The use of alternative dispute resolution by government departments fell last year, though settlement rates increased, a report published by the Ministry of Justice has revealed.

In 2008/09 ADR was used in 314 cases, leading to settlement in 259 (82%), saving costs estimated at £90.2m, the eighth annual pledge report shows. In 2007/08 government departments attempted ADR in 374 cases, of which 72% settled.

In 2001 the lord chancellor published a formal pledge committing government departments and agencies to settle legal cases by ADR techniques in all suitable cases whenever the other side agreed to it.

The overriding objective was that government could be seen to lead by example, and use ADR to resolve disputes, so that relationships with suppliers could be maintained and expensive legal costs avoided.

Over the last year the Ministry of Defence used roundtable settlement meetings to determine damages in personal injury claims brought by former members of the armed forces.

The Treasury Solicitor used conference calls with a mediator to settle a number of cases brought against the Prison Service by a serial litigant who had spent several years in prison.

And the NHS Litigation Authority used mediation to settle quantum in very high-value claims relating to severe neurological damage resulting from alleged negligence in medical care.

Government departments also engaged in training to increase awareness of ADR and other initiatives to promote it. Full Sutton Prison in York trained 12 staff and 12 prisoners to mediate disputes that arise in the prison.