Court should be the last resort in settling disputes, Justice Secretary Kenny MacAskill said yesterday.

He told MSPs that alternative dispute resolution (ADR) such as arbitration, adjudication and mediation could "enable people to resolve their disputes more quickly and effectively".

Building up expertise in ADR could lead to Scotland becoming recognised as an international leader in the field and somewhere to which global companies could take their disagreements, boosting the Scottish economy, he said.

Mr MacAskill said Scotland was "perhaps too reliant on traditional adversarial processes and laws.

"My aspiration is to make use of the formal court system the remedy of last resort rather than the remedy of first resort," he said.

Pressed by Tory MSP Gavin Brown on whether the Scottish Government would use ADR, Mr MacAskill said: "I don't think I can give that formal commitment because it depends on each and every matter. We would have to reserve the right to litigate and litigate urgently and immediately."

The minister told MSPs that at least one aspect of Scots law on arbitration dated back to 1695 and it needed to be modernised.

"The unsatisfactory state of the law here makes Scotland an unattractive place in which to arbitrate. As world trade continues to expand, there will be increasing demand for high-quality arbitration services to resolve cross border commercial disputes," he said.

He said an Arbitration Bill to modernise the system would be issued for consultation next spring.

The government wanted to develop a dispute resolution centre, which could attract international arbitration cases as well as domestic one.

"Scotland should be an easy place to do business and it needs the law and courts to back this up and make Scotland the jurisdiction of choice for resolution of disputes."

For Labour, Pauline McNeill said that at its highest level ADR was about "solving disputes and differences between commercial companies across national borders" but she said it could also help those who could not afford to take cases to the civil courts, including people involved in family disputes.