FAQ

What is Alternative Dispute Resolution?

What is Alternative Dispute Resolution?

California and federal courts typically require all litigants to conduct some type of Alternative Dispute Resolution (ADR). ADR is a process in which a neutral person helps people who cannot agree, so that they can resolve their case.  ADR is designed to take place as early as possible in the life of a case, to provide an opportunity to settle all or part of the case and keep litigation expense to a minimum.  Parties in a civil case can use a mediator, neutral evaluator, arbitrator, or settlement conference neutral for assistance in resolving a case. In some programs, ADR providers determine their own fee for their services.

Types of Civil ADR available:

Mediation:

Mediation is an informal, confidential, flexible and non-binding process in which the mediator helps the parties to understand the interests of everyone involved, and their practical and legal choices. The mediator helps the parties to:

• Communicate better,

• Explore legal and practical settlement options, and

• Reach an acceptable solution of the problem.

The mediator does not decide the solution to the dispute; the parties do. The mediator does not have the power to force either party to accept any particular result, and does not render a decision regarding who will or who will not prevail in the case.  Rather, the mediator helps the parties facilitate a resolution of the case.

Mediators are allowed to charge for their time. The cost of mediation can vary depending on the mediator and the parties usually split the mediator’s fee. Some mediators charge an hourly rate, and others charge a daily rate.  Some programs offer free mediations in particular situations.

Neutral evaluation

Neutral evaluation, sometimes called “early neutral evaluation” or “ENE”, is an informal process in which the evaluator, an experienced neutral lawyer:

• Hears a compact presentation of the case from both sides,

• Gives a non-binding assessment of the strengths and weaknesses on each side, and

• Predicts the likely outcome.

The evaluator can help parties to identify issues, prepare stipulations, and draft discovery plans. The parties may use the evaluation to discuss settlement. Evaluators are allowed to charge for their time.

Like mediation, the evaluator does not have the authority to decide who wins or loses the case.  The evaluator discusses the strengths and weaknesses of the parties’ case and can offer his/her opinion as to the likelihood of prevailing.  Oftentimes, ENE will lead to settlement discussions after the parties receive feedback regarding the merits and weaknesses of their claims and defenses.

The court oftentimes provides free ENE services, but the parties can also hire a private evaluator.

Private Arbitration

Arbitration is less formal than a trial. The arbitrator:

• Hears the evidence and arguments of the parties, and then

• Makes a written decision.

The parties can agree to binding or non-binding arbitration:

• In binding arbitration the arbitrator’s decision is final and completely resolves the case, without the opportunity for appeal.

• In non-binding arbitration, the arbitrator’s decision could resolve the case, without the opportunity of appeal, unless a party timely rejects the arbitrator’s decision within 30 days and requests a trial.

Many private arbitrations are BINDING; if there is an arbitration clause in a contract, that clause may state whether or not arbitration will be binding.

Some agreements require arbitration before or in lieu of filing a lawsuit.

Civil Judge ADR

The Civil Judges ADR program allows parties to have a mediation or settlement conference with an experienced judge of the Superior Court.

Judicially supervised mediation is an informal, confidential, flexible and non-binding process in which the judge helps the parties to understand the interests of everyone involved, and their practical and legal choices, and to hopefully resolve their disputes.

A settlement conference is an informal process in which the judge:

• Meets with the parties or their attorneys,

• Hears the facts of the dispute,

• Helps identify issues to be resolved, and

• Normally suggests a resolution that the parties may accept or use as a basis for further negotiations.

Judicial Arbitration

Judicial Arbitration is like a trial, but it is less formal and there is no jury. Each side presents its case to an arbitrator. The arbitrator is either a lawyer or a retired judge, and does not take sides or give advice.

Judicial arbitration is usually free for the parties. (If your arbitration takes more than 5 hours, the arbitrator may charge you a fee, but most arbitrations take 3 hours or less.) The parties can agree to binding or non-binding arbitration:

• In binding arbitration the arbitrator’s decision is final and completely resolves the case, without the opportunity for appeal.

• In non-binding arbitration, the arbitrator’s decision could resolve the case, without the opportunity of appeal, unless a party timely rejects the arbitrator’s decision within 30 days and requests a trial.

If the parties cannot agree on a particular form of ADR, the court’s default ADR process is non-binding judicial arbitration. If the parties use non-binding judicial arbitration, then oftentimes the losing party will simply reject the arbitrator’s decision. Although this can effect the recovery of costs should the matter proceed to litigation, it does not necessarily facilitate a resolution of the claims.

Civil Early Settlement Conference

A settlement conference is an information process in which the neutral (a judge or an experienced attorney):

• Meets with the parties or their attorneys,

• Hears the facts of the dispute,

• Helps identify issues to be resolved, and

• Normally suggests a resolution that the parties may accept or use as a basis for further negotiations.

Some courts offer this service at no additional charge.

When is the right time to engage in ADR?

That depends on a number of factors.  Sometimes early ADR efforts can help the parties resolve their differences without litigation, or early in the litigation process.  Early ADR may allow the parties to resolve their differences without incurring substantial costs and before the parties become too entrenched in their positions.  If ADR occurs too early, the parties may not have sufficient time to develop the evidence and therefore may make incorrect assumptions about what the evidence will or will not show.  The inability to examine the evidence that will come out at trial may help the parties resolve their case, but it can also cause one side or the other to over-value the strengths of their position.

Given the significant costs of litigating a case, the Nuddleman Law Firm believes exploring ADR options early makes sense for most clients, but early ADR is not appropriate for every case.  If one side or the other is too entrenched in their position or has an unrealistic expectation of what will occur during the litigation, the parties may need to litigate the case until their positions become clearer or they have a better understanding of what may happen at trial.