A Transition from the 20th Century to the 21st Century
History of ADR
Most judges and lawyers date alternative dispute resolution (ADR) to the early 1900’s with the advent of the American Arbitration Association and other institutional forms of arbitration. However, arbitration dates to early Biblical times with one of the first noted arbitrators King Solomon. Even earlier, arbitration was used as a method to resolve territorial disputes. In England arbitration was a common means of commercial dispute resolution predating the common law as early as the 1200’s.
George Washington, the nation’s first president, had an arbitration clause in his will requiring any dispute regarding an interpretation of the will to be decided by a panel of three arbitrators. His will stated that the decision was as final and binding as any decision of the Supreme Court.
Perhaps the most common form of dispute resolution, arbitration, was used to resolve labor disputes. This form of dispute resolution was codified by acts of congress and many state legislatures and today is incorporated into most labor collective bargaining agreements. Almost every commercial contract contains an arbitration provision. Also, many form contracts produced by industry specialty groups such as boards of realtors contain arbitration or mediation provisions.
Mediation has also been applied to assist individuals and countries resolve disputes for thousands of years. Through many seasons its use diminished and then later became common place.
Remarkably, neither form of dispute resolution was recognized in any consistent definitional form. It was not until the second half of the 20th Century when the legal community began to focus on trial court delay, that the different forms of dispute resolution began to be defined in commonly accepted ways. The acronym ADR did not become commonly used until the 1980s.
Impact of Trial Court Delay
Trial court delay did not begin overnight, but crept into state courts over several decades – beginning in the 1960s and reaching crisis proportion in the 1980s. In many metropolitan courts it was normal for parties to wait 4 and 5 years for a trial. The American Bar Association, the Conference of Chief Judges and the National Center for State Courts responded to the crisis of delay with commissions such as –
1. ABA Commission on Standards of Judicial Administration, Standards Relating to Trial Courts ( 1975)
2. National Conference of State Trial Judges, Court Delay Reduction Standards (1985)
3. Lawyers Conference Task Force of Litigation Cost and Delay, Defeating Delay: Developing and Implementing a Court Delay Reduction Program (1986)
These commissions and many others, after study and broad input, recommended many reforms. Chief among the reforms was the insertion of ADR into case management systems and processes.
Caseflow Management in Trial Courts
As the reforms began to be studied and implemented, experience was gained and some principles evolved. The center piece of the caseflow management principles became measurement. So it was said that a complete caseflow management information system should provide at least the following –
1. Measures of activity
2. Measures of inventory
3. Measures of delay
4. Measures of case scheduling accuracy
5. Evaluation measures; and
6. Individual case progress information.
As trial courts began to measure the key components affecting delay they discovered that a certain percentage of cases were resolved at each step in the process. Steps in the process varied from court to court but usually contained the following –
1. Discovery cut off
2. Settlement conference
3. Pre-trial
4. Trial
ADR in the Trial Courts
Gradually, the court and the organized bar realized that an additional step requiring ADR would further increase the case resolutions before trial – and so the caseflow process took a different look
1. Discovery cut off
2. ADR
3. Settlement conference
4. Pretrial
5. Trial
Many trial courts began to experiment with different forms of ADR and from those early experiments definitions and standards evolved (and are still evolving in some courts).Two of the most successful court ADR programs took different approaches yet have had a very significant impact not only on court based ADR activities but also non-court based ADR activities. First, the Multi-Door Dispute Resolution Division of the Superior Court of the District of Columbia
Washington, DC and second, MACRO the Mediation and Conflict Resolution Office of the Courts of Maryland .
Multi-Door Dispute Resolution Division of the Superior Court of Washington D.C. was the result of an experimental program motivated in part by the American Bar Association and the National Center for State Courts in 1985.Today, the Multi-Door Dispute Resolution Division maintains a staff of 22 full-time employees to administer its recruitment and training programs, intake and referral program, small claims mediation program, family and community mediation program, child protection mediation program, landlord and tenant mediation program, probate mediation program, tax assessment mediation program and civil mediation, arbitration and case evaluation programs. Most actual mediations and arbitrations are done by 300 independent, court certified neutrals, who are paid by the court. The Division provided a neutral forum for dispute settlement in more than 6,100 matters in 2005
MACRO, a product of the Maryland ADR Commission of 1998 is a court-related agency, which serves as an alternative dispute resolution (ADR) resource for the state. MACRO supports innovative dispute resolution programs, and promotes the appropriate use of ADR in every field. MACRO works collaboratively with many others across the state to support efforts to advance effective conflict resolution practices in Maryland’s courts, communities, schools, state and local government agencies, criminal and juvenile justice programs and businesses.
Types of ADR
Arbitration
Arbitration means a process in which (1) the parties appear before one or more impartial neutrals / arbitrators and present evidence and argument supporting their respective positions, and (2) the neutrals / arbitrators render a decision in the form of an award that is binding. The parties may agree that the decision is not binding.
Mediation
Mediation means a process in which the parties work with one or more impartial neutrals / mediators who, without providing legal advice, assist the parties in reaching their own voluntary agreement for the resolution of the dispute or issues in the dispute.
Settlement Conference Facilitation
Both parties meet with an impartial Neutral, who will facilitate discussions between both parties to help the opposing parties reach a mutually acceptable agreement. The neutral will evaluate the strengths and weaknesses of each party’s case and help the parties analyze the risks associated with a trial. Sometimes, at the request of the parties, the neutral will offer an opinion regarding a likely verdict.
Neutral Case Evaluation
Neutral Case Evaluation means a process in which the parties and their attorneys present in summary fashion, evidence and arguments supporting their respective positions to a neutral. The neutral person renders an evaluation of their positions and an opinion as to the likely outcome of the dispute or issues in the dispute if the action is tried before a jury.
Rules of ADR
Most court rules contain provisions concerning the timing and compulsory requirements of ADR. All court rules and even some statutes mandate that the ADR activity be confidential to the parties and the neutral. Thus the court can never be privy to what the parties said or what their demand or offers were.
Compulsory or Voluntary
Some courts mandate that all parties participate in an ADR activity before a trial date is set – while others allow the parties to volunteer for a court sponsored ADR program. Most courts that mandate ADR allow the parties to petition the court to be relieved of the obligation upon a showing of good cause. The courts maintain a list of qualified neutrals and in most cases require the neutral to meet certain specified minimum qualifications.
Neutral Certification
Largely because the courts began to mandate ADR, a requirement that neutrals be certified evolved. Most courts maintain a list of qualified neutrals in various specialties i.e. family law, medical malpractice, and personal injury, complex civil and commercial litigation. If an individual desires to be placed on a court list of neutrals, most courts require the neutral to demonstrate their experience and successfully complete a 40 hour course on the principles of mediation. Certification requirements and procedures vary widely from state to state and even county to county and in many instances they are largely discretionary with the court although minimum standards are usually established in state wide court rules of procedure.
Private ADR
Bricks and Mortar
In the Internet age, paper based activities are generally referred to as “bricks – and – mortarâ€. Beginning in the mid 1990s arbitration and mediation began to increase dramatically. There are not any good sources which reliability report the national, state or regional number of ADR activities. It would be difficult to tabulate such numbers in part because of the confidential nature of ADR. Some national organizations, such as the American Arbitration Association do report their total activities – however, they are only a small piece of the total ADR pie.
The dramatic increase of ADR is perhaps best demonstrated by the formation of many professional groups and associations. The American Bar Association formed the Section of Alternative Dispute Resolution in1993 and with 17,000 current members it is one of the fastest growing sections. Most state bar associations and many local bar associations have formed similar sections and committees. Most organizations have By-Law provisions similar to those of the Maryland State Bar Associations Section of Alternative Dispute Resolution which provides –
To act to improve the administration of justice and the use of alternative dispute resolution processes throughout Maryland by study, research, reports and recommendations to the Governor of Maryland, the Maryland Legislature, the Court of Appeals of Maryland or to any other public official, legislative body, judiciary or judge, or any other governmental or public agency or body, and also the Association.
The American Bar Association, The Association of Conflict Resolution and the American Arbitration Association promulgated Model Standards of conduct for mediators.
Following the lead of the organized bar state rules committees have provided standards for alternative dispute resolution and requirements for certification and training.
Most all federal agencies and each branch of the armed services have formal alternative dispute resolution programs.
The Internet – Moving into the 21st Century
The ability of technology- especially the internet – to make many business processes more efficient is now making it clear that online dispute resolution is the next frontier of alternative dispute resolution. Courts have not yet adopted any form of Internet ADR. The internet promises to make more disputes reachable by ADR and to facilitate the resolution of disputes faster and at a lower cost. But like many shifts from paper to technology, a clear strategic pathway has yet to appear.
What is Online Dispute Resolution
Online Dispute Resolution provides the ability for two (or more) disparate parties to settle their dispute using the Internet. Sometimes this involves lawyers and mediators and sometimes it does not. It depends on the vehicle/provider that the parties agree to utilize to resolve their claim.
History of Online Dispute Resolution
The concept of on-line dispute resolution (ODR) has been discussed in academic circles since the mid 1990’s . Professor Ethan Katish was a leading researcher and developer of concepts of ODR. From 1997-1999, Professor Katish mediated a variety of disputes online, involving domain name/trademark issues, other intellectual property conflicts, disputes with Internet Service Providers, and others. In the spring of 1999, he supervised a project with the online auction site eBay, in which over 150 disputes were mediated during a two week period. During the summer of 1999, he co-founded Disputes.org, which later worked with eResolution to become one of four providers accredited by ICANN to resolve domain name disputes. He is also an adviser to SquareTrade.com, an Internet start-up focusing on online ADR. There are over 20 internet companies listed on the ODR.info site which provide ODR online services.
How Can ODR Help ADR?
Online dispute resolution (ODR) promises to enable alternative dispute resolution (ADR) to become more efficient, faster and less expensive. By achieving those three improvements ODR will make ADR a real alternative to a greater number of disputes thereby bringing all of the advantages of ADR to a greater number of people. An examination of the ADR process and barriers to ADR will allow a deeper examination of the potential of ODR.
It is All about Change Not Technology – Overcoming Barriers
The adoption of technology by businesses and individuals over the last two decades is astounding. Just 10 years ago managers of the nation’s largest law firms were struggling to get their lawyers to put a PC on their desk and then actually use it. One manager of a firm found a creative strategy. He announced at a firm meeting that he was conducting a pilot to determine how best to use a PC in the practice. He was going to conduct the pilot with the 10 brightest lawyers in the firm. Anyone who was interested was advised to call his office. One by one every lawyer in the firm called, and as soon as they did, a PC showed up on their desk. Adoption of the computer in the everyday life of that firm was well underway.
Today only a few laggards in the legal profession fail to make use of the PC. Interestingly enough the leaders are not always the younger generations as many senior lawyers lead the way. Take Judge Richard Rombro, a retired Judge in Maryland (having been forced to retire because the Constitution requires retirement at age 70). Judge Rombro managed the entire asbestos docket for the Circuit Court for Baltimore City using Lexis-Nexis File and Serve – sometimes even from his winter office in Florida. The legal profession has fully embraced technology including the Internet in order to become better lawyers. Those who have not embraced technology are losing the competitive battle.
So why is it that disputes are still mainly resolved with a dependency on paper and face-to-face meetings? It is all about change. Old ways are not put aside easily. Who hasn’t heard a lawyer say – “I know that is the way it will be done in the future, but I am not going to change now.â€
Change requires strong and great leadership. And great leaders always have a vision, a strategy, and they are enthusiastic and work really hard.
In developing a strategy it is essential to identify the barriers. The following are but a few:
1. The neutral needs to see the parties
2. Scanning and uploading documents
3. It is easier to do it the old way
4. My computer is too slow
As ODR enters its second decade, it requires adoption by three separate constituencies – the claimant, the respondent and the neutral. Much like a stool, if one leg is absent the stool falls. Thus, the challenge of change is multiplied or as the mathematician might say – “cubedâ€.
Most all practitioners have successfully overcome the barriers to change which were presented with the advent of court ordered ADR in the 1990’s. The benefits have become obvious – time savings, cost savings and “resolution satisfactionâ€. Yet the court dockets keep growing – so – much more remains to be accomplished.
Students of the dynamics of CHANGE will testify that change does not occur unless there is;
1. Leadership
2. Strategy
3. Management
What works Best in ODR?
In developing a strategy to successfully implement an ODR project it is helpful to analyze what has been successful.
What has become clear is that certain case criteria lend themselves to online activity, while other criteria lend themselves to the paper and face to face world. Online activity works best when there are only two parties and where the substance of the dispute is only monetary. ODR also has been effective where the dispute arises out of Internet commerce. ODR is difficult when there are many parties, the substance of the dispute is emotional or there is a large amount of money in controversy.
Current ODR Providers
Business-to-Business/Online Enterprise ODR Models
Square Trade handled thousands of disputes which have arisen between the buyer and seller of goods on eBay. Using this online solution a neutral mediates the dispute in an online chat format. In May 2008, however, it discontinued its eBay ODR service.
Cybersettle has successfully settled thousands of disputes, mainly involving personal-injury claims. Using the Cybersettle online process, the parties submit blind monetary demands and offers and agree that if they are within certain limits the case is settled at the midpoint of the last demand and offer.
Neutral-Focused ODR Providers
VirtualCourthouse.comâ„¢ has successfully settled hundreds of personal-injury, contract and real estate claims through an online binding arbitration process. The parties select a neutral though an online negotiation. Once the neutral is selected each party presents their case online – uploading supporting medical bills, doctor reports, pictures and other relevant evidence. The neutral then reviews the presentations and renders a binding decision.
VirtualCourthouse.com specializes in providing neutrals a market place for their services in addition to taking the parties through the entire ODR process. VirtualCourthouse.com comes closer to mimicking the actual court process than most of the services outlined above. They allow exhibits and supporting materials to be submitted electronically and case information is shared among the parties and the assigned neutral in a secure environment. The lowest cost for a simple case brought to VirtualCourthouse.com is less than $400. VirtualCourthouse provides an independent forum by enabling parties to select qualified neutrals (typically judges or attorneys with specific experience), submit digitized materials, schedule an ADR event and track other activities throughout the effort to resolve the claim.
The VirtualCourthouse.comâ„¢ story tracks the experience of a trial judge. The VirtualCourthouse dispute resolution process models a court dispute resolution process delivered on the internet using web based technologies.
§ A case is initiated and a list of Neutrals is selected and the Neutrals are ranked.
§ A system generated email is sent to the other party, inviting them to join the case.
§ The other party joins the case and a Neutral is agreed upon.
§ The Neutral reviews the case initiation, and sends an email to both parties, confirming the type of proceeding and the fees.
§ The claimant prepares a case presentation and uploads the scanned documents into the online case.
§ Once complete, a system generated email is sent to the respondent, advising them the claimant has completed their presentation, and now it is time for them to submit their case presentation
§ Once the case presentations are complete, a system generated email is sent to the Neutral advising them to review the evidence and render a decision.
§ Once reviewed, a verdict is submitted online, and a system generated email is sent to both parties notifying them a verdict has been rendered.
Mediate.com is a site that helps one locate a mediator in a particular geographical area and practice type. Unlike the VirtualCourthouse.com outlined above, Mediate.com does not offer a Web interface to enable one’s case to be submitted and adjudicated online.
Global Arbitration Mediation Association, Inc.’s (GAMA) arbitration and mediation E-Directories of ADR professionals are designed to help disputants find mediators and arbitrators appropriate for resolving their conflicts by permitting searches of the database by years of ADR experience, education, credentials, subject matter expertise, associations, geographic location, video conferencing compatibility and hourly rate.
Paper Based Organizations in Transition
The American Arbitration Association has settled several thousand cases digitally, but it still remains a very small percentage of the AAA caseload. AAA offers a lot of information on their Website, including PDF forms, and the ability to file a case electronically through AAA Webfile. The AAA offers both mediation and arbitration services and is the oldest ADR organization outside of the courts in the U.S.
JAMS , founded by the Hon. H. Warren Knight in 1979, provide mediation and arbitration services across the country. They specialize in a variety of claims including bankruptcy, mass tort and international. The JAMS Website allows the visitor to file an initial claim and select a location and neutral. But beyond that, JAMS does not offer the on-line automated case monitoring that the other services (outlined above) do.
National Arbitration Forum automates domain disputes on the Internet as well as other case types. The Forum is in the process of converting its paper based dispute resolution business to the Internet.
Regional ADR Service Providers
There are many regional ADR providers, like ADR Systems of America, LLC, headquartered in Chicago. ADR Systems has many retired Cook County Circuit Court judges on their roster of neutrals and specialize in complex personal-injury cases. The ADR Systems’ Web interface is limited but they focus on being a regional provider and therefore the need for automation is not quite as great as in a case involving geographically diverse parties.
Other ODR Providers
The ElectronicCourthouse.com , run by a Canadian company called iVentures, provides services to companies that must offer dispute-resolution. They specialize in companies that manufacture and distribute internationally.
Transferring an existing process from the bricks-and-mortar world to the Internet is a daunting undertaking. The process is fraught with barriers of change involving multiple parties and multiple processes. Developing a strategic approach is therefore essential. It is similar to “eating and elephant†– you do not want to plan this event for one meal or you will surely fail. You need to start small but you need to start. It is necessary to strategically identify a starting point where the existing barriers are not overwhelming and where efficiencies of online business will bring the greatest bottom line result.
Trial judges can help lead the way by knowing ODR alternatives which can be made available to litigants as another ADR opportunity. Each ADR opportunity will lead some deputes to a successful resolution thereby helping to relieve the court of congested dockets.
Conclusion
The last 50 years has seen enormous growth in the use of ADR. The growth has been championed and led by the judges of the many state courts. Judges have led the way by incorporating ADR in caseflow management, adopting standards and criteria for the certification of neutrals. The bar has championed ADR growth through the formation of ADR sections and committees and the adoption of model ethical standards. When the bar and the bench join forces as they have with ADR the synergy always leads the way to needed and beneficial change. That change has lead to more predictable, faster trial dockets. Litigants also are gaining greater confidence in the trial courts of the country, while experiencing a higher level of justice through self styled resolution of their disputes.
Most judges and lawyers date alternative dispute resolution (ADR) to the early 1900’s with the advent of the American Arbitration Association and other institutional forms of arbitration. However, arbitration dates to early Biblical times with one of the first noted arbitrators King Solomon. Even earlier, arbitration was used as a method to resolve territorial disputes. In England arbitration was a common means of commercial dispute resolution predating the common law as early as the 1200’s.
by Judge Arthur M. Monty Ahalt ( Ret.) – October 2, 2009
