Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is an umbrella term for processes, other than judicial or tribunal determination, in which an impartial person assists those in a dispute to resolve or narrow the issues between them.
Used appropriately, ADR is a cost-effective, informal, consensual and speedy way to resolve particular types of disputes.
Tax disputes arise where the taxpayer disagrees with the Commissioner’s decision in relation to a liability or entitlement. Tax disputes include:
- a formal dispute between the parties about a taxation liability or entitlement, such as an objection
- a dispute arising prior to the issue of assessments for example following a taxpayer’s consideration of the Australian Taxation Office (ATO)’s position paper.
However ADR is not only used to resolve substantive disputes. It may also be used to clarify or limit issues, streamline procedures and interlocutory issues and remove blockers created by relationship issues between the parties.
Broadly, there are three categories of ADR used by the ATO:
- In-house facilitation is the ATO's version of mediation, and is a free service where a trained independent ATO officer assists participants to negotiate their dispute.
- In large, complex disputes the ATO may consider engaging an external practitioner to conduct ADR.
- ADR can also be initiated by the courts or tribunals in litigation cases. Mediation, conciliation and early neutral evaluation are the most commonly used in tax and superannuation disputes.
Alternative dispute resolution is where an independent third party provides assistance in resolving a dispute. Mediation and conciliation are the most commonly used in tax and superannuation disputes.