The Alternative Dispute Resolution (ADR) process consistently offers disputing parties an impartial and more cost-effective way to resolve legal matters outside of the courtroom. As with any process, over time, ADR has evolved to integrate various practices into alternative or hybrid options that can result in resolution. Counsel seeking optimal outcomes for their clients must understand these various options at the onset of a legal matter. This article will outline a number of those available ADR hybrids, including advantages and disadvantages of each, and how to leverage those options to get the result you seek.
The Evolution (and Realities) of ADR
Any discussion of ADR warrants reflection and consideration of the serious impact that the litigation process places upon the parties, hotly contested or otherwise. Therefore, efforts to seek collaboration between contentious litigants should be of paramount significance to their chosen counsel. Indeed, local and national policies favor the private resolution of disputes, primarily civil in nature (see The Federal Arbitration Act; The Uniform Arbitration Act; The Civil Justice Reform Act; The Alternative Dispute Resolution Act; etc.), and both state and federal judicial efforts encourage—even mandate—ADR efforts. Despite these referenced policies or mandates, ADR processes have consistently been ignored or underutilized.
Sadly, litigation attorneys either ignore or remain unaware of the various settlement options available. Counsel should consider what is in the best interests of their clients, and work toward resolution if possible. The virtues of standard ADR processes—mediation and arbitration—include confidentiality, self-determination, privacy and potential flexibility. However, acknowledged shortcomings of even those most common forms of ADR exist.
- Can be limited by an inability of the mediator to bring the parties to a resolution, satisfactory or otherwise;
- Suffers from the potential power imbalances that can exist between the parties; and
- Lacks any possibility for finality should the mediator be unable to secure settlement.
Alternatively, arbitration (binding or not as agreed upon in advance):
- Can be hampered by increased costs;
- Can become too formal which potentially results in delay; and
- Uunfavorable outcomes discourage the type of collaboration that can assure eventual resolution.
For these and many other reasons, a number of alternative processes (or hybrids) continue to be explored to provide greater flexibility and, hopefully, successful outcomes.
Hybrid processes are developing which seek to combine the advantages of the primary ADR options; one such process is known as “Arb-Lit.” Arb-Lit combines standard arbitration with an eventual litigation outcome, and weds the benefits of a “fact-finding” effort with the accountability of a formal decision. Moreover, if the parties agree, that eventual decision can be appealable. This is intended to eliminate one of the primary disadvantages of the arbitration model which is seldom subject to appeal or other legal review.
Essentially, the parties agree to appoint an arbitrator who hears testimony, considers evidence, and then renders an award on the “factual issues only.” The award can be binding or not, depending upon the agreement. Thereafter, the court maintains jurisdiction in order to render a final determination of “the law” based upon those findings of fact from the arbitrator. This decision is then reviewable on the pertinent law and, therefore, subject to appeal. The advantages of this hybrid process include:
- The referenced appealability;
- Preservation of confidentiality and privacy;
- Reliance upon the expertise and capabilities of the chosen fact finder; and
- Guarantee of the continued right of a public proceeding.
The essential bifurcation of the matter addresses many of the negative issues that exist in the judicial system.
There has been increasing reliance upon a two-tiered process known as Med-Arb. The parties agree upon a facilitator who initially conducts a session tantamount to traditional mediation. Joint sessions or private caucuses can be utilized. Assuming that an impasse occurs and no settlement is reached, that same facilitator, by agreement, assumes the role of arbitrator who then decides any issues not resolved during the mediation phase. Any award rendered is a binding decision, consistently enforceable as though the parties had agreed upon an initial arbitration.
Advantages of Med-Arb include empowering the facilitator more than an ordinary mediator since s/he has the ability to render a binding decision or award. Conversely, one could argue that this additional power limits the incentive for candor with the neutral during the mediation phase for obvious reasons. Another distinction from ordinary mediation could be a reluctance by the neutral to share opinions of their evaluation of the case in efforts to mediate the case to conclusion, for fear of reaching a different arbitration award based upon evidence presented. Also, the parties cannot walk away, and are essentially required to see the matter through due to their original commitment to the process.
Many, due to the inherent finality and cost effectiveness, favor this hybrid process. Another advantage is that much of the time devoted to ordinary “fact finding” in standard arbitration is eliminated during the mediation phase. This process is sometimes criticized for the lack of sworn testimony, disclosure of confidential positions, the potential for ex parte statement influencing the process, etc. However, the efficiency of utilizing a lone facilitator/neutral, and entrusting the eventual decision to that individual, often outweighs any negatives.
Yet another hybrid process gaining favor is the Arb-Med. Again relying upon agreement of the parties, the Arb-Med is initiated by the appointment of an independent arbitrator who conducts an arbitration session which by its very nature is “non-binding.” Each party through counsel is encouraged to essentially “lay out their facts and position(s)”, after which the arbitrator renders an opinion that details or exhibits the strengths or weaknesses in the respective cases. Thereafter, the parties agree upon a separate mediator and conduct the standard mediation process in efforts to conclude the case. Obviously, it is hoped that the “opinion” of the arbitrator has assisted the parties and counsel in acknowledging the strengths and weaknesses of their respective positions.
Early Intervention Method
There is an interesting new hybrid model gaining favor in the U.K. called “Early Intervention Mediation.” While currently being more utilized in mediating discovery disputes or other preliminary aspects of the overall litigation process, this option is dependent upon a spirit of collaboration or cooperation unique to typical ADR. It is more feasible when the parties consciously determine that their dispute(s) require independent evaluation and, eventually, assistance in resolution short of the judicial process. The “early” aspect of the method is paramount, and usually dependent upon one or other of the litigants unilaterally making the suggestion of the potential benefits of this approach. This includes retention of the neutral, obviously with the hope that the opposition will be agreeable to not only the process, but also the chosen mediator.
This option absolutely requires a high level of flexibility throughout, particularly due to the lack of any ability of the neutral/mediator to “compel” the parties in any fashion. The parties instead count upon that individual’s expertise and temperament to assist them in arriving at their own resolutions of anything in dispute. Confidentiality remains key to the efficacy of this process so that the neutral has the freedom to speak with the parties separately and efficiently.
It is recognized that this model lacks the ability to “adjudicate” a case to conclusion, but can be utilized successfully to guide litigants to an eventual successful conclusion.
Alternative dispute resolution is often viewed as a desired means to legal settlement. As this area of the law evolves, hybrid models are offering attorneys new opportunities to find a process that can provide clients with the best, nonlitigious outcomes. Understanding the benefits and potential shortcomings of each early in a legal matter is important to attorneys interested in leveraging ADR effectively.
Joseph A. Macerelli, of Burns White, focuses his practice on medical malpractice, insurance and products liability defense. In addition, he is an alternative dispute resolution (ADR) mediator and arbitrator in the U.S. District Court for the Western District of Pennsylvania, and is the past president of the Academy of Trial Lawyers of Allegheny County and the Pennsylvania Defense Institute.