Arbitration is a means of dispute resolution whereby two disputing parties agree to submit their dispute to a neutral third party for determination.

An agreement of the parties to submit their disputes to arbitration is most commonly found in the form of an arbitration clause incorporated into a contract between the parties. In arbitration, an independent arbitrator will hear details of a disagreement from the parties involved, consider all the facts involved, and give a final decision on the issue.

An arbitration is very similar to a court case and solicitors are usually engaged by the parties

Mediation is defined in the Act as “a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of a mediator, attempt to reach a mutually acceptable agreement to resolve the dispute.”

Because mediation is voluntary, a person cannot be required to use mediation to resolve their dispute. All of the parties must agree to use mediation to try to resolve the dispute.

Even when the parties have agreed to use mediation, it remains voluntary. The parties are free to decide at any time not to continue.

Only the parties decide if, when and how to resolve their dispute in mediation. The terms of any resolution agreement reached between the parties only becomes binding on them when set down in writing and signed by them. The Act provides that, once a settlement agreement is concluded and signed by the parties in mediation, it can be enforced like any other binding contract.

This is similar to mediation. However, in Ireland, construction conciliation is a unique form of ADR: when a conciliator is unable to facilitate a settlement between the parties, he or she will then issue a recommendation that will be binding upon the parties unless it is rejected by either of them within a prescribed time.

Privacy – Litigation takes place in open court to which the press and public generally have access. ADR is usually held in private with only those connected with the dispute present.

Simpler procedures – As a general rule, ADR procedures are considerably simpler and less formal than court.

Greater cost effectiveness – ADR usually serves to significantly reduce costs.

Parties may opt for ADR or they may be forced to do so by contract or by Court.