Arbitration & ADR
Arbitration, mediation, adjudication, and alternative dispute resolution mechanisms.
Introduction
Alternative Dispute Resolution (ADR) provides mechanisms for resolving disputes without court litigation. The Arbitration Act 1996 is the principal statute governing arbitration in England & Wales, making London one of the world's leading arbitration seats. Mediation is voluntary and facilitative. Adjudication is a rapid interim process used primarily in construction disputes. The courts actively encourage ADR and may impose costs sanctions on parties who unreasonably refuse to engage in it.
Core Principles
Arbitration — A private, binding dispute resolution process where the parties agree to submit disputes to one or more arbitrators. The Arbitration Act 1996 gives the tribunal wide powers and limits court intervention.
Party Autonomy — The parties are free to agree how their disputes are resolved, subject to mandatory provisions of the Arbitration Act 1996 (s.1).
Arbitral Awards — Awards are binding and enforceable as if they were court judgments. International awards are enforceable under the New York Convention 1958.
Mediation — A voluntary, non-binding process where an independent mediator helps parties reach a negotiated settlement. Any settlement agreement is contractually binding once signed.
Court Encouragement of ADR — The court considers whether parties have engaged in ADR when making costs orders. Unreasonable refusal to mediate may result in adverse costs consequences (Halsey v Milton Keynes NHS Trust [2004]).
Adjudication — A rapid interim dispute resolution mechanism (28 days) used primarily in construction, providing a decision that is binding until finally determined by arbitration, litigation, or agreement.
Key Statutes
Arbitration Act 1996
Leading Cases
Halsey v Milton Keynes General NHS Trust
[2004] EWCA Civ 576
Enka v Chubb
[2020] UKSC 38
Common Scenarios
Commercial contract with an arbitration clause
If the contract contains an arbitration clause, disputes must be referred to arbitration rather than court. The court will stay proceedings in favour of arbitration (Arbitration Act 1996, s.9) unless the agreement is null and void.
Other party refuses to mediate
While mediation cannot be forced, unreasonable refusal may result in adverse costs consequences. The court considers factors including the nature of the dispute, merits, costs of mediation, and whether mediation had a reasonable prospect of success.