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Using alternative dispute resolution to solve a problem

This advice applies to Scotland

What is alternative dispute resolution (ADR)

Alternative dispute resolution (ADR) describes a variety of ways of solving a problem without having to go to court.

The main advantages of solving a problem with ADR are:

  • ADR is usually cheaper, more flexible, faster and less stressful than going to court
  • you might receive compensation
  • the ADR procedure is confidential.

In most ADR schemes, a decision will be made based on the paper evidence you and the other party send in. You won’t always have to attend a hearing.

You can also use an ADR scheme to narrow down the problem before going to court.

Some ADR schemes are legally binding. This means that you won't be able to take your case to court if you accept the decision from ADR but later change your mind.

You can read more about alternatives to going to court on mygov.scot.

What types of ADR are available

The main types of ADR available for solving a problem are:

  • conciliation
  • mediation
  • ombudsmen - in some consumer problems
  • arbitration.

In consumer cases, the schemes might be offered to you by a trade association.

The Faculty of Advocates has launched a dispute resolution service. This is a specialist service offering the full range of types of resolution processes - arbitration, mediation and adjudication. Members providing the service can also offer an expert determination. You can check what is available on the Faculty of Advocates website.

Checklist of issues

Before choosing alternative dispute resolution (ADR), you should ask yourself the following questions:

  • what do you want
  • how much time do you have
  • do you want to avoid meeting the other side in person
  • how much will it cost to start the process
  • will you have to pay the other side’s costs if you lose - in most ADR cases, each side pays their own costs, although in arbitration, the arbitrator can apportion costs if you and the other side agree to this
  • do you want the option of going to court as well as ADR
  • is there a time limit in which you have to act.

In consumer cases, you should also consider whether the trader is still trading.

Conciliation

Conciliation is usually free to use and is often offered first because it's less formal than arbitration.

Conciliation involves a conciliator who focuses on what you and the other side want and tries to find a way of solving the problem that you're both happy with. The aim is to reach an agreed solution that suits you both.

Sometimes, in consumer cases, the contract you have with a trader might ask you to use their own conciliation service before you can use independent arbitration. You should check if they charge for this service and how long it will take to use.

If there's a clause in your contract about having to use conciliation, it might be an unfair term of your contract if:

  • you have to pay
  • the conciliation process means it takes longer to solve your complaint than it should.

Some local trading standards officers also offer a conciliation service. They'll be able to tell you if your local office offers conciliation and refer you for help.

Read more about reporting a problem to Trading Standards.

If you're not sure if you should use a conciliation service that’s offered to you, you can get advice from an experienced adviser, for example at a Citizens Advice Bureau. Find out where to get advice.

If you don't agree with the outcome of the conciliation, you might be offered independent arbitration, or you can choose to take your case to court.

You can make an agreement from a conciliation legally binding if you make a written agreement.

Mediation

With mediation, a mediator will help the 2 sides in a dispute to focus on the issue and consider the best way of solving it. The needs of both sides are taken into account, and you'll try to find common ground to find the best solution to the problem. The mediator is not there to make a decision but will help both sides to agree a solution.

Conciliators and mediators might be employed by the organisation you're complaining about, but they should be trained to be impartial and help both sides reach an agreement.

You can make a mediated agreement legally binding if you make a signed mediated agreement.

Paying for mediation

You might have to pay for mediation, depending on the provider.

If you can't afford it, you might be able to get legal aid to help with some of the costs. You should look for a mediator who does legal aid work.

Finding a mediator

You can find a mediator through the Scottish Mediation website

Arbitration

Arbitration uses an independent arbitrator, usually from the Chartered Institute of Arbitrators (CIArb), to make an independent decision about your complaint. This is based on the paper evidence you and the other side send in. The decision the arbitrator makes is legally binding, and you won't be able to go to court later if you don't agree with the outcome.

In many arbitrations, there is no court hearing. The decision made by the arbitrator is made from the papers sent in and the evidence that has been presented by you and the other side. The evidence might have been presented only in written form, or you and the other side might have been asked to tell the story of your position on the dispute.

Some arbitration schemes are free to use. If you choose independent arbitration, you'll have to pay a fee. You might be able to get the fee back in an award from the arbitration if you win the argument.

Read more about how an arbitrator decides the outcome of a complaint.

Ombudsmen

Ombudsmen cover many services, including financial companies, such as banks, building societies and insurance companies, as well as energy and telephone and internet companies. Ombudsmen are free for consumers to use, but traders have to pay.

You can only use an ombudsman if you've used the organisation's internal complaints service first. If it’s been longer than 8 weeks since you made your complaint and you and the trader can’t agree on what to do, you can take your complaint to an ombudsman.

You'll need to supply paper evidence to the ombudsman, who looks at it and then makes a recommendation or ruling. Depending on which ombudsman you use, the decision that's made can be legally binding.

Ombudsmen look into how a decision was made. This is more important for them to investigate than the decision itself. They also assess if there has been any injustice.

For example, the ombudsman who deals with energy, communications and property complaints can make a recommendation to the trader about what to do. But the financial ombudsman can order a company to do something. This is because it has greater legal powers.

You can still take court action if you're unhappy with the decision, but the court will take the ombudsman's decision into account when it makes a decision.

Ombudsman schemes include:

  • estate agents
  • retail services
  • financial services
  • pensions
  • telephone services.

Traders who offer ADR

Many traders have their own recognised alternative dispute resolution (ADR) schemes. Some of these schemes cover:

Traders who show Safebuy and Trustmark symbols also offer ADR services.

If your complaint is with a trader who belongs to any of these trade associations, you should contact them directly to find out more about the ADR schemes they offer.

If your complaint is about other goods or services, read our advice for when something's gone wrong with a purchase to see if there's a trade association that offers ADR.

More help

If you need more help, contact Advice Direct Scotland's consumer service or a Citizens Advice Bureau. Find out where to get advice

Advice Direct Scotland's Consumer Service 

Freephone: 0808 164 6000
Website: www.consumeradvice.scot

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