Since the revised Civil Procedure Rules were introduced in 1998 there has been a concerted effort to encourage parties to undertake Alternative Dispute Resolution prior to proceeding to court. This can involve arbitration or mediation. Often agreements may specify that arbitration is obligatory. Mediation is a slightly more informal method, with the process to be determined by the parties. It is often the case that a list of mediators will be sent by one side to the other and then the appropriate person appointed from that list.
Under the Civil Procedures Rules 1998 there is an obligation to consider Alternative Dispute Resolution. That is, the parties must give a reasonable consideration and if it can be shown that they have unreasonably refused then there may be cost implications. That does not mean that the parties have to undertake Alternative Dispute Resolution or that they will be punished on costs, it merely means they have to give it proper consideration and not unreasonably refuse. The same applies to Employment Tribunal proceedings, although it is less likely that there will be any cost consequences.