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Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR)

“It is the spirit and not the form of law that keeps the justice alive.”

~ LJ Earl Warren

What is ADR?

  • Conflict management via a mechanism of dispute resolution that is alternative to traditional adversarial litigation.

  • Dispute resolution in cost-effective manner and with increased efficacy (promotes working together co-operatively, reducing hostility and reaching solution optimum for both parties.)

  • Generally, neutral third party helps parties to communicate, discuss differences and resolve dispute.

  • The Legal Services Authorities Act was passed in 1987 to encourage out-of-court settlements, The Arbitration and Conciliation Act was enacted in 1996 and was significantly amended in 2019.

Why ADR?

  • Not just an alternative means, but an additional method that is utilized by courts to ease the burden of pending cases. (The Court also orders mediation between parties in some cases so that the burden of the courts may be relieved and the parties may come to a compromise amongst themselves under Section 89 of the Civil Procedure Code)

  • Provides scientifically developed techniques – reduces burden on the judiciary.

  • Urgent need to clear mounting backlog of cases. (speedier process as formal court proceedings are avoided.)

  • Make litigation affordable to the ordinary people. (less expensive than going to court; saves stress of court appearances for common man.)

Modes of ADR

Alternative Dispute Resolution (ADR)

Lok Adalat

  • A non-adversarial system based on Gandhian principles – known as People’s Courts;

  • Assumed statutory recognition under Legal Services Authority Act, 1987.

Alternative Dispute Resolution (ADR)


Though it is true that “Justice delayed is justice denied”, it is also true that “justice hurried is justice buried.”

  • System of Lok Adalats is based on compromise and settlement – if parties do not arrive at consensus:
    case is returned to the court of law;
    unnecessary delays in the dispensation of justice.

  • Members other than Chairman are persons without a legal background, even in Permanent Lok Adalat.

  • Judges are pressured to quickly dispose of the cases for political gains:
    Limited consideration to the parties’ rights and needs.

  • Provisions of Code of Civil Procedure and the Indian Evidence Act not strictly applicable:
    Decisions made only if element of settlement exists.
    Decisions will be in a summary manner.
    If parties do not settle, Permanent Lok Adalat shall decide the dispute.


  • Legal Awareness
    Accessible legal literacy/ legal aid programs for the marginalised.
    Awareness camps at grassroot level.
    Mass media coverage to encourage public approach to Lok Adalats.

  • Expanded Jurisdiction
    Inclusion of business disputes or conflicts where the public at large are involved.

  • More Lawyers
    Improved quality of legal aid.
    Incentivising lawyers to provide effective legal assistance to the needy, e.g. increasing renumerations.

  • Cultural & Structural Reforms
    Balance between formal and informal forum to encourage public.
    Mobilisation of resources - staff, funding and facilities – enhance structural soundness of Lok Adalats.
    Including specialists of concerned disputes.
    Free legal training to social workers to prevent exploitation of poor by lawyers.
    Encouraging referral to Lok Adalats to increase awareness and reduce prejudice against it.

Legislations of ADR in India

  • Section 89 of the Civil Procedure Code, 1908 - if it appears to court there exist elements of settlement outside the court then court formulate the terms of the possible settlement and refer the same for: Arbitration, Conciliation, Mediation or Lok Adalat.

  • Arbitration and Conciliation Act, 1996 - modernization of The Arbitration Act, 1940, which dealt with only domestic arbitration.

  • The Legal Services Authority Act, 1987 - passed in 1987 to encourage out-of-court settlements; to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen.


  • Less time consuming: people resolve their dispute in shorter periods as compared to traditional litigation in courts, which may take years

  • Cost effective: it saves lot of money if one undergoes in litigation process.

  • Informal:  It is free from technicalities of courts resulting in fewer procedural delays; people are free to express themselves without any fear or intimidation.

  • Efficient: there are always chances of restoring relationship back as parties discuss their issues together on the same platform.

  • Preserves the best interests of parties and prevents further conflict and souring of relationships.

  • Specialized expertise can be made available on the tribunal in order to facilitate the most appropriate outcome.


  • Several issues like admitted liability, divorce, granting of probates etc. cannot be referred to arbitration.

  • can only be adopted when there is no statutory bar and further if parties mutually agree.

  • quality of ADR depends on the arbitrator/mediator it; depending on arbitrator, it sometimes proves to be more costly than court litigation (Arbitration and Conciliation Act in this regard provides for the Court's intervention at the appropriate situation so that ADR is not misused resulting in miscarriage of justice.

Further, due to parties often appealing Arbitral Awards before Courts, Commercial entities are beginning to view Arbitration as a wasted exercise that is costly and time consuming)

  • Hurdles in the effective implementation of ADR are many which include the following:

  1. Lack of appropriate arbitrators (very often, retired judges are appointed as arbitrators, which results in arbitrators assuming the adversarial form of dispute resolution which they are comfortable with. This is viewed unfavourably, especially since the arbitrators often lack the expertise to resolve complex factual disputes in international commercial arbitration).

  2. Lack of infrastructural facilities.

  3. Lack of awareness and legal literacy.

Way Forward

  • There is a lack of awareness about the availability of ADR mechanisms.

  • The National and State Legal Services Authorities should disseminate more information regarding these, so they become the first option explored by potential litigants.

  • Requisite infrastructure should be provided and institutional frame work put to place to achieve goals of adoption of ADR mechanisms.

  • ADR centres should be created for settling disputes out-of-court.

  • The award should be made binding on the parties and no appeal to the court should be allowed unless it is arrived at fraudulently or if it against public policy (will make sure that ADR is binding and prevent delay of implementation of the award.)

  • Several online ADR platforms have been launched such as SAMA and ADR-ODR International which facilitate dispute resolution online. These platforms must be encouraged and given official recognition, so that Courts may take their assistance in referring cases to ADR.

Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR)
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