ADR Options

In all federal and many California trial courts, mediation, non-binding arbitration, or early neutral evaluation are mandatory in the early phases of litigation. If a case has not settled, pre-trial settlement conferences also are mandatory in all federal and California courts. What should clients know to participate in selecting the most appropriate ADR method to achieve resolution of their cases? Begin with a definition of ADR then proceed to an explanation of the mediation process and its benefits. This gives context to subsequent comparisons of mediation with adjudicative (arbitration) and non- adjudicative (early neutral evaluation, settlement conference) methods.

Define Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is a “generic term referring to ways in which a society with a formal, state sponsored adjudicative process attempts to resolve disputes without using that process. (DCR* at 17.) In employment cases, the formal adjudicative process consists of claims filed in a State or federal court or administrative agency and proceeds with answer, discovery, motions, trial, verdict and, perhaps, appeal. Alternatives to this process include mediation, arbitration, early neutral evaluation and settlement conferences.

Explaine the Mediation Process and its Benifits

“Mediation is a [g]eneric term encompassing certain . . . nonadjudicative dispute resolution processes that involve intervention by a party not involved in the dispute.” (DCR at 272.)

In employment cases, the mediator “intervenes,” through communication with the parties, to facilitate resolution. Participation of the parties and confidentiality of communications in the mediation process are fundamental to the many benefits that mediation offers. (California statutes protecting the confidentiality of the mediation are found in Evidence Code sections 1115 et seq.) Party participation empowers the client to assume a causal role in the resolution of the case. Confidentiality creates an opportunity to resolve underlying issues that would not be addressed in other ADR formats. Specific benefits that are unique to the mediation process include:

The parties communicate directly with the mediator in private, confidential sessions and in joint sessions where party-specific interests, relative merits of the asserted legal claims, negotiation strategies, and resolution options may be explored and evaluated.
The parties retain the power to decide which legal issues and facts, including information that would be deemed privileged or inadmissible, will be presented at the mediation.
The parties voluntarily choose to mediate a dispute and retain the power to select a mediator by mutual agreement.
The parties’ attorneys can (and should) interview prospective mediators to determine the mediator’s experience, style, and legal expertise vis-à-vis the case to be mediated.
The parties retain the power to tailor the mediation structure and process based on the context and nature of the case and party-specific interests.
The parties retain the power to determine the terms and conditions of resolution of the dispute.
The parties retain the power to rescind the authority granted the mediator to conduct the mediation and terminate the mediation at any time without prejudice to the terminating party’s claims or defenses.
The parties avoid the substantial costs, publicity and unpredictability that are inherent in litigation.

Compare the Processes and Benefits of Mediation and Arbitration

Arbitration is a “[g]eneric term for a range of dispute resolution process involving the referral of a dispute to an impartial third party who, after giving the parties an opportunity to present their evidence, renders a determination in settlement of the dispute. Most commonly used in the United States to describe a private, voluntary, adjudicative, and usually binding process established by mutual agreement of the disputants to resolve . . . disputes.” (DCR at 28.)

On the continuum of alternative dispute resolution methods, arbitration is most similar to litigation and trial in structure and process while mediation is least similar. Compare the following attributes of arbitration to the benefits of mediation. In arbitration:

The arbitrator possesses sole authority to resolve the dispute by rendering a binding verdict and award in favor of one of the parties.
The arbitrator possesses sole authority to adjudicate issues of governing law, questions of fact, and admissibility of evidence.
The arbitrator’s direct communication with a party is restricted to the party’s testimony in the arbitration hearing. Ethical standards of judicial conduct prohibit private, confidential communications between one party and the arbitrator.
Arbitration agreements establish the method for arbitrator selection. Typically, the parties will select an arbitrator by striking names from a list or by agreement after exchanging names of proposed arbitrators. Lists of proposed arbitrators are used because attorneys as well as parties are prohibited from engaging in private communications with an arbitrator or prospective arbitrator.
The arbitrator’s singular authority to make legal, factual and evidentiary rulings and render a binding award cannot be rescinded.
Once the arbitration process has begun, a party cannot terminate the process without prejudice to the party’s claims or defenses.
The attorneys’ fees incurred in briefing legal and factual issues, discovery, preparing witnesses and presenting evidence at hearing substantially exceed the cost of mediation.
The cost of arbitration to the employer in the most common types of litigation has increased as courts have restricted the employer’s ability to include many cost reduction features in arbitration agreements.
The same risks of unpredictability inherent in litigation exist in arbitration.

Compare the Processes and Benefits of Mediation and ENE

ENE is designed to target a case early in the formative stage of litigation before significant discovery has taken place. Usually, volunteer attorneys who have expertise in litigating the subject matter in dispute are appointed by the court to serve as evaluators. In a typical model:

[A]n evaluation session is scheduled [at a time certain] after case filing. . . .
The clients are ordered by the court to attend an evaluation session. . . .
The neutral identifies issues that are not in dispute and helps the parties enter into stipulations when appropriate.
The neutral assesses the strengths and weaknesses of the parties' respective cases and evidence, then estimates, when possible, the probable outcomes with respect to liability and amount of damages.
The neutral helps the parties plan future motions and discovery activities that will be more efficient and cost effective.
ENE should not be confused with mediation, because the purpose in ENE is to get a third‑party evaluation of the case to promote negotiation rather than to actively encourage the parties to fashion their own resolution.

(DCR at 163‑64)

Caveat: If the client expects resolution, failure to resolve the case at an ENE session may diminish the client’s confidence and willingness to participate in a subsequent mediation.

Compare the Processes and Benefits of Mediation and Settlement Conference

Settlement conference is a “[b]road term covering a variety of court‑connected procedures designed to encourage the settlement of civil suits before adjudication.” (DCR at 392.) “Although settlement is commonly used interchangeably with resolution, it is useful to distinguish the terms. Though a settlement may put an end to a dispute, it may not resolve or even alter the underlying conflict.” (DCR at 392.)

The purpose of a settlement conference is to remove the case from the trial calendar.
Mandatory pre-trial settlement conferences are conducted by a sitting or pro tem judge whose purpose is to settle, not resolve, the case.
Few sitting and pro tem settlement conference judges are trained in mediation or dispute resolution processes so the client risks encountering a judge who may “hammer” the client in an effort to settle the case.
Settlement conferences do not contemplate resolution of underlying issues
Mandatory settlement conferences occur after considerable funds have been expended in litigation resulting in the parties’ tendency to assume intractable positions and reject even reasonable settlement offers.
Time limitations imposed on the settlement conference process preclude continuation of party communications. Termination of the settlement before settlement is reached may exacerbate the parties’ adversarial positions.

* All citations to “DCR” are to the Dictionary of Conflict Resolution, compiled and
edited by Douglas H. Yarn, Jossey-Bass Inc. (1999)