Administrative Dispute Resolution Act

• Author: William Funk - Jeffrey S. Lubbers
• Pages: 395-430

395

ADMINISTRATIVE DISPUTE RESOLUTION ACT

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Administrative

Dispute

Resolution Act

395

Citations:

5 U.S.C. §§ 571–584 (2012) (general provisions, confidentiality, admin-

istrative arbitration); 5 U.S.C. § 556(c) (2012) (ALJ authority); 9 U.S.C. §

10 (2012) (arbitration, judicial review); 41 U.S.C. §§ 604–607 (contract

disputes); 29 U.S.C. § 173 (2012) (FMCS authority); 28 U.S.C. § 2672

(2012) (tort claims); and 31 U.S.C. § 3711(a)(2) (2012) (government claims);

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

nificantly 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 Administrative

Conference of the U.S. in numerous formal recommendations to Congress

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

to employ, alternative means of dispute resolution. These methods—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, conciliation,

arbitration, minitrials, fact-finding, early neutral evaluation, settlement judges,

ombuds, and similar methods have begun to prove increasingly useful in

resolving administrative disputes.

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

legal questions regarding agency authority to employ ADR, to define

procedural safeguards, and to prompt agencies to experiment. The 1990 Act

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

consensual processes to enhance the possibility of reaching agreements

expeditiously within the confines of agency authority. It was premised on

Congress’s findings that ADR can lead to more creative, efficient, stable, and

sensible outcomes. In 1996, Congress amended and permanently reauthorized

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

Congress recognized the permanent place of ADR methods in agency decision-

making activities.

Agency Implementation. Section 3 of the Administrative Dispute

Resolution Act of 1990 provides for agency action to put the legislation’s

provisions into effect. The Act calls for agencies to conduct an internal review

process to consider whether, and under what circumstances, ADR techniques

may benefit 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 “protection

of the public interest and the determination of rights. . . .” Agency review is

directed to all manner of agency actions, including actions involving

entitlement programs, grants, contracts, insurance, loans, guarantees, licensing,

inspections, taxes, fees, enforcement, postal services, economic regulation,

management, claims, or private-party complaints. Following review of its

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

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

dispute lends itself to ADR, especially binding arbitration.

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

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

dispute resolution specialist (DRS). The DRS 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 DRS or a designee

would also seek to interact with counsel and program officers in helping

them make full and effective use of the wide range of available dispute

resolution options and in keeping them apprised of relevant developments in

the public and private sectors. Each agency is expected to make training

available to its DRS and other employees involved in implementing the Act.

The DRS, in turn, is expected to recommend to the agency head a list of other

employees for similar training to be conducted by the DRS within the agency.

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

functions review its standard contract or assistance agreements to determine

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

(FAR) 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 evidence

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

through either 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 mandatory,

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 presides

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 authority

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

environmental disputes.

Negotiated Rulemaking. This formal process (covered separately by the

Negotiated Rulemaking Act) is initiated by an agency promulgating a

regulation. If a convenor recommends negotiation, neutral-led discussions

including interested parties seek to effect an acceptable solution. It is used