Alternative Dispute Resolution
Alternative dispute resolution (ADR) is the name for a group of options for settling disputes between parties. ADR allows the parties to resolve their differences outside the courtroom, usually with the assistance of a neutral third party. The ADR process has become increasingly popular with litigants for four reasons:
Litigation(the process of resolving a dispute in the court system) can be a lengthy process. Even a simple litigation matter may take over a year to conclude. Matters that are more complicated are often unresolved for two or three years or more. ADR is a streamlined process that shortens the length of litigation.
Litigation is also expensive. The litigation process tends to foster an attitude of uncovering every possible fact, examining every possible document, and exploring every possible legal theory. This approach is driven, in part, by the fear of being surprised at trial. Because so many fee arrangements are based on the hourly rate, this approach also tends to increase legal fees. ADR encourages early resolution and focuses on reaching agreement rather than marshalling evidence of differences.
Litigation creates precedent. The fundamental feature of the American legal system is that disputes with similar facts are decided in a similar fashion. In some cases, litigants want to resolve a dispute without creating a precedent to guide the decision of future disputes. ADR is a private agreement between the parties and is not binding in future disputes.
Most litigated disputes are resolved by voluntary settlement. By some estimates, as many as 95 percent of all civil cases settle before trial. A significant number of these cases settle “on the courthouse steps,” or just as trial is about to begin. ADR starts the process of negotiation much earlier and results in fewer last minute settlements.
The parties may choose any ADR procedure they like — days-long arbitration hearings before panels of experts or an informal evaluation of the case by an experienced ADR professional. Although most states allow the court to order ADR, the vast majority of ADR proceedings are voluntary. The parties can choose a procedure that is binding or nonbinding. ADR usually takes place on a schedule that is convenient for the parties. Typical ADR procedures fall into two categories: negotiated settlement ADR procedures or quasi-litigation ADR procedures.
The timing of the ADR procedure is as important as the form of the procedure. The success of ADR depends on the belief of each party that all the facts were heard. If the progress of the factual development in the case is not significantly advanced, one of the parties may resist settlement in the hopes that additional facts will change the view of the case. For this reason, most ADR procedures are more successful if they take place after the parties have engaged in some fact investigation and development.
Negotiated-settlement ADR Procedures
Negotiated-settlement ADR procedures are based on the premise that the parties want to settle their dispute but may require the assistance of an independent third party in reaching agreement. Most states allow any qualified person selected by the parties to serve as the independent third party. Even in states that register persons trained in ADR procedures, the parties are free to choose any third party they think will help them resolve their case. Negotiated settlement ADR procedures can take several forms.
The early neutral evaluator is usually an experienced practitioner in the field. The early neutral evaluator reviews the facts of the dispute and provides an independent analysis of the legal principles involved. The results of this analysis are communicated to the parties. The evaluator does not become involved in any subsequent negotiations and the results of the analysis are nonbinding. Because early neutral evaluation takes place early in the litigation process, it is sometimes used to prevent parties from becoming entrenched in their positions.
The most common form of negotiated-settlement ADR is mediation. In
Quasi-litigation ADR Procedures
In some cases, the parties may require a more formal approach to resolving a dispute. The disagreement may center on the resolution of a specific factual issue, the application of a principle of law, or some other issue that is not easily negotiated. For these disputes, a quasi-litigation ADR procedure is appropriate.
The most common quasi-litigation ADR procedure is arbitration.
The use of arbitration varies widely. In some states, arbitration is required for certain kinds of claims. Arbitration is often the preferred means of dispute resolution in contractual matters. Agreements to arbitrate are often seen in insurance policies, construction and development agreements, financial documents, and other contracts where prolonged litigation of a dispute might affect the value of the contract. Collective bargaining agreements typically call for the arbitration of employee grievances. More recently, employers have begun including arbitration clauses in employment agreements. These agreements often specify that the arbitrator be selected from a list maintained by the American Arbitration Association or another independent arbitration administrator.
The Role of Paralegals in ADR
Because one of the goals of ADR is to lower the cost of litigation, the ADR process relies heavily on the use of paralegals. Paralegals can participate in the ADR process in three ways:
Paralegals act in support of a supervising attorney as in any other matter. The ADR process often finds the paralegal more directly involved in selecting, organizing, and summarizing the factual material that is presented to the independent neutral.
Paralegals can act as independent neutrals. A paralegal with the proper training and experience can often serve as an effective independent neutral. This is especially true in family law disputes or the early stages of employment disputes.
Paralegals can appear on behalf of clients in ADR proceedings.
Some states and administrative agencies allow a paralegal to appear on behalf of a client in ADR proceedings. Check the local rules before representing a client and always obtain the client's consent.