Alternative dispute resolution in the UK: mediation and beyond

Before you head to court, you have options. Alternative dispute resolution (ADR) lets you settle disputes without a judge making the decision for you. It's usually faster, cheaper, and more private than going to trial. This guide explains what's available, when to use it, and what happens next.

The short version

ADR covers five main routes: mediation (someone helps you both talk), arbitration (a private judge decides), adjudication (for construction disputes), conciliation (mainly for employment), and ombudsman schemes (for complaints against businesses and public bodies). Most are voluntary. Some are free or cheap. All can save you time and money compared to court. Since 2023, courts can punish you with costs if you refuse mediation unreasonably.

At a glance

What ADR is

Alternative dispute resolution is any method of settling a disagreement outside court. The label "alternative" is a bit old now because courts actively push you towards ADR first, and many contracts require it before litigation.

The five main types overlap slightly and suit different problems:

• Mediation is voluntary and non-binding. A neutral third party helps you and the other side communicate and find common ground. You stay in control. Either side can walk away if talks stall.
• Arbitration is binding. You pick an arbitrator (or use institutional rules), present your case, and they make a decision you must follow. It's private and final.
• Adjudication is rapid and binding (for now). Common in construction contracts. A decision is made quickly but can be challenged in court later.
• Conciliation is like mediation but the conciliator is more likely to suggest solutions. Mainly used in employment disputes through ACAS.
• Expert determination suits technical disputes. A qualified expert examines evidence and decides. Binding once they've made their decision.
• Ombudsman schemes handle complaints against specific sectors (finance, housing, utilities, telecoms). Free to use and quasi-binding.

Mediation: how it works

Mediation is the most common ADR route. It works because it separates people from the problem.

A mediator doesn't judge or decide. They meet separately with each side, ask questions, identify shared interests, and suggest ways forward. Your lawyer (if you have one) usually attends. Everything said is confidential and "without prejudice" (meaning you can't quote it in court later if mediation fails).

The process typically runs like this:

1. Both sides agree to mediate. You can propose it informally or through a mediation service.
2. You pick a mediator (individual or organisation).
3. You pay the fee (often split).
4. Pre-mediation calls happen (10-15 minutes each side, mediator explains the process).
5. In the mediation session, each side presents their case in a joint meeting (usually 1-2 hours). The mediator summarises.
6. Private sessions follow. The mediator shuttles between you both, testing proposals, softening positions.
7. If you reach a deal, you both sign an agreement (legally binding).
8. If you don't, you're no worse off. You can still go to court.

Mediation works best when:

• You want to preserve a relationship (family, business partners, landlord and tenant).
• The dispute is partly about money and partly about principle or emotion.
• You want to avoid publicity.
• You can afford a week or two for talks before court.
• You want to control the outcome instead of leaving it to a judge.

Mediation usually costs GBP 1,000 to GBP 2,000 for a one-off dispute (mediator's fee split 50/50 or by agreement). Many mediators offer reduced fees for smaller claims. Duration is 1-3 months from agreement to settlement or impasse.

Success rates are high. About 65-70% of commercial mediations settle on the day. Many more settle after mediation ends, once both sides have calmed down and heard each other properly.

Small Claims Mediation Service (free phone mediation up to GBP 10,000)

The government funds a free mediation service for claims up to GBP 10,000 in the Small Claims Mediation Service (SCMS). This is a huge advantage if your claim is below that threshold.

How it works:

• You and the defendant must both agree to try it (or the court can order you to attend).
• A mediator phones both of you (separately, then together).
• It's free. The court pays.
• It usually happens within 2-4 weeks of you applying.
• It lasts up to 90 minutes.

Cost to you: Nothing (unless you're represented by a lawyer, in which case you pay them).

When it applies: Any claim in the Small Claims Track (up to GBP 10,000, or GBP 15,000 if both sides agree). This includes contract disputes, damage to property, and unpaid invoices.

If mediation fails, you proceed to court. The judge won't know that mediation was tried.

The SCMS exists because courts found that many small claims could be resolved with a structured conversation. You pay once more to recover your GBP 154 claim fee, so why not try mediation first?

Civil and commercial mediation (paid, larger claims)

For claims over GBP 10,000, or if you prefer face-to-face mediation, you hire a private mediator or use a mediation organisation.

Main providers:

• Civil Mediation Council: accredited mediators across the UK. You pay between GBP 1,500 and GBP 3,000 per day of mediation (split with the other side).
• CEDR (formerly Centre for Effective Dispute Resolution): focus on commercial disputes. GBP 5,000 to 10,000 per day.
• Law firms: many barristers and solicitors offer mediation. Cost varies.

Typical fees:

• Mediator's fee: GBP 1,500-3,000 per half-day session (4 hours).
• Venue hire: GBP 100-500 (many law firms offer rooms free).
• Your lawyer (if attending): GBP 150-300 per hour.
• Total for a case: GBP 2,500-7,500 if settled in one day.

Mediation can happen before court or after you've started proceedings. Many contracts say "try mediation before litigation" to avoid waste.

Arbitration (Arbitration Act 1996, binding award)

Arbitration is used for commercial disputes, often because the contract says so. It's like a private court: an arbitrator listens to both sides and makes a binding decision (an "award").

Advantages:

• Faster than court (3-6 months typical).
• Private (hearings aren't public, award isn't published).
• You pick the arbitrator (or use institutional rules).
• Final. No appeal (except on narrow legal grounds).
• Can be international.

Disadvantages:

• Costly. Arbitrators charge GBP 300-500+ per hour, plus venue and administration fees.
• Limited appeal rights.
• You pay even if you lose (no "costs follow the event" rule like court).

Typical cost: GBP 5,000-20,000+ depending on complexity and hearing length.

When used:

• Commercial contracts (often required by the contract itself).
• International disputes.
• When confidentiality is critical.
• When specialist knowledge is needed (maritime, energy, construction).

The Arbitration Act 1996 governs this in England and Wales. It's a framework that enforces arbitration agreements and awards. If you have a dispute subject to an arbitration clause in your contract, you generally can't go to court even if you want to. The other side can ask the court to stay (pause) any litigation and force you to arbitrate.

Arbitration awards are enforced through court if necessary, but they're rarely challenged because the process is thorough and the legal grounds for appeal are very narrow.

Adjudication (construction disputes, Housing Grants Construction and Regeneration Act 1996)

Adjudication is special to construction contracts. It's a quick interim decision made by an adjudicator, usually within 28 days. It's binding unless later overturned by arbitration or court.

Construction projects often need decisions fast (you can't pause a site for months while a dispute is resolved). Adjudication lets you get a ruling quickly and keep working, knowing you can challenge it later if needed.

How it works:

1. A dispute arises (defective work, delayed payment, variation in contract).
2. One party gives notice of adjudication and appoints an adjudicator (or uses a nominating body).
3. Both sides submit evidence and arguments (usually written).
4. The adjudicator decides within 28 days.
5. You can apply to court or arbitration to challenge it.

Cost: GBP 2,000-5,000 depending on complexity.

Timescale: 28 days (tight, but manageable).

This system exists because construction disputes are urgent and time-sensitive. It's mandatory in construction contracts in England, Wales, and Scotland under the Housing Grants Construction and Regeneration Act 1996. You can't contract out of it (though you can modify some details).

Conciliation (ACAS for employment disputes)

Conciliation is like mediation but the conciliator (usually through ACAS, the Advisory, Conciliation and Arbitration Service) is more likely to suggest solutions.

Mainly used for:

• Unfair dismissal claims.
• Discrimination claims.
• Wage disputes.
• Breach of employment contract.

Cost: Free (ACAS is government-funded).

Process:

1. You file a claim with the Employment Tribunal.
2. ACAS conciliation is automatic. A conciliator phones you and your employer.
3. They explore settlement options without prejudice.
4. If you settle, you sign a "COT3" (Compromise Agreement) and can't pursue the claim further.
5. If you don't settle, your case proceeds to the Employment Tribunal.

Timescale: 4-8 weeks.

ACAS conciliation works well because employment relationships are often ongoing (or fraught). The conciliator has authority to bend the rules slightly and suggest creative solutions (severance, reference agreements, neutral references, etc.) that formal adjudication can't offer.

Expert determination

Expert determination is used when the core dispute is technical: a surveyor's valuation, a contractor's defects assessment, a doctor's medical opinion, a quantum expert's damages calculation.

How it works:

1. Both sides agree on an expert (or the contract specifies how to pick one).
2. They give the expert your evidence and arguments (written, or a brief hearing).
3. The expert decides. They don't have to explain their reasoning in detail.
4. You must accept their decision (it's binding).

Cost: GBP 1,000-5,000 depending on the expert's rate and complexity.

When used:

• Surveyor's valuation in a property dispute.
• Contractor's defects assessment in construction.
• Accountant's tracing of misappropriated funds.
• Actuary's calculation of pension entitlements.

Advantage: Much faster and cheaper than having each side hire separate experts and argue about conflicting reports in court.

Expert determination is binding and final once the expert's decision is issued, though you can challenge it if the expert has acted unfairly or breached their instructions.

Ombudsman schemes

Ombudsman services handle complaints against specific industries. They're free to use and have power to make binding (or quasi-binding) decisions and award compensation.

Main schemes:

• Financial Ombudsman Service: complaints about banks, insurers, investment firms, mortgage lenders. GBP 0 to 30,000 compensation.
• Housing Ombudsman: complaints about social landlords (housing associations).
• Local Government Ombudsman: complaints about local authorities.
• Communications and Media Authority: complaints about telecoms, TV, radio.
• Energy Ombudsman: complaints about gas and electricity providers.
• Legal Ombudsman: complaints about solicitors and barristers.

Cost: Free to you.

Process:

1. You complain to the organisation first.
2. If you're unhappy with their response, you apply to the relevant ombudsman.
3. The ombudsman investigates.
4. They issue a decision. If the organisation disagrees, they can challenge it, but most accept.

Timescale: 4-12 weeks.

Ombudsman decisions are enforceable (if they're binding) or treated very seriously (if quasi-binding). Organisations rarely ignore them because their regulator watches and reputation matters.

You can only use an ombudsman for complaints against organisations covered by that scheme. You can't use one for general contract disputes or arguments between two private citizens.

Mandatory ADR after Churchill v Merthyr Tydfil 2023

The Supreme Court judgment in Churchill v Merthyr Tydfil (2023) reshaped dispute resolution. The court held that refusing mediation unreasonably, even if not ordered by the court, can result in costs sanctions.

What this means:

• If you reject a reasonable offer to mediate and then win your case in court, the judge might not award you all your legal costs.
• The other side can argue: "They refused to mediate. If they'd talked to us, we'd have settled and saved money. That was unreasonable."
• The judge agrees and reduces your costs award by 25%, 50%, or sometimes 100%.

The effect: Mediation is now effectively mandatory in practice, even if no court order forces it. Refusing to mediate is risky.

When can you refuse?

• If mediation genuinely won't help (e.g. the other side won't engage, you have no contact with them, the matter is purely a point of law).
• If you're in a weak financial position and can't afford the mediation fee.
• If mediation has already failed and the other side is just delaying.

Safe practice: If the other side proposes mediation, accept it or explain in writing why you think it won't work. If you initiate it, do so early and in writing.

Costs sanctions for unreasonable refusal to mediate

Courts now routinely reduce costs awards (or award costs against the winner) if they find that either side unreasonably refused to mediate.

The test:

• Was mediation a realistic prospect of settling the dispute?
• Did the refusing party have a good reason?
• Did they explain their refusal clearly?
• How strong was their case (a stronger case is more defensible, but not a free pass)?

Examples of unreasonable refusal:

• "We didn't think mediation would work" (too vague).
• "The other side never suggested it" (you can suggest it yourself).
• "It costs too much" (weigh it against your legal costs, which are higher).
• "Mediation is slow" (it's faster than court).

Examples of reasonable refusal:

• "We have genuine evidence of dishonesty and this is a matter of principle" (weak unless you have very strong proof).
• "The other side refuses to engage" (document their refusal).
• "Mediation has been tried twice already and failed" (reasonable after genuine effort).
• "This is a pure point of law and mediation can't help" (valid, but rare).

Practical impact: Most practitioners now assume mediation will happen and budget for it. Refusing it without a documented reason is high-risk.

Enforceability of ADR outcomes

If you reach a settlement through mediation or other ADR and both sides sign an agreement, it's binding and enforceable like any contract.

If the other side doesn't comply:

• You can sue for breach of contract (or breach of the settlement agreement).
• You can apply to court to enforce it.
• If they ignore a court order, you can pursue contempt of court.

Arbitration awards:

• Binding and enforceable through court.
• Can be enforced internationally under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).
• Very difficult to overturn.

Ombudsman decisions:

• Binding on the organisation (can't ignore it).
• If they don't pay, you can sue for breach of contract or enforcement.
• Organisations rarely ignore because regulators monitor.

Mediation agreements that fail:

• If mediation doesn't succeed, any settlement agreement still stands (if signed).
• Anything said during mediation is confidential and without prejudice (can't be used in court unless both sides agree).

The enforceability of ADR outcomes is strong. This is why the process is trusted: the other side knows a settlement will stick.

Common misconceptions

"Mediation means I give up my legal rights." False. Mediation is non-binding unless you agree to settle. You can walk away.

"Mediation is for wimps or people without a case." False. Strong cases settle through mediation because both sides understand risk and costs. Weak cases too.

"The mediator will judge who's right." False. The mediator doesn't judge. They help you both talk.

"Arbitration is cheaper than court." Sometimes yes, sometimes no. Arbitrator fees add up. Court has fixed fees and public funding (if eligible). Compare case-by-case.

"Ombudsman decisions are just advice." False. Ombudsman decisions are binding on the organisation (or quasi-binding with strong enforcement).

"I can be forced to mediate." Partially true. Courts can order you to attend a mediation session (called a "Mediation and Evaluation" or "Med-Eval" order), but you can't be forced to agree to a settlement.

"ADR takes longer than court." False. Mediation takes weeks. Court takes years.

"I need a lawyer for ADR." False. Many ADR processes work without lawyers. But having legal advice beforehand is smart.

Related concepts

• Small Claims Court UK: the low-cost court route if ADR fails.
• Court costs and fee awards: how courts decide who pays.
• Employment Tribunal claims: where ACAS conciliation applies.
• Settlement agreements and without prejudice: how ADR deals are protected.
• Legal representation and costs: whether to hire a lawyer for ADR.

Sources

• UK Government. Alternative dispute resolution for consumer disputes. www.gov.uk (accessed 2026-05-28).
• Civil Mediation Council. Find a mediator, accreditation, and process guidance. www.civilmediation.org (accessed 2026-05-28).
• Ministry of Justice. Courts and Tribunals Judiciary. Small Claims Mediation Service guidance. www.justice.gov.uk (accessed 2026-05-28).
• ACAS. Conciliation services and Employment Tribunal processes. www.acas.org.uk (accessed 2026-05-28).
• Arbitration Act 1996. Legislation.gov.uk (accessed 2026-05-28).
• Financial Ombudsman Service. What we cover and compensation limits. www.financial-ombudsman.org.uk (accessed 2026-05-28).
• Churchill v Merthyr Tydfil Council (Supreme Court, 2023). Costs sanctions for unreasonable refusal to mediate. BAILII (accessed 2026-05-28).

Written by Peter Kolomiets, founder of CaseCalm. UK content reviewed 2026-05-28.

Disclaimer: This page provides information about UK alternative dispute resolution. It is not legal advice. If you need legal advice specific to your situation, contact a solicitor or barrister.