Intellectual property (IP) isn't solely relevant to larger businesses or those involved in developing innovative new products: all products have IP.

Knowing how and when you plan to sell or relinquish control of your business can help you to make better decisions and achieve the best possible outcome.

From bereavement, wills, inheritance, separation and divorce to selling a house, personal injury and traffic offences, learn more about your personal legal rights.

Alternative dispute resolution FAQs

24 FAQs people ask about alternative dispute resolution

  1. What is alternative dispute resolution (ADR)?
  2. What are the principal differences between mediation, and arbitration or litigation?
  3. Are there circumstances in which ADR is particularly suitable?
  4. Are there circumstances in which ADR would not be suitable?
  5. What are the principal advantages to using mediation?
  6. Are there any disadvantages to using mediation?
  7. Who takes the initiative in deciding on ADR?
  8. Do our lawyers need to be involved if we go in for mediation?
  9. How long does it take to set up the mediation process?
  10. Is there any point in our going to mediation, if the other party is reluctant to make any concessions?
  11. How do we find a mediator?
  12. Do both parties have to agree on the mediator?
  13. What is the procedure in mediation?
  14. Do we have to prepare evidence in advance?
  15. Can we call witnesses?
  16. If an ADR process fails to produce a settlement, could what we say during that process be subsequently used against us in court?
  17. Who should attend the mediation process?
  18. How do we ensure that the other side sends someone who is authorised to settle?
  19. How long is the process likely to last?
  20. What happens if we reach agreement on some issues, but not on others?
  21. Will the agreement be binding on all parties?
  22. How will the agreement be enforced?
  23. How much is recourse to mediation likely to cost?
  24. Can we claim costs from the other party, as part of the settlement?

1. What is alternative dispute resolution (ADR)?

Alternative dispute resolution is the collective name given to several methods of dealing with disputes without going to court.

The method most commonly used in ADR is mediation, with conciliation as another possibility. Both these procedures involve the use of a neutral third party to encourage and facilitate (but not impose) a solution to the dispute.

Other procedures, such as arbitration, adjudication and expert determination, are sometimes classed as ADR methods. However, they are similar to the court process in the sense that they involve the imposition of a solution by a third party, rather than the facilitated negotiation of a settlement. In these questions we will concentrate on mediation, as the principal method used in ADR.

Back to top

2. What are the principal differences between mediation, and arbitration or litigation?

With mediation, the neutral third party encourages all the parties involved to consider, not their legal rights, but their commercial interests, and aims to get them to agree to a compromise that will give both sides something. If the negotiations are successful and all parties agree to observe the outcome, their signature to the agreement makes it legally binding. If the negotiations are not successful, or are only partially successful, the parties can still take the outstanding issues to arbitration or litigation, if they wish.

With arbitration or litigation, all the parties involved are bound by the decision reached by the arbitrator or judge, after he (or she) has considered the submissions and the evidence.

Back to top

3. Are there circumstances in which ADR is particularly suitable?

In general terms, ADR is likely to be both cheaper and quicker than recourse to the courts. Alternative dispute resolution procedures are also confidential, which means that they may be particularly useful in resolving disputes on matters which are themselves confidential - for example, because they involve industrial secrets or commercially-sensitive terms of trade.

Mediation is also a very good way of dealing with disputes where the parties want to emerge with a continuing relationship, partly because the object of the exercise is to create an outcome from which all parties benefit, and partly because the confidential nature of the proceedings means that no-one is seen publicly to 'lose'. Under the Civil Procedure Rules, judges now generally expect the parties to have considered the use of ADR, before commencing court proceedings.

Back to top

4. Are there circumstances in which ADR would not be suitable?

It can be difficult to arrange for ADR where one or more of the parties refuses to accept that there is a problem, or is reluctant to engage in negotiations. There may also be situations in which the parties are prepared to negotiate, but there is little or no prospect of a successful outcome - for instance, where one of the parties is pursuing a case against the other for the sake of making trouble, or where one is claiming an unreasonably large sum, and is unlikely to be satisfied with much less. Even though the courts are putting increasing pressure on disputants (through the award of costs) to try negotiations before going to law, they may accept that it is reasonable to refuse mediation in such circumstances.

ADR is not an effective way of dealing with a situation where one party wants the other to stop immediately - for example, where one party wants to stop another from selling goods with a design and function similar to its own, or where one party wants to stop harassment by the other. And because ADR proceedings are entirely confidential, they will not be suitable where one party wants to give out a message, not just to the other party, but to all other comers: for example, where the holder of intellectual property rights wants to make it plain that they will be defended, and that anyone who infringes them will be sued.

Recourse to ADR does not stop time running where there is a limited period within which action has to be taken. So if you were about to run out of time for issuing a claim, ADR would not be suitable.

Back to top

5. What are the principal advantages to using mediation?

Use of ADR can speed up settlement, which means less cost, time and stress than would be involved in taking matters to court. Moreover, the parties make the decisions and do not have to hand over control to a judge or arbitrator. When successful, mediation can produce results which, overall, are more satisfactory to the parties than those that could have been achieved through the courts. These results may include outcomes which are not available from litigation - for example, an apology, or a new means of co-operation. And finally, the process is confidential, enabling the parties to avoid unwanted interest from, for example, competitors or the press.

Back to top

6. Are there any disadvantages to using mediation?

Yes. Settlement is voluntary, so you cannot be certain of getting a result. To obtain a result from mediation, the parties will have to agree to resolve the matter. There is no outside party imposing a solution, and there is a risk of the process being exploited by a cynical opponent. However, even if the parties fail to reach agreement, and go back to court to get the matter settled, the amount of thought that has gone into deciding what the issues are, and where the parties' interests really lie, is likely to make it much easier to reach a solution than it would have been otherwise.

Another potential disadvantage is that, although recourse to ADR is likely to take less time than recourse to the courts, it will not stop the clock running where there is a limit on the amount of time within which a legal claim can be made. This is something you need to factor into your considerations, if you are thinking of using ADR.

Back to top

7. Who takes the initiative in deciding on ADR?

Either party may do so. Or their lawyers might suggest it, particularly in view of the judges' increasing tendency to require ADR - in any case that is suitable (see 3 and 4) - ADR should be considered before there is recourse to the courts.

Back to top

8. Do our lawyers need to be involved if we go in for mediation?

Not necessarily. However, it might be helpful - depending on the kind of lawyers you use - particularly if the issues involved are complex or emotive. If your lawyers are the kind that focus tenaciously on maintaining your strict legal 'rights', you should perhaps leave them out of the mediation process. If they focus on your wider interests, they will probably be useful.

Back to top

9. How long does it take to set up the mediation process?

One month or less on average.

Back to top

10. Is there any point in our going to mediation, if the other party is reluctant to make any concessions?

Yes. You are not necessarily looking for 'concessions'; you are looking for an arrangement that will suit you sufficiently well for you to abandon the idea of going to court, and the mediator is there to help you tease out what that might be. You might, for instance, get no 'concessions' at all about the issue(s) in dispute, but come away with a continuing relationship and new (and legally enforceable) payment terms - or new licences, or a new offer of co-operation in product development - that are worth far more to you.

Back to top

11. How do we find a mediator?

This is an important question, because the quality of the mediator could make or break the deal. You want someone who is:

  • neutral
  • experienced
  • suitable for the job.

'Suitable' is the hardest quality to define, but also the most important. It might (but need not necessarily) mean someone who has a good knowledge of the industry, or of the technicalities of production. Most importantly it should be someone with whom both you and the other party (or parties) are comfortable. You need to be able to trust your mediator, and they need to be able to challenge you. Your legal adviser will be able to assist with the selection process.

Back to top

12. Do both parties have to agree on the mediator?

Yes. A mediator cannot be imposed on you.

Back to top

13. What is the procedure in mediation?

It can vary in detail, but in broad terms:

  • prior to mediation the parties will exchange case summaries and supporting documents with one another, and provide copies to the mediator
  • the mediator will introduce themselves to the parties, probably by phone, and ask that they ensure they are represented by someone with authority to settle
  • the mediation itself will start with a joint meeting, at which the ground rules will be set out, and each party may make an opening statement outlining the key issues
  • there will then be private meetings, in confidence, with the mediator trying to establish what each party would value, and what they really think of the strengths and weaknesses of their case
  • the mediator will go to-and-fro between the parties, revealing no more than they have been authorised to do, but endeavouring to bring the parties gradually closer together
  • there may be another joint meeting, to establish how far the parties have moved
  • given success, the mediator will then put forward the agreed solution
  • the agreement will be drawn up and once it has been signed, it is binding.

Back to top

14. Do we have to prepare evidence in advance?

Yes. The mediator will set out what evidence should be prepared and when it should be sent to them and the other parties. This is likely to be at least a week in advance.

Back to top

15. Can we call witnesses?

Yes, but you cannot compel witnesses to attend, as you could at a court hearing. You can also present witness statements, as part of your evidence.

Back to top

16. If an ADR process fails to produce a settlement, could what we say during that process be subsequently used against us in court?

No. Everything that is said during the ADR process is said in confidence. Having said that, however, your opponents will bear in mind any concessions you would have been prepared to make, in assessing the strength of their own court case - and so will you. This may influence each side's actions, even though neither can refer to such concessions in court.

Back to top

17. Who should attend the mediation process?

Someone senior, who has the power to settle. This may or may not be someone who has been engaged in the dispute from the start. If not, this may be all to the good: a fresh pair of eyes may be exactly what is needed.

Back to top

18. How do we ensure that the other side sends someone who is authorised to settle?

It is in both parties' interests that those attending have authority to agree terms if acceptable proposals are on the table. This point will be made to both parties by the mediator.

Back to top

19. How long is the process likely to last?

That depends on the complexity of the issues and the stances adopted by the parties. It could take as little as half a day, but a full day is quite common and some may take longer. Generally, the longer the parties have, the longer they will take. The mediator may well set a realistic deadline, to assist the process.

Back to top

20. What happens if we reach agreement on some issues, but not on others?

You will have to decide what you want to do next. You could settle those issues upon which agreement has been reached and continue the dispute in relation to the others. Alternatively, you may take the view that all issues should be decided in the same forum and therefore choose to continue the dispute in relation to all the issues.

Back to top

21. Will the agreement be binding on all parties?

Yes, once it has been signed.

Back to top

22. How will the agreement be enforced?

Through the courts in the normal manner, unless the agreement itself makes provision for an alternative method of resolving the problem.

Back to top

23. How much is recourse to mediation likely to cost?

That will depend on the complexity of the issues, the length of the process, and the standing of the mediator. The parties will generally agree to bear the costs of the mediator equally. As a general rule, you should assume mediator's costs of around £1,500 per party for a full day. There may be additional expenses, such as arrangement fees and the hire of rooms as a venue for the mediation. If you choose to use solicitors or a barrister, you will also need to pay their costs for preparing for and attending the mediation.

Back to top

24. Can we claim costs from the other party, as part of the settlement?

Yes. Each party in an ADR process normally agrees to pay its own share of the costs of the ADR process itself (see 23), but the costs incurred in dealing with the dispute more generally will normally be allocated between the parties as part of any settlement achieved.

Back to top

Contact us

Make an enquiry