Alternative Dispute Resolution: Meaning & Significance

Although the Indian legal system is among the oldest in the world, it is also widely acknowledged that it is becoming less effective at handling open cases. Indian courts are overburdened with protracted, unresolved issues. The situation is that despite the establishment of more than a thousand fast-track courts that have previously resolved millions of cases, the issue is still far from being resolved as backlogs of unresolved cases continue to grow.

Alternative Dispute Resolution (ADR), which settles disputes in a way that is acceptable to all parties, might be a useful tool in dealing with such a circumstance.

The public and the legal community now generally embrace alternative dispute resolution. Anyone in the United States with a civil (non-criminal) dispute has the option of using ADR instead of going to court. In some situations, courts encourage or mandate the use of ADR by the parties to a lawsuit in order to facilitate more amicable dispute resolution and lighten the caseload on the court system.

What is Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) is the process by which issues between the parties are resolved amicably or with minimal litigation and without the involvement of judicial institutions.

  • ADR provides a means to resolve any form of dispute, including civil, commercial, industrial, and familial disputes in which parties are unable to initiate negotiations and come to a resolution.

  • A neutral third party is typically used in ADR to facilitate communication, conflict resolution, and discussion between the parties.

  • It is a technique that enables individuals and groups to uphold social order, promote cooperation, and lessen conflict.

ADR is a non-adversarial method of resolving disputes that involves working cooperatively to find the best solution for everyone.

  • ADR can play a significant role in lessening the load of litigation on the courts while providing a comprehensive and rewarding experience for the parties.

  • Through innovative, cooperative bargaining, it offers the chance to "expand the pie" and satisfy the motives behind their demands.

Alternative dispute resolution is frequently hailed as the finest method for resolving conflicts. Many judges, attorneys, and academics strongly support it because of its capacity to establish deals without detracting from the overburdened legal system.

Advantages and Disadvantages of Alternative Dispute Resolution

The following table illustrates the major advantages and disadvantages of ADR −

Advantages Disadvantages

Saving Time  The duration of litigation can be very long. A case may take months or even years to properly resolve, depending on the nature of the disagreement and the issues raised. The majority of alternative dispute resolution techniques, if not all of them, can be finished in a few months, if not sooner.

Surrenders Appeal  Alternative dispute resolution procedures restrict the parties' capacity to reach a different conclusion after the process is over and a judgment has been made, in contrast to litigation, where a party may appeal a decision after it has been made. This may make the process less accessible for some people.

Saving Money  Alternative conflict resolution typically takes substantially less time than traditional dispute settlement, which results in lower costs for participants. The parties will save money on attorneys' fees as a result of the time saved, even though arbitration or mediation may have higher fees than the judicial system. Most procedures, with the exception of arbitration, won't require as much discovery as a trial would, which would also result in significant financial savings.

Increases Spending  Though ADR process saves money, but in the beginning of this procedure, there are greater out-of-pocket expenses than there would be with litigation. The costs of a arbitrator/s, the venue for the process, and many other expenses will be borne by the parties. It is crucial to balance the costs of the process with the costs at stake because of this.

Avoid Hostility  Even when there was no harm done to the parties' relationship in the initial conflict, the adversarial nature of the legal procedure frequently leads to hatred between the parties. The adversarial element of the legal process is frequently removed through alternative dispute resolution, which instead encourages the parties to cooperate in settling their differences. Even if it doesn't completely mend the relationship, doing this can still prevent it from ending completely.

Avoids Binding  A ruling reached through litigation is conclusive for the parties. The non-binding nature of alternative dispute resolution can be advantageous. It can also be a trap since the parties might go through the motions but still fail to come to an agreement, which would leave them back where they started.

Provides Reality  Some parties find that the longer they dwell on a disagreement, the more probable it is that they will persuade themselves that they are correct. A party may, as a result, fail to see the truth of their situation and cling to a fictitious notion of their rights. Alternative dispute resolution can frequently assist the parties in acknowledging the other party's stance and recognizing some potential strengths to aid in better decision-making.

Encourages Compromise  The collaborative nature of alternative conflict resolution necessitates that the parties arrive at the table prepared to make some sort of concession to the other side. This outcome might be rapid, but it might not be the ideal one. When engaging in such proceedings, a party must be extremely aware of their rights.

Stays Confidentiality  Anyone can often access the public record of the legal process. Alternative dispute resolution is often private, so the conflict only affects the parties and the mediator.

Allows Power  In alternative conflict resolution, power disparities may compromise the impartiality of the procedure. For instance, if one party has greater clout, the other will frequently feel like they are making efforts to placate them rather than striking a compromise.

Feels Informal  There are alternate conflict settlement processes that are more formal. But in practice, it is frequently considerably quicker and less formal than the litigation procedure. The rules of evidence and other court regulations won't usually be a concern for the parties.

Stalls Process  Because the process is voluntary, some parties may utilize alternative dispute resolution as a strategy to drag out the proceedings. This may be done to give the gathering of evidence more time or to make the plaintiff wait longer to receive their award. It's crucial to recognize when someone enters a dispute resolution procedure without intending to try to settle it.

Allows Experience  In contrast to litigation, the parties can pick the neutral based on their familiarity with the issue. As a result, because they have a better understanding of the issue, the parties will frequently avoid having to explain specifics to the neutral.

Importance of ADR

ADR plays a vital role in India by using its variety of strategies to deal with the problem of cases that are pending in Indian courts. The Indian judiciary is given scientifically designed methods for alternative dispute resolution, which serves to lighten the load on the courts. ADR offers a number of ways to resolve disputes, including arbitration, conciliation, mediation, negotiation, and Lok Adalat. Negotiation in this context refers to the parties engaging in self-counseling to address their conflict; however, in India, this practice is not formally recognized.

Articles 14 and 21, which deal with equality before the law and the rights to life and personal liberty, respectively, are also the foundations of ADR. The goal of ADR is to uphold the preamble-guaranteed social, economic, and political justice as well as the integrity of society. Equal justice and free legal assistance are further goals pursued by ADR in accordance with Article 39-A of the Directive Principles of State Policy (DPSP).

Types of ADR

There are majorly four types of ADR as given below 

  • Arbitration

  • Conciliation

  • Mediation

  • Lok Adalat

Let’s discuss each one of them separately 


  • The case is heard by an arbitral tribunal, which issues a decision (an "award") that is largely binding on the parties.

  • Compared to a trial, it is less formal, and the rules of evidence are frequently loosened.

  • Generally speaking, an arbitrator's ruling cannot be challenged. There is relatively limited room for judicial intervention in the arbitration process, save for a few temporary measures.


  • A non-binding process where a conciliator, or unbiased third party, helps the parties to a dispute come to a mutually accepted resolution.

  • A less formal variation of arbitration is conciliation.

  • The proposals of the conciliator are open for acceptance or rejection by the parties.

  • However, the settlement agreement put up by the conciliator will only be final and binding if both parties approve it.


  • In mediation, a third party called a "mediator" assists the parties while they work to resolve their differences in a way that is mutually agreeable.

  • Instead of making a decision on the issue, the mediator facilitates communication between the parties so that they can try to resolve it on their own.

  • The parties retain final decision-making authority during mediation.

Lok Adalat

Lok Adalat is one of the accepted and reliable modes of dispute resolution. It has the following features 

  • The emergence of voluntary organizations known as Lok Adalats (People's Courts) is an intriguing aspect of the Indian judicial system.

  • To promote out-of-court settlements, the Legal Services Authorities Act was passed in 1987, and the revised Arbitration and Conciliation Act was passed in 1996.

  • In Lok Adalat, often known as "People's Court," issues are decided without excessive emphasis on legal nuances in a relaxed setting that encourages compromises in the presence of a judge.

  • The Lok-decision Adalat's is final, will be regarded as a civil court's judgment, and will bind the parties to the dispute.

  • Adalat's Lok-decision cannot be challenged in court. 

Mechanism of ADR

It includes 

  • ADR is a non-adversarial method of resolving disputes that involves working cooperatively to find the best solution for everyone.

  • ADR can play a significant role in lessening the load of litigation on the courts while providing a comprehensive and rewarding experience for the parties.

  • Through innovative, cooperative negotiating, it offers the chance to "grow the pie" and satisfy the motives behind their requests.


In conclusion, alternative dispute resolution (ADR) is a terrific way to achieve justice. Alternative Dispute Resolution makes it simple to address problems since it is very affordable, quick, expert, accessible, and provides conciliation between parties. It also involves less formality and is less combative.

Frequently Asked Questions

Q1. What is the importance of ADR?

Ans: ADR affords disputing parties the chance to resolve their differences with the aid of an unbiased third party. Comparatively speaking, it is quicker and less expensive than going to court.

Q2. What is the scope of ADR?

Ans: It has developed into a rival to India's adversarial judicial system and is now referred to as the "consensual legal system." ADR is a more expeditious, cost-effective, peaceful, and satisfactory means of resolving disputes between parties.

Q3. How successful is ADR?

Ans: Overall, 80% of people who used alternative dispute resolution (ADR) and 91% of the people who went the courts believed that their issues would not have been resolved without ADR or a court respectively.

Q4. What makes an ADR process successful?

Ans: The applicable legislation, excluding conflicts of law, should be specified in the agreement to arbitrate. Limiting discovery is a good idea. There shouldn't be more than twenty (20) questions in interrogatories. Depositions are only permitted for witnesses who refuse or are unable to appear voluntarily.

Q5. What is the nature of ADR?

Ans: Alternative dispute resolution (ADR) is intended to resolve conflicts without the involvement of a judge or jury (outside the court of law). This route is typically open whenever efforts between the client and the insurer to address any disagreements among themselves have failed and come to a standstill.

Updated on: 16-Jan-2023

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