The primary method of resolving legal disputes is litigation; however, litigation is an expensive and lengthy process. Alternative Dispute Resolution (“ADR”) is designed to help parties resolve disputes without lengthy litigation or a trial. The ADR process is typically less formal, less expensive, and less time-consuming. Nevertheless, it is Important to understand how ADR works, as well as the advantages and disadvantages.
The most common types of ADR for civil cases are mediation, settlement conferences, neutral evaluation, and arbitration. If all parties agree to use an alternative dispute resolution process, they must jointly complete the ADR stipulation form provided under California Rules of Court, rule 3.221 (in the ADR package) and file it with the court. (Cal. Rules of Court, rule 3.726.)
MEDIATION
In mediation, an impartial person called a “mediator” helps the parties try to reach a mutually acceptable resolution of the dispute. The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves. Mediation leaves control of the outcome with the parties.
Mediation may be particularly useful when parties have a relationship they want to preserve. So, when family members, neighbors, or business partners have a dispute, mediation may be the ADR process to use.
Mediation is also effective when emotions are getting in the way of resolution. An effective mediator can hear the parties out and help them communicate with each other in an effective and nondestructive manner.
The mediation process may not be effective if one of the parties is unwilling to cooperate or compromise. Mediation also may not be effective if one of the parties has a significant advantage in power over the other.
Mediation is confidential, and no written report is made to the court. The parties do not file any separate statements with the court.
The parties may elect or stipulate to a judicial mediation or private mediation. Regardless, although written reports do not get made to the court, the parties must keep the court apprised of their efforts. The parties shall agree on a mediator or mediators. In judicial mediation, if the parties cannot agree within a certain amount of time on a mediator, the court will appoint one. All parties and their attorneys must appear at the mediation. Normally, the parties do not prepare exhibits, statements, or bring witnesses to the mediation to testify.
Compensation for the appointed mediator will be handled between the parties independently, or pursuant to specific court rules governing judicial mediation.
If, during the mediation, the parties agree upon a settlement of the case, the parties will enter into a settlement agreement at that time. If the parties do not settle, the mediator will notify the court. The court will then place the matter back on the civil active list and monitor the case to conclusion. If the case does not settle in mediation, the next step that follows will be judicial arbitration.
ARBITRATION
Private and judicial arbitration is governed by California Rules of Court, rules 3.810 – 3.830. It is an informal trial proceeding where evidence is presented, witnesses and/or parties testify at the hearing with counsel present before a neutral arbitrator.
In arbitration, a neutral person called an “arbitrator” hears arguments and evidence from each side and then decides the outcome of the dispute. Arbitration is less formal than a trial, and the rules of evidence are often relaxed. Arbitration may be either “binding” or “nonbinding.” Binding arbitration means that the parties waive their right to a trial and agree to accept the arbitrator’s decision as final. Generally, there is no right to appeal an arbitrator’s decision. Nonbinding arbitration means that the parties are free to request a trial if they do not accept the arbitrator’s decision.
Arbitration is best for cases where the parties want another person to decide the outcome of their dispute for them but would like to avoid the formality, time, and expense of a trial. It may also be appropriate for complex matters where the parties want a decision-maker who has training or experience in the subject matter of the dispute.
If parties want to retain control over how their dispute is resolved, arbitration, particularly binding arbitration, is not appropriate.
In binding arbitration, the parties generally cannot appeal the arbitrator’s award, even if it is not supported by the evidence or the law. Even in nonbinding arbitration, if a party requests a trial and does not receive a more favorable result at trial than in arbitration, there may be penalties.
Arbitration must be elected or stipulated to by the parties and must be done no later than the time the initial case management conference statement is filed (unless the court orders otherwise). The arbitration process includes:
- Selection or appointment of the arbitrator.
- Setting the hearing date.
- Calendaring the deadlines associated with arbitration.
- Completion of discovery.
- Presentation of evidence.
- Preparation and submission of arbitration briefs.
- Other requirements set by the arbitrator.
- Arbitrator’s decision.
- Confirmation or rejection of arbitrator’s award/decision.
NEUTRAL EVALUATION
In neutral evaluation, each party gets a chance to present the case to a neutral person called an “evaluator.” The evaluator then gives an opinion on the strengths and weaknesses of each party’s evidence and arguments and about how the dispute could be resolved.
The evaluator is often an expert in the subject matter of the dispute. Although the evaluator’s opinion is not binding, the parties typically use it as a basis for trying to negotiate a resolution of the dispute.
Neutral evaluation may be most appropriate in cases in which there are technical issues that require special expertise to resolve, or the only significant issue in the case is the amount of damages. Conversely, neutral evaluation may not be appropriate when there are significant personal or emotional barriers to resolving the dispute.
SETTLEMENT CONFERENCES
Settlement conferences may be either mandatory or voluntary. In both types of settlement conferences, the parties and their attorneys meet with a judge or a neutral person called a “settlement officer” to discuss possible settlement of their dispute.
The judge or settlement officer does not make a decision in the case but assists the parties in evaluating the strengths and weaknesses of the case and in negotiating a settlement. Settlement conferences are appropriate in any case where settlement is an option. Mandatory settlement conferences are often held close to the date a case is set for trial.
While ADR may not always be a good fit, Alternative Dispute Resolution can be an efficient, expedient, cost-saving, and productive process for your clients.
Categorized in: Legal Procedure
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