Government use of ADR saves £23 million in costs

United Kingdom

The latest annual report on the "Effectiveness of the Government's Commitment to using Alternative Dispute Resolution", just published by the Department for Constitutional Affairs, shows that the use of ADR by Government Departments has grown year on year. In March 2001, Government Departments and agencies pledged to consider Alternative Dispute Resolution (ADR) "in all suitable cases wherever the other party accepts it". The wording of the pledge is not a cast-iron promise to use ADR and was met by a number of commentators with a degree of scepticism and a fair degree of reluctance to use it in practice.

However, an analysis of these latest figures indicates that it is beginning to be used in bigger and more complex disputes with substantial savings in legal costs; the savings in the Government's legal costs in 2004 are estimated to be £14.6 million, an increase of 128% on 2003.

The report also highlights that:

  • the number of cases in which ADR has been used has grown from 49 in 2001, to 163 in 2003 and 229 in 2004
  • the settlement rate decreased from 83% to 79%.

The decline in the settlement rate of 4% is not significant and is in line with experience generally as litigators are more inured with the process. Disappointingly, the latest report fails to include details of the number of cases in which it was recommended; a comparison between recommendation and actual take up would have provided a good indication of the level of commitment to its use. On the positive side, the report highlights the diverse types of disputes being taken to ADR, illustrated by examples from five Government Departments.

The saving in legal costs over the three years since the pledge was published now totals £23 million and should act as an incentive to Government Departments to use ADR and assist litigants involved with Government Departments to persuade those managing the dispute to use alternatives to litigation.