Alternative Dispute Resolution
“ADR”
• Professor Julia Gold
• University of Washington School of Law
• Seattle, Washington
Alternative Dispute Resolution:
alternatives to having a court decide a
dispute in a trial of the case.
• What percentage of civil cases are tried in a
court?
– In Slovenia? In the U.S.?
• ADR goal: “Fitting the forum to the fuss” or
appropriate dispute resolution
– Process choice: which process best meets the
client’s needs?
Objectives for this Class
• Review different types of ADR processes
• Experiential activity
• Discuss growth of ADR in United States and
reasons for its popularity
• Advantages and disadvantages of different
processes
• If time, case study
• Q and A
Hybrid Processes
Med-Arb
Early neutral evaluation
Summary jury trial
Mini-trial
Negotiation
Court
Arbitration
 Voluntary, binding
 Compulsory, non-binding
Administrative agency
Mediation
Adjudication
Primary Dispute Resolution
Processes
Primary DR Processes
• Negotiation: disputants negotiate for themselves,
may be represented by attorneys. Decisions
made by the disputants.
• Mediation: impartial third party facilitates
discussion of matters in dispute and assists
disputants to reach a mutually acceptable
agreement.
• Arbitration: impartial third party selected by the
disputants. Arbitrator conducts an informal
hearing and makes a decision, which may be
binding or nonbinding.
Small Group Activity
• Divide into groups of 3.
• Once in your group, decide who will be Marija,
Darja and the neutral third party, review your
information
• Wait until I tell you to begin
• Round 1—two minutes for each person to argue,
neutral arbitrator asks questions, makes decision.
Wait for me to tell you to begin Round 2!!
• Round 2—switch neutral with another group, then
neutral acts as mediator, Marija & Darja start over
and discuss as though no Round 1
• When you finish, discuss in your small group what
was different about the two processes.
Debrief
• What was the outcome?
• Which process was more appropriate for this
dispute?
• What was different?
• Parties (Marija and Darja): which did you
prefer and why?
• Neutrals: which did you prefer and why?
Reasons: Growth of ADR in U.S.
• Costs of litigation increasing
• Long delays for trials, especially in larger cities
• Desire for privacy, control, flexibility
• Dissatisfaction with court outcomes
Starting in late 1960’s & 1970’s, judges, lawyers,
court administrators called for change
Dream of the “multi-door courthouse”
Now in most jurisdictions ADR is a requirement
before a trial
History of ADR in U.S:
Community-Based
• Starting in the 1960’s, local DR centers formed
to address conflicts in communities (racial,
neighborhood) using volunteer mediators
• Citizens volunteer as mediators and dispute
resolvers, not just lawyers
• Nationwide network of community dispute
resolution centers has developed throughout
the U.S.
History of ADR in the U.S:
Court-Connected
• Need: Increase in litigation (especially divorce)
led to expensive, slow, “all or nothing”
approach, limited role for parties
• 1970’s-Judges and lawyers advocated for a
better way to tailor the process to the dispute
• Proliferation of court rules, statutes
• Both public and private providers
• Mediation is becoming preferred process, in
both trial and appellate courts
Effects on U.S. Justice System
• Growth of private ADR firms
• Retirement of judges to become private
mediators and arbitrators
• Number of cases going to trial has greatly
decreased-- the “vanishing trial”
• 1999-California Task Force to study effects of ADR
on quality of justice:
– Concluded that ADR improved quality of justice for
litigants with greater choice, speed, savings,
satisfaction
Advantages and Disadvantages of
Different Processes
Litigation: Advantages
• Creates a precedent, helps define social norms
• Involuntary: can force other party to
participate
• Right to appeal
• Proceedings are public—helpful when issue of
public interest
• Ability to punish wrongdoers publicly
Litigation: Disadvantages
• Adversarial process inhibits cooperation, may damage
future relationships
• Parties lose control of outcome
• Parties cannot choose decision-maker, as with
arbitration
• Skill of lawyers of crucial importance
• Expensive and time-consuming
• Only resolves issues that are legal causes of action
• Win-lose outcomes
• Parties’ participation limited, compliance lower
Litigation: Suitable Case Characteristics
• Need for precedent
• Important social issue at stake where public
forum most appropriate
• Adversarial stance of parties makes voluntary
resolution unlikely
• Parties willing to spend money, time
Arbitration: Advantages
• Parties control process and select neutral (who may
be expert in substantive area of law or subject
matter)
• Outcomes tailored to needs and interests of parties
• Broader range of issues can be decided
• Confidential
• Faster, cheaper
• Parties assured of final resolution
• Greater satisfaction with outcome, higher level of
compliance
Arbitration: Disadvantages
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No formal public precedent created
Very limited right to appeal
Outcomes are “win-lose”
Issues limited to those agreed to by both
parties
• Adversarial process may limit ability to
develop creative solutions
Arbitration: Suitable Case
Characteristics
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•
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•
•
Desire to avoid publicity, have privacy
Need “expert” or trusted third party to decide
No need for precedent
Want fast, binding decision by third party
Dispute has limited potential for creative
resolution
Mediation: Advantages
• Parties retain control of process and outcome
• Outcomes tailored to needs and interests of
parties
• Broader range of issues can be decided
• Improves parties’ capacity to resolve future
disputes
• Confidential
• Faster, cheaper
• Greater satisfaction with outcome, higher level of
compliance
Mediation: Disadvantages
• No precedent created
• Societal norms for behavior not created,
refined
• May advantage more powerful party
• Since voluntary, may be difficult to ensure
participation
• Does not guarantee end to dispute
Mediation: Suitable Case
Characteristics
• Parties have ongoing relationship or potential
for a future relationship
• Dispute raises non-legal issues
• Creative solutions possible
• Future dealings will benefit from improved
communication
• Multiple issues, with possibility of trade-offs
Typical Cases-Mediation
• Civil: commercial contracts, torts, employment
disputes
• Family, especially when children involved
• Small claims
• Neighborhood, interpersonal disputes
• Environmental, public policy
Mediation Values
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Process is consensual
Party self-determination
Mediator impartiality
Confidentiality
Consideration of not just legal but also human
and business aspects of a case
ADR: Common Elements of all
Processes
• Relieves attorney from initiating settlement
discussions
• Promotes early settlement
• Promotes participation of key decision-makers
• Relieves pressure on courts/judges by using
attorneys as neutrals
• More flexibility
• Avoids involving trial judge in settlement
discussions
Matching the Process to the Dispute:
Considerations
• Nature of the dispute, goals of client
– Fact-finding, vindication, punishment, state
enforcement of remedy, establish precedent,
strategic use of litigation?
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Relationship between the disputants
Amount in dispute v. costs of trial
Need for speedy resolution
Desire for control of outcome
Does client want active role?
Case Study
• ABC Electronics is a small company that makes and
sells computer parts for small industrial
manufacturers. One of ABC’s best customers for the
last 5 years has been Export Industries. In March
2011, the owners of the two companies negotiated
a contract, for delivery of 500,000 Euro worth of
parts to Export Industries, to be delivered on
September 1, 2011. Due to difficulty obtaining
necessary computer chips, ABC was unable to
deliver the product by Sept 1, causing Export
substantial financial loss. Export has threatened to
bring a lawsuit against ABC for breach of contract.
• Discuss with one or two other students:
• What ADR process should these two companies
consider using to resolve this dispute and why?
Questions??
Controversial Issues in ADR
• Effects of disproportionate power
– Use in domestic violence cases
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Cultural differences
Extent of confidentiality
Mandatory participation in mediation
Good faith bargaining requirements
Enforcement of mediated agreements
Certification and licensing of mediators
Role of lawyers as mediators