By Helen I. Bendix and Alexander M. Wolf
Alternative Dispute Resolution (ADR) generally means resolution of a dispute by means other than a court or jury trial on the merits. ADR provides litigants with a means of resolving cases without the expense or delay of trial. It can cause less damage to existing relationships than litigation, and can give litigants greater control over the process. ADR also helps bench officers trim congested calendars.
The objective of this article and self-study test is to introduce judges and attorneys to the fundamentals of court-sponsored ADR in typical civil cases. Readers will learn about the more common types of ADR, including mediation, neutral evaluation, settlement conferences, and judicial arbitration.
Rule 3.800(1) of the California Rules of Court defines ADR as "a process, other than formal litigation, in which a neutral person or persons resolve a dispute or assist parties in resolving their dispute." As part of effective case management, the judge and litigants work hand in hand in determining whether ADR is appropriate for a case, and if so, which ADR procedure is best suited to the case.
Generally speaking, ADR takes two forms: facilitative and adjudicatory. Facilitative ADR brings parties before a neutral person (a "neutral") who is not a decision maker, but who assists the parties in arriving at a settlement. Mediation, neutral evaluation, and settlement conferences fall into this category of ADR.
Adjudicatory ADR takes place before a neutral chosen by the parties to decide some or all of their dispute. Examples include arbitration and private judging under Article VI, Section 21 of the California Constitution (concerning the appointment of temporary judges) and the Code of Civil Procedure Section 638 (concerning the appointment of referees).
Mediation "means a process in which a neutral person or persons facilitate communication between disputants to assist them in reaching a mutually acceptable agreement." (California Rule of Court 3.800(2).) In facilitating settlement, mediators generally focus on the interests of the parties, rather than the merits of the parties' legal positions, although some mediators may be more evaluative than others.
Mediation is particularly appropriate for parties who want to preserve ongoing or future personal and business relationships or who cannot afford the expense of trial.
Los Angeles courts may order into mediation those cases in which the amount in controversy does not exceed $50,000. (Code of Civil Procedure Sections 1775.2(a), 1775.5.) Los Angeles is the only county that must have a mandatory mediation program for these cases (Code of Civil Procedure Section 1775.2(a)), but other counties may elect to apply this statutory title. (Code of Civil Procedure Section 1775.2(b); see, e.g., Superior Court Sonoma County, Local Rule 16.7.) For cases in which the amount in controversy exceeds $50,000, courts may provide voluntary mediation programs - indeed, courts are encouraged to do so as part of effective case management. (See Code of Civil Procedure Section 1775.) Courts, however, cannot compel mediation in these cases. (Code of Civil Procedure Section 1775.5; Jeld-Wen Inc. v. Superior Court, 146 Cal.App.4th 536 (2007).) Under Jeld-Wen, courts also cannot force parties to pay for a mediator.
All parties and decision makers must be present at the mediation session. (California Rule of Court 3.894(a)(1); see Rule 3.894(a)(1), (2) for provisions regarding the presence of government entities and insurance representatives, respectively.)
Statements made during mediation are confidential. Evidence Code Sections 1119-1128 create a robust confidentiality framework that renders inadmissible and not subject to discovery all written and oral communications made during the mediation process (Section 1119) and all mediator's reports or findings of any kind (Section 1121). The mediator may not report to the court any statements or conduct of parties at the mediation. (Foxgate Homeowners' Assoc. Inc. v. Bramalea Cal. Inc., 26 Cal.4th 1 (2001).) California's strict rules of confidentiality include writings, graphs, e-mails, mediation briefs, and other materials prepared in connection with mediation, except as expressly provided by the Legislature, as in Evidence Code Section 1122. (Rojas v. Superior Court, 33 Cal.4th 407 (2004); Wimsatt v. Superior Court, 152 Cal.App.4th 137 (2007).)
Each county sets its own rules regarding compensation of mediators. Los Angeles maintains a free panel of mediators, because it must offer mandatory mediation for certain cases and cannot force parties to pay. This panel is called the "random select" panel because parties who choose this option cannot select the mediator. (Superior Court L.A. County, Local Rules, ch. 12, app. A-1.) Under this same Rule, if the parties want to choose a mediator, Los Angeles also offers a "party select" panel at a fixed rate. Mediators on court panels are governed by state ethics rules. (See California Rules of Court 3.850-3.872.) Finally, parties may mediate before a mediator or provider in the private market.
Neutral evaluation provides a forum for the parties to make a brief presentation of their case or a particular issue before a neutral who is an expert in the subject matter of the dispute. The neutral then assists in narrowing disagreements and can also provide an evaluation on the merits of the case or issue. Counties offering neutral evaluation include Los Angeles, Stanislaus, and Orange.
Counties set their own guidelines regarding cases eligible for neutral evaluation. For example, in Los Angeles, neutral evaluation is available in cases involving the following subject matters: commercial, employment, medical malpractice, legal malpractice, real estate, trade secrets, and unfair competition. (Superior Court L.A. County ADR Dept., Neutral Evaluation Announcement (June 2007), p. 1.) Neutral evaluation can be particularly useful when one side or a client has an unrealistic view of the value or the merits of his or her case. In such a situation, the neutral can provide a "reality check."
Courts typically maintain a panel of evaluators, who have extensive experience in specified subject areas and who have completed a court training program. (See, e.g., Superior Court L.A. County, Local Rules, ch. 12, app. A-2.) In a neutral evaluation proceeding, the parties personally appear before the neutral evaluator. (See, e.g., Superior Court L.A. County, Local Rules, rules 12.19, 12.22.) In advance of the proceeding, the parties submit neutral evaluation statements describing the major legal and factual issues in the case, as well as any discovery or evidentiary problems that may have an effect on a resolution. Also, the statements should address damages and attach highlighted copies of key documents.
At the meeting with the evaluator, the parties and lawyers present their case; the evaluator may ask questions and raise issues for further discussion. (See, e.g., Superior Court L.A. County, Local Rule 12.19.) The evaluator then identifies areas of agreement and disagreement and "encourages the parties to enter into procedural and substantive stipulations." (Rule 12.19(3).) The neutral evaluator offers to present an evaluation to the parties, and must give his or her evaluation if a party so requests. (Rule 12.19(5), (5)(A).)
Neutral evaluation proceedings are confidential. (See, e.g., Superior Court L.A. County, Local Rules, rule 12.8.) In Los Angeles, under Rule 12.20, neutral evaluation is available on a voluntary basis only and may not be ordered by the court. Los Angeles offers free random select and fixed-rate party select panels for neutral evaluation. (Superior Court L.A. County, Local Rules, ch. 12, app. A-2.)
In a settlement conference, the parties and lawyers meet with a sitting judge or experienced lawyer or retired judge, who provides his or her services on a pro bono basis. The settlement officer typically focuses on the merits of the parties' respective legal positions. Unlike many mediations, settlement conferences tend to be highly evaluative. A settlement conference may be set on a judge's own motion or at the request of any party. (California Rule of Court 3.1380(a); Superior Court L.A. County, Local Rule 7.9(d).)
Settlement conferences are not mediations. The strict confidentiality provisions of Evidence Code Sections 1119-1128 do not apply to settlement conferences. Instead, Evidence Code Section 1152 applies, under which an offer to compromise is not admissible to prove liability except as otherwise specified.
"Trial counsel, parties, and persons with full authority to settle the case must personally attend" a settlement conference, "unless excused by the court for good cause." (California Rule of Court 3.1380(b).) Under this same Rule, if consent to settle is required, a party with authority to consent "must be personally present at the conference."
Arbitration is the most trial-like form of court-sponsored ADR. It is best suited for parties desiring a confidential resolution on the merits without the expense and formality of a trial before a judge or jury. (Superior Court L.A. County, ADR Info. Package (Dec. 2009), p. 1; see Code of Civil Procedure Section 1141.10(b)(1).) Arbitration comes in two forms: contractual and judicial.
Contractual arbitration is a private process in which the parties agree to submit their dispute to one or more arbitrators whom they select. Contractual arbitration is not covered here because it is not part of court-sponsored ADR programs. Judges, however, can be involved in contractual arbitration, for example, in enforcing agreements to arbitrate or confirming or vacating an arbitral award. (See Code of Civil Procedure Sections 1280-1294.2.)
In judicial arbitration, a neutral person called an "arbitrator" reviews evidence, hears arguments, and renders a confidential decision. The decision is non-binding in that the parties may file a request for a trial de novo within 30 days of the arbitrator's decision. (Code of Civil Procedure Section 1141.20(a).) If a party submits a request for trial de novo, the case proceeds to a trial before a judge or jury as if the arbitration never took place. Absent such a request, the decision of the arbitrator becomes final and cannot be appealed. (Code of Civil Procedure Sections 1141.20(a), 1141.23.) Judicial arbitration is particularly useful in cases in which the amount in controversy is relatively small, or in which only the amount of damages is in dispute.
In Superior Courts with 18 or more judges, all non-exempt unlimited civil cases in which the amount in controversy does not exceed $50,000 per plaintiff must be submitted to judicial arbitration. (Code of Civil Procedure Section 1141.11(a).) In these cases in Los Angeles, the parties may, in the alternative, be ordered to mediation. (Code of Civil Procedure Sections 1775.2-1775.5). In courts with fewer than 18 judges, local rules may impose the same requirement to arbitrate. (Code of Civil Procedure Section 1141.11(b).) Courts may also adopt local rules requiring judicial arbitration for all non-exempt, limited civil cases. (Code of Civil Procedure Section 1141.11(c).)
Parties may stipulate to send any case to judicial arbitration, regardless of the amount in controversy. (Code of Civil Procedure Section 1141.12(a); California Rule of Court 3.811(a)(4).) Additionally, a plaintiff may elect mandatory arbitration if all plaintiffs agree that the arbitration award will not exceed $50,000 per plaintiff. (Code of Civil Procedure Section 1141.12(b); see Superior Court L.A. County, Local Rules, rule 12.28(2).) Certain cases are exempt from judicial arbitration, including class actions and cases that "include a prayer for equitable relief that is not frivolous or insubstantial." (California Rule of Court 3.811(b); see Code of Civil Procedure Section 1141.15.)
Retired judges, court commissioners (who were licensed to practice law before appointment as commissioners), and members of the State Bar may serve as arbitrators, as may non-attorneys if the parties so stipulate. (Code of Civil Procedure Section 1141.18(a); see also California Rule of Court 3.815.) In Los Angeles, free random select and fixed-rate party select panels are available for judicial arbitration. (Superior Court L.A. County, Local Rules, ch. 12, app. A-3.)
Helen I. Bendix is a Los Angeles County Superior Court judge.
Alexander M. Wolf is a second year law student at Harvard Law School.