ADR stands for Alternative Dispute Resolution. Alternative to what? Litigation, or any other combative-based method of resolution (primarily arbitration and/or trial). Consider Mediation:
Cost: Mediation can be anything the parties would like it to be and therefore is the most cost effective alternative to litigation, or any other drawn out form of resolution. The parties can decide the procedures which they will follow in order to prepare themselves to resolve their matter. Often, the mere ability to agree on how to resolve a dispute is the first step toward forging a substantive agreement.
Control: Litigation is governed by procedural rules which can be inflexible, and rigidly enforced by the Courts. But since the parties can decide the procedural elements involved in settling their dispute, as well as what agreeing on the substantive resolution, they control the amount of time and energy which will govern the process and the end result.
Time: In deciding how to govern the procedure, the parties have more control over how much time it will take to resolve their matter. And this does not have to mean a faster resolution. While disputants generally seek a faster resolution than, say, the Courts might provide, some matters actually require more time than the Courts want to allow, which creates great tension for the disputants. One example is a case where a house was constructed on a hill, and was suffering damage as a result of land movement. While all of the parties and their consultants agreed they needed more time, the Court required resolution of the case in less time. Subsequently, the parties' need for investigation and analysis was limited by inflexibly short time restrictions imposed by the Court.
Are there any downsides?
Unless the parties do not wish to control their future, there are no pitfalls to mediation! Best case scenario: the disputants resolve their matter in less time at lower cost than litigation, or other forms of ADR.
If the parties agree that they cannot resolve their matter at the start of the process, mediation is not a worthwhile alternative to other forms of ADR, or litigation.