Understanding Alternative Dispute Resolution (ADR)

In this era of technology and a fast legal landscape, resolving a dispute efficiently and effectively is important for individuals and business owners. Traditional litigation involves lengthy processes and substantial costs which affect both parties’ work and mental peace. As a result, alternative dispute resolution has emerged as a popular alternative tool for solving legal conflicts outside the court with its flexible approach. 

ADR comes with a variety of methods for resolving the issues according to the needs and circumstances of the parties involved in the case. The old suit process in the court takes a longer time and the decision relies on the judges of the court, but the ADR, allows the parties to control the proceedings and decision of their dispute.

In the present time, the ADR has become a popular and reliable source of justice for solving the conflicts of parties in different disputes related to business, family matters, employment and any other civil cases. It also provides many benefits like faster resolution, lower cost, confidentiality, and preservation of the relationship between the parties.

As we discuss the different types of alternative dispute resolutions, you will come to know about the procedure of how ADR can resolve the dispute by its quick method and by maintaining the confidentiality of the case.

What is Alternative Dispute Resolution?

Alternative Dispute resolution (ADR) is a different way to solve the dispute between parties without any trial in the court. There are different types of ADR such as arbitration, mediation, conciliation, negotiation, Lok Adalat and Settlement Conferences. These ADRs are highly confidential, stressful, and less formal than the court proceedings. The parties have the right to choose the location and person who is going to provide them with the opportunity to be heard and provide the solution according to the situation and evidence.

Alternative Dispute Resolution in India

India has been following the Alternative Dispute Resolution (ADR) for centuries. We can trace its roots from ancient times. However, the modern ADR became more popular in the late 20th century due to the lengthy process of the Court of Justice. The people started resolving their issues with the help of ADR due to its fast process and cost-effectiveness. The first attempt was made in 1986 by the Indian Council of Arbitration for the establishment of Permanent Machinery for Alternative dispute resolution. The main aim of this organization was to promote and aware people of the ADR techniques in the country.

It was the time of 1996 when the Arbitration and Conciliation Act was enacted. This act provides all the framework related to the arbitration proceedings in India. This was the first-ever act and was based on the UNICITRAL Model to make the arbitration effective and helpful for dispute settlement.

The first Lok Adalat was held in 1982 in Gujrat. The National Legal Services Authority which is also known as NALSA was constituted on December 5, 1995. This authority works under the Legal Services Authorities Act of 1987. The main aim of this authority is to provide free legal aid to underprivileged people.

As the time spent, there were lots of changes made in the act and now, we have The Arbitration and Conciliation (Amendment) Act of 2021 which governs the ADR in India. With the help of this act, ADR mechanisms such as arbitration, mediation, conciliation, and Lok Adalat are being used all over the country to solve disputes in many different domains. Even the Indian judiciary is also encouraging people to solve civil matters outside the court by taking the help of ADR.

Types of ADR (Alternative Dispute Resolution)

There are different types of ADR which have gained popularity for resolving disputes in fast and cost-effective ways. Let’s discuss each type of ADR one by one:


Facilitating Constructive Dialogue

The ADR,s mediation is a flexible and reliable process where a third neutral party which is called the Mediator, assists the other parties in achieving a voluntary and negotiated settlement solution of the running dispute. Mediation acts differently from other types of ADR methods because in mediation, the parties in the dispute participate voluntarily and the third party which is called the mediator has no authority to dictate or pass the decision. The decision-making power lies in the hands of the parties in the dispute. 

Mediation is a free process and confidential process which allows the parties to discuss the issues raised in the dispute and solve them without going to Court. The mediator helps the parties to solve the dispute by enabling the option for settlement.


Binding Decision-Making

Arbitration is a personal dispute resolution process between the parties where the parties agree to solve the dispute with the help of a neutral third party known as the Arbitrator. He is the person who hears the dispute from both sides outside the courtroom. The arbitrator has the power to make a binding decision in the arbitration proceedings.

Arbitration is one of the main branches of the ADR which helps to solve disputes outside the court and without following the longer process being followed in the court of law. The parties can solve the dispute outside the court more easily and less expensively.


Direct Communication and Compromise

Negotiation is one of the best processes which resolve the differences between the terms and conditions of parties and reach a mutual agreement which can is acceptable for both parties in dispute. There is a third neutral party called a negotiator who listens to both parties with their terms and conditions. After listing the parties, he uses negotiation skills and makes strategies to compel both parties to come to a conclusion which will be accepted by both parties.

Alternative Dispute Resolution (ADR)- Law Addiction

Negotiation mainly focuses on solving disputes related to the terms and conditions and in disputes where money is involved.


Finding Common Ground

Same as the mediation, the conciliation also helps the parties to solve the dispute and come to an agreement to resolve the dispute. But the third party is known as the “Conciliator”. The main role of the conciliator in the conciliation is to evaluate, facilitate or intervene in the conciliation session to compel the patient to agree. The conciliator can be the professional expert in that field who can help to identify the issue and develop new options or alternatives to solve the problem.

Lok Adalat

Justice at the Grassroots Level

Lok Adalat is known as the People’s Court which was established to solve the pending cases of the court speedily and less inexpensively. This method also comes under the Alternative dispute resolution process due to its speedy trials. As we know our courts are overburdened with lots of pending cases. So if any person wants to solve his case speedily, then he can choose Lok Adalat to solve the civil cases.

The proceedings of Lok Adalat are informal and parties in dispute are free to participate directly just by representing the case in Lok Adalat without the help of any representative.  This process mainly focuses on negotiation or compromise. Its decision is legally binding and enforceable as an original court.

The Benefits of Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) covers many types of processes to solve civil disputes. ADR is becoming popular in the present time due to its different benefits of ADR, which include:


ADR methods are much less expensive than the litigation process in the court. The court proceedings have different costs such as court proceedings, attorney fees, filing charges, appeals and many more. But in the case of ADR, it is less costly and can solve the dispute without affecting your pocket.


Litigation in the court is a very lengthy process. As we know the courts are full of cases and if you attend one hearing then your next hearing date can be one or two months away which takes must time. On the other hand, the ADR process is time-saving because it works as the person court and solves the dispute in minimum hearings.


ADR proceedings are done in private and confidential mode. There is no need to record the ADR hearing as a matter of public record. So if there is any case which can be related to Intellectual property rights like Patents or any Trade secret, then you can be sure regarding its confidentiality and privacy.


The parties can tailor the ADR process according to their needs. This flexibility helps the parties to reach creative and mutual satisfaction regarding the decision.

Preservation of relationships

ADR processes encourage the parties for communication and cooperation which helps to preserve the relationship between the parties which can be more important to secure the brand name and future dealing.

Greater control

The parties have more control over the process and decisions made in the dispute. The parties can also choose the neutral third party mutually and without any pressure. It provides more control of parties to solve the dispute.

Increase Understanding

The ADR process helps the parties to understand what the other party wants from the first party. The third party also helps the parties to understand the importance and need to come to a solution which can lower the risk of any future conflicts between them.

FAQs related to ADR

What are the limitations of ADR?

One of the major limitations of ADR is that ADR is unsuitable for resolving complex legal issues and criminal cases.

Why is ADR important?

ADR is important because it provides justice in a short time and in a cost-effective way. It also helps to preserve the relations between the parties.

What are the four types of Alternative Dispute Resolution?

The main four types of Alternative Dispute Resolution are Arbitration, Mediation, Negotiation and Conciliation. The Lok Adalat can also be included in this list and 5th important type of ADR.


Though Alternative Dispute Resolution is not suitable for all types of cases, it is one of the most helpful processes if a person wants to decide with the help of speedy trials. The person can save time and money by taking the help of ADR methods to solve disputes. I hope now you know Alternative dispute resolution. If you still have any questions or suggestions, you can contact us.

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