# ADR overview: mediation and arbitration

> **Key takeaway:** Mediation: without prejudice settlement facilitation; costs risk if unreasonably refused (Halsey line). Arbitration: agreement + AA 1996 as amended by AA 2025 (in force 1 Aug 2025); stay s.9; limited challenges ss.67–69. Enforce awards domestically/internationally.

- **Jurisdiction:** England & Wales
- **Practice area:** Civil Procedure
- **Last reviewed:** 2026-08-04
- **Interactive page:** https://kttclegal.info/library/notes/CivilProcedure/adr-mediation-arbitration-overview
- **Keywords:** ADR, mediation, arbitration, Arbitration Act 1996, Arbitration Act 2025, Halsey, stay of proceedings, without prejudice, award enforcement

## What is this about?

Alternative dispute resolution includes negotiation, mediation, and arbitration. English civil courts actively encourage ADR; unreasonable refusal can attract costs sanctions. Arbitration seated in England and Wales is governed by the Arbitration Act 1996 as amended by the Arbitration Act 2025 (substantive reforms in force from 1 August 2025).

## What is the core rule?

Mediation is a facilitated settlement process; it is usually without prejudice and non-binding unless a settlement agreement is reached. Courts may stay proceedings for ADR and penalise unreasonable refusal in costs (Halsey framework as developed). Arbitration requires an arbitration agreement; the tribunal's jurisdiction, procedure, and challenges to awards are governed by the Arbitration Act 1996 as amended by the Arbitration Act 2025. Awards are enforceable, with limited appeal/challenge grounds (notably ss.67–69 of the 1996 Act as amended). Transitional rules determine whether a given arbitration or related court proceeding falls under the pre- or post-1 August 2025 text.

## What are the elements or test?

1. Is there a contractual ADR/arbitration clause?
2. Mediation: timing, mediator, without-prejudice protection?
3. Arbitration: seat, rules, number of arbitrators, institutional vs ad hoc; which AA text applies?
4. Stay of court proceedings under AA 1996 s.9?
5. Enforcement or challenge of award?

## Which authorities matter?

- **Arbitration Act 1996, as amended by the Arbitration Act 2025 (substantive provisions in force from 1 August 2025)** — Primary domestic arbitration statute. The 2025 Act makes incremental reforms (e.g. governing law of the arbitration agreement, arbitrators' duty of disclosure, summary disposal powers) — apply the consolidated text for post-commencement proceedings.
- **Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002** — Leading modern starting point on costs consequences of refusing mediation (applied with later case-law refinements).
- **Civil Procedure Rules, Part 1 overriding objective and costs rules encouraging ADR** — Judicial encouragement of settlement and ADR.
- **New York Convention 1958 (international award enforcement context)** — Framework for recognition/enforcement of foreign arbitral awards implemented in UK law.

## How does this apply in practice?

Mediation is not second-class advocacy preparation — position papers matter. Arbitration confidentiality is often expected but not absolute. Consumer ADR and construction adjudication (HGCRA) are specialised regimes. For proceedings straddling 1 August 2025, check the Arbitration Act 2025 transitional provisions.

## What are common pitfalls?

- Pathological arbitration clauses (unclear seat/rules)
- Missing s.9 stay strategy
- Treating mediation as showing weakness without costs analysis
- Confusing expert determination with arbitration
- Applying pre-2025 AA text to a post-1 August 2025 arbitration without checking transition

## When would a practitioner use this?

Dispute resolution clauses; mediation strategy; arbitration seating and enforcement.

## Quick reference

Mediation: without prejudice settlement facilitation; costs risk if unreasonably refused (Halsey line). Arbitration: agreement + AA 1996 as amended by AA 2025 (in force 1 Aug 2025); stay s.9; limited challenges ss.67–69. Enforce awards domestically/internationally.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*