Costs and Cost Shifting in ADR

Abstract This chapter explores costs and cost shifting in alternative dispute resolution (ADR). Each party will be liable to pay their own costs and expenses in relation to an ADR process, unless some other agreement is reached. Given that high expenditure in dispute resolution is a major driver for the use of ADR, options for getting costs orders or otherwise shifting costs to another party are a significant consideration in taking strategic and cost-effective decisions relating to the use of litigation and ADR. While cost recoverability is not the norm in ADR, there are ways in which costs can be recovered: as part of a settlement reached in negotiation or mediation; through the use of a Part 36 offer; or in an adjudicative ADR process as part of an award made by a third party, if the third party has been given power to award costs by agreement. The chapter then looks at the recovery of ADR costs within a court process, before considering Part 36 offers.