Time & Cost Savings
Adjudication and mediation processes take only about a month to conclude from start to finish. Arbitration processes tended to take between 6 months to a year to conduct but the advent of fast track arbitrations has cut this time scale radically in recent times. By contrast it is not unusual for it to take up to a year for a major case to be heard by the courts. It is attractive for commerce to settle disputes quickly and put an end to uncertainty about future financial commitments. This enables businessmen to settle their affairs and get on with business without having to ring fence funds to meet potential liabilities. Payments into court and guarantees for security of costs can also have adverse effects on cash flow.
The interest that may accrue over a two-year period between the commission of a wrong and the court decision can far exceed the cost of ADR processes. The losing party is likely to be ordered to repay this interest to the winning party. If interest is taken into account it may in reality cost nothing at all to settle a dispute using an ADR process since the interest that accrues over a short period is relatively little.