CHAPTER 7 ALTERNATIVE DISPUTE RESOLUTION TECHNIQUES

• Jurisdiction: United States

Resolution and Avoidance of Disputes
(Mar 1984)
CHAPTER 7
ALTERNATIVE DISPUTE RESOLUTION TECHNIQUES
Eric D. Green
Boston University School of Law
Boston, Massachusetts

I. A Conceptual Framework for "ADR"

"Alternate Dispute Resolution" is best thought of as involving processes other than the two most-used primary processes — adjudication and negotiation. Alternative processes can be used in a variety of settings:

* They can be court-annexed or court-sponsored — as in the trial court's voluntary arbitration program or Federal Judge Thomas Lambros' summary jury trial.

* They can take place in an established private forum — as in a privately funded arbitration or mediation service, such as the American Arbitration Association, Better Business Bureau, EnDispute, or many Neighborhood Justice Centers.

* They can be implemented in an ad hoc arrangement agreed to by the parties to a dispute — as where the parties agreed to hire a former judge to conduct a private voluntary settlement conference or choose to conduct a "Mini-Trial..."

All alternative processes aim to allow the parties to reach a faster, less expensive and more appropriate resolution of their dispute than they would reach if they relied on the traditional processes of adjudication and negotiation.

Some alternative processes — such as mediation and Mini-Trials — aim to help facilitate the process of voluntary settlement. The mediation, for example, may help calm the emotionalism of a dispute. Other alternative processes — such as binding arbitration — aim to provide a faster and less expensive binding resolution than would be obtained through the traditional in-court process.

A large number of novel alternative dispute resolution processes and techniques have been applied to institutional disputes in the past few years with successful results. Many of these techniques are hybrids combining various characteristics of the primary dispute resolution processes (adjudication, arbitration, mediation, negotiation, and fact-finding) in novel combinations. These alternative processes and techniques range from the purely private to the fully public, with some processes employing both private and public parts. Although many of the processes were custom-tailored in response to a particular dispute, they tend to share common characteristics of:

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1. Re-translation from a legalistic dispute into a problem to be dealt with on its own terms;

2. Co-operative rather than aggressively adversarial processes, at least to the extent of depending on the parties' willingness to discuss the dispute openly and in good faith;

3. Involvement of a neutral third party at least as a facilitator; and

4. The involvement of representatives of the parties—often non-lawyers—with authority to resolve the dispute.

Before discussing some of the most promising new Alternative Dispute Resolution techniques, it may be helpful to consider the following typology of resolution and management processes by stage of intervention in a dispute. As the table indicates, some techniques can be used to head off a dispute even before it arises. Others may be used to manage a dispute while it is pending. The last group of techniques constitutes the resolution, or "ADR" processes.

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TABLE I

TYPOLOGY OF CORPORATE ALTERNATIVE DISPUTE RESOLUTION AND MANAGEMENT TECHNIQUES AND PROCESSES BY STAGES OF INTERVENTION

1. Dispute Anticipation and Prevention

— Consensus building

— Dispute Management Audit

— Environmental and consumer assessment programs

— Corporate codes of responsibility

— Corporate ambassador

— Ombudsman

— Negotiated development

— Dispute resolution contract clauses

2. Dispute Management

— Case management programs

— Private lawyer retention letter

— Legal budgeting; use of decision and investment analysis

— Supervision of outside counsel

— Case-containment litigation strategies (e.g. Rules 16, 26(f))

3. Dispute Resolution

— Mini-Trial

— Private judging; use of masters

— Self-Regulation

— Ombudsman

— Mediation

— Regulatory bargaining; negotiated development

— Neutral expert fact-finding; joint fact-finding

— Tailored arbitration

— Neutral lawyering

— Voluntary settlement conferences

— Court-annexed arbitration

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When considering the ADR techniques, it is important to understand the essential characteristics of the traditional, or "primary" resolution techniques, and how these elements are recombined in the new, hybrid "ADR" processes, such as the "Mini-Trial." The following Table defines the primary and hybrid processes in terms of their essential structure and process characteristics.

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TABLE II

"Primary" Dispute Resolution Processes

ADJUDICATION	ARBITRATION	MEDIATION/; CONCILIATION	TRADITIONAL NEGOTIATION
Non-voluntary	Voluntary unless contractual or court centered	Voluntary	Voluntary
Binding, subject to appeal	Binding (usually), no appeal	Non-binding	Non-binding (except through use of adjudication to enforce agreement
Imposed, third-party neutral decision-maker, with no specialized expertise in dispute subject	Party-selected third-party decision-maker, usually with specialized subject expertise	Party-selected outside facilitator, often with specialized subject expertise	No third-party facilitator
Highly procedural; formalized and highly structured by predetermined, rigid rules	Procedurally less formal; procedural rules and substantive law may be set by parties	Usually informal, unstructured	Usually informal, unstructured
Opportunity for each party to present proofs supporting decision in its favor	Opportunity for each party to present proofs supporting decision in its favor	Presentation of proofs less important than attitudes of each party; may include principled argument	Presentation of proofs usually indirect or non-existent; may include principled argument
Win/Lose result	Compromise result possible (probable?)	Mutually acceptable agreement sought	Mutually acceptable agreement sought
Expectation of reasoned statement	Reason for result not usually required	Agreement usually embodied in contract or release	Agreement usually embodied in contract or release
Process emphasizes attaining substantive consistency and predictability of results	Consistency and predictability balanced against concern for disputants' relationship	Emphasis on disputants' relationship, not on adherence to or development of consistent rules	Emphasis on disputants' relationship, not on adherence to or development of consistent rules
Public process; lack of privacy of submissions	Private process unless judicial enforcement sought	Private process	Highly private process

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"Hybrid" Dispute Resolution Processes

PRIVATE JUDGING	NEUTRAL EXPERT FACT-FINDING	MINI-TRIAL	SETTLEMENT CONFERENCE
Voluntary	Voluntary or nonvoluntary under FRE 706	Voluntary	Voluntary or mandatory
Binding but subject to appeal and possibly review by trial court	Non-binding but results may be admissible	Non-binding (except throughouse of adjudication to enforce agreement)	Binding or non-binding
Party-selected third-party decision-maker; may have to be former judge or lawyer	Third-party neutral with specialized subject matter expertise may be selected by the parties	Third-party neutral advisor often with specialized subject expertise	Judge, other judge, or third-party neutral selected by parties
Statutory procedure (see, e.g., Cal. Code Civ. Proc. § 638 et seq.) but highly flexible as to timing, place and procedures	Informal	Less formal than adjudication and arbitration but procedural rules and scope of issues may be set by the parties and implemented by neutral advisor	Informal, off-the-record
Opportunity for each party to present proofs supporting decision in its favor	Investigatory	Opportunity and responsibility to present proofs supporting result in its favor	Presentation of proofs may or may not be allowed
Win/lose result (judgment of court)	Report or testimony	Mutually acceptable agreement sought	Mutually acceptable agreement sought; binding conference is similar to arbitration
Findings of fact and conclusions of law possible but not required	May influence result or settlement	Agreement usually embodied in contract or release	Agreement usually embodied in contract or release
Adherence to norms, laws and precedent	Emphasis on reliable fact determination	Emphasis on sound, cost-effective and fair resolution satisfactory to both parties	Emphasis on resolving the dispute
Private process unless judicial enforcement sought	May be highly private or disclosed in court	Highly private process	Private process but may be discovered

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II. Mini-Trial

The Mini-Trial is the leading example of these hybrid private dispute resolution processes (Green 1982; Green, Marks and Olson 1978; Green 1981; Janicke 1981; Wray 1981; Zampano 1981).

Applied initially to large inter-corporate disputes but more recently to employment, regulatory and government contracts cases, the Mini-Trial is not a trial at all, but rather a rational and voluntary way to structure a settlement process. In the Mini-Trial, after a foreshortened period of pre-trial preparation, the lawyers make informal and abbreviated presentations of each party's best case before principals of the parties with settling authority. No judge or arbitrator is involved. Rather, the presentations are designed to give each party's principals a clear, balanced conception of the strengths and weaknesses of the positions on both sides as preparation for settlement negotiations which begin immediately upon conclusion of the presentations. A third party Neutral Advisor is present at most Mini-Trials to advise the parties' representatives, if necessary, during the negotiations of the Advisor's estimate of how the case would be...