Alternative dispute resolution
Litigation is only one way to resolve a dispute; the CPR and the courts actively encourage alternatives. SQE1 tests the main forms of ADR, their binding effect and the costs consequences of refusing to engage.
What "Alternative dispute resolution" covers
- The principal forms of ADR are negotiation, mediation, arbitration, adjudication, early neutral evaluation and ombudsman schemes, each with different cost, speed and formality.
- Mediation is a facilitated negotiation that is non-binding until a settlement agreement is signed; the mediator does not impose a decision.
- Arbitration under the Arbitration Act 1996 produces a binding award that is enforceable and subject only to limited rights of challenge or appeal.
- Where parties have agreed to arbitrate, the court will generally stay court proceedings brought in breach of that agreement (s.9 AA 1996).
- Following Churchill v Merthyr Tydfil the court may lawfully order parties to engage in ADR or stay proceedings for that purpose, provided it does not impair the right to a fair trial.
- An unreasonable refusal to engage in ADR can be penalised in costs under the court's discretion, and silence in the face of an invitation may itself be unreasonable (PGF II).
- The Halsey factors remain relevant to whether a refusal was reasonable, even though Halsey's suggestion that the court could not compel ADR has been superseded.
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For alternative dispute resolution, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Citing Halsey for the proposition that a court cannot compel ADR — Churchill establishes the court can now order or stay for ADR.
- Confusing arbitration (binding award) with mediation (non-binding until agreement) when advising a client on outcomes.
- Overlooking that a failure even to respond to an ADR invitation may be treated as unreasonable (PGF II) and attract a costs sanction.
Learn this subtopic in the course
A video lesson, notes and exam-style practice on alternative dispute resolution.
FAQ
Is alternative dispute resolution tested on SQE1?
Yes — alternative dispute resolution is part of the SQE1 Dispute Resolution syllabus (FLK1) and can appear in single best answer questions.
How is alternative dispute resolution examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (Arbitration Act 1996, s.9 Arbitration Act 1996) helps.