Contract dispute resolution

The ways a commercial disagreement gets resolved, in ascending order of cost.

What it means

Options run from negotiation, to mediation, to arbitration or adjudication, to litigation.

Why it matters

Litigation is slow, expensive and public, and the loser normally pays the winner's costs. Almost every commercial dispute settles, and the question is how much is spent first.

What it looks like in practice

Mediation is confidential, comparatively cheap and settles a high proportion of disputes. Courts expect parties to have considered it and can penalise unreasonable refusal in costs.\n\nCheck the contract for a dispute resolution clause — it may require a specific route.

What to watch out for

Litigating a point of principle. The costs almost always exceed the principle, and the commercial relationship rarely survives.

Where to get proper advice

A commercial solicitor on the merits and the costs risk. CEDR and the Civil Mediation Council list accredited mediators.