Drafting ADR clauses — overviewDrafting the ADR clause

Many contracts contain an ADR clause as an alternative to litigation, although parties may still use ADR without such a clause. Care is required in drafting to provide an enforceable clause. There are many points to consider when drafting such a clause, for example having a trigger for the process, including a time frame and whether to use an industry model form.

Model ADR clauses

Various institutions have produced model ADR clauses which tend to revolve around mediation. They can be amended for use with other types of ADR.

Types of dispute resolution clauses - ADR

There are an array of different types of dispute resolution clauses, providing for various mechanisms by which parties' disputes can be resolved. Often, parties provide for a mechanism for the parties to try to resolve their dispute prior to issuing litigation or arbitration proceedings, such as mediation. It is important, before a dispute is raised or responded to, that practitioners appreciate the meaning and effect of any alternative dispute resolution clause contained in the relevant contract. Practitioners also need to be aware of the consequences of a failure to comply with the clause set out in the contract.