The Impact of ADR on SME Development: A Comparative Study Between England and India

This article explores the impact of alternative dispute resolution (ADR) on the development of small and medium-sized enterprises (SMEs), focusing specifically on mediation and arbitration. A comparative analysis between ADR frameworks prevalent in England and India is conducted. ADR offers SMEs a flexible, time efficient and cost-effective alternative to traditional litigation, allowing them to resolve disputes while maintaining crucial business relationships. The article highlights mediation as the most suitable form of ADR for SMEs due to its adaptability which gives parties control over the process. While arbitration provides finality, it is identified as less ideal for SMEs due to its high costs, particularly in institutional settings. This article delves into the legislative frameworks supporting ADR in both countries, identifying key differences and areas where improvements are needed. In England, ADR is well integrated into the legal system, with a robust infrastructure supporting its use. In contrast, ADR is gaining traction in India but its adoption is hindered by the perception that ADR is a weak alternative to litigation. The article argues that legal reforms in both nations are necessary to enhance the accessibility and effectiveness of ADR for SMEs, ensuring that these mechanisms evolve alongside the changing landscape of business and technology. Additionally, this article emphasises the importance of increasing awareness of ADR, particularly among vulnerable groups like SMEs. Further, suggestions regarding renaming ADR as “amicable dispute resolution” could make it more appealing. The research also calls for deeper future studies focusing on the cost, speed and efficiency of ADR. This will assist governments to formulate more effective ADR frameworks that meet the evolving needs of SMEs.