Chapter 5

• Jurisdiction: United States

Chapter 5

Court Annexed Alternate Dispute Resolution

§ 5.01 Introduction to Court Annexed ADR

Traditionally, when parties who have been unable or unwilling to settle their disputes entered the courthouse, it was with going to trial in mind. With the growth of alternate dispute resolution in the private sector, the parties to an employment lawsuit may reach the courthouse only after utilizing a variety of private or contractual ADR methods, including perhaps mediation, an ombuds program, or other non–binding processes, without success, or the parties may have spurned the use of private alternate dispute resolution for reasons of their own. In either case, the parties may find themselves again involved, or involved for the first time, in alternate dispute resolution processes mandated by the courts. Such mandates are termed “court annexed.” All federal courts are now required to authorize, by local rule, the use of alternative dispute resolution processes in all civil actions and to encourage and promote the use of these procedures.¹

The term “court annexed,” as used in this text, means alternate dispute resolution processes that are mandated, or offered on a voluntary basis, under the aegis of a government body. These systems differ from private ones in the very important respect that that while the parties may be allowed input, they have no choice about participation and no ability to enforce variations on the rules, nature, or structure of the court annexed system. One purpose of court annexed alternate dispute resolution may be to help the parties reach settlement, but the underlying goal for the courts is to clear their crowded dockets. As one commentator has noted, “[f]or well over a decade now, Alternative Dispute Resolution (ADR) and all its variations have been hailed in rhetoric and anecdote as the Prince Charming to a court system in distress.”² In enacting the Alternative Dispute Resolution Act of 1998,³ Congress found that mediation, early neutral evaluation, mini-trials, and voluntary arbitration might have the potential to reduce the backlog of cases pending in some federal courts and allow those courts to process remaining cases more efficiently.⁴

The purpose of this subsection is to define the major variations on court annexed ADR. To the extent that such variations as mediation and arbitration have been discussed in Chapter 4, that discussion will not be repeated here. Those variations will be defined here only to the extent that they differ from their private sector cousins. This subsection is largely definitional. Analyses of the legal issues surrounding court annexed alternate dispute resolution and its variations, together with expanded analysis of the defined alternatives, are contained in another discussion.⁵

[1]—Definitions of Specific Court Annexed ADR Procedures

[a]—Mediation

Mediation may be defined as a process in which an individual serving as a “neutral third party who has no authoritative decision making power” is brought into a matter “to assist disputing parties in voluntarily reaching their own mutually acceptable [resolution].”⁶ Mediation purists may insist that the term mediation should not be utilized for court annexed mediation because mediation at its core is a process that the parties should enter entirely voluntarily. However, in court annexed mediation, unwilling parties may be sent to “mediation.” For purposes of this text and its definitions, the term mediation will be used broadly to cover both voluntarily and court ordered mediation. In either case, the essential fact is that the mediator does not have the power to bind the parties to any particular agreement.

[b]—Arbitration

Arbitration in the private sector may be defined as “an informal presentation of each side’s case, without specific rules governing the manner of presentation, before an arbitrator (or three arbitrators under federal court programs) who render a judgment that can be appealed de novo.”⁷ What distinguishes the definition of “arbitration” in the court annexed context from its private sector counterpart is that while certain courts are authorized to use “arbitration,”⁸ the award of the arbitrator is not final and binding and a party may require a trial de novo, at which no evidence that there has been an arbitration, as to the award, or any other matter concerning the conduct of the arbitration may be admitted without the parties’ consent, or unless the evidence would otherwise be admissible under the Federal Rules of Evidence.⁹ The Alternative Dispute Resolution Act of 1998 makes clear a continuing congressional mandate that both that participation in court annexed arbitration is to remain voluntary and that the losing party in such an “arbitration” may seek a trial de novo without disfavor.¹⁰ In this context, “arbitration” partakes more of the character of evaluative mediation, although the cost of litigation and the voluntary nature of entering such “arbitration” may encourage the parties to accept a court annexed “arbitration” award.

There are several variations or combinations of mediation and arbitration. Mediation-arbitration features mediation followed by arbitration if mediation does not result in a resolution, using the same neutral. “Mediate then arbitrate” uses mediation, followed, if unsuccessful, with arbitration before a different third-party neutral.

[c]—Early Neutral Evaluation

Early neutral evaluation may be defined as a “meeting between the parties and a neutral party (usually a lawyer) in which each side is given an opportunity to make a narrative presentation of its case, after which the neutral party issues a nonbinding evaluation.”¹¹ Early neutral evaluation is likely to be most effective when the parties are participating fully voluntarily and are prepared to provide the neutral with detailed information regarding the facts and their views of the law.

[d]—Settlement Conferences

Although settlement conferences before a judge or court officer have long been a tool in resolving cases, they are also considered a form of alternate dispute resolution. A judicial settlement conference is “an informal meeting with a judge to discuss the case, again without rules as to the manner of presentation.”¹² These conferences are specifically provided for in the Federal Rules, which state that “the court may in its discretion direct the attorneys for the parties and any unrepresented parties to appear before it for a conference or conferences before trial for such purposes as . . . facilitating the settlement of the case.”¹³ The purpose of this provision is to ensure that those attending the settlement conference have the power to enter into binding settlements.

[e]—Mini-Trials

Mini-trials may be described briefly as “an abbreviated presentation of summaries of the evidence in a trial-type format before the representatives of the parties having settlement authority, presided over by a neutral advisor who may give his or her opinion if asked and who facilitates settlement discussions.”¹⁴ The basic concept of the mini-trial in the court annexed context is that when top decision makers listen to evidence presented by attorneys, they may better understand the underlying factual and legal issues.¹⁵ Not all federal district courts authorize mini-trials. For example, the Eastern District of New York does not,¹⁶ while the Northern District of Texas does use mini-trials.¹⁷ However, it is not unusual in the court annexed context for the terms mini-trial and summary jury trial to be confused. The Alternative Dispute Resolution Act of 1998 does not require all federal district courts to utilize mini-trials. The Act expressly states that each district court shall provide litigants in all civil cases with at least one form of alternate dispute resolution. The statute is clear that the only forms of alternative dispute resolution that the court may compel the parties to utilize without their consent are mediation and early neutral evaluation.¹⁸

[f]—Summary Jury Trials

A summary jury trial may be defined as “an abbreviated trial held before a judge and jury in a courtroom in which summaries of evidence are presented in a trial format and the jury renders a nonbinding verdict at the end.”¹⁹ Summary jury trials are controversial. Circuit courts have held that the federal courts do not have the power to compel participation in summary jury trials,²⁰ although this position is not widely accepted and is controversial.

[g]—New York Court Annexed Simplified Procedure

The states have their own variants on court annexed alternate dispute resolution. One of the more interesting is the “Simplified Procedure for Court Determination of Disputes” (SPCDD)²¹ under New York’s Civil Practice Law and Rules (CPLR). The SPCDD may be used for the resolution of any justiciable controversy, provided both sides agree to its use. The procedure is a simple one which eliminates the summons and complaint, pretrial disclosure, most of the rules of evidence, jury trial, interlocutory appeals from orders that are not final, and standard appellate review of judicial fact finding. Although the SPCDD provides for a very flexible approach to alternate dispute resolution, it has not been frequently used.²² SPCDD mixes judicial and ADR techniques. Under SPCDD, facts are found by a judge who makes decisions that may be reviewed on appeal, substantive state law is applied, and judges have wide authority to utilize other provisions of the procedural rules to expedite the process and contain costs.²³

[h]—The Spectrum of Court Annexed ADR Procedures

One commentator has made the highly perceptive observation that the various court annexed methods cover a range from the informal to the formal. The least formal method is mediation without a judge present—with formality then increasing through settlement conferences with a judge present to the most formal “trial run” methods such as mini-trials and summary jury trials which have many of the...