Being Sued

7. Alternative Dispute Resolution

There are a number of different methods of resolving disputes without resorting to litigation. The advantages of these methods of alternative dispute resolution (ADR) are that they are generally regarded as being quicker and cheaper than court proceedings. They are also more likely to preserve any future relationship between you and your customers or suppliers.

7.1 The main attraction of this approach is the flexibility it provides.

• You can agree how formal the procedure should be and who should act as the arbitrator or mediator. In this way you can control costs.
• Disputes can be resolved more quickly than in court.
• The process can be less confrontational than going to court.

7.2 If the parties agree, there are two forms of ADR, arbitration or mediation. Both procedures are legally binding. In commercial disputes:

• Arbitration is inappropriate for claims below £20,000, due to the costs involved. The main exception is 'paper arbitrations' (where the arbitrator's decision is based solely on written evidence that both parties have submitted), which can be used for small claims.
• Mediation can be used for claims of any size. It is less formal, time-limited, cheaper, and under the parties' control as the mediator assists the parties to reach their own decision.