With the high cost of going to trial, crowded court dockets and lengthy litigation time, New York attorneys are increasingly engaging in forms of alternative dispute resolution, in certain cases, rather than to going to trial.
“ADR is an area of legal services that has for decades been devoted to reducing costs, increasing efficiency, and improving results for participants in the legal system,” according to the American Bar Association’s Report on the Future of Legal Services in the United States, published in 2016. “By several measures, ADR outperforms litigation.”
The principle methods of ADR are arbitration and mediation. Arbitration involves a neutral party hearing evidence under relaxed rules and deciding who is right and who is wrong, rendering a final, usually binding, resolution. Mediation is a method used to resolve disputes through an impartial person attempting to help the parties come to an agreement.
ADR processes result in “high party satisfaction rates, high settlement rates, cost savings and efficiency, increased long-term cooperation among the parties, and higher compliance rates with the outcomes,” according to a 2015 white paper by Deborah Thompson Eisenberg.
While litigation goes on for months if not years, in some cases, arbitration can be completed in days or weeks. Mediation is often completed in a few hours. The savings realized by each ADR method are significant and give parties in a dispute the opportunity to work through issues with the help of a neutral third party.
New York State court officials have encouraged the increased use of ADR in certain cases to help reduce case backlogs and enhance the quality of justice. Increased utilization of ADR is a major component of Chief Judge Janet DiFiore’s “Excellence Initiative,” which was launched in 2016 with the goal of improving the efficiency of the state’s court system. An ADR initiative was launched in April.
“Litigation of civil disputes often costs too much and takes too long to be affordable by the parties, and inefficiency in resolution of disputes contributes to overburdened court dockets that place enormous demands on limited judicial system resources,” said New York State Chief Administrative Judge Lawrence Marks in a press release announcing the program.
The court system, through its ADR Office, collaborates with trial courts and community dispute resolution centers to offer parties access to free or reduced-fee ADR services in a wide range of disputes, from small claims to family matters to complex business disputes, according to the New York State United Court System. The office also conducts ADR trainings, approves trainers and training programs, and supports courts in maintaining rosters of ADR practitioners.
Efficiency Versus Transparency
Despite the benefits, ADR can lack the transparency that might otherwise be evident in a jury trial. Of course, Americans’ love affair with the jury trial and the belief that it is fairer is a hurdle to overcome. Remember, however, that “equity” arose, in part, precisely because common law juries were perceived as unfair. Further, the common law writs did not allow the courts to provide relief in situations where it was clearly warranted hence, the move away from the common law courts and juries to the Chancellor.
ADR may be the 21st Century equivalent to the rise of equity, this time the move away from the courts is based on efficiency rather than fairness. The lack of efficiency combined with the high cost of going to court, contribute, in in large measure, to the nation’s “disappearing” jury trials.
More and more contracts stipulate arbitration where the details of resolution are not public information. Judges are increasingly encouraging settlements in the event of disputes. The decline in jury trials in both state and federal courts across the country have been noted in law journal articles, bar association studies and judicial opinions for several years. “In federal courts, the decline [in civil jury trials] coincides with the Supreme Court’s 1986 decisions instructing trial courts to grant summary judgments unless the plaintiff proves the probability of his allegations,” wrote Stephen Susman, who established The Civil Jury Project at NYU School of Law, in the Harvard Law Record in 2016. “It is clear that those decisions and other judicially created obstacles to trials were the products of the ‘lawsuit abuse’ movement that gave us so-called “tort reform, securities law reform, antitrust reform, class action reform and patent reform.”
“Those judicial obstacles…to protect businesses from having to confront juries, include: enhanced pleading, summary judgment motions, mandatory mediation, Daubert motions, class certification hearings, and motion in limine practice,” Susman continued, noting that the Supreme Court’s “affection for arbitration as a form of private dispute resolution makes it an obvious alternative to any form of public trial.”
A longtime litigator made similar conclusions. “Look at the stories we keep seeing about habitual offensive behavior by individuals and companies that were kept out of public view, sometimes for decades,” said Edward McCarthy, in a Boston Globe opinion piece on the trend away from jury trials. “Whatever you think of the jury system, it is public for one and all. No sealed settlements, no confidential arbitration and mediation agreements.
Society and the profession need to determine whether efficiency is an appropriate trade-off for transparency. In commercial disputes the answer is almost uniformly going to be “yes.” Jury trials are always going to be appropriate in connection with certain claims or causes of action, but the growth of ADR truly reflects the maturation of the legal system and not the death knell of long-held concepts of justice.
Robert J. Rock is the the managing partner of the Albany office at Tully Rinckey.