ADR Clauses In Contracts

The Centre for Effective Dispute Resolution, has reported an increase in alternative dispute resolution (ADR) clauses in contracts which it believes is resulting in more mediations taking place and at an earlier stage.

Contracts often include clauses that specify what jurisdiction and the the agreement is covered by. For example, a contract between two English companies might state that the law of England and Wales is to apply and the courts of England and Wales have jurisdiction to decide any disputes.

Some contracts, in particular construction contracts, go further and include provisions that disputes should be determined by arbitration or adjudication.

The current trend is to include clauses that the parties should try ADR and in particular mediation, before either party issues a claim at court.

The benefits of mediation and the risks of failing to engage in it, are now more widely known amongst the legal profession and amongst businesses, making it more popular as a method of trying to resolve disputes.


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