• Alternative Dispute Resolution
  • Disputes Settled by ADR
  • ADR Options
    • Mediation
    • Conciliation
    • Mini-Trial
    • Moderated Settlement Conference
    • Arbitration
    • Summary Jury Trial
  • Finding an ADR Provider
  • Costs
  • Resources

Alternative Dispute Resolution (ADR) is an increasingly popular trend that allows people to solve disputes outside of court in a cooperative manner rather than through litigation. Texas state policy is to encourage peaceable resolution of disputes, particularly in conflicts involving children. ADR 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.

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 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, including questions about refunds, repairs, services, and warranties

• Disputes between relatives

• Employment disputes, such as a termination or interpretation of an employment contract

• Landlord/tenant disputes over evictions, rent, repairs, or security deposits

• Neighborhood disputes

Although participation in some ADR programs may be mandatory, usually reaching agreement is voluntary. ADR 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. If the settlement is written and signed by the parties, Texas law provides that a court must enforce it like any other 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 ADR process may help each party better define the dispute and 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. These cases usually are settled in less time than litigated cases, so both parties can achieve considerable cost and time savings. Even people who believe they could win a court case sometimes prefer to use ADR rather than incur court costs and lawyers' fees, which could swallow a large part of any award received.

ADR is considered private and confidential. All communications and documents, including work notes made and used during the meetings, are confidential and cannot be used in a court of law should there be subsequent litigation, unless the documents are independently discoverable. Even a party's demeanor in the proceedings may not be disclosed.

ADR may involve the use of mediation, conciliation, arbitration, moderated settlement conference, mini-trial, or summary jury trial instead of litigation and other formal, adversarial proceedings. Texas statutes provide that each Texas county may establish an ADR system through which parties to litigation may resolve disputes in an informal way. Dispute resolution processes may be voluntary, mandatory, binding, or advisory.

ADR 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. In counties in which an ADR system exists, judges may refer parties in civil suits to ADR while the case is pending.

Mediation

Mediation is an informal method of ADR that involves a trained impartial third party (the mediator or mediation panel) helping disputing parties negotiate a settlement of 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 non-binding because the mediator does not have the power to impose a resolution on the parties. Rather, the role of the mediator or mediation panel is to help the parties reach their own resolution. Mediation aims to 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. Because it is the ADR method that involves the parties more than any other method, mediation has the potential for being the most successful. The parties come to a solution themselves, and therefore are invested in an enduring resolution.

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, 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 at separate times, analyzes the disputed facts, and issues his or her findings in a non-binding report or recommendation. This process may be especially useful in handling sensitive internal disputes, such as an allegation of discrimination within a company. Such cases often provoke strong emotions, internal division, and even 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.

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), impartial 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. The panel of representatives or impartial third parties 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. It is a method for the parties to a dispute to evaluate their case and come to a realistic understanding of its settlement potential. Unlike the mini-trial, there is no trial-like presentation of the facts. All of the people involved sit in negotiations. The parties' attorneys present the core of the dispute and the parties' basic positions to a panel of impartial third parties. This occurs after the case is filed in court but before discovery of facts is conducted. The neutral panel then gives a candid assessment of the strengths and weaknesses of the case. The assessment is in the form of an advisory opinion regarding liability and damages. If the parties cannot settle, the impartial third parties help narrow the dispute and suggest guidelines for managing discovery.

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. Unless the parties have provided in their agreement for a particular arbitrator, the court will appoint the arbitrator or arbitration panel. The role of an arbitrator is different from 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 non-binding. 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.

Texas has adopted the Uniform Arbitration Act, which declares that agreements to arbitrate are valid and enforceable and provides exclusive grounds for a judge to overturn an arbitration award.

Summary Jury Trial

A 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 the evidence, are presented. Counsel are given a limited amount of time for their abbreviated 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 non-binding, rules of evidence and procedure are more flexible than at a normal trial.

The jury renders an advisory, non-binding decision based on the information provided. The verdict in this setting serves to give counsel and their clients 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 before the court 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.

As noted, Texas has numerous dispute resolution programs through the county court system that provide ADR services. Participating courts, therefore, have information regarding programs and providers. Additionally, the State Bar of Texas assists parties wishing to resolve a dispute through arbitration or conciliation by providing names of trained impartial third parties. Other resources for finding an ADR provider are listed at the end of this chapter.

Several steps should be taken when choosing a provider. Parties should ask potential impartial third parties about their conflict resolution training and about their substantive knowledge about the issues in dispute. If, after selecting an impartial third party, a party to the dispute genuinely feels that the third party has shown bias, has a conflict of interest, or lacks the skills or experience necessary to help resolve 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.

Any impartial third party--whether in the role of mediator, arbitrator, or another neutral role--must have a minimum of 40 hours of training. Texas law requires that the training be approved by the court and that it include education in conflict or dispute resolution techniques. Any impartial third party who assists in resolving disputes involving the parent-child relationship must have further training. These third parties must complete an additional 24 hours of training in family dynamics, child development, and family law. Under certain circumstances, a judge may appoint a third-party mediator or arbitrator who does not have specialized conflict resolution training, but who may have similar experience or education. For example, sometimes attorneys may be appointed by a court to assist in ADR.

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 Texas dispute resolution programs use a portion of the court fees collected by Texas courts, there usually is no charge for these ADR services. The parties pay the impartial third party's fee, as long as it is reasonable. The costs of for-profit ADR providers vary depending on 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 when a given ADR provider charges a substantial hourly rate, using ADR often resolves a dispute quickly, saving time and money.

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, 1901 L Street N.W. #600, Washington, DC 20036, (202) 466-4764.

To find out whether a particular county in Texas has established a dispute resolution program, contact the dispute resolution program office or ask for "information" at the county courthouse.

The State Bar of Texas provides names of trained impartial third parties. Contact the State Bar of Texas, P.O. Box 12487, Austin, TX 78711-2487, (512) 463-1463 or (800) 204-2222.