California Law
California Alternative Dispute Resolution
Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) is an increasingly popular trend that allows people to solve disputes outside court in a cooperative manner rather than through litigation. It can be faster and cheaper than litigation. Because the parties settle out of court, expenses for depositions and clerical costs may be substantially reduced, and there is little or no waiting for trial dates. The use of ADR also can improve client satisfaction with the way disputes are resolved. Interested parties should contact an attorney for a referral to a qualified ADR provider.
Disputes Settled by ADR
ADR techniques have been used successfully in a variety of disputes involving individuals, small and large businesses, the government, and the general public. ADR is becoming very popular in family law cases, in which divorce settlements, property disputes, child custody and visitation matters, and spousal and child support issues often lend themselves to an alternative and informal method of dispute resolution. Other examples of disputes often settled by ADR include:
- Business disputes
- Consumer/merchant disputes, include questions about refunds, repairs, services, and warranties
- Employment disputes, such as interpretation of employment contracts or terminations
- Landlord/tenant disputes over evictions, rent, repairs, or security deposits
- Neighborhood disputes
ADR Options
ADR may involve the use of mediation, arbitration, mediation-arbitration, conciliation, mini-trials, or summary jury trials instead of litigation and other formal, adversarial proceedings.
Dispute resolution processes can be voluntary, mandatory, binding, or advisory. These dispute resolution options may be used at any point during a dispute. Some parties might choose to use ADR from the very beginning of a dispute, while others will turn to ADR after more traditional dispute resolution options become too lengthy or costly.
Mediation
Mediation is an informal method of ADR that involves a trained third party (mediator or mediation panel) helping disputing parties negotiate a settlement to their conflict. Instead of presenting cases in a courtroom, each side meets privately with the mediator, as well as in joint sessions with the mediator and the other side. Mediation is nonbinding because the mediator does not have the power to impose a resolution upon the parties. Rather, the role of the mediator or mediation panel is to help the parties reach their own resolution. Mediation seeks solutions that satisfy all parties, and because the parties are empowered to control the outcome, the potential exists for a solution that addresses the interests of all parties. While courts are limited by law to specific remedies, mediation is limited only by the nature of the problem and the parties' own creativity.
Although participation in some mediation programs may be mandatory, reaching agreement usually is voluntary. Mediation gives the parties a sense of involvement in the dispute resolution process, making compliance with the result more likely than in the case of an imposed solution. Parties sometimes stipulate beforehand that any agreement reached will be enforceable as a contract. However, if the parties do not reach agreement between themselves, there is no agreement to enforce and the parties are free to use other methods to solve their dispute. Even in cases in which the parties cannot reach an agreement, the process of mediation may better define the dispute and help each party understand how a judge or jury might react to the case in court. Agreement can be reached on some issues while the parties agree to seek an advisory or binding judgment on the issues that remain in dispute.
Parties who use ADR learn valuable skills to help them address future conflicts more creatively. Mediated cases usually are settled in less time than litigated cases, and both parties can achieve considerable cost and time savings. Even people who believe they could win a court case sometimes prefer to mediate rather than incur court costs and lawyers' fees, which could swallow a large part of any award received.
With the exception of some disputes involving public interest, mediation is considered to be private and confidential. Pursuant to California's Civil Action Mediation Act and other California laws, all communications and documents, including work notes made and used during mediation, are confidential and cannot be used in a court of law should there be subsequent litigation.
Mediation currently is used to resolve disputes in a wide variety of settings. Whether the dispute is between students, neighbors, family members, businesses, or parties to an accident, whether it involves a claim, governmental agencies, or nations, the mediation process is an effective tool for achieving solutions by mutual agreement rather than by court order.
Conciliation
Conciliation is an informal process in which an agreed-upon neutral third party is asked to investigate a dispute, usually one involving complex or technical issues. Conciliation is voluntary and private. The third party meets with the parties to the dispute at separate times, analyzes the disputed facts, and issues his or her findings in a nonbinding report or recommendation. This process may be useful especially in handling sensitive internal disputes, such as an allegation of discrimination within a company. Such cases often provoke strong emotions and internal division within a company. If both parties are employees of the same company, there may be conflicts of interest that would interfere with a supervisor's or manager's ability to conduct a fair and impartial investigation of an allegation. To avoid the appearance of unfairness, a company may turn to the outside neutral third party in hopes of reaching a settlement all employees will respect.
Early Neutral Evaluation
A variation on conciliation is early neutral evaluation (ENE). Parties using ENE have their attorneys present the core of the dispute to a neutral evaluator in the presence of the parties. This occurs after the case is filed in court but before discovery of facts is conducted. The neutral evaluator then gives a candid assessment of the strengths and weaknesses of the case. If the parties cannot settle, the neutral evaluator helps narrow the dispute and suggests guidelines for managing discovery.
Mini-Trial
In a mini-trial, each party presents its position in trial-like fashion before a panel that includes selected representatives for both parties (such as managers or executives), neutral third parties, or both. Every panel has one neutral advisor. Mini-trials help to define the issues and develop a basis for realistic settlement negotiations. The representatives from the two sides provide an overview of their positions and arguments to the panel. As a result, each party becomes more knowledgeable about the other party's position. After hearing each side's presentation, the panel, including the advisor, meets to develop a compromise solution, as in the mediation process. The neutral advisor also may issue an advisory opinion regarding the merits of the case. The advisory opinion is not binding unless the parties agree beforehand that it will be binding and enter into a written settlement agreement. The primary benefit of a mini-trial is that both parties have an opportunity to develop solutions, because each side has representation and access to detailed information.
Moderated Settlement Conference
A moderated settlement conference is like a mini-trial in that the parties' attorneys are involved, and the goal is to reach a settlement agreement. The process also involves a neutral third party who works with the parties and the attorneys. Unlike the mini-trial, there is no trial-like presentation of the facts. All of the people involved sit in negotiations and work with the advisor, who suggests a solution. The parties may accept or reject the decision.
Arbitration
Like a mini-trial, arbitration allows both parties to present their cases to a neutral third party or a panel of third parties who are experts in a particular area. An arbitration panel differs from a mediation panel in that it is chosen by both sides, much like attorneys choose members of a jury. In California, arbitrators are trained judges. The role of an arbitrator is different than that of a mediator, because the arbitrator makes a decision. The parties stipulate in advance whether the decision of the arbitrator will be binding or nonbinding. If binding, the decision is enforceable in court in the same manner as any other contractual obligation.
Arbitration is best used in cases involving factual conflicts that can be resolved by experts on a particular subject. For many this is a distinct advantage to arbitration. Many people feel especially comfortable knowing their dispute is settled by an expert who is knowledgeable in a particular field.
Some arbitration cases are as complex and expensive as litigated cases. Usually, however, they are settled without much publicity. This can be a significant advantage if a dispute involves sensitive issues, such as trade secrets or future business plans, or if the parties prefer to remain out of the public eye.
California has a long-standing policy of favoring arbitration as a method of settling disputes. Some statutes govern particular kinds of arbitration, such as the Dispute Resolution Programs Act and the Judicial Arbitration Act, both of which declare agreements to arbitrate valid and enforceable, and provide exclusive grounds for a judge to overturn an arbitration award.
Mediation-Arbitration
Mediation-arbitration, or "med-arb," combines mediation and arbitration. The parties agree in advance that if they are unable to resolve their dispute using mediation, they will seek arbitration and receive an advisory or binding judgment on all or part of the issues that remain in dispute. In these instances, the mediator typically will switch roles and, as the arbitrator, provide a judgment.
The med-arb process has advantages over using arbitration or mediation alone. There is greater incentive for parties to cooperate in the mediation stage of the process because they know that if they are unable to come to an agreement voluntarily, they may have a solution imposed upon them in the arbitration stage. Also, med-arb can be less expensive, because if the parties have the same person perform both the mediator and the arbitrator functions, they save time and money that otherwise would be spent re-educating a new arbitrator or taking a dispute to court.
Summary Jury Trial
Summary jury trial is a court-managed process that takes place after a case has been filed but before it reaches trial. In a summary jury trial, each party presents its arguments to a six-person jury. Abbreviated opening and closing arguments, as well as an overview of arguments, are presented. Counsel usually are given one hour each for their presentations, and are limited to presenting information that would be admissible at trial. No testimony is taken from sworn witnesses, and proceedings generally are not recorded. Because the proceedings are nonbinding, rules of evidence and procedure are more flexible than at a normal trial.
The jury renders an advisory, nonbinding decision based on the information provided. The verdict in this setting serves to give counsel and client insight into their case, and may suggest a fair basis for settlement of the dispute. If the dispute is not resolved by counsel at or immediately following the summary jury trial proceeding, a pretrial conference is held with a judge to discuss settlement.
A summary jury trial proceeding typically concludes in less than a day, but on rare occasions extends beyond a full day. The proceedings may be presided over by either a district court judge or a magistrate assigned by the judge.
Finding an ADR Provider
As noted, California has numerous dispute resolution programs which provide ADR services. California's Dispute Resolution Coordinator at the Department of Consumer Affairs publishes a directory of all programs and providers. California courts, as well as the State Bar of California, also have lists for parties wishing to resolve disputes through arbitration, which include names of licensed attorneys who are trained as mediators and judges who are trained as arbitrators.
Several steps should be taken when choosing an ADR provider. Parties should ask potential mediators about their mediation training and about their substantive knowledge about the issues in dispute. If, after selecting a mediator, a party to the dispute genuinely feels that the mediator has shown bias, has a conflict of interest, or lacks the skills or experience necessary to mediate the case, he or she should voice the concern.
There is a wide range of ADR providers with varying levels of specialization, expertise, ability, and quality. The kind of ADR provider appropriate to a particular dispute depends on the kind of dispute, the parties, how much money is involved, the level of expertise necessary to handle a matter, and how far the parties are into the dispute. ADR providers offer dispute resolution services for specific kinds of disputes, such as post-divorce visitation mediation, as well as for large, multi-party disputes. Some providers have special areas of expertise, such as corporate, environmental, or family dispute resolution.
Costs
The costs of ADR vary depending on the type of dispute, the type of ADR process chosen, and the experience and expertise of the ADR provider. Because California dispute resolution programs use a portion of the court fees collected by California courts, usually there is no charge for their ADR services. The costs of for-profit ADR providers vary depending upon the experience and expertise of the provider chosen. Some ADR providers charge an hourly rate while others charge a flat fee for handling an entire matter from initiation to resolution. Even if an ADR provider charges a substantial hourly rate, using ADR often resolves a dispute quickly, saving time and money.
Resources
General information about alternative dispute resolution is available from the following organizations:
- American Arbitration Association, 140 51st Street West, New York, NY 10020, (212) 484-4000.
- National Institute for Dispute Resolution, 1726 M Street N.W. #500, Washington, DC 20036, (202) 466-4764.
For a directory of all programs and providers in California, contact California's Dispute Resolution Coordinator at the Department of Consumer Affairs, 400 R Street #3000, Sacramento, CA 95814, (916) 323-2191.
For a free pamphlet entitled Should I Try to Settle My Problem Out of Court?, or a directory of ADR providers, contact the State Bar of California, Office of Legal Services, 555 Franklin Street, San Francisco, CA 94102-4498, (415) 561-8268 or (800) 628-4858. This pamphlet describes the types of ADR used in California and answers common questions about the ADR process.