alternative dispute resolution
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Alternative Dispute Resolution
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 to some degree a misnomer. In reality, fewer than 5 percent of all lawsuits filed go to trial; the other 95 percent are settled or otherwise concluded before trial. Thus, it is more accurate to think of litigation as the alternative and ADR as the norm. Despite this fact, the term alternative dispute resolution 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 well established and frequently used—for example, mediation and arbitration—alternative dispute resolution has no fixed definition. The term alternative dispute resolution includes a wide range of processes, many with little in common except that each is an alternative to full-blown litigation. Litigants, lawyers, and judges are constantly adapting existing ADR processes or devising new ones to meet the unique needs of their legal disputes. The definition of alternative dispute resolution is constantly expanding to include new techniques.
ADR techniques have not been created to undercut 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 explore other options but also want to remain free to return to the traditional court process at any point.
Of the many ways to resolve a legal dispute other than formal litigation, mediation, arbitration, mediation-arbitration, Minitrial, early neutral evaluation, and summary jury trial are the most common.
Mediation—also known as conciliation—is the fastest growing ADR method. Unlike litigation, mediation provides a forum in which parties can resolve their own disputes, with the help of a neutral third party.
Mediation depends upon the commitment of the disputants to solve their own problems. The mediator, also known as a facilitator, never imposes a decision upon the parties. Rather, the mediator's job is to keep the parties talking and to 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 agree on procedural matters, such as by stating that they 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 the other's complete and uninterrupted version. The parties may begin to see that the story has two sides and that it may not be so unreasonable to compromise their initial positions.
Third, if the parties have agreed to what is called a caucusing procedure, the mediator meets with each side separately in a series of confidential, private meetings and begins exploring settlement alternatives, perhaps by engaging the parties in some "reality testing" of their initial proposals. This process, sometimes called shuttle diplomacy, often uncovers areas of flexibility that the parties could not see or would have been uncomfortable putting forward officially.
Fourth, when the gap between the parties begins to close, the mediator may carry offers and counteroffers back and forth between them, or the parties may elect to return to a joint session to exchange their offers.
Finally, when the parties agree upon the broad terms of a settlement, they formally reaffirm their understanding of that settlement, complete the final details, and sign a settlement agreement.
Mediation permits the parties to design and retain control of the process at all times and, ideally, eventually strike their own bargain. Evidence suggests that parties are more willing to comply with their own agreements, achieved through mediation, than with adjudicated decisions, imposed upon them by an outside party such as a judge.
An additional advantage is that when the parties reach agreement in mediation, the dispute is 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 more closely resembles traditional litigation in that a neutral third party hears the disputants' arguments and imposes a final and binding decision that is enforceable by the courts. The difference is that in arbitration, the disputants generally agreed to the procedure before the dispute arose; the disputants mutually decide who will hear their case; and the proceedings are typically less formal than in a court of law. One extremely important difference is that, unlike court decisions, arbitration offers almost no effective appeal process. Thus, when an arbitration decision is issued, the case is ended.
Final and binding arbitration has long been used in labor-management disputes. For decades, unions and employers have found it mutually advantageous to have a knowledgeable 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 kept everyone working by providing an alternative to strikes and lockouts and has kept everyone out of the courts. Given this very successful track record, the commercial world has become enthusiastic about arbitration for other types of disputes as well.
Now a new form of arbitration, known as court-annexed arbitration, has emerged. Many variations of court-annexed arbitration have developed throughout the United States. One can be found in Minnesota, where, in the mid-1990s, the Hennepin County District Court adopted a program making civil cases involving less than $50,000 subject to mandatory nonbinding arbitration. The results of that experimental program were so encouraging that legislation was later enacted expanding the arbitration program statewide. As of 2003, most cases were channeled through an ADR process before they could be heard in the courts. A growing number of other federal and state courts were adopting this or similar approaches.
As its name suggests, mediation-arbitration, or med-arb, combines mediation and arbitration. First, a mediator tries to bring the parties closer together and help them reach their own agreement. If the parties cannot compromise, they proceed to arbitration—before that same third party or before a different arbitrator—for a final and binding decision.
The minitrial, a development in ADR, is finding its greatest use in resolving large-scale disputes involving complex questions of mixed law and fact, such as Product Liability, massive construction, and antitrust cases. In a mini-trial, each party presents its case as in a regular trial, but with the notable difference that the case is "tried" by the parties themselves, and the presentations are dramatically abbreviated.
In a minitrial, lawyers and experts present a condensed version of the case to top management of both parties. Often, a neutral adviser—sometimes an expert in the subject area—sits with 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 negotiate a resolution of the problem. If they are unable to do so, they often ask for the neutral adviser's best guess as to the probable outcome of the case. They then resume negotiations.
The key to the success of this approach is the presence 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 true strengths and weaknesses of their cases. Mini-trial presentations allow them to see the dispute as it would appear to an outsider and set the stage for a cooperative settlement.
Early Neutral Evaluation
An early neutral evaluation (ENE) is used when one or both parties to a dispute seek the advice of an experienced individual, usually an attorney, concerning the strength of their cases. An objective evaluation by a knowledgeable outsider can sometimes move parties away from unrealistic positions, or at least provide them with more insight into their cases' strengths and weaknesses. Of course, the success of this technique depends upon the parties' faith in the fairness and objectivity of the neutral third-party, and their willingness to compromise.
Summary Jury Trial
Summary jury trials have been used prima-rily in the federal courts, where they provide parties with the opportunity to "try" their cases in an abbreviated fashion before a group of jurors, who then deliberate and render an Advisory Opinion.
Like an early neutral evaluation, an advisory opinion from a summary jury trial can help the parties assess the strengths and weaknesses of their cases and sometimes can facilitate the settlement of the dispute. Another advantage of the summary jury trial, which it has in common with the minitrial, is that it can be scheduled much sooner than a trial. When early evaluations help 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 recognized that ADR provides a cost-efficient alternative to traditional methods for dispute resolution. In 1988, Congress enacted the Judicial Improvements and Access to Justice Act, 28U.S.C.A. § 652 (1993 & Supp. 2003), which permitted U.S. district courts to submit disputes to arbitration. Congress amended this statute with the 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 each district 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 settlement conference, summary jury trial, and arbitration 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 adopted similar rules. Congress has also included ADR provisions in a number of statutes to resolve a variety of disputes. For instance, the Board of Directors of the Office of Compliance, which reviews complaints brought by employees of Congress, may order counseling or mediation, in addition to holding a board hearing or initiating a civil action in federal court. 2 U.S.C.A. § 1401 (1997). Similar statutes apply to such conflicts as labor disputes and claims by individuals with disabilities.
State legislatures have similarly provided for ADR in many of their statutes. Judges in Florida, for example, possess authority to submit most types of cases to mediation or arbitration in lieu of litigation. Fla. Stat. § 44.1011 (1997). The Commissioners on Uniform Laws have approved several uniform laws, which may be adopted by the various states, related to ADR proceedings. Versions of the Uniform Arbitration Act, first approved in 1956, have been adopted by 49 states. Likewise, the Uniform Mediation Act, drafted in conjunction with the American Bar Association's Section on Dispute Resolution in 2001, provides rules on the issues of confidentiality and privileges in mediation.
ADR has had an impact on administrative agencies as well. Congress amended the Administrative Procedure Act in 1990 to authorize and encourage administrative agencies to submit administrative disputes to ADR. 5 U.S.C.A. § 572 (1996). ADR often takes the form of mediation in disputes involving labor and employment relations and equal employment opportunity. Several federal agencies provide guides about ADR proceedings to prospective complainants 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 the Ninth Circuit Court of Appeals had reversed a decision of an arbitration panel regarding a complaint by former Baseball player Steve Garvey about a contract dispute. The Ninth Circuit then remanded the case to the arbitration panel with instructions to enter an award in favor of the player for the amount he claimed. Noting that Judicial Review of labor arbitration decisions is limited, the Supreme Court reversed the Ninth Circuit's decision, holding that it was not the place of a court of appeals to resolve the dispute on its merits.
Meek, Susan B. 1996. Alternative Dispute Resolution. Tucson, Az.: Lawyers and Judges.
Ware, Stephen J. 2001. Alternative Dispute Resolution. St. Paul, Minn.: West Group.