Alternative dispute resolution

Lore & Background

The term 'alternative dispute resolution' arose from Frank Sander's paper, 'Varieties of Dispute Processing'. Traditional arbitration involved heads of trade guilds or other dominant authorities settling disputes. The modern innovation was to have commercial vendors of arbitrators, often ones with little or no social or political dominance over the parties.

The advantage was that such persons were much more readily available. The disadvantage is that it does not involve the community of the parties. When wool contract arbitration was conducted by senior guild officials, the arbitrator combined a seasoned expert on the subject matter with a socially dominant individual whose patronage, goodwill and opinion were important.

Reader's Guide

Despite historic resistance to ADR by many popular parties and their advocates, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In 2008, some courts required some parties to resort to ADR of some type, like mediation, before permitting the parties' cases to be tried (the European Mediation Directive (2008) expressly contemplates so-called 'compulsory' mediation). This means that attendance is compulsory, not that settlement must be reached through mediation. Additionally, parties to merger and acquisition transactions are increasingly turning to ADR to resolve post-acquisition disputes.

United Kingdom

In England and Wales, ADR is now more commonly referred to as 'NCDR' (Non Court Dispute Resolution), in an effort to promote this as the normal (rather than alternative) way to resolve disputes. A 2023 judgment of the Court of Appeal called Churchill v Merthyr Tydfil County Borough Council confirmed that in the right case the Court can order (i) the parties to engage in NCDR and / or (ii) stay the proceedings to allow for NCDR to take place. This overturns the previous orthodoxy (the 2004 Court of Appeal decision of Halsey v.

Milton Keynes General NHS Trust) which was that unwilling parties could not be obliged to participate in NCDR. The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR imposes fewer costs than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute. Some of the senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly in favour of this use of mediation and other NCDR processes to settle disputes.

Since the 1990s many American courts have also increasingly advocated for the use of ADR to settle disputes. However, it is not clear as to whether litigants can properly identify and then use the ADR programmes available to them, thereby potentially limiting their effectiveness. ADR can increasingly be conducted online, which is known as online dispute resolution (ODR, which is mostly a buzzword and an attempt to create a distinctive product). ODR services can be provided by government entities, and as such may form part of the litigation process.

Did You Know?

• In collaborative law or collaborative divorce, each party has an attorney who facilitates the resolution process within specifically contracted terms.

Scope and Purpose of Online Dispute Resolution

ODR represents a broad technological layer applied to the existing landscape of dispute resolution. Rather than replacing negotiation, mediation, or arbitration, it channels these established processes through digital infrastructure, making them accessible to parties who may be separated by significant geographic distance. The field spans an impressive range of conflicts: from everyday consumer-to-consumer disagreements and marital separations all the way up to court proceedings and even interstate tensions.

While ODR is not confined to business-to-consumer transactions, it finds its most natural home in e-commerce disputes, where the very medium that created the conflict (the internet) also provides the most logical venue for resolving it. Designers of ODR systems must balance the competing interests of individual consumers and commercial entities while embedding a thorough understanding of procedural justice into every step. Proponents argue that efficient online resolution mechanisms will be a critical driver in the continued growth of electronic commerce, removing one of the key barriers that has historically limited cross-border digital trade.

The Fourth Party: Technology as an Independent Actor

One of the most striking conceptual contributions to ODR scholarship is the designation of technology itself as a "fourth party" in the dispute process. Coined by Katsh and Rifkin, this label elevates software and computing systems from mere tools to an independent force that actively shapes how information is managed, how communications flow, and how parties interact. In a traditional three-sided model—two disputants plus a neutral—the fourth party disrupts the geometry entirely. It can organize evidence, dispatch automatic responses, filter hostile language from written exchanges, monitor compliance, schedule sessions, and even help parties articulate their underlying interests and priorities.

At times it steps in to replace the neutral altogether, as in fully automated negotiation, while at other times it serves as an assistant to the third party. Katsh and Wing have noted that technological capability is advancing on an exponential curve, meaning the fourth party's influence will only deepen. Some scholars have gone so far as to predict virtual avatar judges that grow more sophisticated over time, further compressing the time and cost burden that disputants traditionally bear.

The Spectrum of Control and the Full Online Process

Dispute resolution techniques exist along a continuum, stretching from scenarios in which the parties retain complete authority over procedure to those in which a third-party neutral governs both the process and the final outcome. ODR sits within this spectrum but adds a distinctive digital dimension: when the bulk of the procedure—initial filing, appointment of a neutral, exchange of evidence, oral hearings, structured discussions, and the issuance of binding settlements—takes place online, the process qualifies as ODR. It is, in essence, a different medium for carrying out dispute resolution from start to finish while still honoring due process principles. The field was born out of a practical gap: disputes were multiplying in online spaces where traditional resolution channels proved slow, costly, or simply inaccessible.

Today, the boundary between offline and online proceedings has grown increasingly porous. Some commentators restrict ODR to ADR processes assisted principally by ICT tools, while a broader school of thought encompasses online litigation and other bespoke forms of dispute resolution that rely heavily on purpose-built digital infrastructure. The most fitting characterization, many argue, is to treat ODR as an interdisciplinary field rather than a standalone discipline.

Automated Negotiation and the Blind-Bidding Model

Among the most distinctive methods within the ODR toolkit is automated negotiation, a category in which technology assumes direct control over aspects of the bargaining process. The most prevalent implementation of this approach is the so-called blind-bidding service, a structured mechanism designed to determine economic settlements in claims where liability is not challenged. Functioning much like a constrained auction, the system allows parties to submit offers while keeping some or all information about those bids concealed from the other side.

A resolution is formally declared by the platform at the close of a negotiating session once all participants have accepted one or more settlement packages. Because the technology handles the negotiation directly, it can at times take the place of the third-party neutral entirely, as the ODR literature explicitly notes. The approach exemplifies how ODR can go beyond merely digitizing existing ADR procedures and instead introduce novel resolution techniques that leverage digital infrastructure to produce meaningful time savings and cost reductions for disputants.