16 Jan 2026

Alternative dispute resolution (ADR): a practical guide for traders

Are you dealing with a dispute and looking for alternatives to court? Find out more about the benefits of alternative dispute resolution and how it works.

In this article

What is ADR?
Types of ADR
When ADR becomes relevant to your business
What a Trusted Trader needs to display on their website
Which? Trusted Traders ADR scheme through RICS
How ADR can help your business

Disputes can arise when a customer is unhappy with a service, such as the quality of work, delays, a quote or the final invoice. Alternative dispute resolution (ADR) provides consumers and traders with a formal way to resolve a complaint without going to court. This method uses an independent third party and aims for a fair outcome based on evidence.

In addition, UK consumer law requires traders to give customers clear information about ADR once their own complaints process has reached its end. This applies across most consumer-facing sectors.

What is ADR?

ADR is any out-of-court dispute process that involves an independent third party. It’s not 'informal advice, but a structured approach to reaching an outcome. For Which? Trusted Traders, ADR sits after your own complaints handling. The customer starts the ADR case, and the ADR provider then asks both parties for evidence and reaches a decision.

Types of ADR

Different disputes require different types of alternative dispute resolution. These are the most common:

Mediation

A mediator helps both sides to reach an agreement. They don’t ‘pick a winner’, but the solution relies on both parties accepting a settlement. The mediator will facilitate communication between them.

Conciliation

Conciliation is similar to mediation; however, the conciliator may take a more active role in moving the discussion forward. This may involve actively suggesting solutions, as well as simply facilitating communication.

Adjudication/arbitration

In adjudication, also known as arbitration, a third party reviews the evidence and makes a decision. Some schemes treat that decision as binding on the trader, while others treat it as a recommendation unless accepted; however, the rules sit with the specific ADR body.

Ombudsman-style schemes

In this type of ADR, an independent body considers the documents and issues an outcome. Many consumers recognise the term ‘ombudsman’ and view it as a clear next step.

Read our guide on what to do when you’re in a dispute with your customer.

When ADR becomes relevant to your business

Always begin by following your own internal complaints procedure and giving the customer a fair opportunity to resolve the issue directly with you.

If you’re unable to reach an agreement through this process, your duty to provide ADR information then applies. In practical terms, this means you must issue a final response to the customer that clearly sets out their next options. This final response should:

name an approved ADR provider that’s relevant to your sector
include the ADR provider’s website details so the customer can access further information
explain whether you’re willing to use ADR to resolve the dispute.

In some cases, you may be required to use ADR rather than simply offer it. This can depend on the rules of any trade association you belong to, or on specific legal or regulatory requirements within your sector.

According to Trading Standards guidance, ADR should usually be completed within around 90 days once the ADR body has what it needs, although complex cases can take longer.

Are you in a dispute and need legal advice? Read our guide to finding a lawyer.

What a Trusted Trader needs to display on their website

If you’re endorsed by Which? Trusted Traders, you’re expected to update your complaints policy and website wording to match the current ADR provider setup.

Which? provides the exact text traders should use. It reads:

‘The business has access to an alternative dispute resolution (ADR) service for our domestic installation, service, repair and maintenance contracts as part of the Which? Trusted Traders endorsement. If you choose to, you can refer your complaint to Which? Trusted Traders’ alternative dispute resolution. You will need to contact Which? Trusted Traders on 02922 670 040, and they’ll tell you if you’re eligible to use their service.’

Tip: Place the text in two spots to ensure it’s visible, as recommended by Trading Standards:

your complaints policy page
your terms and conditions (or equivalent customer terms page).

Which? Trusted Traders ADR scheme through RICS

Which? Trusted Traders gives endorsed traders access to ADR for domestic installation, service, repair and maintenance contracts. The current provider is the Royal Institution of Chartered Surveyors (RICS).

For consumers, ADR is available if:

the work took place during the trader’s endorsement period
the trader is still endorsed at the time of the complaint.

The RICS ADR service is not-for-profit, independent and free for customers to use. If you’re not registered as a Which? Trusted Trader, Trading Standards maintains a list of contact details for approved ADR bodies covering different sectors to help you find the right solution for your business.

Fair usage and costs

Which? publishes a fair usage policy, stating that the ADR service is free for customers. It also explains that costs are covered by Which? Trusted Traders under reasonable use, with fees possible if a trader has a disproportionate number of cases.

How ADR can help your business

Using a third party to arbitrate disputes can provide faster decisions that will be more easily understood and so more readily accepted by both parties. This means that cases will typically be resolved more quickly. Access to the ADR service provided by RICS is just one of the many perks and benefits of a Which? Trusted Traders endorsement.

In addition, access to an alternative dispute resolution scheme can help to reassure your customers that, in the unlikely event that something goes wrong, there’s a procedure in place to resolve any dispute should it go beyond your own complaints procedure.