ALTERNATIVE DISPUTE RESOLUTION

Alternative Dispute Resolution Information Form

Procedures for settling disputes by means other than litigation; e.g., by ARBITRATION, mediation, or minitrials. Such procedures, which are usually less costly and more expeditious than litigation, are increasingly being used in commercial and labor disputes, DIVORCE actions, in resolving motor vehicle and MEDICAL MALPRACTICE tort claims, and in other disputes that would likely otherwise involve court litigation. In the late 1980s and early 1990s, many people became increasingly concerned that the traditional method of resolving legal disputes in the United States, through conventional litigation, had become too expensive, too slow, and too cumbersome for many civil lawsuits (cases between private parties). This concern led to the growing use of ways other than litigation to resolve disputes. These other methods are commonly known collectively as alternative dispute resolution (ADR).

As of the early 2000s, ADR techniques were being used more and more, as parties and
lawyers and courts realized that these techniques could often help them resolve legal disputes quickly and cheaply and more privately than could conventional litigation. Moreover, many people preferred ADR approaches because they saw these methods as being more creative and more focused on problem solving than litigation, which has always been based on an adversarial model. The term alternative dispute resolution is tosome degree a misnomer. In reality, fewer than 5percent of all lawsuits filed go to trial; the other95 percent are settled or otherwise concluded before trial. Thus, it is more accurate to think of litigation as the alternative and ADR as thenorm. Despite this fact, the term alternative disputeresolution has become such a well-accepted shorthand for the vast array of nonlitigation processes that its continued use seems assured. Although certain ADR techniques are wellestablished and frequently used—for example, mediation and arbitration—alternative dispute resolution has no fixed definition. The term alternative dispute resolution includes a widerange of processes, many with little in common except that each is an alternative to full-blown litigation. Litigants, lawyers, and judges are constantlyadapting existing ADR processes ordevising new ones to meet the unique needs oftheir legal disputes. The definition of alternative dispute resolution is constantly expanding toinclude new techniques. ADR techniques have not been created toundercut the traditional U.S. court system. Certainly, ADR options can be used in cases where litigation is not the most appropriate route. However, they can also be used in conjunction with litigation when the parties want to exploreother options but also want to remain free toreturn to the traditional court process at any point. Of the many ways to resolve a legal disputeother than formal litigation, mediation, arbitration,mediation-arbitration, MINITRIAL, earlyneutral evaluation, and summary jury trial arethe most common.

Mediation

Mediation—also known as conciliation—isthe fastest growing ADR method. Unlike litigation, mediation provides a forum in which partiescan resolve their own disputes, with the helpof a neutral third party.Mediation depends upon the commitment of the disputants to solve their own problems. The mediator, also known as a facilitator, neverimposes a decision upon the parties. Rather, themediator’s job is to keep the parties talking andto help move them through the more difficult points of contention. To do this, the mediator typically takes the parties through five stages.

First, the mediator gets the parties to agreeon procedural matters, such as by stating thatthey are participating in the mediation voluntarily, setting the time and place for future sessions ,and executing a formal confidentiality agreement. One valuable aspect of this stage is that the parties, who often have been unable to agree on anything, begin a pattern of saying yes.

Second, the parties exchange initial positions,not by way of lecturing the mediator but in a face-to-face exchange with each other.Often, this is the first time each party hears theother’s complete and uninterrupted version.The parties may begin to see that the story hastwo sides and that it may not be so unreasonable to compromise their initial positions.

Third, if the parties have agreed to what iscalled a caucusing procedure, the mediator meets with each side separately in a series of confidential, private meetings and begins exploring settlement alternatives, perhaps byengaging the parties in some “reality testing” oftheir initial proposals. This process, sometimes called shuttle diplomacy, often uncovers areas offlexibility that the parties could not see or wouldhave been uncomfortable putting forward officially.

Fourth, when the gap between the partiesbegins to close, the mediator may carry offersand counteroffers back and forth between them,or the parties may elect to return to a joint sessionto exchange their offers.Finally, when the parties agree upon thebroad terms of a settlement, they formally reaffirmtheir understanding of that settlement,complete the final details, and sign a settlementagreement.

Mediation permits the parties to design andretain control of the process at all times and, ideally,eventually strike their own bargain. Evidence suggests that parties are more willing tocomply with their own agreements, achieved through mediation, than with adjudicated decisions, imposed upon them by an outside partysuch as a judge. An additional advantage is that when theparties reach agreement in mediation, the disputeis over—they face no appeals, delays, continuing expenses, or unknown risks. The parties can begin to move forward again. Unlike litigation, which focuses on the past, mediation looks to the future. Thus, a mediated agreement is particularly valuable to parties who have an ongoing relationship, such as a commercial or employment relationship.

Arbitration

Arbitration more closely resembles traditional litigation in that a neutral third party hears the disputants’ arguments and imposes afinal and binding decision that is enforceable bythe courts. The difference is that in arbitration,the disputants generally agreed to the procedurebefore the dispute arose; the disputants mutually decide who will hear their case; and the proceedingsare typically less formal than in a court of law. One extremely important difference isthat, unlike court decisions, arbitration offers almost no effective appeal process. Thus, whenan arbitration decision is issued, the case is ended. Final and binding arbitration has long beenused in labor-management disputes. Fordecades, unions and employers have found itmutually advantageous to have a knowledge able arbitrator—whom they have chosen—resolve their disputes in this cheaper and faster fashion. One primary advantage for both sides has been that taking disputes to arbitration has kepteveryone working by providing an alternative to strikes and lockouts and has kept everyone outof the courts. Given this very successful trackrecord, the commercial world has become enthusiastic about arbitration for other types of disputes as well.Now a new form of arbitration, known ascourt-annexed arbitration, has emerged. Manyvariations of court-annexed arbitration havedeveloped throughout the United States. Onecan be found in Minnesota, where, in the mid-1990s, the Hennepin County District Courtadopted a program making civil cases involvingless than $50,000 subject to mandatory nonbindingarbitration. The results of that experimentalprogram were so encouraging that legislation was later enacted expanding the arbitrationprogram statewide. As of 2003, mostcases were channeled through an ADR processbefore they could be heard in the courts. Agrowing number of other federal and statecourts were adopting this or similar approaches.Mediation-ArbitrationAs its name suggests, mediation-arbitration,or med-arb, combines mediation and arbitration.First, a mediator tries to bring the partiescloser together and help them reach their ownagreement. If the parties cannot compromise,they proceed to arbitration—before that samethird party or before a different arbitrator—for a final and binding decision.

Minitrial

The minitrial, a development in ADR, isfinding its greatest use in resolving large-scaledisputes involving complex questions of mixedlaw and fact, such as PRODUCT LIABILITY, massive construction, and antitrust cases. In a minitrial, each party presents its case as in a regulartrial, but with the notable difference that thecase is “tried” by the parties themselves, and thepresentations are dramatically abbreviated.

In a minitrial, lawyers and experts present acondensed version of the case to top managementof both parties. Often, a neutral adviser—sometimes an expert in the subject area—sitswith management and conducts the hearing.After these presentations, top management representatives—by now more aware of the strengths and weaknesses of each side—try to nnegotiate a resolution of the problem. If they are unable to do so, they often ask for the neutraladviser’s best guess as to the probable outcome of the case. They then resume negotiations.

The key to the success of this approach is thepresence of both sides’ top officials and the exchange of information that takes place during the minitrial. Too often, prelitigation work has insulated top management from the truestrengths and weaknesses of their cases. Minitrialpresentations allow them to see the disputeas it would appear to an outsider and set thestage for a cooperative settlement.

Early Neutral Evaluation

An early neutral evaluation (ENE) is usedwhen one or both parties to a dispute seek theadvice of an experienced individual, usually anattorney, concerning the strength of their cases.An objective evaluation by a knowledgeable outsidercan sometimes move parties away fromunrealistic positions, or at least provide themwith more insight into their cases’ strengths andweaknesses. Of course, the success of this techniquedepends upon the parties’ faith in the fairnessand objectivity of the neutral third-party,and their willingness to compromise.

Summary Jury Trial

Summary jury trials have been used primarilyin the federal courts, where they provideparties with the opportunity to “try” their casesin an abbreviated fashion before a group ofjurors, who then deliberate and render an ADVISORY OPINION.

Like an early neutral evaluation, an advisory opinion from a summary jury trial can help theparties assess the strengths and weaknesses oftheir cases and sometimes can facilitate the settlementof the dispute.Another advantage of thesummary jury trial, which it has in commonwith the minitrial, is that it can be scheduledmuch sooner than a trial. When early evaluationshelp the parties settle their cases, the parties typically avoid much of the delay, expense,and anxiety that occurs in litigation.

ADR by Statute and Regulation

Since the late 1980s, Congress has recognizedthat ADR provides a cost-efficient alternativeto traditional methods for disputeresolution. In 1988, Congress enacted the Judicial Improvements and Access to Justice Act, 28U.S.C.A. § 652 (1993 & Supp. 2003), which permittedU.S. district courts to submit disputes toarbitration. Congress amended this statute withthe enactment of the Alternative Dispute Resolution Act of 1998, Pub. L.No. 105-315, 112 Stat.2994 (28 U.S.C.A. § 652), which requires eachdistrict court to require, by local rule, that litigants in all civil cases consider using an ADR process at the appropriate state of litigation.

Local rules of U.S. district courts typically provide a wide array of ADR methods. For example, the U.S. District Court for the Western District of Texas recognizes early neutral evaluation,mediation, minitrial, moderated settlementconference, summary jury trial, andarbitration as acceptable forms of ADR. W.D.Tex. Loc. R. CV-88. According to these rules, the court may order ADR on the motion of a party,on agreement of both parties, or on its own motion. Most other district courts have adoptedsimilar rules. Congress has also included ADR provisions in a number of statutes to resolve avariety of disputes. For instance, the Board of Directors of the Office of Compliance, which reviews complaints brought by employees ofCongress, may order counseling or mediation,in addition to holding a board hearing or initiatinga civil action in federal court. 2 U.S.C.A. §1401 (1997). Similar statutes apply to such conflictsas labor disputes and claims by individuals with disabilities.

State legislatures have similarly provided forADR in many of their statutes. Judges in Florida,for example, possess authority to submit mosttypes of cases to mediation or arbitration in lieuof litigation. Fla. Stat. § 44.1011 (1997). TheCOMMISSIONERS ON UNIFORM LAWS haveapproved several uniform laws, which may beadopted by the various states, related to ADRproceedings. Versions of the Uniform Arbitration Act, first approved in 1956, have beenadopted by 49 states. Likewise, the Uniform Mediation Act, drafted in conjunction with the American Bar Association’s Section on DisputeResolution in 2001, provides rules on the issuesof confidentiality and privileges in mediation.

ADR has had an impact on administrative agencies as well. Congress amended the AdministrativeProcedure Act in 1990 to authorize andencourage administrative agencies to submitadministrative disputes to ADR. 5 U.S.C.A. §572 (1996). ADR often takes the form of mediationin disputes involving labor and employmentrelations and equal employmentopportunity. Several federal agencies provideguides about ADR proceedings to prospectivecomplainants and other constituents.

Courts frequently uphold decisions made during ADR proceedings. In Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 121 S.Ct. 1724, 149 L. Ed. 2d 740 (2001), the U.S. Supreme Court reviewed a decision in which theNinth Circuit Court of Appeals had reversed adecision of an arbitration panel regarding acomplaint by former BASEBALL player Steve Garvey about a contract dispute. The Ninth Circuit then remanded the case to the arbitrationpanel with instructions to enter an award infavor of the player for the amount he claimed. Noting that JUDICIAL REVIEW of labor arbitrationdecisions is limited, the Supreme Courtreversed the Ninth Circuit’s decision, holdingthat it was not the place of a court of appeals toresolve the dispute on its merits.

ALTERNATIVE DISPUTE RESOLUTION