5. Administrative Dispute Resolution Act

• Pages: 397-432

397

ADMINISTRATIVE DISPUTE RESOLUTION ACT

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Administrative

Dispute

Resolution Act

397

Citations:

5 U.S.C. §§571-584 (2000) (general provisions, confidentiality, admin-

istrative arbitration); 5 U.S.C. §556(c) (2000) (ALJ authority); 9 U.S.C. §10

(2000) (arbitration, judicial review); 41 U.S.C. §§604-607 (contract dis-

putes); 29 U.S.C. §173 (2000) (FMCS authority); 28 U.S.C. §2672 (2000)

(tort claims); and 31 U.S.C. §3711(a)(2) (2000) (government claims); en-

acted November 15, 1990 by Pub. L. No. 101-552, 104 Stat. 2736; signifi-

cantly amended August 6, 1992 by Pub. L. No. 102-354, 106 Stat. 944, and

October 19, 1996 by Pub. L. No. 104-320, 110 Stat. 3870.

Lead Agency:

U.S. Department of Justice, Office of Alternative Dispute Resolution,

Office of the Associate Attorney General, 10th Street and Constitution Av-

enue, NW, Room 5238, Washington, DC 20530 (202) 616-9471.

Overview:

Background of the Act. The Administrative Dispute Resolution Act of

1990 established a statutory framework for federal agency use of ADR. Based

largely on reforms advocated by many observers, including the Administra-

tive Conference of the U.S. in numerous formal recommendations to Con-

gress and agencies, the Act recognized the value of, and encouraged federal

agencies to employ, alternative means of dispute resolution. These meth-

ods—which have been used increasingly by states, courts and private entities

in recent years—enable parties to bring to bear their experience to foster

creative, acceptable solutions and to produce expeditious decisions requiring

fewer resources than litigation and adjudicative processes. Mediation, con-

ciliation, arbitration, minitrials, factfinding, early neutral evaluation, settle-

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ment judges, ombuds, and similar methods have begun to prove increasingly

useful in resolving administrative disputes.

It became evident to many experts that legislation was needed to resolve

legal questions regarding agency authority to employ ADR, to define proce-

dural safeguards, and to prompt agencies to experiment. The 1990 Act was

the response. It authorized and encouraged all federal agencies to use consen-

sual processes to enhance the possibility of reaching agreements expeditiously

within the confines of agency authority. It was premised on Congress’ find-

ings that ADR can lead to more creative, efficient, stable and sensible out-

comes. In 1996, the Congress amended and permanently reauthorized the

Act. By eliminating further sunset dates and special reporting requirements,

Congress recognized ADR methods’ permanent place in agency decisionmaking

activities.

Agency Implementation. Section 3 of the Administrative Dispute Reso-

lution Act of 1990 provides for agency action to put the legislation’s provi-

sions into effect. The Act calls for an internal review process for agencies to

consider whether, and under what circumstances, ADR techniques may ben-

efit the public and help it to fulfill statutory duties more effectively.

An agency is required to consider if ADR can be useful to each of its

“administrative programs.” Section 571 of this subchapter defines an agency’s

“administrative program” broadly to include all activities involving “protec-

tion of the public interest and the determination of rights. . . .” Agency re-

view is directed to all manner of agency actions including actions involving

entitlement programs, grants, contracts, insurance, loans, guarantees, licens-

ing, inspections, taxes, fees, enforcement, postal services, economic regula-

tion, management, claims, or private party complaints. Following review of

its administrative programs, an agency is directed to adopt policies on use of

ADR. Section 572(b) lists factors an agency should use to determine if the

dispute a agency has identified lends itself to ADR, especially binding arbi-

tration.

Section 3 assigns responsibility to implement the provisions of the Act.

Each agency head is expected to designate a senior official to be the dispute

resolution specialist (DRS) of the agency. This official generally works at a

departmental or comparable level to oversee the implementation of ADR

activities and development of the agency policy on ADR. Ideally, the special-

ist or a designee would also seek to interact with counsel and program offic-

ers in helping these colleagues make full and effective use of the wide range

of available dispute resolution options and in keeping them apprised of rel-

evant developments in the public and private sectors. Each agency is ex-

pected to make training available to its specialist and other employees involved

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in implementing the Act. The agency specialist is expected to recommend to

the agency head a list of other agency employees for similar training to be

conducted by the specialist within the agency.

Section 3(d)(1) provides that each agency with significant grant or con-

tract functions review its standard contract or assistance agreements to deter-

mine if a need exists for amendments to those agreements to authorize or

encourage ADR use. Section 3(d)(2) provides that the Federal Acquisition

Regulation be amended to reflect the amendments made by the Act, and FAR

amendments became effective on December 29, 1998. 63 Fed. Reg.58,594

(Oct. 30, 1998).

ADR Methods. Arbitration. Arbitration is closely akin to adjudication

in that a neutral third party decides the submitted issue after reviewing evi-

dence and hearing argument from the parties. It may be binding on the par-

ties either through agreement or operation of law, or it may be nonbinding in

that the decision is only advisory. Arbitration may be voluntary, where the

parties agree to resolve the issues by means of arbitration, or it may be man-

datory, where the process is the exclusive means provided. Under the Act, it

must always be voluntary.

Minitrial. A minitrial is a structured settlement process in which each

side presents a highly abbreviated summary of its case before senior officials

of each party authorized to settle the case. A neutral adviser sometimes pre-

sides over the proceeding and will render an advisory opinion if asked to do

so. Following the presentations, the officials seek to negotiate a settlement.

Mediation. Mediation involves a neutral third party trained to assist the

parties in negotiating an agreement. The mediator has no independent au-

thority and does not render a decision; any decision must be reached by the

parties themselves.

Facilitation. Facilitation helps parties reach a decision or a satisfactory

resolution of the matter to be addressed. While often used interchangeably

with “mediator,” a facilitator generally conducts meetings and coordinates

discussions, but does not become as involved in the resolution of substantive

issues as does a mediator.

Convening or Conflict Assessment. Convening helps identify issues in

controversy and affected interests. The convenor is generally called upon to

determine whether direct negotiations among the parties would be a suitable

means of resolving the issues, and if so to bring the parties together for that

purpose. Convening has proved valuable in negotiated rulemaking and envi-

ronmental disputes.

Negotiated Rulemaking. This formal process (covered separately by the

Negotiated Rulemaking Act) is initiated by an agency promulgating a regula-