Court-Annexed

Arbitration in

Ten District Courts

Barbara S. Meierhoefer

Federal Judicial Center

1990

This publication is a product of a study undertaken in furtherance of the Center’s

statutory mission to conduct and stimulate research and development on matters

of judicial administration. The analyses, conclusions, and points of view are those

of the author. This work has been reviewed by Center staff, and publication

signifies that it is regarded as responsible and valuable. It should be emphasized,

however, that on matters of policy the Center speaks only through its Board.
ii

Cite as B. Meierhoefer, Court-Annexed Arbitration in Ten District Courts (Federal

Judicial Center 1990)

FJC–R–90–2

First printing
iii

Contents

Executive Summary .................................................................................. 1

Background.................................................................................. 1

Research design ........................................................................... 2

Program description .................................................................... 3

Goal achievement ....................................................................... 5

Lessons for program developers ................................................. 8

Effects of and recommendations regarding

program characteristics .................................................... 9

Recommendation for legislation................................................ 11

1. Background......................................................................................... 13

Introduction and recommendation ........................................... 13

Status of court-annexed arbitration in the federal

courts 14 ................................................................................

Goals of court-annexed arbitration programs........................... 16

2. Evaluation Study Design ................................................................... 19

Objectives .................................................................................... 19

Procedure ..................................................................................... 20

Analysis and presentation of data ............................................. 26

3. Program Characteristics .................................................................... 29

Program development ................................................................ 30

Selecting program features ......................................................... 32

4. Arbitration Program Experiences ...................................................... 41

Caseload experiences .................................................................. 41

Case participants ........................................................................ 51

Conclusion .................................................................................. 57

5. Increased Options for Litigants ........................................................ 59

6. Procedural Fairness............................................................................. 63

Party perceptions of overall fairness.......................................... 63

Fairness of the arbitration hearing............................................. 65

Litigant selection of arbitration ................................................. 69

Attorney approval of court-annexed arbitration ...................... 77

Conclusions................................................................................. 82

7. Cost Savings ....................................................................................... 85

Attorney views of savings .......................................................... 85

Party perceptions of reasonable cost ......................................... 89

Conclusion .................................................................................. 93
iv

8. Reducing Time to Disposition ........................................................ 95

Disposition time in the Middle District

of North Carolina ............................................................. 95

Disposition time in the other new pilot courts ........................ 96

Encouraging earlier settlement discussions before

the hearing ........................................................................ 103

Effecting quicker settlements .................................................... 104

Views of attorneys in de novo demand cases ........................... 106

Views of parties as to the time required to settle

the dispute ........................................................................ 107

Conclusion .................................................................................. 109

9. Reducing Court Burden ................................................................... 111

Court assessment of arbitration programs ............................... 111

Judge perceptions of reduction of burden ................................. 114

De novo demands ....................................................................... 116

Trial rates .................................................................................... 117

Conclusion .................................................................................. 118

10. Mandatory vs. Voluntary Referral .................................................. 119

Mandatory programs and the right to trial............................... 119

Voluntary programs and program size ...................................... 120

Experimentation with degrees of voluntariness ....................... 121

11. Conclusions and Recommendations ............................................... 123

Assessment of program features ................................................ 123

Implementing arbitration programs.......................................... 130

Appendix A: Table of Local Rules............................................................ 133

Appendix B: Case Types Selected as Initially Eligible for Arbitration .. 139
v

Acknowledgments

This report is a product of a collaborative effort among colleagues at

the Research Division of the Federal Judicial Center. Carroll Seron was an

equal partner during the first eighteen months of the project and wrote the

first-year interim reports for five of the ten pilot courts. Carol Witcher had

much of the responsibility for carrying out the litigant surveys. Herman

Brown developed the Arbitration Newsletter, to facilitate communication between the Center and all of the pilot courts. Others in the Research

Division reviewed early drafts and made significant suggestions for

changes. Responsibility for any remaining deficiencies, as well as all analyses, conclusions, and points of view, rests with the author.
1

Executive Summary

Background

Ten federal district courts have mandatory programs of court-annexed,

non-binding arbitration that are funded by Congress. They are

Eastern Pennsylvania Northern California

Middle Florida Western Michigan

Western Missouri New Jersey

Western Oklahoma Eastern New York

Middle North Carolina Western Texas

In 1988, Congress enacted legislation to authorize continuation of

these mandatory pilot programs as well as to authorize additional pilot

programs that would be voluntary. 28 U.S.C. §§ 651–658. The legislation

directs that, not more than five years after enactment, the Federal Judicial

Center shall submit to Congress a report on its implementation. This report is submitted pursuant to that requirement. It evaluates how well the

mandatory programs have achieved their general purposes of reducing

court burden and its associated costs and delays while maintaining or improving the quality of justice. More specifically, the report assesses how

well the programs have met the following goals:

• increasing options for case resolution by providing litigants in cases

that normally settle with an opportunity to accept a known adjudication by a neutral third party given at an earlier time than is possible for a trial;

• providing litigants with a fair process;

• reducing costs to clients;

• reducing the time from filing to disposition;

• lessening the burden on the court by reducing the number of cases

that require judicial attention, or by reducing the amount of attention required.
2 Court-Annexed Arbitration in Ten District Courts

Research design

At the request of the Administrative Office of the U.S. Courts, the Federal

Judicial Center began an evaluation of the federal pilot programs in May

1985. The evaluation design, subsequently embodied as statutory requirements of the report to Congress, called for

• a description of the arbitration programs as conceived and as implemented in the judicial districts in which such programs are authorized;

• a determination of the level of satisfaction with the arbitration programs by a sampling of court personnel, attorneys, and litigants

whose cases have been referred to arbitration;

• a summary of those program features that can be identified as being

related to program acceptance both within and across judicial districts; and

• a description of the levels of satisfaction relative to the cost per

hearing of each program.

The major research objective was to determine whether the litigants—

particularly the parties—view arbitration as a form of second-class justice,

an issue of concern to legislatures and courts contemplating adoption of

such programs. The primary data for the evaluation were therefore the

survey responses of 3,501 attorneys, 723 parties, and 62 judges indicating

their perceptions of the arbitration process.

In addition to focusing on participant satisfaction, the study also examined how well the programs are addressing all of their goals. Therefore,

the data we collected are organized by what they have to tell about each of

the goals. It must be emphasized, however, that much of the information

we present is attitudinal and therefore addresses only what those with experience with the programs believe to have been accomplished. Moreover,

we do not address many other important, and still vague, questions about

arbitration programs, including precisely how much time they may save

litigants and the courts, or whether some other form of alternative or innovative case-management strategy might be an even better way to handle

particular cases.
Executive Summary 3

Program description

Program characteristics

The arbitration programs developed in the ten federal pilot district courts

have a number of features in common.

• Particular types of cases, as specified by local rule, are mandatorily

referred to the program to be heard either by a single arbitrator or

by a panel of three arbitrators (lawyers who have volunteered to

serve and are paid at levels specified by each district).

• Following a hearing at which each side presents its case, arbitrators

issue a decision based on the merits of the case and, where appropriate, determine an award.

• Parties who are dissatisfied with the decision at arbitration then

have a specified period of time to file a demand for trial de novo.

• If a demand is filed, the case goes back onto the regular docket for

pretrial and trial before the judge assigned to the case.

• If a trial de novo is not demanded, the arbitration award becomes a

non-appealable judgment of the court.

There are also important areas of variation that reflect each court’s goals

and resources as well as its local legal community.

Types and dollar amounts of cases defined as eligible for the program

(see Tables 3A and 3B, pp. 32, 33)

Six of the pilot courts limit the types of cases eligible for the program, primarily to those involving contracts and torts. Four districts include all civil

cases except agency appeals and prisoner petitions.

The dollar ceilings range from $50,000 to $150,000; six of the pilots

have a $100,000 ceiling.

All limit eligibility to cases where the claim is either for money damages only or for money damages plus non-monetary claims determined by

the court to be insubstantial.

Some exclude claims for punitive damages when assessing program

eligibility for the program; others do not.
4 Court-Annexed Arbitration in Ten District Courts

Timing of the hearing (see Table 3C, p. 34)

The pilot courts adopted periods ranging from 80 to 180 days between the

time litigants are notified that a case has been referred to arbitration and

the date of the hearing.

Degree of party input to selecting the arbitrator (see Table 3E, p. 36)

In four pilots, the clerk’s office selects the arbitrator(s) and in four the parties may choose or strike names from a limited list of names selected by

the clerk’s office. In two of the pilots, the parties may choose from the full

list of approved arbitrators.

Number of arbitrators (see Table 3F, p. 37)

Some pilots use a panel of three attorneys, some a single arbitrator; some

specify a panel unless the parties request otherwise, and some specify a

single arbitrator unless the parties request a panel.

Arbitrator fees and hearing cost (see Table 3G, p. 38)

Fees for individual arbitrators range from $75 to, at the time the study was

done, a potential $500 per case, with approximate average per hearing

costs from $125 to $300 depending on the number of arbitrators, their fees,

and whether they are paid by day of hearing or per case.

Up-front posting of fees to accompany trial de novo demands (see Table 3I, p. 40)

Seven courts require any party who demands trial de novo to post the arbitrators’ fee at the time of the demand. The fee is returned if the party betters its position at trial. In the other pilots, there is no consequence unless

and until the party demanding trial de novo fails to better its position at

trial.

Composition of arbitration caseloads

The most common types of cases included in arbitration programs are diversity contract and tort cases with prayers for relief under $50,000 that

involve disputes over the facts and/or value of the case (see Tables 5–7, pp.

43–46).

The proportion of the civil caseload diverted to arbitration varies from

5% to 27% (see Table 4, p. 42). Program eligibility requirements have an effect on, but do not by themselves determine, the proportion of the civil

caseload diverted to arbitration (see Table 4) and the composition of the

arbitration caseload (see Table 5).
Executive Summary 5

Disposition of arbitration caseloads (see Table 9, p. 49)

The majority of cases close before reaching an arbitration hearing, and over

two-thirds do not return to the court’s regular trial calendar.

The trial rate of the arbitration caseloads is similar across the districts,

ranging from less than 1% in Eastern New York to 4% in Middle North

Carolina.

De novo demand rates as a proportion of the arbitration caseload range

from a low of 7% in Northern California and Eastern New York to a high

of 32% in Western Michigan, nine percentage points higher than in any

other district.

The low de novo rates result primarily from the low proportion of the

arbitration caseload that reaches hearing rather than from frequent acceptance of an arbitration award. In eight of the ten pilot courts, over half of

the arbitrations result in a demand for trial de novo. The lowest de novo

demand rate (as a proportion of hearings held) was 46% in Eastern New

York. Few of these cases reach trial, however.

Goal achievement

Providing increased options for litigants

There are parties who seek arbitration adjudications in cases that would

otherwise have settled without any response from a neutrally positioned

official. Arbitration programs can provide for these adjudications at an earlier time than is possible for trial adjudication.

Depending on the district, cases that are resolved by arbitration close

from two to eighteen months sooner than cases resolved by trial (see Table

13B, p. 60).

Although the majority of parties in all districts exercise their option to

settle before the hearing, parties also let their cases reach arbitration adjudication far more often than they permit cases to reach trial adjudication

(see Table 13A, p. 60).

The fact that less than half of the arbitration awards were accepted in

eight of the ten pilot courts indicates that the hearing did not give many

litigants all that they wanted. Nevertheless, even most litigants in de novo

demand cases found the experience useful, with majorities indicating that

the award was a useful starting point for settlement negotiations and disagreeing when asked if the hearing was a waste of time (see Table 14, p.

61).
6 Court-Annexed Arbitration in Ten District Courts

Providing procedural fairness

Most parties and attorneys do not think that arbitration is a form of second-class justice.

Eighty-four percent of the attorneys in cases referred to arbitration

said that they approved of both the concept of arbitration (see Table 21, p.

78) and the programs that were implemented in their districts (see Table

22, p. 80).

Eighty percent of the parties in cases referred to arbitration believed

that the procedures used to handle their cases were fair (see Table 15, p.

64).

Eighty-one percent of the parties reported that the hearing was fair

(see Table 16, p. 66). Ninety-two percent of the attorneys in arbitrated

cases reported that the hearing was fair (see Table 17, p. 68).

The characteristics that define a fair hearing for parties are an opportunity to tell their side of the story and bring out all of the important facts

to prepared arbitrators at a reasonable expenditure of time and money (see

Table 16).

The characteristics that define a fair arbitration for attorneys are a

hearing of appropriate formality at which there is enough time to present

their case before impartial and prepared arbitrators, with the whole procedure resulting in time and cost savings for themselves and their clients (see

Table 17).

Half of the parties (see Table 18, p. 70) and a plurality of attorneys (see

Table 19, p. 71) in arbitrated cases selected arbitration as their preferred

method of proceeding when asked whether, considering cost, time, and

fairness, they would prefer that their case be decided by a judge, jury, or

arbitration.

Cost savings

Arbitration programs can reduce the cost of litigation and provide for a

hearing on the merits at a cost that parties see as reasonable.

Majorities of attorneys in all districts reported cost savings. Highest

time and cost savings were reported by lawyers in successfully arbitrated

cases. Involvement in cases with no dispute over applicable law also increased the chances that attorneys would report savings (see Tables 23–25,

pp. 86–88).

Cost and time savings were not reported by the majority of attorneys

in cases where trial de novo was demanded (see Tables 23–25). The major-
Executive Summary 7

ity of the parties in these cases, however, report that the time and money

costs were reasonable (see Tables 26 and 27, pp. 90, 92).

Reducing time to disposition

Arbitration programs can, but do not always, reduce disposition times.

However, the programs do not appear to delay resolution of de novo demand cases, and parties report reasonable case-processing times.

The evidence suggests that arbitration programs in Middle Florida,

Western Michigan, and Western Missouri have reduced disposition time

(see Graphs 3–5, pp. 98–99), but such evidence was not present in the

other new pilot courts (see Graph 1, p. 96, and Graphs 6–9, pp. 100–01).

There is only lukewarm attorney support for the suggestion that arbitration expedites settlement discussions and settlements before the hearing. A majority of attorneys in arbitrated cases that closed before the hearing agreed that referring the case to the program resulted in earlier settlement discussions (see Table 29, p. 104), but a majority also reported that

the case had not settled more quickly than expected at the outset (see

Table 30, p. 105).

Seventy percent of the parties in arbitration cases reported that the

time required to resolve the dispute was reasonable (see Table 32, p. 108).

Parties in cases closed either before or as a result of the arbitration

hearing were the most likely to agree that the time to disposition was reasonable, but even in de novo demand cases a majority responded favorably

(see Table 32).

Seventy percent of the attorneys in de novo demand cases did not

think that the arbitration hearing delayed resolution (see Table 31, p. 107).

Reducing court burden

The large majority of judges in the pilot courts support their own program (see Table 33, p. 112) and agree with its particular features (see Table

34, p. 113); there is no widely held view about what characteristics constitute a good program.

Judges agree that other courts would do well to adopt arbitration programs (see Table 35, p. 114).

The strength of judges’ positive attitudes toward their programs varies

significantly with the strength of their agreement that arbitration reduces

their caseload burden (see Tables 33 and 35). Ninety-seven percent of the

judges agreed that burden was reduced, with 58% agreeing strongly (see

Table 36, p. 115).
8 Court-Annexed Arbitration in Ten District Courts

The factors that were significantly associated with judges’ burden assessments were the proportion of the civil caseload that their district diverts to the arbitration program and the frequency with which arbitration

cases require their attention before the hearing (see Table 36).

Neither the actual nor perceived rate of de novo demands in arbitration cases affected judges’ burden reduction assessments, a finding attributed to the fact that less than a third of the arbitration caseload returns

to the regular trial calendar in every pilot court.

The case least likely to return to the regular trial calendar is a U.S.

plaintiff contract case in a program that provides for a longer answer-tohearing period and a panel of arbitrators paid relatively lower fees (see

Table 38, p. 126).

We do not know whether the pilot arbitration programs reduce the

number of trials.

Lessons for program developers

Although all of the pilot programs can be considered successes, some took

more time than others to generate support and some were more enthusiastically embraced than others. A key to successful program planning is a full

working knowledge of the local legal culture into which the program will

be introduced. What attorneys are used to will influence their perceptions.

Program implementation may be eased by incorporating some features of

successful state programs, while a lack of experience or a history of unsuccessful state programs must be recognized as obstacles to be overcome.

It is also necessary to plan how court-annexed arbitration programs

will relate to other existing alternatives and to the broader case-management practices of the court. The arbitration program in Western Michigan,

which had the least favorable—although still high—approval ratings

among attorneys, seems to have suffered from unfavorable comparison

with a preexisting mediation program that provides for attorneys’ fees

sanctions if a rejected award is not bettered at trial. Here, far from finding

the program a barrier to trial, the comments offered by attorneys showed

dissatisfaction with the lack of meaningful sanctions for rejecting the arbitration award. There were also complaints from attorneys and parties

whose cases went through both arbitration and mediation procedures.

These experiences should not be taken to mean that multiple alternatives cannot work. Northern California and Western Oklahoma, the new

pilot with the highest proportion of “strongly approve” program ratings

from attorneys, have successfully integrated their arbitration programs
Executive Summary 9

with other forms of innovative dispute resolution by clearly designating

the separate purposes of each. The key is selecting the right cases for the

right forum and avoiding too many different attempts to resolve any particular case short of trial.

Effects of and recommendations regarding

program characteristics

This research found no program characteristic that either guaranteed satisfaction, or resulted in overall dissatisfaction, with arbitration, so there is

no empirical basis for requiring any particular way of structuring arbitration programs. There were, however, a number of program design or implementation features that had a relatively small, but significant, influence

on particular program goals (see Tables 37 and 38, pp. 124, 126).

Program eligibility criteria

There was some evidence that tort and civil rights cases might benefit from

arbitration in terms of increasing litigants’ options. Since the current legislation exempts all civil rights cases from mandatory referral to arbitration,

courts are advised to explore the option of arbitration with litigants in civil

rights cases involving only money damages to see if they are interested in

consenting to arbitration.

Arbitration programs that diverted less than 15% of the civil caseload

to the program were less likely to result in a perceived reduction of court

burden. Courts considering adoption of a court-annexed arbitration program should first do a thorough caseload analysis to determine which eligibility requirements will divert enough cases (at least 10%) to make the effort worthwhile, and at the same time limit the size of the program to

available resources.

Timing of the hearing

Shorter answer-to-hearing time periods were significantly associated with

lawyers’ reports of quicker settlements before the hearing, but also with

fewer attorneys’ selecting arbitration as their preferred procedure and

higher probabilities that the case would both reach hearing and result in a

de novo demand.

The choice of an answer-to-hearing time should depend on the primary purpose the program is to serve. If the idea is to speed settlements in

the bulk of the cases that close before the hearing, short periods may assist
10 Court-Annexed Arbitration in Ten District Courts

in this goal. Longer periods are more consistent with the goal of reducing

court burden.

Number of arbitrators

Programs that supply only one arbitrator may appear somewhat less satisfactory to the bar in general (as indicated by lower approval ratings among

all attorneys), but they do not result in less satisfaction among those who

avail themselves of the opportunity for a hearing, i.e., this feature had no

effect on the ratings of those attorneys and parties who actually participated in an arbitration. In fact, Middle North Carolina—a one-arbitrator

pilot—had the highest hearing fairness ratings among attorneys.

In programs that supply only one arbitrator, there is a higher likelihood that a case will be arbitrated and thereafter result in a de novo demand.

Courts designing arbitration programs are advised to balance the negative appearance factor associated with using only one arbitrator with the

administrative and dollar costs associated with panels. They should also

consider the mixed method used in five of the pilot courts, which allows

for hearings by either one or three arbitrators depending on what the parties request. Mixed-model rules that specify one-arbitrator hearings unless

parties request otherwise result in the large majority of hearings being

conducted by one arbitrator. The reverse is true where the mixed-model

rule specifies a panel unless parties request otherwise.

Arbitrator fees

There is no evidence that higher arbitrator fees enhance the quality of arbitration programs. Higher fees should not be expected to translate into either litigant satisfaction or lesser burden on the court. Higher fees

• were negatively associated with attorneys’ approval of both the

concept of arbitration and the particular program;

• led fewer attorneys in arbitrated cases to select arbitration as their

preferred procedure; and

• did not discourage litigants from either proceeding to arbitration or

demanding trials de novo.

Courts designing arbitration programs are advised to engage in realistic

discussions with their local bars to determine what fees are necessary to

attract attorneys to their program, and to explore alternative non-monetary incentives to serving as an arbitrator. As examples, two of the current
Executive Summary 11

pilot programs, Western Oklahoma and Western Texas, exempt arbitrators

from certain Criminal Justice Act appointments.

Participation in arbitrator selection

While litigant input to the arbitrator selection process appears to enhance

the appeal of arbitration hearings, and the parties do not seem to think

that the extra time it requires of them is unreasonable, the process appears

cumbersome to some attorneys, creates an administrative burden on the

clerk’s office, and neither increases nor decreases the probability of de novo

demands. Therefore, while litigant input may be beneficial in terms of increasing options, it is not likely to reduce cost or court burden.

Mandatory vs. voluntary referral

All of the current pilot court-annexed arbitration programs mandate the

referral of selected cases to arbitration, so this research does not directly

address the relative merits and drawbacks of voluntary and mandatory referral. We do, however, have information that is relevant to the debate.

The current disincentives to pursue trial de novo are not seen as

significant barriers to trial.

There is no evidence that litigants in cases mandatorily referred to arbitration see themselves as receiving second-class justice.

Voluntary alternative programs in other jurisdictions have been notably unsuccessful in attracting cases. Programs that do not attract cases

are unlikely to have any overall effect on the cost of litigation or court

burden.

Although there is a clear distinction between voluntary and mandatory programs in the authority of the court to require litigant participation, there are a number of approaches to voluntariness that may affect the

level of participation (e.g., whether participants must “opt-in” or “opt-out”

of the program). We recommend that districts entering the voluntary pilot

programs adopt somewhat different patterns of “voluntariness” so that the

programs can serve as laboratory models to assess program participation

and litigant satisfaction.

Recommendation for legislation

Congress instructed the Federal Judicial Center to include in its report

“Recommendations to the Congress on whether to terminate or continue

Chapter 44, or, alternatively, to enact an arbitration provision in title 28,

United States Code, authorizing arbitration in all Federal district courts.”
12 Court-Annexed Arbitration in Ten District Courts

H.R. 4807 § 901(b). In light of our generally favorable findings in regard to

the mandatory programs, it is recommended that the Judicial Conference

of the United States propose that

• Congress enact an arbitration provision in title 28, United States

Code, authorizing arbitration in all federal district courts, to be

mandatory or voluntary in the discretion of the court; and

• the Federal Judicial Center continue to study and report on arbitration in courts using voluntary programs.

It is also recommended that the Judicial Conference monitor, through

the Center’s reports and otherwise, the continuing operation of arbitration

in federal courts in order to formulate rules and policies to guide and support the program, and to develop more specific recommendations to

Congress as to appropriate arbitration legislation.
13

Chapter 1

Background

Introduction and Recommendation

The federal district courts have been experimenting with mandatory, nonbinding court-annexed arbitration since 1977. In 1988, Congress enacted

legislation to authorize continuation of these pilot mandatory programs as

well as to authorize additional pilot programs that would be voluntary. 28

U.S.C. §§ 651–658. The legislation directs that, not more than five years after enactment, the Federal Judicial Center shall submit to Congress a report on its implementation. H.R. 4807 § 901(b).

In prescribing the features of this report, Congress incorporated the focus and design of the Center research project that was already under way,

and added a requirement that the Center include “Recommendations to

the Congress on whether to terminate or continue Chapter 44, or, alternatively, to enact an arbitration provision in title 28, United States Code, authorizing arbitration in all Federal district courts.” This report and the recommendations it contains are submitted pursuant to that requirement.

While no courts have yet established and conducted arbitration programs under the voluntary feature prescribed by the legislation, it seems

beyond question that the level of satisfaction and acceptance required to

support continuance of a mandatory program would be at least as high as

the level required to support a voluntary program. In light of the generally

favorable findings detailed in this report on the mandatory programs, it is

therefore recommended that the Judicial Conference of the United States

propose that Congress enact an arbitration provision in title 28, United

States Code, authorizing arbitration in all federal district courts, to be

mandatory or voluntary or a combination of both in the discretion of the

court. It is further recommended that the Federal Judicial Center continue

to study and report on arbitration in courts using voluntary programs. And

it is recommended that the Judicial Conference monitor, through these reports and otherwise, the continuing operation of arbitration in federal

courts in order to formulate rules and policies to guide and support the

program, and to develop more specific recommendations to Congress as to

appropriate arbitration legislation.
14 Court-Annexed Arbitration in Ten District Courts

Status of court-annexed arbitration in the federal courts

The 1976 National Conference on the Causes of Popular Dissatisfaction

with the Administration of Justice (the Pound Conference) marked the beginning of the current interest in court-sponsored alternative dispute resolution programs to reduce cost and delay in civil litigation. Advocates believe that these programs can relieve the burden on congested court systems while improving the delivery of justice services to parties.1

A 1986 survey reported 458 alternative programs operating in the

courts of twenty-two states and the District of Columbia.2 Approximately

200 trial courts feature court-annexed arbitration, an alternative begun in

the Pennsylvania state system in 1952.3

The federal courts began experimenting with mandatory courtannexed, non-binding arbitration in three districts in 1978 in response to

encouragement from then Attorney General Griffin Bell. The programs in

the Eastern District of Pennsylvania and the Northern District of California are still in place.4

A 1982 evaluation of the effect of arbitration in the first three pilot

courts reported that court-annexed arbitration could reduce time from filing to disposition, that most attorneys who had experience with the program gave it favorable marks, and that this approach to dispute resolution

warranted further experimentation.5

 

1. Levin, Court-Annexed Arbitration, 16 J.L. Reform 537 (Spring 1983); McEwen &

Maiman, Mediation and Arbitration: Their Promise and Performance as Alternatives to Court, in P.

Dubois (ed.), The Analysis of Judicial Reform 72 (Lexington Books 1982).

2. Keilitz, Gallas & Hanson, State Adoption of Alternative Dispute Resolution: Where Is It

Today?, State Ct. J. 6–8 (Spring 1988). The article also points out some interesting patterns in

how alternative dispute resolution programs spread, noting that the steady increase in numbers from the mid-1970s through 1983 has since slowed, and that alternative programs are

operating in a very small minority of courts.

3. Hensler, What We Know and Don’t Know About Court-Administered Arbitration, 69

Judicature 271 (February–March 1986).

4. Eastern Pennsylvania began its program Feb. 1, 1978. The Northern California pro -

gram began May 1, 1978. The third original federal pilot court was the District of

Connecticut, which disbanded its program in 1982. It appears that that court preferred a preexisting mediation program which involved essentially the same types of cases. The District

of Connecticut remains very active in alternative dispute resolution, using special masters to

facilitate settlement, binding and non-binding mediation and mini-trials, judicially supervised

settlement conferences, and summary jury trials.

5. See E. Lind & J. Shapard, Evaluation of Court-Annexed Arbitration in Three Federal

District Courts (Federal Judicial Center rev. ed. 1983).
Background 15

Given both continued interest and many unanswered questions, in

1985 the Administrative Office of the U.S. Courts obtained funding from

Congress for pilot implementation of court-annexed arbitration programs

in additional courts. From eighteen applicants, eight new pilot districts

were selected: Middle Florida, Western Michigan, Western Missouri, New

Jersey, Western Oklahoma, Eastern New York, Middle North Carolina, and

Western Texas. 6

As the new pilots were getting under way, Congress had before it a

number of bills to authorize court-annexed arbitration in some or all of the

federal district courts. It was not until November 1988, however, that authorizing legislation was enacted, as title IX of the Judicial Improvements

and Access to Justice Act of 1988. 7 The bill, effective May 19, 1989,

authorized programs of mandatory, non-binding arbitration in the ten

courts already serving as pilots, and provided that ten additional courts

could adopt programs of non-binding arbitration with the consent of the

parties. The ten voluntary pilots have been selected, but funding is not yet

available. 8 No new program is expected to commence operations until

1991.

This report evaluates the ten mandatory court-annexed arbitration

programs. It is based on the programs as they were originally implemented

rather than as they have been modified to conform to program requirements set forth in the 1988 Act.9

 As none of the voluntary pilots has begun

operation, an examination of the effects of voluntary participation must be

deferred.

 

6. The dates these districts began their programs are in Table 1 (see p. 22). Two other

districts, the Northern District of Illinois and the Southern District of Texas, initially applied

for funding but later withdrew their requests.

7. H.R. 4807, adding Chapter 44 to 28 U.S.C.

8. The courts are Western New York, Utah, Middle Georgia, Southern Indiana

(bankruptcy court), Western Washington, Eastern Texas, Western Kentucky, Northern New

York, and Western Pennsylvania. Of these, only Western Pennsylvania had previously applied

for pilot status.

9. Appendix A summarizes the local rules for each district and shows later changes to

each program’s local rule.
16 Court-Annexed Arbitration in Ten District Courts

Goals of court-annexed arbitration programs

The general goals of all alternative dispute resolution programs are to reduce court burden and its associated costs and delays while maintaining or

improving the quality of justice by assuring that cases receive the attention that litigants expect and deserve from the court system.

Various types of programs lumped under the rubric of alternative dispute resolution have different ways of seeking to accomplish these goals. It

is important to compare court-annexed arbitration with other types of

programs to define the specific objectives against which the arbitration pilots should be evaluated.

There are two methods of resolving disputes: adjudication and negotiation.10 The outcome of an adjudication is a decision based on the application of a rule of law. The outcome of negotiation is whatever the litigants are willing to accept.11 “Alternative dispute resolution” does not refer

to a new method of resolving disputes, but rather to the involvement of

different people in the resolution process or the employment of different

procedures or techniques to arrive at either an adjudicated or negotiated

outcome.

Once a case is filed in court, the traditional adjudicative technique is

trial by judge or jury. 12 The traditional negotiation technique is bilateral

settlement discussion. Court-annexed arbitration and summary jury trials

are the most common forms of alternative adjudicative techniques; courtsponsored settlement conferences and court-annexed mediation are

examples of alternative negotiation techniques.13

In the absence of an alternative procedure, most civil cases are resolved

by attorney-controlled settlement. Negotiation alternatives offer neutral

assistance in facilitating earlier or better settlements, either through input

as to the settlement value of a case or by direct assistance in the communi-

 

10. We are referring to disputes that the litigants pursue. Many cases are simply dis -

missed when plaintiffs fail to prosecute their claims, or end in judgment for the plaintiff

when the defendant does not resist.

11. Throughout this paper, the term “party” is used to refer to a disputant excluding

counsel, while “litigants” includes both parties and counsel.

12. There are many other forums for resolving disputes before filing suit, some of which

have great impact on the court system because they provide remedies that must be exhausted

prior to filing a case in court (e.g., arbitration under 9 U.S.C.; agency adjudications; grievance

procedures). Although the use and expansion of these other forums are important topics, they

are not a focus of this paper.

13. For a description of each of these programs as used in the federal courts, see D.

Provine, Settlement Strategies for Federal District Judges (Federal Judicial Center 1986).
Background 17

cation process among litigants. Adjudicative alternatives offer the opportunity for an advisory judgment on the merits in lieu of settlement, without the delay and cost associated with going to trial.14

These differences in approach imply somewhat different goals. Alternative negotiation strategies, particularly those that rely on shuttle diplomacy between parties, often have an explicit goal of providing better

settlements that will increase both parties’ satisfaction with the outcome

of the case and preserve ongoing relationships.15 A collateral consequence

should be reduced demands for future judicial resources because of fewer

post-settlement disputes among litigants. But under adjudicative alternatives such as arbitration, there is always a loser. There, litigant satisfaction

with the process is more important than maximizing both parties’ satisfaction with the outcome.

Despite clear differences in what adjudicative and negotiation approaches offer, they share a number of objectives. A court should experience reduced caseload burden from any program that diverts cases from

the normal processing track. Both types of alternative aim to reduce costs

and delay, and strategies for accomplishing these goals can be adopted by

either type of program. For example, having a date by which attorneys

must be familiar with their cases is popularly assumed to be a catalyst for

meaningful settlement discussions. An alternative hearing date—be it for

arbitration or mediation—set relatively early in the processing of a case

should stimulate earlier settlements before the hearing. Furthermore, either

type of hearing can be conducted under less formal procedures than are required by the Federal Rules of Evidence, thereby saving some of the time

and cost that would be involved in trial.

Regardless of specific procedures, litigants who go through any alternative process, even if they reject the result, have gained information—be

it a determination on the merits, an appraisal of settlement value, or a

creative settlement package—that was not available under traditional

procedures. This new information should enable litigants to better predict

the outcome of their cases and ensure that both sides are operating on the

same information. This, in turn, may narrow the issues in controversy and

spur further negotiation, thereby leading to more settlements or to shorter,

more focused trials.

 

14. For a discussion of the respective roles of mediators and arbitrators, see Cooley,

Arbitration vs. Mediation—Explaining the Differences, 69 Judicature 263–69 (1986).

15. See, e.g., J. H. Wilkinson (ed.), Donovan Leisure Newton & Irvine ADR Practice Book

18, 19–20 (1990).
18 Court-Annexed Arbitration in Ten District Courts

The court-annexed arbitration programs in the federal courts are adjudicatory in outcome, are designed to intervene within the first six months

of a dispute, and feature hearings with relaxed rules of evidence at the end

of which an explicit award is announced.16 Their specific goals are these:

1. To increase options for case resolution by providing litigants in

cases that normally settle with an opportunity to accept a known

adjudication by a neutral third party given at an earlier time than is

possible for a trial.

2. To provide litigants with a fair process.

3. To reduce costs to clients.

4. To reduce the time from filing to disposition.

5. To lessen the burden on the court by reducing the number of cases

that require judicial attention, or by reducing the amount of attention required.

Although all of the pilot courts embrace these goals to some extent, they

differ in which goals receive primary emphasis. For some courts, particularly those with overcrowded criminal dockets, the emphasis is on reducing

court burden, with the benefits to case participants seen as a hoped-for and

desirable side-effect. In others, the emphasis is reversed. These general differences in emphasis are mirrored in the specific procedures adopted by

each district, described in Chapter 3.

 

16. Given these features, Judge Raymond J. Broderick, the spokesman for the program in

the Eastern District of Pennsylvania, has suggested that the title “Speedy Civil Trials” better

describes what the programs have to offer. Broderick, Court-Annexed Compulsory Arbitration: It

Works, 62 Judicature 218 (1989). Eastern Pennsylvania, in the 1989 amendments to its local

rule, changed the name of its program to “Speedy Civil Trials.”
19

Chapter 2

Evaluation Study Design

At the request of the Administrative Office, the Federal Judicial Center began an evaluation of the federal pilot programs in May 1985. The evaluation design called for

1. a description of the arbitration programs as conceived and as implemented in the judicial districts in which such programs are authorized;

2. a determination of the level of satisfaction with the arbitration programs by a sampling of court personnel, attorneys, and litigants

whose cases have been referred to arbitration;

3. a summary of those program features that can be identified as being

related to program acceptance both within and across judicial districts; and

4. a description of the levels of satisfaction relative to the cost per

hearing of each program.17

Objectives

The focus of the original design, and of the congressional directive extending it, is assessment of participant satisfaction with the pilot programs,

and the effect of various program characteristics on participant satisfaction. The major objective was to determine whether the litigants—particularly the parties—view arbitration as a form of second-class justice; this

was a major concern of both legislatures and courts considering adoption

of this alternative.

Previous research findings indicated that arbitration programs can have

positive consequences. The Federal Judicial Center evaluation of the

original pilot courts found that two of the three programs reduced the

time from filing to disposition.18 It also found that attorneys were satisfied

 

17. Recently passed legislation requires the Federal Judicial Center to conduct an evalu -

ation covering these four points and to present recommendations to Congress on whether to

terminate or continue pilot programs or, alternatively, to enact statutes authorizing all district courts to establish court-annexed arbitration. 28 U.S.C. § 903. See supra p.13.

18. E. Lind & J. Shapard, supra note 5, at 45–52.
20 Court-Annexed Arbitration in Ten District Courts

with the procedures. The evaluations of many state programs had yielded

similar positive results.19 Given this potential for benefits, there was a need

to shift toward probing for potential adverse effects of court-annexed

arbitration.

Despite the focus on participant satisfaction, there is continued

interest in how well the programs are addressing all of their goals.

Therefore, the data we collected are organized in the chapters that follow

by what they have to tell about each of the goals ennumerated on p. 18. It

must be recognized, however, that, given the original focus of the research,

much of the information we present is attitudinal and therefore addresses

only what those with experience with the programs believe to have been

accomplished. Moreover, we do not address many other important, and

still vague, questions about arbitration programs, including precisely how

much time they may save litigants and the courts, or whether some other

form of alternative or innovative case-management strategy might be an

even better way to handle particular cases.

Procedure

Selection of districts

At the outset, we selected the pilot courts with an eye to the evaluation

objectives. Each of the eighteen districts that expressed interest was asked

to submit a proposed local rule, an estimate of the number of cases that

would be included in the program, and the projected annual cost of the

program. The selection was made by the Administrative Office, in consultation with the Center.

One important criterion for district selection was the originality of the

proposed program. Since the evaluation was aimed at assessing the impact

of various design features, programs that proposed new features were preferred over those that would have duplicated the Eastern Pennsylvania or

 

19. See, e.g., J. Adler, D. Hensler & C. Nelson, Simple Justice: How Litigants Fare in the

Pittsburgh Court Arbitration Program (Rand Corporation 1983); D. Hensler, A. Lipson &

E. Rolph, Judicial Arbitration in California (Rand Corporation 1981). Since this project got

under way, additional evaluations of court-annexed arbitration programs have been reported:

C. Simoni, M. Wise & M. Finigan, Litigant and Attorney Attitudes Toward Court-Annexed

Arbitration: An Empirical Study, 28 Santa Clara L. Rev. 543–79 (1988); R. MacCoun, A. Lind, D.

Hensler, D. Bryant & P. Ebener, Alternative Adjudication: An Evaluation of the New Jersey

Automobile Arbitration Program (Rand Corporation 1988); J. Barkai, W. Richardson & G.

Kassebaum, Hawaii Court-Annexed Arbitration Evaluation Is First to Show Cost Reduction to

Litigants, 3 Practice and Perspective (Bureau of National Affairs, Inc., April 13, 1989).
Evaluation Study Design 21

Northern California experience. Anticipated size was also considered, with

programs that expected fewer than fifty cases per year rejected as being too

small to be instructive. Two other considerations were evidence of bar

acceptance and the enthusiasm demonstrated by judges and clerks—

conditions deemed important in establishing programs that would be well

managed and well received. Last was operational cost; the total funding

had to fall within the $400,000 allocated by Congress for the new pilot

courts.

The original selection was made in November 1984. Two of the selected courts, Northern Illinois and Southern Texas, later withdrew from

consideration. They were replaced with Western Oklahoma and Eastern

New York. Selection was completed in June 1985.

Data collection

Views of court personnel. To describe the operation and goals of the

pilot arbitration programs, we first interviewed court personnel, either before or soon after their programs went into effect.20 The interviews focused

on the particulars of the local rule governing the program, as well as the

court’s expectations. We remained in close contact with the clerk’s offices

of the pilot districts, and requested that they keep us informed of any

changes in rules or procedures.

After each program had been in effect for at least eighteen months, we

surveyed all of the judges. The survey questions sought to determine

judges’ general satisfaction with their arbitration programs and how well

they believed the programs were meeting various goals.

Tracking of cases. To describe and analyze the program experience,

we followed to termination a sample of arbitration cases in each pilot district. Although the original plan was to follow a twelve-month sample of

filings in each pilot court, the time period was extended in four of the ten

districts to increase the sample size, or to accomodate either a slow program start or a mid-sample rule change. Table 1 on the following page

shows the starting and ending dates for including newly filed cases in each

district’s sample of cases. A district’s sample was considered ready for

analysis when 95% of its cases were terminated.21

 

20. Copies of the interview protocol, and all other data collection instruments, are on

file at the Federal Judicial Center.

21. To assist the districts in reviewing their own programs, separate interim reports

were prepared for each district when 95% of their sample cases had closed. Copies of the individual district reports are available on loan from the Federal Judicial Center. These evaluations
22 Court-Annexed Arbitration in Ten District Courts

TABLE 1

Dates of Program Implementation and Case Filings

Included in the Evaluation Sample

Date

Program Period of

District Started Case Sample Notes

 

E.D. Pa. 2/1/78 1/1/85–12/31/85

N.D. Cal. 5/1/78 10/1/84–12/31/85 Sample extended to fifteen months by

district request.

M.D. Fla. 10/1/84 10/1/84–9/30/85

M.D.N.C. 1/1/85 1/1/85–5/31/86 Included random assignment of cases,

fully implemented June 1, 1985. Sample

extended to eighteen months to include

more cases. Re search conducted in

conjunction with Duke’s Private

Adjudication Center and the Rand

Institute for Civil Justice.

D.N.J. 3/11/85 3/11/85–3/31/86 Included selected cases pending on the

rule’s effective date.

W.D. Okla. 5/1/85 5/1/85–4/30/86

W.D. Tex. 5/6/85 5/6/85–10/31/86 Implemented in one division only. Sample

extended because of small number of

cases.

W.D. Mich. 7/1/85 7/1/85–12/31/86 Included some cases pending on the rule’s

effective date. Sample ex tended because

of slow program start.

W.D. Mo. 11/30/85 12/1/85–11/30/86

E.D.N.Y. 1/1/86 1/1/86–12/31/86

 

The data collected for each case included dates of filing, notification of

arbitration, hearing scheduled, hearing held, award entered, trial de novo

demanded, and disposition, the number of arbitrators, and the outcome of

the arbitration hearing. These data were supplied to us monthly by the

clerk’s office in each pilot court. Although communication varied depending on each district’s system of case tracking, we were notified, at mini-

 

describe each program in detail and report the results of the survey of the bench and case participants. The numbers reported for each district in this paper may differ slightly from those

in the interim reports if either (1) surveys were received after the data for the district report

were analyzed or (2) final check of consistency disclosed duplicate cases or surveys. In no instance do these differences change the nature or the significance of the results as reported in

the individual district evaluations.
Evaluation Study Design 23

mum, of any case that was opened, closed, or arbitrated (i.e., had a hearing

held) in a given month.22

Attitudes of case participants. To learn how attorneys and parties

reacted to the arbitration program, we surveyed counsel of record and parties in sample cases that closed after counsel had been notified that the

case was to be referred to the program.23

The survey sample included cases closed before the hearing, during or

after the hearing without a demand for trial de novo, and after a de novo

demand. The more of these procedural steps a case had taken before termination, the more information we needed. Accordingly, we used separate

questionnaires for attorneys and for parties for each group of closings.

Appropriate surveys were sent after we were notified that the case had

closed, regardless of the method of disposition or the point in the proceedings at which the case terminated. Excluded from surveys were cases either

exempted from the program or, though terminated from the court’s point

of view, not actually resolved (e.g., transfers, remands). If no response was

received within approximately three weeks from this first mailing, a followup survey was sent. If there was still no reply in the next three weeks,

a telephone interview was conducted.24

Comparison data. A number of relevant questions about arbitration

programs, such as how much time they save parties and the courts, or

whether they reduce the trial rate, can be answered with authority only by

a research strategy that employs the random assignment of a large number

of cases to comparison groups.

An independently funded evaluation of the pilot program in Middle

North Carolina, conducted by the Rand Corporation, called for a random

assignment design in that district. 25 The Center explored the possibility of

 

22. Some districts had automated arbitration case-tracking systems, which they shared,

while others sent copies of relevant material. Because the districts varied in the precise data

they collected for each case, the information available to us also varied somewhat from court

to court. For a detailed description of the information collected, and the method of transmittal, see the individual district reports (supra note 21).

23. In accordance with the research agreement made with all of the pilot arbitration

courts, no contact was made with attorneys or litigants until after our records indicated that

the case had been terminated. This was to ensure that our research did not interfere in any

way with the processing of the case. We were not given permission to survey the parties to

arbitration cases in Eastern Pennsylvania.

24. In New Jersey, we were asked not to telephone parties who did not respond to the

two mailed surveys.

25. The private portion of the research in Middle North Carolina was funded by the

National Science Foundation, the Institute for Civil Justice, and the National Institute for
24 Court-Annexed Arbitration in Ten District Courts

random case assignment in two other pilot courts, New Jersey and Eastern

New York. After assessing the costs and benefits of such a design, and

discussing the results with the court and the Administrative Office, we

concluded that it would not be feasible. 26 In New Jersey, the arbitration

procedures involved a combination of judicial and clerk’s office discretion

in the referral of cases to the program that was not conducive to implementing random assignment. In Eastern New York, the size of the control

group needed to determine the effect of the program on the reduction of

trials—an important, yet still unknown, potential effect of arbitration programs—was prohibitive given the relatively small size of the program.

Therefore, only one of the pilot courts, Middle North Carolina, went forward with the random assignment of cases.

Random assignment of cases in Middle North Carolina. Middle North

Carolina used a random assignment procedure under which one in every

four cases deemed eligible for arbitration was assigned to a control group

and handled under normal procedures. The research in Middle North

Carolina consisted of two parallel studies, one by the Federal Judicial Center and one by the Rand Institute for Civil Justice (Rand) and the Duke

Private Adjudication Center. The Rand study gathered information on participant attitudes that was shared with the Federal Judicial Center. 27 The

results of Rand’s analyses, which are based on more cases followed for a

longer period of time than our own, are presented throughout this report

where appropriate.28

 

Dispute Resolution. For a description of the research design and the allocation of responsibilities among the participants, see B. Meierhoefer, Court-Annexed Arbitration in the Middle

District of North Carolina 2 (Federal Judicial Center 1989) (available on loan from the Federal

Judicial Center); E. Lind, Arbitrating High-Stakes Cases: An Evaluation of Court-Annexed

Arbitration in a United States District Court 15–22 (Rand Corporation forthcoming report

May 1990).

26. The assessment was performed in accordance with the procedures set forth in

Experimentation in the Law: Report of the Federal Judicial Center Advisory Committee on

Experimentation in the Law (Federal Judicial Center 1981).

27. Rand either surveyed or interviewed attorneys, and interviewed all parties. Their

protocols were somewhat different from the surveys sent by the Center to participants in arbitration cases in the other pilot courts. When survey results from all of the pilots are presented throughout this report, the responses from Middle North Carolina participants are included where they were asked comparable questions with the same range of possible responses; otherwise they are eliminated. Middle North Carolina is included in all analyses

based on case-tracking data.

28. The forthcoming Rand Corporation report, supra note 25, is cited with permission

from the author and the Rand Corporation’s Institute for Civil Justice.
Evaluation Study Design 25

District civil case data. The only comparison source for the other new

pilot courts was a sample of civil cases drawn from each district before and

after the arbitration program began.29

The pre-program sample contains cases filed six months before the

program began in any particular district. The post-program sample is made

up of cases filed from six months to a year after program implementation.

The filing dates of the cases included in the pre-program and post-program

samples are shown in Table 2.

The last date for which we had closing information available was June

30, 1988, a date eighteen months from the latest filing date included in the

post-program sample for any pilot court (December 31, 1986, in Eastern

New York). To preserve comparability between the exposure times for the

pre-program and post-program samples, all cases that were disposed of

after eighteen months were treated as though they were pending as of

eighteen months.

The civil cases used for these analyses were diversity tort and contract

cases with dollar demands under $150,000. This group was selected so that

the post-program sample would be likely to contain a substantial proportion of cases that would be eligible for arbitration.

TABLE 2

Filing Dates Defining the Pre-Program and Post-Program Sample

Filing Dates for Date Filing Dates for

Pre-Program Program Post-Program

Court Case Sample Began Case Sample 

M.D. Fla. 4/1/84–9/30/84 10/1/84 4/1/85–9/30/85

D.N.J. 9/1/84–2/28/85 3/11/85 9/1/85–2/28/86

W.D. Okla. 11/1/84–4/30/85 5/1/85 11/1/85–4/30/86

W.D. Tex. 11/1/84–4/30/85 5/3/85 11/1/85–4/30/86

W.D. Mich. 1/1/85–6/30/85 7/1/85 1/1/86–6/30/86

W.D. Mo. 6/1/85–11/30/85 11/30/85 6/1/86–11/30/86

E.D.N.Y. 7/1/85–12/31/85 1/1/86 7/1/86–12/31/86 

 

29. Since the programs in Eastern Pennsylvania and Northern California are over ten

years old, and were already compared with groups of other civil cases in the earlier Center report (E. Lind & J. Shapard, supra note 5), the analysis was not repeated in this evaluation. The

samples for the other pilots were drawn from the Center’s Integrated Database, a standardformat version of the data reported by the courts to the Administrative Office of the U.S.

Courts. This database is available from the Interuniversity Consortium.
26 Court-Annexed Arbitration in Ten District Courts

Analysis and presentation of data

For purposes of analysis and presentation, the data were organized into

subject-matter categories as follows:30

1. Program characteristics: Features that differentiate among the ten pilot arbitration programs. They include features of the local rules,

such as the number of arbitrators used, litigant input to the arbitrator selection process, the timing and cost of the hearing, and disincentives to demanding trial de novo, as well as the types of cases

that were included in the program.

2. Litigant perceptions of outcome: Survey responses to questions about

participants’ satisfaction with the outcome, and whether it was the

outcome they expected and if it was favorable (available for all

parties and for attorneys in arbitrated cases).31

3. Litigant perceptions of process: Attorney survey responses as to

whether the process saved time and money, and party survey responses as to the fairness of the process, whether it was understandable and afforded them adequate control over the case, and

whether its associated time and cost burdens were reasonable.

4. Litigant perceptions of the arbitration hearing: Survey responses to

questions concerning the fairness of the hearing, arbitrator impartiality and preparedness, the adequacy of time provided to prepare

and present one’s case, and the formality of the hearing.

5. Litigant characteristics: Variables relating to the background and status of the litigants who responded to the survey questionnaires,

e.g., plaintiff or defendant, type of party (private, business, other),

type of representation, and prior experience (with trials for parties;

with arbitration for attorneys).

6. Attorney perceptions of the case: Attorney survey responses as to the

perceived likelihood that the case would go to trial, and of the general issues that presented barriers to settlement of the case.

 

30. A technical appendix that lists all of the specific variables within each category and

which were used for each analysis is on file at the Federal Judicial Center.

31. Attorneys in cases that closed before the hearing were not asked questions about

case outcome. The original thinking was that an attorney would not have settled if such an

outcome was not considered satisfactory. In retrospect, it would still have been interesting to

get this information.
Evaluation Study Design 27

7. Party participation in the case: The case-related events in which parties indicated they took part, e.g., depositions, court or arbitration

hearings, settlement discussions, trial.

8. District characteristics: Features that differentiate among the districts’ general pattern of case disposition, e.g., the median times

from filing to disposition of all civil cases.

Conclusions of this report are of two types; many are straightforward reports of how cases progressed and of litigant perceptions of the process and

the hearing, the variables used to measure various program goals. Others

rely on regression analysis of the survey responses and case events to determine what factors significantly affected the overall response on perceptions of fairness, speed, and reduction of cost and burden.32

The text reports only cross-tabulations of the program goal measures

by those variables with which they were significantly related. For ease of

presentation, the text groups independent variables into only two categories (e.g., agree or disagree) even if, as was common, the variables were

entered into the regression as four-point scale ratings (e.g., strongly agree,

agree, disagree, and strongly disagree).

The next two chapters provide more detailed information on program

characteristics and describe the caseload experiences and case participants

in the pilot programs.

 

32. A full discussion of the variables entered into regression equations and how

significance was determined, along with the results of all analyses, is presented in the

Technical Appendix, which is on file at the Federal Judicial Center.

29

Chapter 3

Program Characteristics

The arbitration programs developed in the ten federal pilot district courts

have a number of features in common.33 Court-annexed arbitration, unlike

conventional arbitration, is neither voluntary nor binding. Particular types

of cases (most commonly those involving contracts and torts) are

mandatorily referred to the program; in each district, a local rule specifies

the types of cases and the amount in controversy that determine program

eligibility. These local rules provide that arbitration cases be heard either

by a single arbitrator or by a panel of three arbitrators (lawyers who have

volunteered to serve and are paid at levels specified by each district). Following a hearing at which each side presents its case, arbitrators are to issue a decision based on the merits of the case and, where appropriate, determine an award. Parties who are dissatisfied with the decision at arbitration then have a specified period of time to file a demand for trial de novo.

If a demand is filed, the case goes back onto the regular docket for pretrial

and trial by the judge assigned to the case. If a trial de novo is not demanded, the arbitration award becomes a non-appealable judgment of the

court.

While the pilot courts have these features in common, there are some

significant differences in program design that reflect each court’s goals and

resources as well as its local legal community. Appendix A presents a

summary of each district’s program characteristics as specified in their local

rule.34

Table 3, which begins on p. 32, categorizes the pilot courts in terms of

specific program features that reflect interesting differences in approach

across the districts.35 No two districts are alike along all dimensions.

Although the new pilot courts relied heavily on the models set by Eastern

 

33. This chapter describes the programs as they operated when the cases examined for

this research went through the programs. See Appendix A for a description of how some programs have since changed.

34. Occasionally, actual practices as they developed differ somewhat from those de -

scribed in the local rule. The program descriptions at Appendix A of each of the individual

district reports, which are available on loan from the Federal Judicial Center, should be consulted for precise procedures.

35. The table also serves as the reference for how districts were grouped on the program

characteristic variables in subsequent analyses.
30 Court-Annexed Arbitration in Ten District Courts

Pennsylvania and Northern California—which are rarely categorized

together—they have opted to combine features of those two districts’

programs with ideas of their own rather than simply import one of the

existing local rules. This is not surprising as the new pilots were selected in

part because of the distinctiveness of their designs. It is nevertheless

important because it illustrates that even courts with basically similar

approaches to arbitration do not necessarily agree on specific methods.

Program development

Most of the new pilot courts became interested in court-annexed arbitration at the urging of a judge who had heard reports of the success of such

programs in Eastern Pennsylvania, Northern California, and various state

systems. Personal experience with other successful alternatives also encouraged interest. Two of the new pilots courts, New Jersey and Western

Michigan, are located in states with established alternative programs.36

Western Michigan has a successful mediation program and was among the

first courts to use summary jury trials. Western Oklahoma uses both magistrate-hosted settlement conferences and summary jury trials. These

courts adopted their arbitration programs explicitly to increase their caseprocessing options.

The Missouri state system had experimented with a program to handle medical malpractice cases, but it was described by members of the

court as notably unsuccessful. The programs in the rest of the new pilot

courts were adopted without any expectation that their bar associations

would be familiar with either court-annexed arbitration or alternatives in

general.

The concept for the program in Middle North Carolina was originally

presented to the court by a former clerk of court who was working with

members of the Duke Law School faculty to develop alternatives to traditional court processing. This early working relationship between the law

school and the court led to a unique arrangement under which the program was co-administered by the court and the law school’s Private Adjudication Center for the first three years. The Adjudication Center had responsibility for assembling the arbitrator pool and administering the arbi-

 

36. New Jersey has a state program to arbitrate automobile negligence actions and a

mediation program in Essex County. Michigan is known for its large mediation program in

Wayne County, in which the federal court in the Eastern District of Michigan participates.
Program Characteristics 31

trator selection process, and provided research services to the court and educational services to the bar.

Coordination with the bar

All of the new pilot courts took steps to reach out to the bar. This was particularly true where the concept of arbitration was a new idea. Two districts, Western Missouri and Western Texas, opted to implement the program in only one division, believing that a gradual, deliberate approach was

the best way to alleviate concerns expressed by the bar. New Jersey and

Eastern New York opted to narrow their programs by selecting relatively

low dollar amounts for eligibility, recognizing that the program could be

expanded if it should prove satisfactory to both bench and bar. Other districts, such as Middle Florida, Middle North Carolina, and Western Oklahoma, made special efforts to educate the bar about the upcoming program, developing written materials and speaking frequently at various bar

functions. In some cases, bar association committees were asked to work

with the court in the drafting of the local rule, and in no new pilot did

program implementation proceed without giving the bar an opportunity to

comment on the rule.

Assembling an arbitrator pool

The first step in assembling an arbitrator pool is to set minimum qualifications. These include admission to the bar of the district court (or, in

Western Texas and Middle North Carolina, membership on the faculty of

a law school within the state), a certain number of years of experience as a

practicing attorney (from five to ten years among the pilot courts), and, in

most courts, a certification that the attorney is competent to serve. In

Eastern Pennsylvania, Middle Florida, New Jersey, and Middle North

Carolina, the chief judge certifies; in Eastern New York, the function is

performed by the “certifying judge”; and in Western Texas, Western Missouri, and Western Michigan arbitrators must be certified by either “the

court” or “the judges.” New Jersey has the additional requirement that, before submission to the chief judge for final approval, applicants must first

be recommended by the court’s Lawyer’s Advisory Committee. Northern

California and Western Oklahoma require no certification.

There is a tendency for courts that provide for litigant input to the arbitrator selection process to be less stringent in their qualification requirements, believing that counsel are adequate assessors of their colleagues. It
32 Court-Annexed Arbitration in Ten District Courts

also appears that the districts that allow for just one arbitrator per hearing

had a more exacting quality review process than the others.

The initial arbitrator pools were assembled by compiling lists of attorneys who met the general eligibility requirements, in some cases culling

this initial list, and requesting the selected attorney to submit an application. In all cases, the pilot courts reported that the response of the bar was

exceptional. The actual size of the arbitrator pool depended on the number

of hearings anticipated, the number of arbitrators per hearing, and the

stringency of the qualifying process.

Selecting program features

Eligibility criteria

Decisions about program eligibility were based on the courts’ views of

what the bar would be willing to accept, the projected size and cost of the

program, and assessments as to which types of cases were most likely to

benefit from the program.

Six of the pilot courts limit the types of cases eligible for the program

(primarily to those involving contracts and torts) (see Table 3.A). Four

districts include all civil cases except agency appeals and prisoner petitions.

All limit eligibility to cases where the claim is either for money damages

only or for money damages plus non-monetary claims determined by the

court to be insubstantial. The dollar limit for case eligibility in the pilot

courts ranges from $50,000 to $150,000 (see Table 3.B). Middle North

Carolina, New Jersey, Western Michigan, and Western Missouri by rule

exclude claims for punitive damages when assessing case eligibility for the

program; the other pilot courts do not.

TABLE 3: Special Program Features

A. Case Type Limitations for Program Eligibility

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

All Civil Cases,

Limited Exceptions

• •• •

Specific Types of

Civil Cases Listed

in Rule

•• •• ••
Program Characteristics 33

TABLE 3: Special Program Features

B. Dollar Ceiling for Program Eligibility

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

$150,000 •

$100,000 •••• • •

$75,000 •

$50,000 • •

Note: Northern California, Western Texas, Eastern Pennsylvania, New Jersey, Middle Florida, and Eastern

New York raised their dollar ceiling since the time period covered by this study. The current ceilings are

Northern California, Middle Florida, and Western Texas: $150,000; Eastern Pennsylvania and New Jersey:

$100,000; Eastern New York: $75,000. New Jersey has raised its limit twice, first to $75,000 and later to the

current $100,000. Except for the first New Jersey raise, these changes resulted from the anticipated

consequences of changing the ceiling for diversity jurisdiction from $10,000 to $50,000.

All of the pilot courts allow for referral of cases that do not meet the

eligibility criteria upon agreement of the parties. They also provide that

litigants may, on motion, request exemption of their cases from the program at any time.

Selection and referral of cases

In all of the pilot programs, the clerk’s office reviews civil cases when they

are filed and determines whether the case meets the arbitration program’s

case-type and dollar-eligibility requirements. All but two of the pilot courts

have local rules stating that the dollar value of a case of an eligible type is

presumed to be within the arbitration ceiling unless attorneys certify

otherwise. In the others, dollar eligibility is determined from the prayer for

relief.

In courts that allow the referral of otherwise eligible cases that also include claims for non-monetary relief, the case is referred to a judge or magistrate to determine whether such relief is insubstantial and the case eligible. A judicial officer is also involved in cases that become eligible by

agreement of the parties or through a determination that, upon review, the

case does fall within the program’s parameters.

Once a case is identified as eligible, its actual referral to the program

may require more or less judicial input. At one end of the spectrum are

New Jersey, Western Texas, and Western Oklahoma, where the case is not

referred until after the litigants have met with a judicial officer and the

program is discussed. At the other end are Eastern Pennsylvania, Middle
34 Court-Annexed Arbitration in Ten District Courts

North Carolina, Western Michigan, and Western Missouri, where the

clerk’s office automatically notifies the litigants of the pending referral, and

the date of the hearing, when the case is at issue. Most judges in these

districts limit their case selection input to reviewing and signing an official

referral order about one month prior to the scheduled hearing date. In the

other pilot courts, the involvement of judicial officers varies from chambers to chambers.

Timing of the hearing

The pilot courts adopted periods ranging from 80 to 180 days between the

date the last answer is received and the date of the hearing (see Table 3.C).

The selection of a particular time period depended both on the normal case

processing time for civil cases in the district and on whether the program

was explicitly designed to shorten the discovery process or reduce

disposition time.

TABLE 3: Special Program Features

C. Days Between Last Answer and Date for Hearing

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

80 days • •

120 days •

150 days • • • •

165 days • •

180 days •

Scheduling and pre-hearing motions

Judges in the pilot courts may involve themselves in arbitration cases in

any way they choose. However, the local rules of a number of districts

(generally those with a primary goal of reducing court burden) provide opportunities for judges and magistrates to defer some of their normal pretrial involvement in the areas of scheduling and motions (see Table 3.D).

In four districts, the clerk’s office sets the cut-off date for discovery

when issue is joined in arbitration cases, thereby eliminating the necessity

for judicial involvement in pre-hearing scheduling. Local rules of these

districts specifically exempt arbitration cases from the Rule 16 conference.
Program Characteristics 35

There are also two types of provisions designed to lessen the demand

on judges to decide dispositive motions (see Table 3.D). The first, adopted

by four courts, specifies that motions filed after entry of the formal order

appointing the arbitrators and scheduling the hearing (approximately

thirty days prior to the hearing) will not stay the hearing except upon

order of the judge. This provision leaves it to the individual judge whether

to decide motions filed during the thirty-day window and protects the

arbitration process from the filing of motions as a delaying tactic. Middle

North Carolina and Western Michigan made stronger efforts to remove

judicial officers from the prehearing process. Middle North Carolina’s rule

specifies that dispositive motions, except those relating to jurisdiction or

venue, will not be ruled upon by the court and need not be filed until, and

unless, a case returns to the regular trial track via a demand for trial de

novo. Similarly, Western Michigan’s rule specifies that no summary

judgment motion will be noticed or heard prior to completion of the

arbitration process.

TABLE 3: Special Program Features

D. Rules Designed to Reduce Judicial Involvement

in the Pre-Hearing Phase

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

None • • • •

Clerk’s office

schedules discovery cut-off date

• •• •

Rulings on some

dispositive motions are to be deferred

• •

Rulings on some

dispositive motions may be deferred

• •••

Those judges who choose not to decide motions before the arbitration

hearing believe that the issues raised can be presented just as well to arbitrators. Judges who routinely do resolve dispositive motions filed prior to

the hearing do not think that parties will be willing to accept anything less

than a final judicial decision on the legal contentions they present. Not deciding these motions could therefore result in de novo demands from liti-
36 Court-Annexed Arbitration in Ten District Courts

gants awaiting their resolution. Furthermore, these judges believe that

they may as well avoid the expense of an arbitration hearing if the case can

be resolved by motion beforehand.

Selecting the arbitrator

The pilot courts vary in the roles played by the litigants and the clerk’s office in selecting an arbitrator or arbitrator panel (see Table 3.E). Courts

were likely to provide for litigant input to the selection process if they

believed that it helped to gain general acceptance from the bar, or if they

believed that input would enhance the chances that litigants in particular

cases would accept the results of the procedure. On the negative side were

fears that providing for litigant input would bog down the process, thereby

diminishing the chance of reducing case delay and placing an undue

administrative burden on the clerk’s office. The latter concern was

particularly important for the large programs.

TABLE 3: Special Program Features

E. How Arbitrators Are Selected

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

By clerk • •••

Initial party

choice, limited list

• •• •

Initial party

choice, full list

• •

In four districts, choice of arbitrator(s) is the sole responsibility of the

clerk’s office. The New Jersey clerk’s office goes about the process by a

combination of random selection and matching of arbitrator expertise

with the issues in dispute. In Eastern Pennsylvania and Eastern New York,

the arbitrator pool is divided into attorneys who represent primarily plaintiffs, defendants, or both; one name is randomly selected from each category to form a panel of three. Western Missouri randomly selects the panel

from an undifferentiated list.

Litigants are given the most control in the process in Middle North

Carolina and Middle Florida, where they may select who will arbitrate

their case from the complete list of certified arbitrators. In Middle North
Program Characteristics 37

Carolina, litigants also have the option of agreeing on an arbitrator who is

not on the list. If litigants do not act within a specified time, the clerk’s office makes the selection.

The other pilot courts employ a mixed model, under which the litigants may choose names (or strike them) from a short list randomly drawn

by the clerk’s office.

Number of abitrators and arbitrator fees

Five districts provide for three arbitrators (but in three of these the parties

may agree to fewer) and five provide for only one, but in two of these, the

parties may request to proceed before a panel of three (see Table 3.F).

TABLE 3: Special Program Features

F. Specified Number of Arbitrators

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

One •• •

One (may request

three)

• •

Three (may agree

to fewer)

•• •

Three • •

Decisions about the number of arbitrators were based on the courts’

views of whether a panel is necessary to ensure litigant perceptions of fairness balanced against the administrative benefits of having one arbitrator

(e.g., greater ease of scheduling, or ability to hold more hearings with a

smaller arbitrator pool). Choices were also tied to related decisions about

how much to pay arbitrators and the resources available: it is possible to

pay a single arbitrator more at a lower per-hearing cost.

In deciding what arbitrators should be paid, districts evaluated both

resources and what they believed was needed to attract and retain the services of top-flight lawyers. In pilot courts with other alternative federal or

state programs, parity with what these programs pay their neutrals was

also a consideration. Two districts, Western Oklahoma and Western

Texas, offer non-monetary incentives to arbitrators by exempting them

from certain Criminal Justice Act appointments.
38 Court-Annexed Arbitration in Ten District Courts

The various combinations of number of arbitrators per hearing and

what they are paid have resulted in estimated per hearing costs across the

pilot courts that range from $125 to $300 (see Table 3.G).

TABLE 3: Special Program Features

G. Approximate Arbitrator Fees Per Hearing

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

$125 •

$150 •

$200 •

$225 • •

$250 ••• •

$300 •

Note: The fees are paid by the courts, not by the parties. The approximate arbitrator fees per hearing for all

districts except Eastern Pennsylvania, New Jersey, Western Michigan, and Eastern New York are estimates.

The $300 estimate for Middle North Carolina comes from figures for the first year of the program provided

by the clerk’s office. They pay their arbitrators at an hourly rate up to a maximum of $500, since raised to

$800. The estimate for districts that provide for fees per day of hearing rather than for the case (Northern

California, Middle Florida, Western Oklahoma, Western Texas, Western Missouri) include a nominal $25,

added to the stated arbitrator fee to account for the rare hearing that will exceed one day. The estimates for

Northern California and Western Oklahoma also in clude consideration that the hearing fee depends on the

number of arbitrators ($125 for one (since raised to $250) and $225 for three (since raised to $450) in

Northern California, and $75 for one and $225 for three in Western Oklahoma). In Northern California,

about two-thirds of the cases are heard by one arbitrator, and in Western Oklahoma about 80% are heard

by one.

Time from hearing to demand for trial de novo

The pilot courts allow either twenty or thirty days from the date the

award is entered for any party to demand a trial de novo (see Table 3.H).

The shorter time period is generally associated with programs aimed at

speeding case dispositions or those in which the twenty-day time frame

meshes better with the scheduling of other pretrial events in civil cases.

Eastern Pennsylvania, which switched from a twenty- to a thirty-day

period, did so in response to suggestions that the shorter time encouraged

pro forma demands for trial de novo from attorneys who needed to keep

their options open while they discussed the award with their clients.
Program Characteristics 39

TABLE 3: Special Program Features

H. Time from Hearing to Demand for Trial De Novo

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

20 days • •

30 days •• ••• •••

Disincentives to demanding trial de novo

All of the pilot courts except New Jersey provide that litigants who reject

the arbitration award, and then do not receive a more favorable judgment,

are to pay an amount equal to the arbitrators’ fees (see Table 3.I). In these

circumstances, New Jersey requires payment of a flat fee of $250, more

than their $150 arbitrator fee. Seven of the pilots require that the fee be

posted at the time the demand is made, returnable if they receive a more

favorable judgment. The purpose of the up-front posting of arbitrators’

fees is to discourage frivolous de novo demands.
40 Court-Annexed Arbitration in Ten District Courts

TABLE 3: Special Program Features

I. Financial Disincentives to Demands for Trial De Novo

Fee to be posted

with demand; for -

feited if trial judgment not better

than award

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

Maximum arbitrator fee of $225• • •• •

Maximum arbitrator fee of $250•

Flat fee of $250 •

Note: In response to the 1988 legislation, New Jersey amended its rule to require payment of only the $150

arbitrator fee.

Pay arbitrator fee

after trial if judgment not better

than award

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

W.D.

Mo.

W.D.

Mich.

D.

N.J.

W.D.

Okla.

E.D.

N.Y.

M.D.

N.C.

W.D.

Tex.

Maximum fee of

$225

•

Maximum fee of

$500

•

Costs (not

including

attorneys’ fees)

•

Note:After two years of program experience, Middle Florida amended its rule to provide for the posting of

the fee with the demand. Middle North Carolina has raised its fee maximum to $800 since the time period

covered by this study. Northern California now has no disincentives.
41

Chapter 4

Arbitration Program Experiences

Differences in program design will result in differences in the composition

of the arbitration caseloads across the pilot courts. This chapter compares

the types of cases referred and the proportion of the civil caseload diverted

to the ten programs, and how quickly and at what stage of the process

those cases closed. The last section describes the litigants who participated

in the arbitration cases.

Caseload experiences

Proportion of the civil caseload diverted to the arbitration process

Table 4 (see p. 42) displays the approximate proportion of the civil

caseload diverted to the arbitration programs in each of the pilot courts. It

compares the number of arbitration cases in the sample with the total

number of civil filings during the same time period.37

The districts vary considerably in the proportion of civil cases diverted

to arbitration, from a low of 5% in Northern California to 28% in Eastern

Pennsylvania.38 Although the variability across districts is influenced

somewhat by the district’s exemption practices and local rules as to eligible

types of cases, these program features do not fully account for the

differences. For example, Western Michigan and Western Missouri both

include most types of civil cases and exclude punitive damages from a

$100,000 ceiling, yet the former diverts 16% of its cases to arbitration

while the latter diverts only 6%. Western Oklahoma, which restricts its

program to particular types of cases and includes punitive damages in its

$100,000 ceiling, diverts a larger proportion of its caseload (18%) than

either of these districts. The largest proportion of civil cases is included in

Eastern Pennsylvania’s arbitration program, which, while including most

 

37. Total civil filings were taken from the Center’s Integrated Civil Database. See supra

note 29.

38. Total civil filings include many types of cases that typically require little judicial ac -

tion (e.g., student loan contract cases; prisoner petitions; Social Security cases) and the proportion of such cases differs from one court to the next. The variation across districts as to

the proportion of civil cases diverted to arbitration therefore does not necessarily represent

the same degree of variation in the proportion of cases that would otherwise have been likely

to consume significant judicial resources.
42 Court-Annexed Arbitration in Ten District Courts

types of civil cases, restricts the dollar amount to $75,000 including

punitive damages. Therefore, it is not possible to specify a general set of

eligibility criteria that will ensure a program of a particular size.

TABLE 4

Percentage of the Civil Caseload Diverted to Court-Annexed Arbitration

(with relevant program features displayed)

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Filing Period 1/85 -

12/85

10/84-

12/85

10/84–

9/85

 1/85–

6/86

3/85 –

3/86

5/85 –

4/86

 5/85–

10/86

 7/85–

12/86

12/85–

11/86

1/86 –

12/86

Total Civil Cases 7,854 12,255 5,488 2,012 6,333 3,044 1,112 3,095 3,069 4,483

Cases Identified

as Arbitration -

Eligible

2,415 669 630 161 1,376 596 144 579 261 423

Cases Exempted

from Program

321 26 46 30 201 40 34 82 77 43

Actual Arbitration

Caseload

2,094 599 569 127 1,161 547 100 495 179 377

Percentage of Civil

Cases Diverted

27% 5% 10% 6% 18% 18% 9% 16% 6% 8%

Relevant Program Features

Inclusion of Most

Types of Civil

Cases?

yes no no no no no no yes yes yes

Dollar Ceiling

(in thousands)

75 100 100 150 50 100 100 100 100 50

Punitive Damages

Excluded for Dollar

Ceiling?

no no no yes yes no no yes yes no

 

Note: Both New Jersey and Western Michigan included pending cases in their arbitration program; the

pending cases were excluded from analysis in order to preserve comparability with the other pilot courts.

The figure for “all civil cases” in Western Texas is from the San Antonio office only.
Arbitration Program Experiences 43

Types of cases

Nature of suit. Table 5 displays the general types of cases included in

the arbitration programs in each of the pilot districts.39 The most common

case types are contracts and torts; these two groups together constitute

the majority of cases identified as eligible for arbitration in all ten of the

pilot courts. There are, however, substantial differences between the

districts. Contract cases range from a low of 26% of the caseload in Western Michigan to 74% of the caseload in Northern California. Tort cases

make up a low of 10% of the cases in Western Oklahoma and a high of

51% in New Jersey.

TABLE 5

Summary of Case Types Selected As Eligible for Arbitration

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

E.D. Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Most Civil Cases

Eligible By Rule?

yes no no no no no no yes yes yes

Number of Cases

Identified as Eligible

2,415 669 630 195 1,376 596 144 579 261 423

Type of Dispute

Contract 30% 74% 65% 63% 43% 70% 54% 26% 59% 54%

Personal 

Injury/

Personal 

Property

Torts

43% 24% 30% 32% 51% 10% 35% 29% 14% 20%

Other 27% 3% 5% 4% 6% 20% 10% 45% 27% 26%

Jurisdiction

U.S. Plaintiff 4% 13% 7% 2% 2% 12% 20% 4% 29% 5%

U.S. Defendant 5% 7% 5% 1% 7 2% 6% 6% 7% 10%

Federal 

Question

21% 26% 32% 11% 17% 18% 17% 46% 25% 32%

Diversity 70% 55% 57% 86% 75% 68% 57% 43% 39% 52% 

Note: Middle North Carolina assigned thirty-four of the cases identified as eligible for arbitration to a

control group. They are included in the case type tables, but not in any others since they did not go

through the arbitration process.

 

39. A complete listing of the types of cases in each district’s sample is presented in

Appendix B.
44 Court-Annexed Arbitration in Ten District Courts

Not surprisingly, those districts with the fewest restrictions as to case

type in their arbitration eligibility criteria also have the largest proportion

of cases other than contracts and torts: At least a quarter of the caseload in

Eastern Pennsylvania, Western Missouri, Western Michigan, and Eastern

New York falls into this “other” category. Western Michigan, at 45%, has

the largest number of “other” cases, having selected more civil rights and

labor cases for arbitration than the other pilots.

Jurisdiction. As shown in Table 5, in each pilot court except Western

Michigan diversity cases are the most common. The Western Michigan

program includes slightly more federal question than diversity cases (46%

vs. 43%) and has a much larger proportion of federal question cases than

the other pilots. None of the programs has more than 10% U.S. defendant

cases, but at least one-fifth of the arbitration caseload in two districts—

Western Texas and Western Missouri—are U.S. plaintiff cases.

Dollar demand. We do not have very precise data on the actual dollar

values of arbitration cases. The primary source of information is the dollar

amount that plaintiffs’ counsel enter on the docket face sheet when filing

the case, a value reported to the Administrative Office of the U.S. Courts.

In many cases, the only entry is “more than $10,000,” to meet the dollar

amount required (at the time this study was done) for diversity

jurisdiction of the federal courts. Furthermore, a study that looked beyond

the stated demands to the actual complaints found a number of

inaccuracies in the demand data (e.g., many dollar values recorded as

$10,000 were actually just statements of the diversity jurisdiction floor).40

Because of these problems, the dollar data available from the Administrative Office statistics were supplemented by the dollar value figures on

the arbitration case tracking systems maintained by the clerk’s office in

some of the pilot courts. Whichever figure was the most precise was used,

e.g., any dollar value was used in lieu of either “more than $10,000,” or an

even $10,000. If both systems carried a zero or “more than $10,000” demand, the case was counted as “not available” in Table 6. Note that the

proportion of arbitration cases falling in this category among the pilot

courts ranges from a low of 1% in Western Oklahoma and Western Missouri to highs of 69% and 79% in New Jersey and Eastern Pennsylvania. It

is not known if this represents truly different types of cases across districts, or simply different reporting or case tracking practices.

 

40. A. Partridge, The Budgetary Impact of Possible Changes in Diversity Jurisdiction 38 –

39 (Federal Judicial Center 1988).
Arbitration Program Experiences 45

With these data difficulties in mind, Table 6 shows that the majority

of arbitration cases in all districts except Middle North Carolina are valued

at $50,000 or less. In Middle North Carolina, the only pilot with a dollar

ceiling of $150,000, 42% of the cases identified for the program sought

more than $100,000. The court closest to Middle North Carolina in this

category was Western Michigan, a district with a $100,000 ceiling

(excluding punitive damages) where demands in 24% of the arbitration

cases were for more than $100,000. The demands, however, were not tied

solely to a district’s dollar ceiling. Eastern Pennsylvania and Eastern New

York, both with ceilings under $100,000, had the next highest proportions

of cases over $100,000 (17% and 15% respectively). Recall that in these districts, as in most others, it is the presence of an attorney certification,

rather than the demand in the prayer for relief, that determines case eligibility, and that cases with larger demands may be included in the program

if (1) the parties agree or (2) the judge determines that the case was originally certified at an unrealistically high amount.

TABLE 6

Dollar Demands in Cases Identified As Eligible for Arbitration

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Number of Cases

Identified as Eligible 2,415 669 630 195 1,376 596 144 579 261 423

Dollar Value Not Available 79% 8% 25% 24% 69% 1% 36% 28% 1% 24%

Dollar value in available cases:

$0–$20,000 47% 52% 56% 21% 48% 26% 40% 63% 49% 47%

$20,000 –$50,000 18% 27% 23% 24% 36% 43% 33% 8% 26% 34%

$50,000–$75,000 17% 10% 11% 9% 5% 15% 5% 3% 8% 3%

$75,000–$100,000 1% 7% 6% 5% 2% 10% 13% 2% 8% 1%

$100,000 –$150,000 1% 1% 2% 10% 2% 2% 0% 1% 1% 1%

$150,000 16% 3% 2% 32% 8% 4% 9% 23% 8% 14%

Program Characteristics

Dollar Ceiling 75 100 100 150 50 100 100 100 100 50

(in thousands)

Punitive Damages Excluded

for Dollar Ceiling? no no no yes yes no no yes yes no 
46 Court-Annexed Arbitration in Ten District Courts

Attorney perceptions of issues involved in the dispute. A series

of questions on the attorney survey asked lawyers in cases referred to arbitration which of a number of factors they considered to have been important barriers to settlement. Among these were (1) different views as to the

facts of the case; (2) different views as to the value of the case; and (3) different views as to the law applicable to the case. The attorney responses to

these questions are used here to describe the nature of the underlying conflict in those cases that were actually referred to the arbitration program.41

Disputes over the value of the case were the most common, followed

closely by disagreements as to the facts (see Table 7). Each was identified

as a source of conflict in the cases of over 60% of the attorneys. Disputes

over the applicable law were less common, but were identified as a source

of conflict by a significant proportion of attorneys—ranging from 31% to

52% depending on the district. Not all arbitration cases, therefore, involve

straightforward money or factual disputes.

TABLE 7

Attorney Perceptions of Sources of Disagreement

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Barrier to Settlement Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Different predictions 70% 66% 70% — 68% 66% 63% 75% 66% 64%

of the value of the case

Different views of the 62% 64% 69% — 62% 65% 62% 71% 64% 65%

facts of the case

Different views of the 31% 42% 44% — 32% 50% 35% 52% 50% 37%

law applicable to the case

 

Note: Entries are percentage of attorneys agreeing or agreeing strongly that factor was important. The

Middle North Carolina survey did not include questions on perceived barriers to settlement.

Cases exempted from the program. All of the districts have

procedures under which litigants may, by motion, petition the court to

have their case exempted from the arbitration program. To ascertain if

particular types of cases, initially identified as eligible for the program, are

more likely than others to be exempted, 42 we analyzed the effect of nature

 

41. Attorneys in cases that closed prior to referral were not surveyed.

42. The percentage of exemptions by district will be slightly lower than that shown in

the Table 9 category “cases removed or consolidated,” a category that includes consolidations

as well as removals from the program and remands to state court.
Arbitration Program Experiences 47

of suit, dollar demand, jurisdictional basis, and district on exemption rates

(see Table 8).43

TABLE 8

Percentage of Cases Exempted from the Program by District,

Nature of Suit, Jurisdictional Basis, and Dollar Demand

Percentage

District Exempted

 

E.D. Pa. (n=2,415) 10

N.D. Cal. (n=669) 4

M.D. Fla. (n=630) 7

M.D.N.C. (n=161) 19

D.N.J. (n=1,376) 15

W.D. Okla. (n=596) 7

W.D. Tex. (n=144) 24

W.D. Mich. (n=579) 14

W.D. Mo. (n=261) 30

E.D.N.Y. (n=423) 10

Percentage

Nature of Suit Exempted

 

Contract (n=3,343) 9

Tort (n=2,520) 14

Labor (n=335) 10

Civil Rights (n=389) 12

Real Property (n=121) 13

ICA ( n=113) 5

Other 17

Percentage

Jurisdictional Basis Exempted

 

U.S. Plaintiff (n=465) 14

U.S. Defendant (n=413) 6

Federal Question (n=1,726) 10

Diversity (n=4,633) 11

Percentage

Dollar Demand Exempted

 

Not Available (n=3,436) 14

0–$20,000 10

$20,000–$50,000 6

$50,000–$75,000 9

$75,000–$100,000 7

$100,000–$150,000 8

Over $150,000 17 

Note: n = all cases identified as eligible.

Regression analysis disclosed that the types of cases most likely to be

exempted were those with unavailable dollar amounts (i.e., either “at least

$10,000” or none) or those valued at over $150,000. These cases were probably granted exemptions when counsel returned to the court with a certification that the dollar assessment exceeded the ceiling for program eligibility. In addition, U.S. plaintiff cases, and those that fell in the “other” nature of suit category, were also more likely than others to be exempted.

The case types that were least likely to be exempted were those involving

 

43. Findings presented in the text were selected from results obtained by regression

analysis in which the dependent variable was exemption and the independent variables were

program characteristics. Full details are presented at Analysis 1 of the Technical Appendix, on

file at the Federal Judicial Center.
48 Court-Annexed Arbitration in Ten District Courts

contract disputes or Interstate Commerce Act questions, and those

brought under federal-question jurisdiction.

The probability of exemption was as dependent on the practices of the

particular district as on the type of dispute. After controlling for caserelated features, exemptions were less likely in Eastern Pennsylvania,

Northern California, Middle Florida, and Western Oklahoma than in other

districts, and more common in Western Missouri, Middle North Carolina,

and Western Texas.

Method of case disposition

Table 9 shows the arbitration case tracking statistics for each of the pilot

courts. Although the districts vary considerably in the proportion of cases

that reached hearing, that demanded trial de novo, and that closed at various stages of the arbitration process before trial, the trial rate of the arbitration caseloads is similar across the districts, ranging from less than 1%

in Eastern New York to 4% in Middle North Carolina.

In all districts, the majority of cases closed prior to an arbitration hearing, and at least two-thirds of the arbitration caseload in each district terminated before returning to the regular trial calendar. 44 De novo demand

rates as a proportion of the arbitration caseload range from a low of 7% in

Northern California and Eastern New York to a high of 32% in Western

Michigan, nine percentage points higher than in any other district.45

These low de novo rates result primarily from the low proportion of

the arbitration caseload that reaches hearing rather than from frequent acceptance of an arbitration award. In eight of the ten pilot courts, over half

of the arbitrations result in a demand for trial de novo. The lowest de novo

demand rate (as a proportion of hearings held) was 46% in Eastern New

York.

 

44. In this section, the terms “cases” and “caseload” are used interchangeably to mean all

cases identified for, and not later exempted from, the program. “Arbitrated cases” includes all

those in which an arbitration hearing was held, regardless of whether it later resulted in a

demand for trial de novo. “Arbitrations” and “hearings” both refer to arbitration hearings.

Unless specifically modified by “closed,” the terms apply to both pending and terminated

cases.

45. The results from Western Michigan are often the least favorable among the pilot

courts. Comments from case participants indicate that the program there may have suffered

an unfavorable comparison with a preexisting mediation program that had stronger sanctions

for rejecting awards not bettered at trial. Dissatisfaction was also expressed by those whose

cases were subjected to both arbitration and mediation procedures.
Arbitration Program Experiences 49

TABLE 9

Summary of Arbitration Case Tracking Statistics

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Filings from: 1/85 10/84 10/84 1/85 3/85 5/85 5/85 7/85 12/85 1/86

to: 12/85 12/85 9/85 6/86 3/86 4/86 10/86 12/86 11/86 12/86

Number of Cases

Identified as Eligible 2,415 669 630 161 1,376 596 144 579 261 423

Percentage removed 13 10 10 21 16 8 31 15 31 11

or consolidated

Actual Arbitration 2,094 599 569 127 1,161 547 100 495 179 377

Caseload

Number (%) 55 19 27 5 52 11 4 23 9 2

of pending cases (3) (3) (5) (4) (4) (2) (4) ( 5) (5) (3)

Number (%) of 2,039 580 542 122 1,109 536 96 472 170 375

closed cases (97) (97) (95) (96) (96) (98) (96) (95) (95) (97)

Percentage Closed:

Before referral 48 59 45 34 55 57 40 28 25 61

After referral,

before hearing 36 28 27 40 29 22 27 30 39 26

After hearing,

no de novo demand 7 7 8 8 8 10 14 12 15 8

After de novo demand

before trial 7 4 18 14 7 9 18 28 18 5

After trial began 3 1 2 4 1 2 2 2 4 1

Arbitrations as a Percentage

of All Cases 17 14 30 26 18 22 35 43 36 14

De Novo Demands as a

Percentage of

All cases 11 7 23 19 11 12 22 32 23 7

All arbitrations 62 49 74 70 58 55 63 74 61 46

Trial Rate as a

Percentage of

All closed cases 3 1 2 4 1 2 2 2 3 <1

All closed arbitrations 18 11 7 16 7 8 6 5 10 2 

Note: The arbitration caseload figures are lower than those for program size in Table 4 because they exclude

remands to state court and consolidations as well as cases exempted from the program.
50 Court-Annexed Arbitration in Ten District Courts

Timing of case disposition

Table 10 shows the median days from filing to disposition for the arbitration cases in each of the pilot courts. For all cases identified for, and not

later removed from, arbitration, the range is from under six months in

Northern California and Western Oklahoma to just under one year in

Western Michigan. When cases that closed before program referral are

excluded, the filing to disposition times ranged from under eight months in

Western Oklahoma to over thirteen months in Western Michigan.

TABLE 10

Median Months from Filing to Termination by District

Arbitration Sample

Cases Closed

District Sample Cases District After Referral

 

E.D. Pa. (n=2031) 6.5 E.D. Pa. (n=1060) 8.4

N.D. Cal. (n=580) 5.5 N.D. Cal. (n=239) 8.8

M.D. Fla. (n=541) 8.1 M.D. Fla. (n=296) 9.9

M.D.N.C. (n=122) 8.8 M.D.N.C. (n=81) 10.1

D.N.J. (n=1109) 8.2 D.N.J. (n=503) 12.3

W.D. Okla. (n=536) 5.9 W.D. Okla. (n=229) 7.9

W.D. Tex. (n=96) 6.7 W.D. Tex. (n=58) 8.7

W.D. Mich. (n=472) 11.7 W.D. Mich. (n=338) 13.4

W.D. Mo. (n=170) 9.1 W.D. Mo. (n=128) 10.2

E.D.N.Y. (n=365) 8.1 E.D.N.Y. (n=143) 11.2 

The relative speed with which a district moves its referred arbitration

cases also bears a loose relationship to the district’s local rule provision

regarding the time between last answer and the date of hearing (see Table

3.C on p. 34). The three courts that adopted time periods under 150 days

fall within the lower half of the pilot courts in case processing time, while

the three districts that adopted answer to hearing times in excess of 150

days fall within the upper half and account for the two longest disposition

times.
Arbitration Program Experiences 51

Case participants

The information we have on case participants comes from the survey of

attorneys and parties who participated in cases that closed after notification of the impending referral to arbitration.

Description of the attorney survey sample

Table 11 presents information on the number of surveys sent to and

responses received from attorneys in cases that closed after having been

referred to arbitration. The response rates are generally good, averaging

75% across all districts, from a low of 61% in New Jersey to a high of 88%

in Northern California.46

Table 11 also shows some characteristics of the attorney respondents

and their cases. It can be seen that the districts vary as to the percentage of

responses received from those whose cases closed at various stages, but

within each district the responses represent the distribution of case closings fairly well. The exceptions are Eastern Pennsylvania and Western

Texas, where attorneys in cases that closed before the hearing are overrepresented at the expense of those in both categories of arbitrated cases.

The survey respondents from all districts except Middle North Carolina are

also evenly split between attorneys representing plaintiffs or defendants.

Overall, the sample appears adequately representative of the target population, i.e., attorneys in cases that closed after referral to arbitration.

There is considerable difference across districts in the prior experience

attorneys had with various forms of arbitration. The reported experience

varies both with the length of time the federal program has been in place

and with the presence of state arbitration programs. Eastern Pennsylvania,

with the fewest attorneys reporting no experience with arbitration, is also

the district where court-annexed arbitration has the longest history in

both state and federal courts. Later chapters will examine whether these

differences in experience, as well as which side was represented, affect

attorneys’ responses to other survey questions.

 

46. The reasons why the response rate is considerably lower in New Jersey than in the

other districts are discussed in the interim New Jersey district report, Court-Annexed

Arbitration in the District of New Jersey , available on loan from the Federal Judicial Center.

Briefly, it was often difficult to locate the attorney who handled the case because New Jersey

dockets commonly listed only the name of the law firm rather than an individual attorney.

Furthermore, some attorneys may have been dissuaded from responding by our simultaneous

request for their client’s name.
52 Court-Annexed Arbitration in Ten District Courts

TABLE 11

Description of the Attorney Survey Sample

A. Sample Size and Response Rates

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

Districts 

Number of

Surveys

Returned

601 422 510 211 393 353 84 454 222 160 3,501

Response

Rate

71% 88% 79% 79% 61% 84% 85% 76% 80% 71% 75%

Note: The survey in Middle North Carolina was conducted by Rand. Western Michigan and New Jersey

included pending cases in their arbitration program; the pending participant surveys were excluded from

analysis in order to preserve comparability with the other pilot courts.

B. Characteristics of Attorney Survey Respondents and Their Cases

Type of Survey

When Case

Closed

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

Districts 

Before Hearing

% of surveys 83 74 49 57 62 48 63 39 57 59 59

% of caseload 68 69 49 60 65 52 45 42 52 66

After Hearing,,

Before De Novo

% of surveys 10 15 15 14 24 24 11 16 23 26 18

% of caseload 13 17 15 12 18 23 22 17 20 20

After De Novo

Demand

% of surveys 7 12 36 29 14 28 26 45 20 14 23

% of caseload 19 14 36 27 18 25 33 42 28 14

Side

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

Districts 

Plaintiff 46% 50% 50% 39% 50% 50% 48% 46% 51% 44% 48%

Defendant 54% 50% 50% 61% 50% 50% 52% 54% 49% 56% 52%

(continued)
Arbitration Program Experiences 53

TABLE 11, part B, continued

Prior Experience with Arbitration

E.D.

Pa.

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

Districts 

As Counsel in

Arbitration

Under Rule

61% 35% 27% 20% 33% 29% 10% 38% 23% 11% 34%

As Counsel in

Conventional

Arbitration

59% 55% 50% 45% 58% 18% 14% 50% 32% 55% 46%

As an

Arbitrator

62% 19% 35% 17% 52% 11% 10% 35% 12% 29% 33%

In a State

Court

Arbitration

Proceeding

88% 67% 41% 10% 78% 12% 10% 80% 18% 56% 51%

None 6% 17% 27% 43% 11% 53% 70% 12% 42% 21% 23%

 

Note: The “% of caseload” figures are calculated on the basis of referred cases only, as attorneys in cases that closed before

referral were not surveyed.

Description of the party survey

Table 12 (see p. 55) presents information on the number of survey responses received from parties in cases that closed after being referred to arbitration. Comparing the number of party responses with those from attorneys in the same cases, it is apparent that we were not able to contact

all parties in relevant cases. The court in Eastern Pennsylvania did not give

us permission to survey clients at all. In the other pilots, the procedures

used to obtain the information necessary for surveying parties varied from

one district to another. In Northern California and Eastern New York, we

sent a letter from the court after issue was joined requesting that attorneys

supply us with their client’s addresses; in New Jersey, we asked the attorneys for their client’s addresses on the face sheet of the survey sent when

the case was closed; in the other districts, the court asked the attorneys to

complete a party information sheet and forward it to us. The procedures

met with varying success. Assuming that, at a minimum, we should have a

client for each attorney who returned a survey, the estimated proportion

of targeted parties who could actually be contacted ranged from a low of

20% in Middle Florida to highs of 89% in Middle North Carolina (which

represents the proportion of attorneys who allowed Rand to interview
54 Court-Annexed Arbitration in Ten District Courts

their clients) and 62% in Western Oklahoma. This, coupled with response

rates that varied from 44% to 68%, calls into question the representativeness of the party sample.

There are signs that the data are representative, however. Except in

New Jersey, attorneys were deciding whether or not to supply their clients’

addresses prior to knowing the outcome of the case. We therefore believe

that the incomplete sample is not biased by outcome; over one-third of the

parties reported that they were not satisfied with the outcome of the case.

The balance between plaintiffs and defendants is good in all districts except in Western Texas, where we had only twenty party respondents. Similarly, the distribution of respondents in cases that closed at various stages

in the process reflects fairly accurately the actual case-closing stages in all

but one district. The exception was Western Oklahoma, where parties in

de novo demand cases are significantly over-represented at the expense of

those in cases that closed before the hearing. Overall, however, the party

sample appears fairly representative of the target party population along

some important dimensions. Even so, we urge caution in generalizing from

these data given the attorney-selection and self-selection problems evident

from the proportion of parties available for survey and the response rates.

Of the parties who did report, 42% had previous civil trial experience

and over half had been involved previously as a party in a civil case. Only

17% reported that they had never been a party to a civil case or participated in, or observed, a trial. Most respondents, therefore, had some experience to call on in making their survey responses.

The high proportion of parties with prior litigation experience may

stem from the fact that only one-third of the respondents were private

parties. The rest were corporations or individuals sued or suing in their

business or public capacities. Ninety-eight percent of the parties were represented by counsel.

Table 12 also shows that just under one-third of the parties had no

personal participation in any event concerning the case on which they reported. About one-third reported participating in settlement discussions,

depositions, and arbitration hearings, while the number involved in court

hearings or trials was considerably lower (9% and 3% respectively).

Side, type of party, type of representation, personal participation in

the case, and prior litigation experience are all examined in later chapters

for their effect on party views of arbitration procedures.
Arbitration Program Experiences 55

TABLE 12

Description of the Party Survey Sample

A. Sample Size and Response Rate

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

Estimated Proportion

of Target Sample

Contacted

34% 20% 89% 23% 62% 27% 50% 45% 40% 46%

Number of Surveys

Returned

 90 76 107 49 143 20 111 78 49 723

Response Rate 53% 68% 44% 55% 55% 63% 66% 65% 45% 59%

Note: Interviews in Middle North Carolina were conducted by Rand; the figure shown represents the

percentage of attorneys who did not object to Rand contacting their clients. Western Michigan and New

Jersey included pending cases in their arbitration program; the pending participant surveys were excluded

from analysis in order to preserve comparability with the other pilot courts.

B. Characteristics of Party Survey Respondents and Their Cases

Type of Survey

When Case Closed

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

Before Hearing

% of Surveys 63 40 52 65 28 55 39 46 51 46

% of Caseload 69 49 60 65 52 45 42 52 66

As a Result of Hearing

% of Surveys 18 25 12 20 28 10 17 30 39 22

% of Caseload 17 15 12 18 23 22 17 20 20

After De Novo Demand

% of Surveys 19 36 35 14 44 35 44 24 10 32

% of Caseload 14 36 27 18 25 33 42 28 14

Reported Satisfaction with the Outcome of the Case

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Satisfied 68 51 53 80 62 63 64 68 74 63

% Dissatisfied 32 49 47 20 38 37 36 32 26 37

(continued)
56 Court-Annexed Arbitration in Ten District Courts

TABLE 12, part B, continued

Side

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Plaintiff 48 53 57 49 51 39 46 48 52 49

% Defendant 52 47 43 51 49 61 54 52 48 51

Type of Party

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Private Individual 24 36 27 41 27 24 36 30 25 30

% Business 48 44 50 46 51 59 35 44 55 47

% Other 29 20 23 13 21 18 30 26 20 24

Type of Representation

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Regular Family or

Business Lawyer

38 29 34 32 37 12 19 51 32 33

% Insurance Company’s

Lawyer

10 19 14 23 14 12 24 7 15 16

% Other Lawyer 50 49 52 43 46 71 56 39 51 49

% Represented Self 2 4 0 2 2 6 0 3 2 2

Participation in Case

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Settlement

Discussions

27 33 — 27 46 10 35 30 33 34

% Depositions 31 36 — 37 39 10 44 26 29 35

% Arbitration Hearing 26 41 — 18 55 15 39 35 35 38

% Court Hearing 6 4 — 10 11 5 13 6 10 9

% Trial 1 4 — 0 6 0 4 4 2 3

% None 43 30 — 41 21 55 28 30 35 31

(continued)
Arbitration Program Experiences 57

TABLE 12, part B, continued

Prior Litigation Experience

N.D.

Cal.

M.D.

Fla.

M.D.

N.C.

D.

N.J.

W.D.

Okla.

W.D.

Tex.

W.D.

Mich.

W.D.

Mo.

E.D.

N.Y.

All

districts 

% Party to Civil 52 46 — 44 59 57 49 62 51 53

% Party to Contested

Divorce

6 16 — 7 6 0 11 12 14 9

% Party in Case that

Went to Trial

48 42 — 34 43 50 35 58 33 42

% Witness in a Trial 46 44 — 29 52 33 43 35 38 43

% Observer of a Trial 49 46 — 39 59 30 48 36 35 47

% None 14 18 — 31 11 20 14 19 29 17

Note: The Middle North Carolina survey did not ask parties about their prior litigation experience and did

not gather case participation information in a compatible format.

 

Conclusion

Across districts, the most common types of cases included in arbitration

programs are diversity contract and tort cases with prayers for relief under

$50,000 that involve disputes over the facts and/or value of the case. The

majority of cases close prior to reaching an arbitration hearing, and over

two-thirds do not return to the court’s regular trial calendar. Of those

cases that are arbitrated, most (a majority in eight districts, and just under

half in the other two) demand trial de novo, but few reach trial.

Although these general patterns are repeated across districts, the pilot

courts vary considerably in the proportion of the civil caseload diverted to

arbitration, the composition of the arbitration caseload, the stage of the

arbitration process at which cases close, and the speed with which they

terminate. Program eligibility requirements have an effect on, but do not

by themselves determine, the proportion of the civil caseload diverted to

arbitration and the composition of the arbitration caseload. The time it

takes to process arbitration cases across districts appears to be influenced

by the timing of the arbitration hearing, and the speed of disposing of referred arbitration cases is loosely related to the district’s normal caseprocessing time for at-issue cases.

The parties who participated in arbitration cases were relatively sophisticated. Over two-thirds were not private parties and over 80% had
58 Court-Annexed Arbitration in Ten District Courts

some prior exposure to the justice system. Two-thirds of the parties personally participated in at least one case-related event, such as depositions,

settlement discussions, hearings, or a trial.

Attorneys in arbitration cases varied widely in their previous experience with some form of arbitration, depending on the length of time the

court-annexed arbitration program had been in effect in their district and

the presence of alternatives in the state court system.
59

Chapter 5

Increased Options for Litigants

Advocates of arbitration argue that these programs can increase access to

justice by providing litigants with more opportunity to have their cases adjudicated. We do not believe that adjudication per se is a critical element of

justice. What arbitration—like other alternatives—can do is broaden the

options available to litigants. Achieving this goal depends on both the attractiveness of the particular option that is offered and what other options

may have been foreclosed by the alternative approach.

What options are foreclosed by the federal court-annexed arbitration

pilots depends on how the program’s procedures differ from those routinely available. For example, some arbitration litigants may not have access to early rulings on certain dispositive motions; other litigants may be

required to adhere to a shorter discovery period that could interfere with

their opportunity to reach a bilateral settlement. But in return, arbitration

offers litigants an opportunity for an adjudicatory hearing, held at an

earlier time than is possible for trial.

How often do parties take advantage of this opportunity? Table 13

shows the proportion of sample cases that had an arbitration hearing. On

the one hand, the majority of parties in all districts exercise their option to

settle before the hearing. On the other, parties also let their cases reach

arbitration adjudication far more often than they permit cases to reach

trial adjudication. The percentages range from 14% in Northern California

to 43% in Western Michigan, and in all districts greatly exceed the

proportion of all civil cases that reach trial.47

Arbitration programs also provide for more timely adjudicative case

resolutions. Table 13 shows, for each pilot court, the median time from filing to disposition in arbitration cases that closed after the hearing without

a demand for trial de novo, and the median time from filing to disposition

for all civil cases that reach trial. Depending on the district, cases that are

 

47. The trial figures were taken from the Annual Report of the Director of the

Administrative of the U.S. Courts, 1986, at 208–13. The basis for comparison is all civil cases,

including those that did and did not go through arbitration procedures.
60 Court-Annexed Arbitration in Ten District Courts

resolved by arbitration close from two to eighteen months sooner than

cases resolved by trial.48

TABLE 13

Comparing Number and Timing of Arbitrations and Trials

A. Proportion of Cases Arbitrated and Tried

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

% of Arbitration Caseload 17 14 30 26 18 22 35 43 36 14

Reaching Arbitration

% of Civil Caseload 6 2 4 4 5 5 4 3 4 4

Reaching Trial

B. Median Months From Filing to Disposition in Cases Resolved by

Arbitration and by Trial

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Median Months 10 11 8 9 14 7 7 11 9 12

From Filing to

Disposition in

Arbitration Cases

Resolved by Hearing

Media Months from 12 18 23 20 18 12 17 29 19 28

Filing to Disposition in

All Civil Cases Resolved

by Trial

 

Litigants who actually went through arbitration presumably either

wanted what it had to offer, viewed it as a too early interference with ongoing discovery in a case not yet ripe for settlement, or saw it as a barrier

to be hurdled on the way to trial. That so few cases actually went on to

trial is some evidence that trial was not the ultimate objective. There are

also indications that the hearing was not seen simply as an interference. If

this were true, we would expect parties to refuse the arbitration award and

report that the arbitration hearing was not useful. When parties in cases

with de novo demands were asked if the hearing was a waste of time, twothirds disagreed (see Table 14). The responses of attorneys in de novo de-

 

48. In some districts, the median time to disposition figures for the arbitrated cases in -

clude the twenty- or thirty-day waiting period between entry of the arbitrator’s award and

entry of judgment. In programs where judgment is entered on the award and is vacated if a

de novo demand is received, it does not.
Increased Options for Litigants 61

mand cases were similar, with 62% disagreeing that the hearing was a

waste of time.

These data indicate both that arbitration programs provide for earlier

adjudications and that there are parties who seek adjudications in cases

that would otherwise have terminated without any response from a neutrally positioned official. This confirms findings elsewhere that a substantial number of parties seem to want an adjudication—not merely an end to

the dispute—and, to them, arbitration programs offer an attractive option.49 Although we do not know how many arbitration litigants would

have preferred to proceed under the options foreclosed (or at least postponed) by referral to the program, the random design in Middle North

Carolina—a court that does not decide most dispositive motions before the

arbitration hearing—found that parties in the arbitration group rated the

fairness of their litigation experience more highly than did those in the

control group. 50 This is some indication that the trade-off in options is

considered worthwhile.

TABLE 14

Views of Participants in De Novo Demand Cases as to the

Usefulness of the Hearing

A. Arbitration was a waste of time.

Litigants in de novo Strongly Strongly

demand cases Agree Agree Disagree Disagree

 

Parties (n=166) 15.7 18.7 38.0 27.7

Attorneys (n=702) 19.1 19.1 44.4 17.4

B. The arbitration award was a useful starting point for settlement discussions.

Strongly Strongly

Attorneys Agree Agree Disagree Disagree 

De Novo Demand Cases (n=688) 16.3 40.4 23.0 20.3

 

The fact that less than half of the arbitration awards were accepted in

eight of the ten pilot courts indicates, however, that the hearing did not

 

49. E. Lind, R. MacCoun, P. Ebener, W. Felstiner, D. Hensler, J. Resnik & T. Tyler, The

Perception of Justice: Tort Litigants’ Views of Trial, Court-Annexed Arbitration, and Judicial

Settlement Conferences (Rand Corporation 1989); R. MacCoun, supra note 19, at 73.

50. E. Lind, supra note 25, at 45, Table 4.6. This was one of a number of fairness-related

questions asked of parties. On the others, there were no differences between the groups’ responses.
62 Court-Annexed Arbitration in Ten District Courts

give many litigants all that they wanted. Nevertheless, it may have offered

some benefits of an adjudication without one of its drawbacks: losing control over the outcome of the case. 51 The availability of the option to demand trial de novo assures that the decision of whether to end the case

still rests with the litigants. The hearing, however, has provided them with

information about likely outcomes at trial, and the judgment may give to

the winning party the feeling of vindication that comes from being told

that you are right.52 Both of these outcomes could provide a sound basis for

further settlement discussions and decisions. Indeed, when asked, 57% of

attorneys in de novo demand cases indicated that the award was a useful

starting point for settlement negotiations.

Not all parties and attorneys, however, agreed with the majority

opinion that even unsuccessful arbitrations are useful. Hearings can only

be expected to generate positive results if the participants view both the

hearing itself and the procedures that lead up to it as fair. These topics are

discussed in detail in the next chapter.

 

51. Loss of control over the outcome is an argument in favor of the desirability of set -

tlements (see D. Provine, supra note 13, at 1). For further discussion of the issue of control,

see E. Lind et al., supra note 49, at 19–20.

52. The study comparing settlement, arbitration, and trial programs found evidence to

support such a “vindication”effect (E. Lind et al., supra note 49, at 53).
63

Chapter 6

Procedural Fairness

Do participants in cases mandatorily referred to arbitration receive, or believe they receive, a second-class justice? Since litigants can choose to settle

before the arbitration hearing, and can demand a trial de novo if they are

not satisfied with the outcome of a hearing, they are not deprived of access

to any level of justice associated with traditional adjudicative and settlement processes. The second-class justice issue therefore depends mainly on

whether litigants think that the procedures used to route their cases to the

arbitration alternative are fair and whether they think the hearing is fair.

A number of the survey questions were related to the topic of fairness

and second-class justice. This chapter presents parties’ opinions of the fairness of the general procedures, and the views of both parties and attorneys

as to the fairness of the arbitration hearing. It also reviews the choices that

parties and attorneys made when asked if they would prefer that their case

be decided by a judge, jury, or arbitrators and discusses the degree to which

attorneys approve of court-annexed arbitration in general and as implemented in the various pilot courts.

Party perceptions of overall fairness

Eighty percent of parties in cases referred to arbitration agreed that the

procedures used to handle their case were fair (see Table 15). The response

ranged from a low of 76% in Western Michigan to a high of 98% in New

Jersey.

Parties’ responses did not vary significantly by any of the program

characteristics.53 They were affected by party perceptions of the outcome

of the case. Those who reported favorable outcomes and satisfactory outcomes gave higher fairness ratings than others, but even among those parties who were dissatisfied or received unfavorable outcomes a majority

agreed that the procedures were fair. Most parties, therefore, appear able to

separate procedures from outcome. Few of those with negative outcomes,

however, agreed strongly that the procedures were fair.

 

53. The Technical Appendix, on file at the Federal Judicial Center, has a description of

the regression model.
64 Court-Annexed Arbitration in Ten District Courts

TABLE 15

Party Views of Whether the Arbitration Procedures Were Fair

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=640) 25.8 54.5 10.2 9.5

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

N.D. Cal. (n=70) 30.0 54.3 4.3 11.4

M.D. Fla. (n=67) 20.9 56.7 13.4 9.0

M.D.N.C. (n=107) 39.3 32.7 13.1 15.0

D.N.J. (n=47) 19.1 78.7 2.1 0.0

W.D. Okla. (n=131) 26.0 52.7 13.0 8.4

W.D. Tex. (n=15) 26.7 53.3 6.7 13.3

W.D. Mich. (n=94) 18.1 57.4 14.9 9.6

W.D. Mo. (n=68) 20.6 64.7 4.4 10.3

E.D.N.Y. (n=41) 24.4 63.4 7.3 4.9

B. By Party Perceptions of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Satisfactory Outcome?

Yes ( n=442) 32.8 58.6 4.5 4.1

No ( n=182) 7.1 46.2 23.6 23.1

Favorable Outcome?

Yes ( n=328) 32.3 61.0 4.9 1.8

No ( n=174) 6.3 55.2 19.0 19.5

C. By Party Perceptions of Process

Strongly Strongly

Agree Agree Disagree Disagree 

Understanding

At least some (n=603) 27.0 55.7 9.0 8.3

Little or none (n=32) 6.3 28.1 34.4 31.3

Control Over Decision to End Case

At least some (n=389) 30.1 60.4 5.1 4.4

Little or none (n=191) 14.7 45.0 20.4 19.9

Expenditure of Personal Time

Reasonable (n=367) 26.4 63.2 6.5 3.8

Unreasonable (n=154) 14.9 48.7 16.2 20.1 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 2, p. 6, for regression

results.
Procedural Fairness 65

Parties were also more likely to report fair procedures if they understood what was going on, believed they had control over the decision to

end the case, and thought that their expenditures of personal time were

reasonable. Note that the reasonableness of the delay and dollar cost associated with the case were not related to overall perceptions of fairness. The

fairness ratings were also unaffected by party characteristics or personal

participation in the case.

In only one group of reporting parties—those who did not understand

what was going on in the case—did less than a majority view the procedures as fair. Fortunately, a lack of understanding was rare, reported by

only 5% of the survey sample (thirty-two parties). This high rate of understanding may reflect the relative sophistication of this party sample: Over

half had previously either participated in or observed a trial.

It is possible that these fairness ratings, although high, could still be

less favorable than views parties might hold about regular procedures. The

random design experiment in Middle North Carolina, however, found that

parties in arbitration cases gave higher ratings to the fairness of their litigation experience than did parties in the control cases, and that there were

no differences between the groups on other fairness-related questions.54

Fairness of the arbitration hearing

Eighty-one percent of the parties in arbitrated cases, and 92% of the attorneys, agreed that the arbitration hearing was fair (see Tables 16 and 17).

Not only were attorneys more likely than parties to agree that the hearing

was fair, they were also more likely to agree strongly (39% vs. 28%).

Factors associated with party views

At least two-thirds of the parties in all districts agreed that the arbitration

hearing was fair, up to a high of 94% of those from Middle North Carolina

(see Table 16). The differences across districts were not statistically significant.

No program characteristics were significantly related to party reports

of the fairness of the hearing. Outcome measures were related, with satisfied parties more likely to say that the hearing was fair. In addition, those

who reported reasonable cost and personal time expenditures were more

 

54. E. Lind, supra note 25, at 44–47.
66 Court-Annexed Arbitration in Ten District Courts

TABLE 16

Party Views of Whether the Hearing Was Fair

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=353) 28.3 53.0 11.3 7.4

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

N.D. Cal. (n=28) 28.6 53.6 7.1 10.7

M.D. Fla. (n=40) 17.5 50.0 15.0 17.5

M.D.N.C. (n=49) 65.3 28.6 2.0 4.1

D.N.J. (n=17) 11.8 70.6 17.6 0.0

W.D. Okla. (n=100) 26.0 55.0 14.0 5.0

W.D. Tex. (n=7) 14.3 71.4 0.0 14.3

W.D. Mich. (n=55) 21.8 58.2 16.4 3.6

W.D. Mo. (n=37) 18.9 62.2 5.4 13.5

E.D.N.Y. (n=20) 25.0 55.0 15.0 5.0

B. By Party Perceptions of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Satisfactory Outcome?

Yes ( n=189) 34.9 59.3 4.8 1.1

No ( n=123) 4.9 52.8 23.6 18.7

C. By Party Perceptions of Process

Strongly Strongly

Agree Agree Disagree Disagree 

Cost Requirements

Reasonable (n=177) 29.9 55.9 9.6 4.5

Unreasonable (n=115) 11.3 57.4 17.4 13.9

D. By Party Perceptions of the Hearing

Strongly Strongly

Agree Agree Disagree Disagree 

Arbitrator Preparation

Prepared (n=218) 30.7 63.3 5.0 0.9

Not Prepared (n=80) 1.3 40.0 35.0 23.8

Were All Facts Brought Out?

Yes ( n=222) 28.8 64.0 4.5 2.7

No ( n=81) 4.9 37.0 35.8 22.2

Opportunity to Tell Story?

Yes ( n=285) 33.7 58.2 4.9 3.2

No ( n=62) 4.8 27.4 41.9 25.8 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 3, p. 7, for regression

results.
Procedural Fairness 67

likely to give higher ratings. As with party views of overall fairness, a

majority of those who were negative on the outcome and cost variables

still found the hearings fair.

More influential than outcome or cost was what went on at the hearing itself. Significantly lower fairness ratings came from parties who did

not understand what was going on, who believed that the arbitrator was

unprepared, who did not think that the important facts were brought out,

and who did not believe they had a good opportunity to tell their side of

the story. These perceptions, however, were not common among this

party sample. Ninety-five percent reported at least some understanding of

what was happening, 82% agreed that they told their story, and 73% believed that the arbitrator was prepared and that all of the facts were

brought out.

In sum, the characteristics that define a fair hearing for parties are an

opportunity to tell their side of the story and bring out all of the important

facts to prepared arbitrators at a reasonable expenditure of time and

money. This general picture is unaffected by program characteristics, party

characteristics, or party participation in a trial of the case.

Factors associated with attorney views

Across districts, attorneys’ agreement that the hearing was fair varied from

81% in Eastern New York to 98% in Middle North Carolina (see Table 17).

These differences were not statistically significant.

Attorneys’ responses to the question of hearing fairness form a picture

similar to that presented by the parties. Program characteristics were

unrelated to attorneys’ ratings of hearing fairness, but both satisfaction

with the outcome and receiving an outcome that was anticipated led to

higher ratings. Like parties, attorneys were most strongly influenced by

their perceptions of the hearing itself and the burden entailed by the

process.

The characteristics that define a fair arbitration for attorneys are a

hearing of appropriate formality at which there is enough time to present

their case before impartial and prepared arbitrators, with the whole

procedure resulting in time and cost savings for themselves and their

clients. Hearing formality was the only hearing variable that did not influ-
68 Court-Annexed Arbitration in Ten District Courts

ence the views of both groups of litigants: attorneys, unlike parties, are attuned to the degree of formality at the hearing.55

TABLE 17

Attorney Views of Whether the Hearing Was Fair

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=1,296) 39.4 52.8 5.2 2.6

A. Attorney Perceptions of Basic Fairness

Strongly Strongly

Agree Agree Disagree Disagree 

E.D. Pa. (n=103) 42.7 47.6 8.7 1.0

N.D. Cal. (n=102) 38.2 54.9 3.9 2.9

M.D. Fla. (n=252) 35.3 56.7 6.0 2.0

M.D.N.C. (n = 83) 71.1 26.5 1.2 1.2

D.N.J. (n=131) 40.5 54.2 4.6 0.8

W.D. Okla. (n=181) 38.1 53.6 5.5 2.8

W.D. Tex. (n=29) 31.0 62.1 0.0 6.9

W.D. Mich. (n=261) 36.8 55.9 4.2 3.1

W.D. Mo. (n=92) 40.2 51.1 6.5 2.2

E.D.N.Y. (n=62) 24.2 56.5 9.7 9.7

B. By Attorney Perceptions of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Satisfactory Outcome?

Yes ( n=836) 48.0 49.4 2.0 0.6

No ( n=432) 22.0 60.0 11.3 6.7

Expected Outcome?

Yes ( n=760) 47.0 49.6 2.4 1.1

No ( n=430) 20.5 62.8 10.9 5.8

(continued)

 

55. Other studies of party perceptions, including Rand’s evaluation of the federal pilot

program in Middle North Carolina, have found that the formality of the proceedings does

influence party perceptions. The Middle North Carolina findings indicated that corporations

were more likely to be satisfied with formal proceedings, whereas private parties liked less

formal hearings (E. Lind, supra note 25, at 51). We ran the regression analyses separately for

private parties and corporations, and found that perceptions of whether or not the hearing

was too formal were not significantly related to the hearing fairness ratings for either group.

This does not, however, address the question of whether private parties and corporations

differ in their views of what constitutes inappropriate formality.
Procedural Fairness 69

TABLE 17, continued

C. By Attorney Characteristics

Strongly Strongly

Agree Agree Disagree Disagree 

Experience as Arbitrator?

Yes ( n=433) 42.7 51.5 3.7 2.1

No ( n=833) 37.0 54.3 6.0 2.8

D. By Attorney Perceptions of the Process

Strongly Strongly

Agree Agree Disagree Disagree 

Attorney time savings?

Yes ( n=650) 42.0 51.4 4.5 2.2

No ( n=539) 31.7 58.1 6.9 3.3

More or Less Client Time

Less ( n=609) 42.7 53.7 3.3 0.3

More (n=543) 30.6 56.7 7.9 4.8

Cost savings?

Yes ( n=640) 43.0 53.3 3.1 0.6

No ( n=526) 31.2 55.5 8.6 4.8

E. By Attorney Perceptions of the Hearing

Strongly Strongly

Agree Agree Disagree Disagree 

Adequate Formality

Yes ( n=1,124) 39.8 54.4 4.3 1.6

No ( n=82) 2.4 56.1 23.2 18.3

Arbitrator Preparation

Prepared (n=1,067) 44.3 52.4 2.3 0.9

Not Prepared (n=213) 13.6 55.9 19.7 10.8

Arbitrator Partiality

Impartial (n=1,062) 40.5 55.7 2.9 0.8

Not Impartial (n=141) 11.3 46.8 24.8 17.0

Adequate Time at the Hearing?

Yes ( n=1,181) 41.6 53.3 3.6 1.4

No ( n=97) 12.4 45.4 24.7 17.5 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 4, p. 8, for regression

results.

Litigant selection of arbitration

If arbitration is considered by litigants to be a lower form of justice, we

would expect case participants familiar with the programs to opt for another way of proceeding with their cases if given a choice. This was not
70 Court-Annexed Arbitration in Ten District Courts

the case. We asked attorneys in all cases, and parties in arbitrated cases,

whether, considering time, cost, and fairness, they would prefer to have

their cases decided by a judge, a jury, or by arbitration. Exactly half of the

parties selected arbitration outright, with an additional 12% saying that it

would make no difference (see Table 18). The judge was the next most

common selection, chosen by 22% of the parties, followed by juries, which

were selected by 17%.

TABLE 18

Party Selection of Their Preferred Decision Maker

Makes no

Judge Jury Arbitration Difference 

All Respondents (n=305) 22.0 17.0 49.5 11.5

A. By District

Makes no

Judge Jury Arbitration Difference 

N.D. Cal. (n=28) 28.6 10.7 53.6 7.1

M.D. Fla. (n=41) 14.6 24.4 51.2 9.8

D.N.J. (n=15) 13.3 13.3 46.7 26.7

W.D. Okla. (n=95) 20.0 16.8 56.8 6.3

W.D. Tex. (n=7) 14.3 42.9 42.9 0.0

W.D. Mich. (n=60) 31.7 16.7 36.7 15.0

W.D. Mo. (n=38) 21.1 18.4 42.1 18.4

E.D.N.Y. (n=21) 19.0 4.8 61.9 14.3

B. By Party Perceptions of Process

Makes no

Judge Jury Arbitration Difference 

Expenditure of Personal Time

Reasonable (n=195) 14.9 12.3 61.5 11.3

Unreasonable (n=100) 36.0 26.0 26.0 12.0

C. By Party Participation in the Case

Makes no

Judge Jury Arbitration Difference 

Participated in Hearing?

Yes ( n=216) 19.0 18.1 52.8 10.2

No ( n=81) 32.1 14.8 39.5 13.6

(continued)
Procedural Fairness 71

TABLE 18, continued

D. By Party Perceptions of the Hearing

Makes no

Judge Jury Arbitration Difference 

Hearing Was Fair?

Yes ( n=223) 17.9 9.0 59.6 13.5

No ( n=59) 32.2 45.8 15.3 6.8 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 5, p. 9, for regression

results.

For attorneys in arbitrated cases (the group comparable to the party

sample), arbitration was the choice of 37%—a plurality—of the respondents (see Table 19). Fewer attorneys than parties preferred arbitration, being more likely than parties to select juries or to say that it would make no

difference. Just under one-quarter of both attorneys and parties selected

the judge.

TABLE 19

Attorney Selection of Their Preferred Decision Maker:

Arbitrated Cases Only

By By By Makes No

a Judge a Jury Arbitration Difference 

All Respondents (n=1,183) 22.8 24.3 37.4 15.5

A. By District

By By By Makes No

a Judge a Jury Arbitration Difference 

E.D. Pa. (n=98) 17.3 11.2 54.1 17.3

N.D. Cal. (n=98) 25.5 16.3 49.0 9.2

M.D. Fla. (n=254) 24.4 28.7 32.3 14.6

D.N.J. (n=141) 16.3 22.0 47.5 14.2

W.D. Okla. (n=170) 22.9 21.8 34.7 20.6

W.D. Tex. (n=27) 7.4 40.7 40.7 11.1

W.D. Mich. (n=244) 24.6 35.7 23.8 16.0

W.D. Mo. (n=87) 26.4 12.6 46.0 14.9

E.D.N.Y. (n=64) 29.7 15.6 39.1 15.6

(continued )
72 Court-Annexed Arbitration in Ten District Courts

TABLE 19, continued

B. By Program Characteristics

By By By Makes No

a Judge a Jury Arbitration Difference 

Arbitrator Fees

$150 ( n=141) 16.3 22.0 47.5 14.2

$200 ( n=268) 23.9 19.8 39.9 16.4

$225 ( n=162) 22.2 13.0 48.1 16.7

$250 ( n=612) 24.0 29.7 31.2 15.0

Input to Arbitrator Selection Process?

Yes ( n=793) 23.7 28.2 32.5 15.5

No ( n=390) 21.0 16.2 47.4 15.4

Jurisdiction

U.S. Plaintiff (n=59) 11.9 10.2 55.9 22.0

U.S. Defendant (n=69) 31.9 17.4 43.5 7.2

Federal Question (n=331) 27.8 23.9 34.1 14.2

Diversity (n=715) 20.7 26.3 36.8 16.2

C. By Attorney Perceptions of Outcome

By By By Makes No

a Judge a Jury Arbitration Difference 

Satisfactory Outcome?

Yes ( n=732) 18.3 15.8 47.8 18.0

No ( n=401) 31.9 39.7 18.7 9.7

D. By Attorney Perceptions of Process

By By By Makes No

a Judge a Jury Arbitration Difference 

Attorney time savings?

Yes ( n=639) 15.2 17.1 52.9 14.9

No ( n=522) 31.8 32.8 19.0 16.5

More or Less Client Time

Less ( n=597) 15.2 16.8 53.8 14.2

More (n=528) 31.6 32.4 20.3 15.7

E. By Attorney Perceptions of the Hearing

By By By Makes No

a Judge a Jury Arbitration Difference 

Hearing Was Fair?

Yes ( n=1040) 21.4 22.9 39.6 16.0

No ( n=92) 41.3 38.0 13.0 7.6 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 6, p. 10, for regression

results.
Procedural Fairness 73

When the responses of attorneys in all cases are considered, the plurality—43%—selected arbitration, with an additional 15% saying that it

would make no difference (see Table 20). Note that the proportion of all

attorneys who selected arbitration is somewhat higher than that found

among the attorneys who actually participated in an arbitration hearing.

TABLE 20

Attorney Selection of Their Preferred Decision Maker: All Cases

By By By Makes No

a Judge a Jury Arbitration Difference 

All Respondents (n=2,987) 22.7 19.5 43.1 14.7

A. By District

By By By Makes No

a Judge a Jury Arbitration Difference 

E.D. Pa. (n=572) 15.7 11.7 61.5 11.0

N.D. Cal. (n=389) 28.5 11.6 47.6 12.3

M.D. Fla. (n=493) 28.2 26.4 32.5 13.0

D.N.J. (n=368) 18.8 17.4 47.6 16.3

W.D. Okla. (n=326) 22.1 19.3 39.3 19.3

W.D. Tex. (n=74) 10.8 33.8 40.5 14.9

W.D. Mich. (n=410) 24.4 33.2 23.9 18.5

W.D. Mo. (n=204) 24.0 15.7 43.1 17.2

E.D.N.Y. (n=151) 26.5 12.6 47.7 13.2

B. By Program Characteristics

By By By Makes No

a Judge a Jury Arbitration Difference 

Number of Arbitrators by Rule

1 only (n=778) 21.7 25.7 35.1 17.5

1 or 3, or 3 only (n=2,209) 23.0 17.2 45.9 13.8

Party Input to Arbitrator

Selection Process?

Yes ( n=1,692) 25.4 23.6 35.5 15.5

No ( n=1,295) 19.2 14.1 53.1 13.7

Days from Answer to Hearing

80 (n=567) 25.9 27.3 33.5 13.2

120 (n=326) 22.1 19.3 39.3 19.3

150 (n=1316) 22.0 12.4 53.0 12.6

165 (n=410) 24.4 33.2 23.9 18.5

180 (n=368) 18.8 17.4 47.6 16.3

(continued)
74 Court-Annexed Arbitration in Ten District Courts

TABLE 20, continued

C. By Attorney Characteristics

By By By Makes No

a Judge a Jury Arbitration Difference 

Prior Experience

State ADR program (n=1,740) 19.6 21.0 46.1 13.2

None ( n=672) 22.2 18.9 41.4 17.6

D. By Attorney Views of the Case

By By By Makes No

a Judge a Jury Arbitration Difference 

Case Involved Dispute as to:

Applicable law (n=1,201) 28.7 20.2 38.2 12.8

Value ( n=2,008) 22.4 21.5 42.1 14.0

Applicable facts (n=1,907) 23.4 20.2 41.2 15.1

E. By Attorney Perceptions of Process

By By By Makes No

a Judge a Jury Arbitration Difference 

Attorney time savings?

Yes ( n=1,745) 15.5 14.3 57.8 12.4

No ( n=1,172) 32.8 27.1 21.8 18.3

More or Less Client Time

Less ( n=1,726) 16.1 14.7 56.1 13.1

More (n=911) 32.8 28.1 23.4 15.7

Cost savings?

Yes ( n=1,779) 15.7 14.1 57.0 13.3

No ( n=1,095) 33.6 28.5 207 17.2 

Note: Although the effect of days from answer on choice of method is not apparent from the figures reported in the tables, regression analysis uncovered a statistically significant association after controlling for

other program features.

See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 8, p. 11, for regression

results.

Factors associated with party views

Arbitration was the choice of the majority of parties in four pilot courts,

and in all districts the proportion of respondents selecting arbitration was

greater than or equal to the next most common choice (see Table 18).

Except in Western Texas, where the seven respondents divided one, three,

and three among judge, jury, and arbitration respectively, a clear majority

either opted for arbitration or said that it would make no difference.
Procedural Fairness 75

No program or party characteristics were related to parties’ preferences

as to decision maker. Neither were party perceptions of the outcome. The

three factors that were associated with an increased likelihood of selecting

arbitration were the reasonableness of the personal time requirements, the

perceived fairness of the arbitration hearing, and personal participation in

the hearing. 56 Favorable responses on these factors were associated with

choice of arbitration by at least half of the parties. Among parties who had

not participated in the hearing, a plurality still chose arbitration, but unfavorable responses on the other two factors led to the selection of another

alternative by a plurality of respondents. The judge was selected most frequently (36%) by parties who thought they had to spend an unreasonable

amount of time on the case, with juries and arbitration each the choice of

26% of these parties. Litigants least favorably disposed toward arbitration

were those who were involved in an arbitration hearing they thought was

unfair: 46% of them chose juries, 32% chose judges, and only 15% chose

arbitration. As noted in the previous section, however, few parties (20%)

reported unfair arbitration hearings.

Factors associated with the views of attorneys in arbitrated cases

Across districts, there were only three departures from the general pattern

of selection of arbitration by a plurality of attorneys (see Table 19). In

Eastern Pennsylvania, arbitration was selected by an outright majority of

54%, while in Western Texas, arbitration and the jury were each selected

by 41%. In Western Michigan, a plurality of 36% selected the jury, with

25% choosing the judge and 24% arbitration.

Unlike parties in arbitrated cases, attorneys in cases that reached hearing were influenced by a number of program characteristics. Although

arbitration was selected by a plurality of attorneys in all groupings, it was

a more common choice in programs that (1) do not allow litigant input

into the arbitrator selection process, (2) do not require that arbitrator fees

be posted with any demand for trial de novo, and (3) pay their arbitrators

relatively lower fees. In all districts but New Jersey, the amount of the

disincentive to demand a trial de novo is tied to arbitrators’ fees; it is therefore not possible to disentangle statistically the effects flowing from disapproval of high fees and those flowing from potential costs of an unsuccess-

 

56. Some of the pilot programs do not require that parties attend the hearing.

Furthermore, in some of the survey sample cases there were multiple parties not all of whom

personally attended.
76 Court-Annexed Arbitration in Ten District Courts

ful appeal. We suspect that it is the potential cost of an unsuccessful de

novo demand that leads to less favorable responses.

For both attorneys and parties in arbitrated cases, savings of personal

time were related to a preference for arbitration and cost savings were not.

The conduct of the hearing was influential in the selections of both groups

of litigants. Attorneys’ choices were significantly related to their satisfaction with the outcome, while parties’ choices were not (compare Tables 18

and 19). This counters the common assumption that parties’ perceptions

of process are more likely to be influenced by case outcome than are

attorneys’ perceptions.

Factors affecting the views of attorneys in all cases

As with the selections by those who were actually involved in an arbitration hearing, all attorneys were more likely to choose arbitration if the

process saved time (see Table 20). Cost savings, which were not significantly related to the choices of attorneys in arbitrated cases, were related

to the preferences of all attorneys. Since the difference in the two analyses

was the inclusion of attorneys in cases that settled before the hearing, it is

possible that litigants for whom cost is a primary concern are more likely

to be in this group.

Of the program characteristics, only the negative impact of input into

the arbitrator selection process was carried over to the full sample. Two

other features were related to choice of decision maker, however. First,

programs that allow for a longer period of time between filing of an answer and the hearing generated more favorable results. It is not surprising

that this factor would emerge as more important when the responses analyzed included those from attorneys in cases that closed before the hearing,

as they should be more sensitive to the adequacy of the time for negotiation before the hearing. Participating in a program that allows for more

than one arbitrator was also positively related to the responses of attorneys in all cases. Recall, however, that the actual number of arbitrators

hearing a case did not influence either the choice of arbitration or the

hearing fairness ratings of attorneys who actually had a hearing.

Perceptions of the issues involved in the case were also important to

the group of all attorneys. Arbitration was selected less frequently by those

who identified a dispute over applicable law as a barrier to settlement in

the case on which they reported. While this comports with the speculation

that cases with legal issues are less suitable for arbitration, note that the relationship results from a difference in the size of the plurality of attorneys
Procedural Fairness 77

who selected arbitration rather than from a plurality selection of another

option.

Attorney approval of court-annexed arbitration

Another indication of satisfaction with arbitration programs is the level of

approval expressed by the bar. Attorneys in all cases referred to arbitration

were asked if they approved of court-annexed arbitration programs in general, and of the particular program adopted in their district. Eighty-four

percent responded positively to both questions (see Tables 21 and 22).

Approval of the concept

There were significant differences among the responses of attorneys from

the various districts, but, in each, large majorities of attorneys approved

the concept of court-annexed arbitration (see Table 21). The range was

from 74% in Western Michigan to 94% in New Jersey. The largest proportion of attorneys strongly supporting the concept was from Eastern Pennsylvania, where court-annexed arbitration programs are long-time features

of both the state and federal courts.

A number of program characteristics were significantly related to attorneys’ approval ratings. Higher ratings came from lawyers in programs

that do not provide for litigant input into the arbitration selection process,

those that allow for a hearing before a panel of three arbitrators, and those

that pay their arbitrators relatively lower fees. The jurisdictional basis of

the case was also influential, with attorneys in U.S. defendant cases giving

somewhat lower ratings and those in diversity cases giving generally higher

ratings.

Attorneys’ approval ratings were also affected by their perceptions of

the process; specifically, by whether the program had accomplished a

number of its objectives in the case on which they reported. Attorneys

who agreed that the referral to arbitration led to a faster settlement and

saved their clients time and money gave higher approval ratings than did

attorneys who did not report these benefits. Furthermore, those lawyers

who expected at the outset of the case that trial was more likely gave

higher approval ratings than did those who had thought trial was less

likely.
78 Court-Annexed Arbitration in Ten District Courts

TABLE 21

Attorney Approval of Court-Annexed Arbitration in General

Strongly Strongly

Approve Approve Disapprove Disapprove 

All Respondents (n=3,293) 28.1 55.8 11.3 4.9

A. By District

Strongly Strongly

Approve Approve Disapprove Disapprove 

E.D. Pa. (n=595) 45.4 47.4 5.0 2.2

N.D. Cal. (n=409) 32.5 49.6 12.5 5.4

M.D. Fla. (n=495) 21.6 54.5 16.2 7.7

M.D.N.C. (n=176) 28.4 52.3 15.3 4.0

D.N.J. (n=386) 30.1 63.7 4.9 1.3

W.D. Okla. (n=348) 28.2 60.3 8.3 3.2

W.D. Mich. (n=436) 10.6 63.3 19.0 7.1

W.D. Tex. (n = 79) 20.3 59.5 13.9 6.3

W.D. Mo. (n=215) 24.7 56.3 12.1 7.0

E.D.N.Y. (n=154) 22.7 57.8 10.4 9.1

B. By Program Characteristics

Strongly Strongly

Approve Approve Disapprove Disapprove 

Number of Arbitrators by Rule

1 only (n=998) 21.2 61.5 12.9 4.3

1 or 3, or 3 only (n=2,295) 31.0 53.2 10.6 5.1

Input to Arbitrator Selection Process?

Yes ( n=1,943) 23.2 56.5 14.5 5.9

No ( n=1,350) 35.1 54.7 6.7 3.5

Arbitrator Fees

$150 ( n=386) 30.1 63.7 4.9 1.3

$200 ( n=757) 30.5 54.6 10.6 4.4

$225 ( n=749) 40.7 49.5 6.2 3.6

$250 ( n=1225) 18.1 58.3 16.3 7.3

$300 ( n=176) 28.4 52.3 15.3 4.0

Jurisdiction

U.S. Plaintiff (n=204) 28.9 51.5 14.2 5.4

U.S. Defendant (n=159) 26.4 48.4 12.6 12.6

Federal Question (n=813) 26.7 56.0 11.8 5.5

Diversity (n=1,986) 28.9 56.4 10.7 4.0

(continued)
Procedural Fairness 79

TABLE 21, continued

C. By Attorney Characteristics

Strongly Strongly

Approve Approve Disapprove Disapprove 

Side

Plaintiff (n=1,566) 31.4 53.9 10.0 4.7

Defendant (n=1,711) 24.8 57.7 12.4 5.1

Prior Experience

In binding arbitration (n=1,561) 28.8 52.3 12.6 6.3

As arbitrator (n=1,111) 33.8 53.3 8.7 4.2

None ( n=805) 25.1 59.8 11.7 3.5

D. By Attorney Views of the Case

Strongly Strongly

Approve Approve Disapprove Disapprove 

Expected trial was likely?

Yes ( n = 1,665) 30.7 54.1 10.5 4.7

No ( n = 1,421) 24.8 58.2 11.8 5.3

E. By Attorney Perceptions of Process

Strongly Strongly

Approve Approve Disapprove Disapprove 

More or Less Client Time

Less ( n = 1,799) 34.9 57.3 5.9 1.9

More (n = 944) 18.6 52.2 19.3 9.9

Cost Savings?

Yes ( n = 1,853) 36.6 56.6 4.9 1.9

No ( n=1,141) 14.4 55.2 20.7 9.7

Case Settled More Quickly

Than Anticipated?

Yes ( n = 1,168) 34.0 56.8 7.3 2.0

No ( n = 1,705) 24.6 55.2 13.5 6.6 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 8, p. 12 for regression

results.

In addition, attorney characteristics were influential. Plaintiffs’ counsel

were more favorable than defense counsel, and the attorneys’ prior experiences had a bearing as well. Counsel who had served as arbitrators gave

higher approval ratings than others, while those reporting prior experience

with binding arbitration were less positive. It is not known if some attorneys in this latter group prefer binding arbitration to the non-binding
80 Court-Annexed Arbitration in Ten District Courts

court-annexed variety, or if a previous bad experience with binding arbitration led to less favorable ratings of any type of arbitration program.

Exploration of the factors that are related to attorneys’ approval ratings should not, however, obscure the fact that large majorities of all

groups approve of court-annexed arbitration (see Table 21). Note, however,

that between the choices of “strongly approve” and “approve,” the less

enthusiastic simple approval is more common.

TABLE 22

Attorney Approval of Their Specific Arbitration Program

Strongly Strongly

Approve Approve Disapprove Disapprove 

All Respondents (n=3,062) 26.7 56.8 11.7 4.8

A. By District

Strongly Strongly

Approve Approve Disapprove Disapprove 

E.D. Pa. (n=587) 43.4 49.9 5.3 1.4

N.D. Cal. (n=402) 30.8 51.7 11.4 6.0

M.D. Fla. (n=480) 21.3 55.2 16.5 7.1

D.N.J. (n=382) 26.2 67.3 5.2 1.3

W.D. Okla. (n=344) 30.5 57.0 9.9 2.6

W.D. Tex. (n=79) 16.5 58.2 19.0 6.3

W.D. Mich. (n=425) 9.6 60.7 21.2 8.5

W.D. Mo. (n=212) 22.2 58.0 12.7 7.1

E.D.N.Y. (n=151) 20.5 61.6 9.9 7.9

B. By Program Characteristics

Strongly Strongly

Approve Approve Disapprove Disapprove 

Number of Arbitrators by Rule

1 only (n=807) 17.5 63.8 13.6 5.1

1 or 3, or 3 only (n=2,255) 30.0 54.3 11.0 4.7

Input to Arbitrator Selection Process

Yes ( n=1,730) 22.3 56.2 15.3 6.2

No ( n=1,332) 32.5 57.5 7.0 3.0

Arbitrator Fees

$150 ( n=382) 26.2 67.3 5.2 1.3

$200 ( n=746) 30.7 54.2 10.7 4.4

$225 ( n=738) 38.8 52.3 6.2 2.7

$250 ( n=1,196) 17.0 57.9 17.6 7.5

(continued)
Procedural Fairness 81

TABLE 22, continued

C. By Attorney Characteristics

Strongly Strongly

Approve Approve Disapprove Disapprove 

Side

Plaintiff (n=1,476) 29.7 54.3 11.4 4.6

Defendant (n=1,571) 23.6 59.4 11.9 5.1

Prior Experience

Binding arbitration (n=1,464) 27.0 54.3 12.5 6.1

Arbitrator (n=1,067) 32.0 54.7 9.3 4.0

None ( n=704)

D. By Attorney Views of the Case

Strongly Strongly

Approve Approve Disapprove Disapprove 

Expected Trial was Likely?

Yes ( n=1,637) 29.2 54.7 11.4 4.7

No ( n=1,397) 23.6 59.3 12.2 5.0

E. By Attorney Perceptions of Process

Strongly Strongly

Approve Approve Disapprove Disapprove 

More or Less Client Time

Less ( n=1,776) 33.3 58.7 6.3 1.7

More (n=932) 17.4 51.6 20.7 10.3

Cost Savings?

Yes ( n=1,827) 34.9 57.6 5.5 2.0

No ( n=1,120) 13.8 55.1 21.7 9.5

Case Settled More Quickly

Than Anticipated?

Yes ( n=1,147) 32.6 56.8 8.5 2.0

No ( n=1,681) 23.3 56.7 13.6 6.4 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 9, p. 13, for regression

results.

Approval of the specific programs

The responses across districts for specific program approval were like the

findings reported for attorneys’ approval of the concept. Although there

were significant differences across districts, the large majority of attorneys

in all districts approved of their specific programs (see Table 22).

Furthermore, the results of the analysis of program approval were almost identical to those for concept approval. With the exception of the

jurisdictional basis of the case (which was not related to program ap-
82 Court-Annexed Arbitration in Ten District Courts

proval), all of the factors that influenced approval of the concept of arbitration were also related, and in the same way, to program approval.

Conclusion

Most parties and attorneys do not think that arbitration is a form of second-class justice. Eighty-four percent of the attorneys in cases referred to

arbitration said that they approved of both the concept of arbitration and

the programs that were implemented in their districts. Eighty percent of

the parties in cases referred to arbitration believed that the procedures used

to handle their cases were fair. Eighty-one percent of the parties and 92%

of the attorneys in arbitrated cases reported that the hearing was fair. In

the clearest evidence, half of the parties in arbitrated cases, and a plurality

of attorneys, selected arbitration as their preferred method of proceeding

when asked whether, considering cost, time, and fairness, they would prefer that their case be decided by a judge, jury, or arbitration.

There were no significant relationships between the parties’ ratings

and any particular program characteristics, and few between the program

characteristics and the attorneys’ ratings. The program characteristic that

was most frequently found to be significantly related to attorneys’ perceptions was litigant participation in the arbitrator selection process.

Lawyers from programs that provide for litigant input gave lower approval

ratings of both the concept of arbitration and their specific program, and

were less likely to opt for arbitration when asked if they preferred to have

their case decided by a judge, jury, or arbitration. Perhaps this feature was

more likely to have been built into programs that were initially less popular. Or it may be that the opportunity to select the arbitrator makes the

process seem less like a court proceeding, and therefore less fair. Or it may

be simply that the increased work involved in selecting arbitrators

outweighs any benefits that may derive from increased involvement. Saving time for themselves and their clients is a very important consideration

for attorneys, consistently related to all measures of their satisfaction with

court-annexed arbitration programs.

Another influential program factor was the number of arbitrators. Attorneys from districts that allow for just one arbitrator had less favorable

ratings of the concept of arbitration and of their particular program, and

they were less likely to select arbitration as the preferred method of handling their cases. The choices and hearing fairness ratings by attorneys in

arbitrated cases were not influenced by the actual number of arbitrators

who heard their cases, however. The negative effect of rules that provide
Procedural Fairness 83

for only one arbitrator may therefore stem from their appearance rather

than their actual operation. Indeed, the district with the highest percentage of attorneys reporting a fair hearing was Middle North Carolina, where

the program provides only one arbitrator.

Higher arbitrator fees also led to lower attorney approval ratings, and

less chance that lawyers in arbitrated cases would select arbitration as their

preferred procedure. This probably has to do with how much it costs to

proceed with the case beyond the hearing.

Another finding relevant to program planning is that parties who participated in the arbitration hearing were more likely than others to select

arbitration as their preferred method of decision making. When considered

along with the features that lead to perceptions of hearing fairness, it appears that programs should encourage parties to attend the hearing, and,

once there, to provide them with a chance to present their case fully.

The differences attributable to these program factors, however, were

differences of degree rather than of kind. Large majorities of all attorney

groups formed on the basis of program characteristics approved of arbitration in general, supported the programs as developed in their districts, and

agreed that the hearing was fair; pluralities selected arbitration when asked

to choose between judges, juries, and arbitration. No program factor affected any of the party perceptions. There is, therefore, nothing in these

findings to suggest that any particular program characteristic leads to an

overall lack of program acceptance. There are, however, other goals that

arbitration programs strive to achieve.

85

Chapter 7

Cost Savings

Some believe that traditional litigation is so costly that it has essentially

priced litigants in smaller-dollar cases out of the trial market. Most arbitration programs seek to cut down on litigant cost by streamlining the discovery process before the hearing, providing for an adjudication with

relaxed rules of evidence, and promoting settlement or narrowing the

issues for trial in cases not resolved as a result of the hearing.

There is good evidence that arbitration programs can reduce costs. The

Rand survey of attorneys in Middle North Carolina asked counsel about

the private litigation costs in arbitration and control cases that reached

issue. Total costs and fees, adjusted for demand, averaged $19,972.76 in the

arbitration group and $25,047.36 in the control group for an average saving

of 20%.57

Since no other pilot used a random design, we cannot compare costs

directly in the other districts. We did, however, ask attorneys their opinion

of whether savings were achieved and parties whether they viewed their

time and money costs as reasonable.

Attorney views of savings

Of the surveyed attorneys, 60% reported that their arbitration program

saved them time, 62% agreed that the cost was less, and 65% said that the

referral to arbitration saved their clients time (see Tables 23, 24, and 25).

After controlling for other factors, the responses across the pilot courts are

not significantly different. In each district except Western Michigan, a

majority of the attorneys reported that the arbitration procedures saved

time and money. In Western Michigan, a majority reported cost savings,

but said that neither they nor their client saved time. This is because

Western Michigan has the highest de novo rate, and over 60% of the

attorneys in de novo demand cases did not attribute any savings to the

program. This contrasts sharply with the views of those in cases that

closed before the hearing, at least 60% of whom reported savings of all

 

57. E. Lind, supra note 25, at 37–38. The Rand report also examined the public costs of

the program, at 39–41.
86 Court-Annexed Arbitration in Ten District Courts

types, and with the favorable reports of at least 75% of the attorneys in

successfully arbitrated cases.

TABLE 23

Attorney Views of Whether Arbitration Saved Them Time

Yes No 

All Respondents (n=3,087) 59.5 40.5

A. By District

Yes No 

E.D. Pa. (n=591) 65.8 34.2

N.D. Cal. (n=400) 63.8 36.3

M.D. Fla. (n=497) 60.0 40.0

D.N.J. (n=379) 58.0 42.0

W.D. Okla. (n=344) 59.3 40.7

W.D. Tex. (n=79) 54.4 45.6

W.D. Mich. (n=434) 47.2 52.8

W.D. Mo. (n=211) 62.6 37.4

E.D.N.Y. (n=152) 59.9 40.1

B. By When the Case Closed

Yes No 

Before Hearing (n=1,844) 62.6 37.4

As a Result of Hearing (n=550) 74.5 25.5

After De Novo Demand (n=693) 39.2 60.8

C. By Program Characteristics

Yes No 

Input to Arbitrator Selection Process?

Yes ( n=1,754) 57.3 42.7

No ( n=1,333) 62.4 37.6

Number of Arbitrators by Rule

One only (n=813) 52.3 47.7

Three provided for (n=2,274) 62.1 37.9

D. By Attorney Perceptions of the Case

Yes No 

Dispute Over Applicable Law Barrier to Settlement?

Yes ( n=1,255) 55.2 44.8

No ( n=1,766) 63.0 37.0 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 10, p. 14, for regression

results.
Cost Savings 87

TABLE 24

Attorney Views of Whether Arbitration Reduced Costs

Yes No 

All Respondents (n=3,038) 61.7 38.3

A. By District

Yes No 

E.D. Pa. (n=578) 68.2 31.8

N.D. Cal. (n=399) 62.9 37.1

M.D. Fla. (n=491) 62.7 37.3

D.N.J. (n=368) 63.9 36.1

W.D. Okla. (n=335) 61.8 38.2

W.D. Tex. (n=79) 53.2 46.8

W.D. Mich. (n=424) 50.9 49.1

W.D. Mo. (n=211) 63.5 36.5

E.D.N.Y. (n=153) 56.9 43.1

B. By When Case Closed

Yes No 

Before Hearing (n=1,828) 66.0 34.0

As a result of the hearing (n=523) 75.5 24.5

After De Novo Demand (n=687) 39.6 60.4

C. By Program Characteristics

Yes No 

Input to Arbitrator Selection Process?

Yes ( n=1,728) 59.3 40.7

No ( n=1,310) 64.9 35.1

D. Attorney Perceptions of the Case

Yes No 

Dispute Over Applicable Law Barrier to Settlement?

Yes ( n=1,233) 56.9 43.1

No ( n=1,742) 65.6 34.4

Expected Case Would Go To Trial?

Likely (n=1,622) 62.9 37.1

Unlikely (n=1,386) 60.1 39.9 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 11, p. 15, for regression

results.
88 Court-Annexed Arbitration in Ten District Courts

TABLE 25

Attorney Views of Whether Their Clients Spent More or Less Time as a

Result of the Arbitration Process

Much Somewhat Somewhat Much

More More Less Less 

All Respondents (n=2777) 6.6 28.0 47.7 17.6

A. By District

Much Somewhat Somewhat Much

More More Less Less 

E.D. Pa. (n=528) 5.1 17.4 54.5 22.9

N.D. Cal. (n=353) 5.1 27.2 55.5 12.2

M.D. Fla. (n=463) 8.9 31.1 42.1 17.9

D.N.J. (n=318) 3.5 22.0 55.3 19.2

W.D. Okla. (n=321) 6.9 35.5 37.1 20.6

W.D. Tex. (n=71) 4.2 31.0 46.5 18.3

W.D. Mich. (n=395) 9.4 43.0 36.5 11.1

W.D. Mo. (n=189) 6.3 22.2 55.0 16.4

E.D.N.Y. (n=139) 9.4 20.1 50.4 20.1

B. By When Case Closed

Much Somewhat Somewhat Much

More More Less Less 

Before Hearing (n=1,581) 3.5 21.9 55.9 18.7

As a Result of Hearing (n=521) 6.0 16.7 48.2 29.2

After De Novo Demand (n=675) 14.5 51.1 28.1 6.2

C. By Program Characteristics

Much Somewhat Somewhat Much

More More Less Less 

Party input to Arbitrator

Selection Process?

Yes ( n=1,603) 7.5 34.1 42.9 15.5

No ( n=1,174) 5.4 19.8 54.3 20.5

D. By Attorney Characteristics

Much Somewhat Somewhat Much

More More Less Less 

Prior Experience

In case under rule (n=981) 6.7 30.8 47.8 14.7

In binding arbitration (n=1,311) 8.0 27.0 47.1 17.8

As arbitrator (n=938) 5.7 25.2 48.8 20.4

None ( n=619) 6.1 29.2 45.6 19.1

(continued)
Cost Savings 89

TABLE 25, continued

E. By Attorney Perceptions of the Case

Much Somewhat Somewhat Much

More More Less Less 

Applicable Law Barrier to Settlement?

Yes ( n=1,166) 8.7 31.6 44.7 15.0

No ( n=1,567) 5.2 25.1 50.2 19.5

Lack of Trust Barrier to Settlement?

Yes ( n=772) 10.5 33.2 42.6 13.7

No ( n=1,954) 5.1 25.7 50.1 19.0 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 12, p. 16, for regression

results.

Two factors consistently related negatively to attorney reports of time

and money savings. The first is participation in a program that provides for

litigant input to the arbitrator selection process. This finding supports the

speculation in the conclusion of Chapter 6 that attorneys view this feature

as somewhat burdensome. The second factor was that attorneys who perceived disputes about applicable law as an important issue in the case were

less likely to report cost reduction. The effect of both of these factors,

however, was only to limit the size of the majority that reported savings.

While arbitration programs can achieve savings, they are realized in

cases that do not return to the regular pretrial process (approximately twothirds of the arbitration caseload). There is no evidence that litigants in de

novo demand cases perceive that arbitration programs save them either

time or money. Recall, however, that another purpose of arbitration

programs is to provide an opportunity for adjudication in smaller dollar

cases that might otherwise have settled. It is possible that some of those

who opt for arbitration will spend more money than they would have if

they settled, but still much less than if they went to trial. What may be

important is whether parties believe that the time and money was well

spent.

Party perceptions of reasonable cost

We asked parties in cases referred to arbitration if their dispute was resolved at a reasonable cost and required a reasonable amount of their personal time. Sixty-five percent reported that costs were reasonable and 71%
90 Court-Annexed Arbitration in Ten District Courts

indicated that resolving the case took a reasonable amount of their time

(see Tables 26 and 27).

At least half of the parties from each of the pilot courts responded favorably to these two questions. The percentage agreeing that the cost was

reasonable ranges from under 60% in Western Texas, Western Michigan,

and Eastern New York to over 70% in New Jersey and Western Missouri;

the ranges for reasonable time are from 65% in Western Oklahoma and

Western Michigan to 80% in New Jersey. The differences across districts

remain significant after controlling for other factors.

Parties’ responses also differ depending on the stage at which their

cases closed, with those in de novo demand cases less likely to report reasonable time and cost expenditures. However, 54% of parties in cases

where trial de novo was demanded still reported that the cost was reasonable, and 59% reported that they spent a reasonable amount of their personal time.

No program characteristics relate to party reports of reasonable cost

and personal time expenditures, nor are any party characteristics influential. What did affect parties’ ratings were satisfaction with the outcome

and their views of the process, specifically whether it was understandable

and afforded them some control over the decision to end the case.

TABLE 26

Party Views of Whether Costs Were Reasonable

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=521) 11.9 52.8 20.5 14.8

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

N.D. Cal. (n=72) 18.1 43.1 23.6 15.3

M.D. Fla. (n=66) 13.6 50.0 15.2 21.2

D.N.J. (n=42) 4.8 73.8 16.7 4.8

W.D. Okla. (n=131) 16.0 49.6 18.3 16.0

W.D. Tex. (n=13) 7.7 46.2 23.1 23.1

W.D. Mich. (n=88) 4.5 53.4 29.5 12.5

W.D. Mo. (n=68) 11.8 61.8 16.2 10.3

E.D.N.Y. (n=41) 9.8 48.8 22.0 19.5

(continued)
Cost Savings 91

TABLE 26, continued

B. By When Case Closed

Strongly Strongly

Agree Agree Disagree Disagree 

Before Hearing (n=209) 12.4 58.9 17.7 11.0

As a Result of Hearing (n=138) 13.8 55.1 15.9 15.2

After De Novo Demand (n=174) 9.8 43.7 27.6 19.0

C. By Party Views of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Outcome Satisfaction

Satisfied (n=329) 15.5 63.8 13.4 7.3

Not Satisfied (n=181) 5.0 33.7 33.1 28.2

D. By Party Views of Process

Strongly Strongly

Agree Agree Disagree Disagree 

Understanding

At least some (n=484) 12.6 53.3 20.7 13.4

Little or none (n=31) 0.0 41.9 22.6 35.5

Control Over Decision to End Case

At least some (n=304) 15.1 58.6 17.8 8.6

Little or none (n=161) 5.6 41.6 25.5 27.3 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 13, p. 17, for regression

results.
92 Court-Annexed Arbitration in Ten District Courts

TABLE 27

Party Views of Whether Personal Time Requirements Were Reasonable

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=538) 11.5 58.6 17.8 12.1

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

N.D. Cal. (n=73) 16.4 54.8 17.8 11.0

M.D. Fla. (n=68) 11.8 57.4 17.6 13.2

D.N.J. (n=45) 11.1 68.9 15.6 4.4

W.D. Okla. (n=130) 14.6 50.8 22.3 12.3

W.D. Tex. (n=15) 6.7 60.0 6.7 26.7

W.D. Mich. (n=94) 3.2 61.7 20.2 14.9

W.D. Mo. (n=70) 12.9 65.7 11.4 10.0

E.D.N.Y. (n=43) 11.6 60.5 16.3 11.6

B. By When Case Closed

Strongly Strongly

Agree Agree Disagree Disagree 

Before Hearing (n=220) 12.3 63.6 13.6 10.5

As a Result of Hearing (n=139) 14.4 60.4 14.4 10.8

After De Novo Demand (n=179) 8.4 50.8 25.7 15.1

C. By Party Views of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Outcome Satisfaction

Satisfied (n=342) 14.9 63.7 14.6 6.7

Not Satisfied (n=184) 4.9 50.0 23.9 21.2

D. By Party Views of Process

Strongly Strongly

Agree Agree Disagree Disagree 

Understanding

At least some (n=502) 12.2 59.8 16.9 11.2

Little or none (n=30) 0.0 40.0 30.0 30.0

Control Over Decision to End Case

At least some (n=317) 15.8 61.8 16.7 5.7

Little or none (n=164) 3.7 54.3 17.1 25.0 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 14, p. 18, for regression

results.
Cost Savings 93

Note that neither the number of events in which parties participated

nor their participation in any particular type of event was related to how

they assessed the reasonableness of the time and money spent. More important was understanding why they were there, maintaining control, and

eventually coming to a satisfactory outcome.

Conclusion

Arbitration programs can reduce the cost of litigation and provide for a

hearing on the merits at a cost that parties see as reasonable. Majorities of

attorneys in all districts reported cost savings. Highest time and cost savings were reported by lawyers in successfully arbitrated cases. Involvement

in cases with no dispute over applicable law also increased the chances that

attorneys would report savings.

An important caveat to the conclusion of time and cost savings is that

none were reported by the majority of attorneys in cases where trial de

novo was demanded. The majority of the parties in these cases, however,

report that the time and money costs were reasonable.

Program characteristics failed to show significant relationships to parties’ perceptions of the reasonableness of their time and money expenditures, but this was not so with lawyers. Attorneys from courts that provide for party input to the arbitrator selection process were less likely to

report any time or money savings. The impact of this feature was of degree

rather than kind, however, with majorities of all groups of attorneys

reporting that savings were achieved.

95

Chapter 8

Reducing Time to Disposition

The Center’s previous evaluation of three federal court-annexed arbitration

programs found that arbitration programs can, but do not necessarily, decrease the time from filing to disposition. A random design found that disposition time was reduced in the District of Connecticut.58 A before–after

design indicated that disposition time was reduced in Eastern Pennsylvania, but found no indication of time reduction in Northern California.59

The differences were attributed to Northern California procedures that

gave arbitrators more control over the scheduling—and adjournment—of

the arbitration hearing. (Northern California has since changed its rules to

return more calendar control of arbitration cases to the court.)

This chapter presents the time to disposition results of the random assignment experiment in Middle North Carolina (described at p. 24) and of

the pre-program to post-program comparison in the other new pilot

courts. It also discusses the views of attorneys as to whether the program

led to earlier settlements and the views of parties as to whether the

disposition time was reasonable.

Disposition time in the

Middle District of North Carolina

Of the new pilot courts, only Middle North Carolina employed a random

design. Both the Federal Judicial Center and Rand’s analysis of the arbitration and control group data found no significant difference between the

groups in the time from filing to disposition.60 Graph 1 compares the time

to termination distributions for the arbitration and control cases. Notice

that more control cases terminate during the first few months after filing.

 

58. E. Lind & J. Shapard, supra note 5, at 47.

59. Id. at 48–51.

60. E. Lind, supra note 25, at 41–43; B. Meierhoefer, supra note 25, at 19. The Center re -

port analyzed the data two ways, one based on the groups as originally assigned (the statistically preferred method) and one that excluded “arbitration” cases that were exempted from

the program. In the less rigorous second analysis, there was a significant difference from filing

to disposition after controlling for the time from filing to issue (a period significantly longer

for arbitration cases than for control cases). This was based almost entirely, however, on the

much shorter period between issue and entry of a pretrial order for the arbitration cases.
96 Court-Annexed Arbitration in Ten District Courts

The arbitration caseload then begins to terminate at a faster rate, and the

proportion of closed arbitration cases surpasses that of control cases in the

tenth month after filing. The two distributions then even out seven

months later. One reason that the arbitration cases closed more slowly

than the controls in the early months is that significantly fewer of them

closed before issue was joined. This could indicate that the arbitration

program in Middle North Carolina is encouraging the pursuit of some

cases that otherwise might have been dropped.61

GRAPH 1

Cumulative Proportion of Arbitration and Control Cases Closed in

Middle North Carolina, by Months to Termination

Months to Termination

Percentage of Cases Closed

Control

Arbitration

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0

10

20

30

40

50

60

70

80

90

100

Disposition time in the other new pilot courts

For the other new pilots, the question of whether their arbitration programs reduced the time from filing to disposition was addressed by comparing disposition times in samples of civil cases that were filed before and

after the effective date of program implementation.62

 

61. E. Lind, supra note 25, at 34.

62. This replicates the approach taken by Lind and Shapard ( supra note 5) to assess re -

duction in disposition time in Eastern Pennsylvania and Northern California. Here, however,

our “post” sample began six months after program implementation because some of the pro-
Reducing Time to Disposition 97

This is a weak method for addressing the impact of arbitration on

disposition time. The higher the proportion of civil cases diverted to the

arbitration program, the more likely the post-program sample contains a

significant proportion of arbitration cases, hence the higher likelihood that

any impact due to the program will be uncovered by the analysis (see

Table 28 on p. 102). Furthermore, factors other than introduction of the

program could contribute to any differences. Therefore, findings based on

these data should be viewed as suggestive rather than definitive.

Graphs 2 through 9 display the cumulative percentage of cases closed

from one to eighteen months after filing for the pre-program and postprogram samples. As can be seen from Graph 2, which combines the data

from the seven new pilot courts analyzed by this method, there is very

little difference overall in the speed with which the two samples

terminated. This indicates that speedier dispositions are not an automatic

benefit of arbitration programs.

GRAPH 2

Cumulative Proportion of Cases Closed By Months to Termination in New

Pilot Courts (Except Middle North Carolina): Selected Civil Cases Filed

Before and After Implementation of Court-Annexed Arbitration

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Months to Termination

Percentage of Cases Closed

0

10

20

30

40

50

60

70

80

Pre-program

Post-program

 

grams got off to a slow start. See pp. 23–25 supra for a discussion of the use of random designs and the specific criteria used to select the pre-program and post-program samples.
98 Court-Annexed Arbitration in Ten District Courts

The arbitration programs do appear to have reduced the disposition

time in Western Michigan (see Graph 3), where the post-program sample

terminates faster than the pre-program sample throughout the eighteenmonth period, and in Middle Florida (see Graph 4), where the postprogram cases show a faster rate of termination throughout the eighteenmonth period after the first month. Arbitration also seems to speed

terminations in Western Missouri after the sixth month (see Graph 5).63

The slower start for the post-program cases in Western Missouri is similar

to the pattern in Middle North Carolina.

GRAPH 3

Cumulative Proportion of Cases Closed By Months to Termination in

Western Michigan: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

Months to Termination

Percentage of Cases Closed

0

10

20

30

40

50

60

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Pre-program

Post-program

 

63. The differences in distribution for these three districts were statistically significant,

using the Kolmogorov–Smirnov test, a standard tool of statistical analysis that compares the

similarity of two cumulative distributions.
Reducing Time to Disposition 99

GRAPH 4

Cumulative Proportion of Cases Closed by Months to Termination in

Middle Florida: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

Months to Termination

Percentage of Cases Closed

0

10

20

30

40

50

60

70

80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Pre-program

Post-program

GRAPH 5

Cumulative Proportion of Cases Closed by Months to Termination in

Western Missouri: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

Months to Termination

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

0

10

20

30

40

50

60

70

80

Percentage of Cases Closed

Pre-program

Post-program
100 Court-Annexed Arbitration in Ten District Courts

GRAPH 6

Cumulative Proportion of Cases Closed by Months to Termination in

Western Texas: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

Months to Termination

0

10

20

30

40

50

60

70

80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Pre-program

Post-program

Percentage of Cases Closed

GRAPH 7

Cumulative Proportion of Cases Closed by Months to Termination in

Western Oklahoma: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

0

10

20

30

40

50

60

70

80

90

100

Pre-program

Post-program

Percentage of Cases Closed

Months to Termination
Reducing Time to Disposition 101

GRAPH 8

Cumulative Proportion of Cases Closed by Months to Termination in

New Jersey: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

0

10

20

30

40

50

60

70

80

Pre-program

Post-program

Percentage of Cases Closed

Months to Termination

GRAPH 9

Cumulative Proportion of Cases Closed by Months to Termination in

Eastern New York: Selected Civil Cases Filed Before and After

Implementation of Court-Annexed Arbitration

Pre-program

Post-program

Percentage of Cases Closed

Months to Termination

0

10

20

30

40

50

60

70

80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
102 Court-Annexed Arbitration in Ten District Courts

Western Texas (see Graph 6) does not show a reduction in the overall

time from filing to disposition, but displays a pattern that is very similar to

that found in Middle North Carolina. The post-program cases close much

more slowly at first, then catch up and surpass the pre-program cases in

the eighth through the eleventh months, and then fall behind again. In

Western Oklahoma, New Jersey, and Eastern New York (see Graphs 7-9),

there is little difference between the two distributions.

These results support our expectation that arbitration programs can,

but do not necessarily, reduce the time from filing to disposition. We look

now at which features affected participants’ views about whether arbitration accomplishes some of the more specific goals that underlie its potential to reduce disposition time.

TABLE 28

Pre-Program and Post-Program Sample Sizes and Proportion of Cases

in the Post-Sample Likely to Have Been Eligible for Arbitration

M.D. D. W.D. W.D. W.D. W.D. E.D.

Fla. N.J. Okla. Tex. Mich. Mo. N.Y. 

Number of Contract

and Tort Diversity

Cases Under

$150,000 Filed

Pre-program 293 761 457 85 264 164 356

Post-program 294 851 406 143 318 161 339

Number of Contract

and Tort Diversity

Arbitration Cases

Under $150,000 Filed

During Post-Program

Time Period 165 447 178 30 84 44 76

Estimated Proportion of

Post-Program Sample

Referred to Arbitration 56% 53% 44% 21% 26% 27% 22%

 

Note: Cases from Western Texas are from the San Antonio office only.
Reducing Time to Disposition 103

Encouraging earlier settlement discussions

before the hearing

Since most arbitration cases are disposed of before the hearing, the major

program impact on speed would be to encourage earlier settlements

through the early scheduling of an arbitration hearing. Setting a time for

the arbitration, like setting a date for trial, is expected to focus attorneys’

attention on meaningful discussions. Key factors in accomplishing the goal

of earlier settlement, therefore, are the timing of the arbitration hearing,

the firmness of the hearing date, and how these compare with the district’s

normal practices in civil cases.

Over half (54%) of the attorneys in cases that closed after referral but

before a hearing agreed that referral of their case to arbitration resulted in

settlement discussions at an earlier point than would otherwise have occurred (see Table 29). There were, however, large differences among the

districts. Eastern Pennsylvania led with 61%, followed by Eastern New

York at 57%. Western Texas had the smallest proportion and was the only

district in which less than half (38%) of the attorneys agreed. Attorneys in

Northern California and Western Missouri split fifty–fifty, and slightly

over half of those from the other districts reported earlier settlement discussions. Note that these views of attorneys do not coincide closely with

the findings from the pre-program to post-program comparison of disposition times. A district where the time did appear to be reduced—Western

Missouri—had one of the lowest proportions of attorneys agreeing that

earlier settlement discussions were promoted, whereas a district with no

evidence of speedier dispositions—Eastern New York—had the highest

agreement percentage among the new pilot courts.

Attorneys’ views of earlier settlement discussions were not significantly affected by any program characteristics, nor were they related to the

three factors that were expected to influence their views: the schedule prescribed in the local rule, the actual median time from filing to disposition

of cases closed between referral and hearing, and attorney perceptions of

whether adjournments were difficult to obtain. Two factors positively related to reports of earlier discussions were representation of plaintiffs, and

initially believing that the case was at least somewhat likely to reach trial.

It is possible that cases viewed as unlikely candidates for trial are also those

most likely to settle easily in the first place and that referral to a courtannexed arbitration program will do little to speed their disposition.
104 Court-Annexed Arbitration in Ten District Courts

TABLE 29

Attorneys’ Views of Whether Referral to Arbitration Led to

Earlier Settlement Discussions

Yes No 

All Respondents in Cases Closed Prior to the Hearing (n=1,834) 54.4 45.6

A. By District

Yes No 

E.D. Pa. (n=474) 61.0 39.0

N.D. Cal. (n=299) 50.2 49.8

M.D. Fla. (n=240) 53.8 46.3

D.N.J. (n=227) 52.4 47.6

W.D. Okla. (n=167) 54.5 45.5

W.D. Tex. (n=48) 37.5 62.5

W.D. Mich. (n=167) 52.7 47.3

W.D. Mo. (n=123) 50.4 49.6

E.D.N.Y. (n=89) 57.3 42.7

B. By Attorney Characteristics

Yes No 

Side

Plaintiff (n=881) 59.1 40.9

Defendant (n=947) 49.9 50.1

C. By Attorney Views of the Case

Yes No 

Expected Trial was Likely?

Yes ( n=989) 57.4 42.6

No ( n=828) 51.9 48.1 

Note:See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 15, p. 19, for regression

results.

Effecting quicker settlements

Attorneys in cases that closed before the hearing were also asked if the case

settled more quickly than they had anticipated at the outset. A majority of

the attorneys (51%) disagreed (see Table 30). The responses varied somewhat across districts. In Middle Florida, Western Texas, Western Michigan, and Eastern New York, a majority agreed that the case settled earlier,

and in Eastern Pennsylvania, Northern California, Western Oklahoma, and

Western Missouri a majority disagreed. In New Jersey, the attorneys split

fifty–fifty.
Reducing Time to Disposition 105

TABLE 30

Attorney Views of Whether Referral to Arbitration Led to Quicker

Settlements: Cases Closed Before the Hearing

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents in Cases Closed

Prior to the Hearing (n=1,787) 10.0 39.1 43.6 7.3

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

E.D. Pa. (n=472) 8.9 35.8 45.6 9.7

N.D. Cal. (n=287) 9.1 32.1 50.5 8.4

M.D. Fla. (n=232) 12.5 43.5 37.5 6.5

D.N.J. (n=223) 6.7 43.0 45.3 4.9

W.D. Okla. (n=156) 10.9 37.8 45.5 5.8

W.D. Tex. (n=49) 20.4 40.8 30.6 8.2

W.D. Mich. (n=161) 8.1 46.6 40.4 5.0

W.D. Mo. (n=118) 11.0 37.3 44.1 7.6

E.D.N.Y. (n=89) 15.7 47.2 31.5 5.6

B. By District Characteristics

Strongly Strongly

Agree Agree Disagree Disagree 

Median Days from Filing to

Disposition in Cases Closed

After Issue was Joined

Under 210 (n=388) 11.9 41.2 41.7 6.2

214 (n=472) 8.9 35.8 45.6 9.7

219 & 222 (n=336) 10.7 33.3 47.6 8.3

230 (n=118) 11.0 37.3 44.1 7.6

267 & 273 (n=250) 10.8 46.8 37.2 5.2

315 (n=223) 6.7 43.0 45.3 4.9

C. By Program Characteristics

Strongly Strongly

Agree Agree Disagree Disagree 

Days from Answer to Hearing

80 (n=281) 13.9 43.1 36.3 6.8

120 (n=156) 10.9 37.8 45.5 5.8

150 (n=966) 9.8 35.9 45.5 8.7

165 (n=161) 8.1 46.6 40.4 5.0

180 (n=223) 6.7 43.0 45.3 4.9

(continued)
106 Court-Annexed Arbitration in Ten District Courts

TABLE 30, continued

D. By Attorney Views of the Case

Strongly Strongly

Agree Agree Disagree Disagree 

Expected Trial was Likely?

Yes ( n=801) 12.7 42.7 39.1 5.5

No ( n=970) 7.7 36.4 47.1 8.8

Lack of Trust a Barrier to Settlement?

Yes ( n=442) 8.1 38.9 41.6 11.3

No ( n=1,300) 10.5 39.3 44.5 5.7 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 16, p. 20, for regression

results.

The original pilot courts, Eastern Pennsylvania and Northern California, had the highest proportions of attorneys disagreeing that the case settled earlier than expected. Since this question asked attorneys to compare

what actually happened in the case with what they expected to happen, it

may be that the operation of arbitration programs since 1978 has changed

the initial expectations of attorneys.

Attorneys’ views of quicker settlements were influenced both by time

schedules in the local rule and by the actual time to disposition of referred

cases that closed before the hearing. Attorneys from pilots with local rules

that allow less time between answer and the hearing were more likely than

others to agree that the case settled more quickly. This lends support to

the notion that the ability of arbitration programs to promote earlier settlements before the hearing is tied to the timeliness of the hearing date.

Surprisingly, however, attorneys from courts with longer median disposition times for arbitration sample cases that closed between referral and the

hearing were more likely to say that the case settled earlier than expected.

This probably relates to the loose relationship between the disposition

time of referred arbitration cases and the general speed of case processing

in the district (see Chapter 4). Attorneys from districts where the arbitration caseload took relatively longer to dispose of may also have expected a

longer time to disposition at the outset of the case.

Views of attorneys in de novo demand cases

Although reducing disposition time is a goal of court-annexed arbitration

programs, there is also the danger that inserting the requirement for a
Reducing Time to Disposition 107

hearing prior to proceeding to trial could actually add to the delay in some

cases. We asked attorneys in cases that returned to the trial calendar via a

demand for trial de novo if they thought that arbitration delayed resolution of the case. Seventy percent said no (see Table 31). The differences

across districts were not statistically significant, and the responses were

unaffected by any characteristics of the district, the program, the attorneys, or attorneys’ views of the case.

TABLE 31

Attorney Views of Whether Arbitration Delayed Case: De Novo Cases

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=703) 12.9 16.8 50.8 19.5

E.D. Pa. (n=43) 9.3 16.3 51.2 23.2

N.D. Cal. (n=47) 6.4 14.9 61.7 17.0

M.D. Fla. (n=182) 14.3 15.9 46.2 23.6

D.N.J. (n=53) 13.2 13.2 47.2 26.4

W.D. Okla. (n=96) 9.4 13.5 56.3 20.8

W.D. Tex. (n=20) 10.0 20.0 45.0 25.0

W.D. Mich. (n=197) 12.7 19.8 54.8 12.7

W.D. Mo. (n=43) 16.3 20.9 44.2 18.6

E.D.N.Y. (n=22) 36.4 13.6 31.8 18.2 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 17, p. 21 , for regression

results.

Views of parties as to the time required

to settle the dispute

Parties were asked if the time required to resolve the dispute was reasonable. Two-thirds agreed that it was (see Table 32). A majority of parties

from all districts said that the time was reasonable, with the proportion

ranging from a low of 53% in Western Michigan to a high of 75% in

Western Missouri.

There were, however, significant differences depending on the stage at

which the case closed. The proportion of parties in de novo demand cases

who agreed that the time was reasonable exceeded a majority (56%), but

was significantly less than that for parties in successful arbitrations (70%)

or those in cases that closed before the hearing (75%).

Parties’ responses were not influenced by any of the program characteristics, but they were affected by views of case outcome. Parties who reported being satisfied with the outcome were also more likely to say that
108 Court-Annexed Arbitration in Ten District Courts

the time to disposition was reasonable. Type of party and type of representation also related to the ratings. Businesses were more likely than other

types of parties to report that the time was reasonable, as were any parties

who were represented by insurance companies. Pro se parties were much

less likely to agree that the case took a reasonable length of time.

Higher ratings were also associated with views that the process was

understandable and gave parties some control over the decision to end the

case. All groupings of parties, however, had majorities who agreed that the

time required to resolve the dispute was reasonable, except for the thirtyone parties who reported little or no understanding of what was going on,

and the twelve pro se parties.

TABLE 32

Party Views of Whether the Time Required to

Resolve the Case Was Reasonable

Strongly Strongly

Agree Agree Disagree Disagree 

All Respondents (n=536) 12.5 54.9 20.0 12.7

A. By District

Strongly Strongly

Agree Agree Disagree Disagree 

N.D. Cal. (n=71) 21.1 52.1 14.1 12.7

M.D. Fla. (n=68) 11.8 58.8 17.6 11.8

D.N.J. (n=45) 6.7 60.0 26.7 6.7

W.D. Okla. (n=132) 13.6 59.1 15.9 11.4

W.D. Tex. (n=14) 14.3 42.9 42.9 0.0

W.D. Mich. (n=95) 6.3 46.3 26.3 21.1

W.D. Mo. (n=68) 13.2 61.8 16.2 8.8

E.D.N.Y. (n=43) 14.0 46.5 23.3 16.3

B. By When the Case Closed

Strongly Strongly

Agree Agree Disagree Disagree 

Before Hearing (n=217) 15.2 59.4 14.7 10.6

As a Result of Hearing (n=140) 14.3 55.7 19.3 10.7

After De Novo Demand (n=179) 7.8 48.6 26.8 16.8

(continued)
Reducing Time to Disposition 109

TABLE 32, continued

C. By Party Views of Outcome

Strongly Strongly

Agree Agree Disagree Disagree 

Outcome Satisfaction

Satisfied (n=338) 16.9 58.3 16.3 8.6

Not Satisfied (n=187) 4.8 49.7 26.2 19.3

D. By Party Characteristics

Strongly Strongly

Agree Agree Disagree Disagree 

Type of Party

Private Individual (n=165) 10.3 41.8 28.5 19.4

Business ( n=236) 14.4 61.4 16.1 8.1

Other (n=127) 10.2 60.6 16.5 12.6

Type of Representation

Own Attorney (n=438) 12.1 56.2 18.7 13.0

Insurance Company (n=76) 13.2 55.3 22.4 9.2

Pro Se (n=11) 18.2 27.3 27.3 27.3

E. By Party Views of Process

Strongly Strongly

Agree Agree Disagree Disagree 

Understanding

At least some (n=500) 13.2 55.4 20.6 10.8

Little or none (n=31) 0.0 45.2 12.9 41.9

Control Over Decision to End Case

At least some (n=312) 17.3 57.7 16.0 9.0

Little or none (n=164) 3.0 51.2 25.6 20.1 

Note: See the Technical Appendix, on file at the Federal Judicial Center, at Analysis 18, p. 22, for regression

results.

Conclusion

Arbitration programs can, but do not always, reduce disposition time and

lead to earlier settlements. Furthermore, the programs do not appear to delay resolution of de novo demand cases, and parties report reasonable caseprocessing times.
110 Court-Annexed Arbitration in Ten District Courts

The evidence suggests that arbitration programs in Middle Florida,

Western Michigan, and Western Missouri have reduced disposition time,

but such evidence was not present in the other new pilot courts.

A majority of attorneys in arbitrated cases that closed before the

hearing agreed that referring the case to the program resulted in earlier settlement, but a majority also reported that the case had not settled quicker

than expected at the outset. Part of the latter finding might be attributed

to the longstanding arbitration programs in Eastern Pennsylvania and

Northern California, which may have altered attorneys’ initial expectations of the time required to resolve a case. Overall, however, there is only

lukewarm attorney support for the suggestion that arbitration expedites

settlement discussions and settlements before the hearing.

Seventy percent of the parties in arbitration cases reported that the

time required to resolve the dispute was reasonable. Parties in cases closed

either before or as a result of the arbitration hearing were the most likely

to agree that the time to disposition was reasonable, but even in de novo

demand cases a majority responded favorably. Furthermore, 70% of the

attorneys in de novo demand cases did not think that the arbitration

hearing delayed resolution.
111

Chapter 9

Reducing Court Burden

Court-annexed arbitration programs seek to reduce judges’ caseload burden

so that judicial resources can be directed toward other cases on the court’s

calendar. This chapter presents the results of the judge survey and discusses which factors influence the probability that an arbitration case will

return to the trial calendar.

Court assessment of arbitration programs

When an arbitration program had been in place for at least eighteen

months, we asked judges to indicate their level of support for the program.

Seventy-nine percent of the fifty-seven responding judges reported very

positive support; an additional 17% reported somewhat positive support.

Only 3.5% indicated that they were somewhat negative, and no judge reported a very negative attitude (see Table 33). The differences across districts were significant, based primarily on the strength of judges’ positive

support.

Judges were also asked their opinion of a limited number of program

options. In general, they tended to support the specific procedures adopted

in their districts (see Table 34). For example, Northern California, the only

district in which arbitration hearings are routinely held in arbitrators’

offices, is also the only district with a majority of judges who disagree that

hearings should always be held in the courthouse. Furthermore, the judges

in those courts where the clerk’s office selects the arbitrators are more

likely to agree that arbitrators should be selected in this way than are

judges from courts that use a mixed method (e.g., party selection from a

list chosen by the clerk’s office) who, in turn, are more likely to agree than

judges from Middle Florida and Middle North Carolina, where the litigants

have the most control over arbitrator selection.

Judges were also asked if they would support the expansion of courtannexed arbitration to other courts. Ninety-seven percent responded that

they would (see Table 35). The strength of judges’ support for their

program and its expansion is directly related to perceived workload

reduction benefits for the court (see Tables 33 and 35).
112 Court-Annexed Arbitration in Ten District Courts

TABLE 33

Judges’ Ratings of Their Support for Their Court-Annexed

Arbitration Programs

Very Somewhat Somewhat Very

Positive Positive Negative Negative 

All Respondents (n=57) 78.9% 17.5% 3.5% 0.0%

A. By District

Very Somewhat Somewhat Very

Positive Positive Negative Negative 

E.D. Pa. (n=14) 14 0 0 0

N.D. Cal. (n=7) 6 1 0 0

M.D. Fla. (n=6) 5 0 1 0

M.D.N.C. (n=3) 3 0 0 0

D.N.J. (n=10) 9100

W.D. Okla. (n=3) 2 1 0 0

W.D. Tex. (n=1) 1 0 0 0

W.D. Mich. (n=3) 3 0 0 0

W.D. Mo. (n=4) 1 2 1 0

E.D.N.Y. (n=6) 1 5 0 0

B. By Judges’ Perceptions

Very Somewhat Somewhat Very

Positive Positive Negative Negative 

Arbitration Reduces Caseload

Burden of Judges*

Strongly Agree (n=35) 97.1% 2.9% 0.0% 0.0%

Agree (n=22) 59.1% 40.9% 0.0% 0.0%

Disagree (n=2) 0.0% 0.0% 100.0% 0.0%

*=chi square significant at or beyond the .05 level.

 

Note: Table entries for each district are numbers rather than percentages.
Reducing Court Burden 113

TABLE 34

Judges’ Support for Various Program Procedures

A. How Should Arbitrators Be Selected?

Proportion of Judges

Method of Arbitrator Selection Approving Method

 

By Clerk 85%

By Parties from List Drawn by Clerk 33%

By Parties 11%

B. Where Should Hearing Be Held?

Proportion of Judges

Place of Hearing Approving Place 

Always in Courthouse 85%

Not Always in Courthouse (N.D. Cal.) 43%

 
114 Court-Annexed Arbitration in Ten District Courts

TABLE 35

Judges’ Agreement That Other Courts Would Do Well to

Introduce Arbitration

Strongly Strongly

Agree Agree Disagree Doisagree 

All Respondents ( n=59) 61.0% 35.6% 3.4% 0.0%

A. By District

Strongly Strongly

Agree Agree Disagree Doisagree 

E.D. Pa. (n=15) 13 2 0 0

N.D. Cal. (n=6) 6 0 0 0

M.D. Fla. (n=6) 3 2 1 0

M.D.N.C. (n=3) 2 1 0 0

D.N.J. (n=10) 5500

W.D. Okla. (n=3) 0 3 0 0

W.D. Tex. (n=1) 1 0 0 0

W.D. Mich. (n=4) 3 1 0 0

W.D. Mo. (n=4) 1 2 1 0

E.D.N.Y. (n=7) 2 5 0 0

B. By Judges’ Perceptions*

Strongly Strongly

Agree Agree Disagree Doisagree 

Arbitration Reduces Caseload

Burden of Judges

Strongly Agree (n=36) 80.6% 19.4% 0.0% 0.0%

Agree (n=23) 34.8% 65.2% 0.0% 0.0%

Disagree (n=2) 0.0% 0.0% 100.0% 0.0%

*Chi square significant at or beyond the .05 level.

 

Judge perceptions of reduction of burden

Fifty-eight percent of the judges strongly agreed that their arbitration program reduced the caseload burden (see Table 36). An additional 38%

agreed, and 3% disagreed; none strongly disagreed.
Reducing Court Burden 115

TABLE 36

Judges’ Perceptions of Reduction of Caseload Burden

Strongly Strongly

Agree Agree Disagree Doisagree 

All Respondents (n=60) 58.3% 38.4% 3.3% 0.0%

A. By District

E.D. Pa. (n=15) 13 2 0 0

N.D. Cal. (n=7) 4 3 0 0

M.D. Fla. (n=6) 3 2 1 0

M.D.N.C. (n=3) 1 2 0 0

D.N.J. (n=10) 7300

W.D. Okla. (n=3) 1 2 0 0

W.D. Tex. (n=1) 1 0 0 0

W.D. Mich. (n=4) 2 2 0 0

W.D. Mo. (n=4) 1 2 1 0

E.D.N.Y. (n=7) 2 5 0 0

B. By District Characteristics

Diverts at least 15% of

caseload to arbitration?

Yes ( n=32) 71.9% 28.1% 0.0% 0.0%

No ( n=27) 44.4% 48.1% 7.4% 0.0%

C. By Judges’ Perceptions

Arbitration cases require

attention prior to hearing?

Always or frequently (n=11) 54.5% 27.3% 18.2% 0.0%

Occasionally or never (n=52) 60.8% 39.2% 0.0% 0.0% 

The extent to which burden is reduced should depend on how many

cases are diverted to the arbitration process, how judges’ involvement in

the prehearing phase of arbitration cases relates to what their involvement

would be absent the program, and how many arbitration cases return to

the regular trial calendar with demands for trial de novo. In fact, judges

who reported less frequent involvement in arbitration cases before the

hearing, and those in programs that divert at least 15% of the caseload to

the arbitration program, were significantly more likely to agree, and agree

strongly, that the program reduces the caseload burden of judges. Note
116 Court-Annexed Arbitration in Ten District Courts

that it is actual judicial practice rather than the presence of a local rule designed to reduce judicial involvement (presumably a precondition of the

practice) that is related to judges’ perception of burden reduction.64

There was not, however, a significant relationship between judges’

assessments of burden reduction and either the actual or perceived level of

demands for trial de novo. This probably results from the fact that the

large majority of arbitration cases—at least two-thirds—do not return to

judges’ trial calendars in any of the districts, and fewer still reach trial.

Even so, we would expect the level of burden reduction to be related to the

de novo demand rate, since this defines the proportion of cases that could

require judicial attention after the hearing.

De novo demands

Overall, 14% of the cases identified for, and not later exempted from, the

arbitration program returned to the regular trial calendar. The range across

districts was from 7% in Eastern New York to 32% in Western Michigan,

and the differences across the pilot courts were significant.

The probability of returning to the trial calender is a combination of

the probability that a case will be arbitrated and the probability that, once

heard, a de novo demand will ensue. The least burdensome cases are therefore those that are less likely both to be heard and to produce de novo demands when they do reach hearing. Five program features were associated

with this result: (1) providing for a hearing before a panel of arbitrators,

(2) lower hearing costs, (3) longer periods between answer and the hear–

ing,, (4) U.S. plaintiff cases, and (5) contract cases.65

Although these program features are associated with the least burden

on the court, the fact that they lead to fewer arbitrations (as well as fewer

de novo demands) suggests they are not the best for increasing litigants’

options for case resolution. No program features were associated with both

a higher likelihood of hearing and a lower probability of a de novo demand.

Four, however, led to more hearings and had no effect on demands for trial

de novo: (1) providing for litigant input into the arbitrator selection pro-

 

64. In some districts, magistrates rather than judges normally handle the pretrial

scheduling of civil cases, so it would be the magistrates (unfortunately not included in our

survey) who would benefit from rules that place responsibility for scheduling arbitration

cases in the clerk’s office.

65. See the Technical Appendix (on file at the Federal Judicial Center) at pp. 23, 24.
Reducing Court Burden 117

cess, (2) requiring the posting of arbitrators’ fees with any demand for trial

de novo, (3) tort cases, and (4) civil rights cases.66

Despite these associations, it should be noted that program features

explain only a small proportion of the variation in whether a case is arbitrated (6%) or trial de novo is demanded (4%). This means that factors

other than objective rule provisions or case characteristics are more determinative of whether any particular case is likely to return to the regular

trial calendar.

Trial rates

Reducing trial rates

Arbitration programs could, of course, have their largest impact on court

burden through a reduction in the trial rate. This, however, was not a primary goal of the arbitration programs in any of the pilot courts, because

they recognized that the types of cases eligible for the arbitration program

are unlikely to reach trial in the first place.

The first evaluation of the pilot arbitration programs in Eastern Pennsylvania and Northern California concluded only that it was difficult to

doubt that the programs caused some decrease in the trial rate.67 The current research does not fill the void of definitive knowledge about trial rates,

nor will this knowledge be easy to come by. The problem is methodological. Even the random assignment design in Middle North Carolina, which

found no significant difference between the trial rates of the arbitration

and control groups, 68 was not adequate to address the trial rate issue: The

arbitration and control groups were too small to reliably detect a reduction

in the already low trial rate (4%) if one occurred.69 The question of

whether court-annexed arbitration reduces trial rates can be answered only

by long-term commitment to random assignment from jurisdictions with

very large programs.

 

66. Id.

67. E. Lind & J. Shapard, supra note 5, at 140.

68. E. Lind, supra note 25, at 39–40.

69. This will be a persistent problem in attempts to evaluate the issue of trial rate. The

ability of statistics to detect differences in proportions depends on sample size, the amount of

the difference to be detected, and the actual size of the proportions themselves. Larger sample

sizes are needed to detect small differences and/or to detect the differences between proportions that fall at extremes of the scale. To have an 80% probability of detecting a twopercentage-point reduction from a trial rate of 4%, both the arbitration and control samples

must exceed 1,000 cases.
118 Court-Annexed Arbitration in Ten District Courts

Conclusion

The large majority of judges in the pilot courts support their own program

and agree with its particular features; there is no widely held view about

what characteristics constitute a good program. But judges do agree that

other courts would do well to adopt arbitration programs.

The strength of judges’ positive attitudes toward their programs varies

significantly with the strength of their agreement that arbitration reduces

their caseload burden. Ninety-seven percent of the judges agreed that burden was reduced, with 58% agreeing strongly. The factors that were significantly associated with judges’ burden assessments were the proportion of

the civil caseload that their district diverts to the arbitration program and

the frequency with which arbitration cases require their attention prior to

the hearing. Neither the actual nor perceived rate of de novo demands in

arbitration cases affected these assessments, a finding attributed to the fact

that less than a third of the arbitration caseload returns to the regular trial

calendar in every pilot court.

The case least likely to return to the regular trial calendar is a U.S.

plaintiff contract case in a program that provides for a longer answer-tohearing period and a panel of arbitrators paid relatively lower fees. The

case most likely to reach arbitration, and thereafter neither more nor less

likely to return to the regular trial calendar, is a tort or civil rights case in a

program that allows party input to the arbitrator selection process and requires the posting of fees along with any demand for trial de novo. We do

not know whether the pilot arbitration programs reduce the number of

trials.

The influence of program characteristics is very small, accounting for

less than 10% of the variation in arbitration or de novo rates. This means

that factors that we did not account for in our analyses are more important in determining whether a case will return to the regular trial calender.

For this reason, we are not in a position to prescribe broad program parameters to ensure that an arbitration program will reduce burden on the

court.
119

Chapter 10

Mandatory vs. Voluntary Referral

All of the pilot court-annexed arbitration programs mandate the referral of

selected cases to arbitration, so this research does not directly address the

relative merits and drawbacks of voluntary and mandatory referral. We do,

however, have information that is relevant to the debate. The data from

this research touch on the major criticism of mandatory programs—that

they pose an unacceptable barrier to trial—as well as the major problem

with voluntary programs—that they don’t attract cases.

Mandatory programs and the right to trial

The most frequently expressed concern about the mandatory referral of

cases to alternative dispute resolution programs is the belief that this interferes with the right to trial.

No arbitration programs are completely mandatory. The pilot federal

programs all contain exemption procedures for cases inappropriately identified for the program. Neither do they constitute insurmountable barriers

to trial. In each program, any party not satisfied with the outcome of the

arbitration may demand trial de novo. The programs do have disincentives

to demands for trial de novo. At a minimum, all require payment of the

arbitrators’ fees if the party who demands a trial de novo does not receive a

judgment more favorable than the arbitration award, and eight of the ten

pilot courts require that these fees be posted along with any demand. The

fees range from a low of $75 (in Western Oklahoma) to $500 in Middle

North Carolina. However, since these fees are much lower than the expected cost of trial, litigants who find them unsurmountable are not likely

to have pursued their cases through trial without the program.

Our data do not show that these disincentives are seen as significant

barriers. Indeed, the findings from this research indicate the contrary. Districts with higher fees had proportionally more cases arbitrated and more

de novo demands than those with lower fees. We also found no evidence

that a required posting of fees affected demands for trial.

Neither is there any evidence that litigants in cases mandatorily referred to arbitration see themselves as receiving second-class justice. Eighty

percent of all parties in cases mandatorily referred to arbitration agreed

that the procedures used to handle their cases were fair. Among parties
120 Court-Annexed Arbitration in Ten District Courts

who had prior trial experience, 84% agreed that the procedures were fair.

In Middle North Carolina, which employed a random design for the evaluation, parties in arbitration cases were significantly more likely to say that

their experience with the litigation was fair than were those in a control

group of cases that went through regular procedures. Furthermore, half of

all parties who participated in an arbitration hearing selected arbitration as

their preferred method of decision making when asked to choose among

judges, juries, arbitration, or “makes no difference.”

Voluntary programs and program size

If voluntary programs can accomplish everything that mandatory programs do, then almost everyone would opt for the non-coercive programs.

However, voluntary alternative programs in other jurisdictions have been

notably unsuccessful in attracting cases.70 Programs that do not attract

cases are unlikely to have any overall effect on the cost of litigation or

court burden. Recall that the proportion of the civil caseload diverted to

mandatory arbitration programs was significantly related to the strength

of judges’ agreement that the program reduced their caseload burden. The

only other factor similarly related was the frequency with which judges

reported involvement in arbitration cases prior to the hearing. Voluntary

programs that anticipate judicial participation in selecting cases for arbitration also ensure that this potential avenue for burden reduction will not

come into play. Without a reduction in the caseload burden of judges, the

cost and time required to administer a voluntary program could result in a

net increase in the burden on the court system.

It is not clear why there is a low rate of participation in voluntary programs. Litigants may not be as dissatisfied with traditional processes as

commonly thought. Parties may not be aware of alternatives. Attorneys

may be unwilling to advise trying “something new” for fear their advice

will be faulted if the something new does not work out. And they may be

wary of electing a procedure that might be construed as a sign of weakness. They may also fear disclosing their case in advance of trial or believe

that, in some cases, delay serves the best interests of their clients and may

therefore avoid programs that purport to speed cases to disposition.

 

70. J. Pearson, An Evaluation of Alternatives to Court Adjudication, 7 Justice Sys. J. 420

(1982).
Reducing Court Burden 121

Where non-participation is attributable more to habit than aversion,

the problem might be solved by voluntary programs that incorporate features designed to ensure increased awareness of the alternatives.

Experimentation with degrees of voluntariness

The available structures for alternative dispute resolution programs are

more extensive than the simple voluntary–mandatory dichotomy might

suggest. For example, voluntary arbitration procedures may consist of a

simple notification, via local rule, that the program is available should litigants wish to avail themselves of it. Thus, litigants are offered a program

that they may, at the expenditure of some effort, opt into. Judicial officers

need not play a role. Programs of this sort will likely be used sparingly.

Another option, designed to increase awareness and program size, but

which also increases judicial involvement, could be to require that arbitration be discussed at the Rule 16 conference. Program size might be increased without increasing judicial involvement by automatically referring

cases to the program but allowing any litigant to opt out.

The difference between a voluntary program of the “opt-out” variety

and mandatory programs from which cases may be exempted is the authority the court has to deny a request for exemption. We noted above

that no court-annexed arbitration program is completely mandatory. A

“mandatory” program that operates in such a way that any request for exemption is granted is, in practice, a voluntary opt-out program.

We recommend that districts entering the voluntary pilot programs

adopt somewhat different patterns of “voluntariness” so that the programs

can serve as laboratory models to assess program participation and litigant

satisfaction.

123

Chapter 11

Conclusions and Recommendations

Assessment of program features

This research found no program characteristic that either guaranteed satisfaction, or resulted in overall dissatisfaction, with arbitration, so there is

no empirical basis for requiring any particular way of structuring arbitration programs. There were, however, a number of program design or implementation features that had a relatively small, but significant, influence

on particular program goals. Table 37 presents a summary of these program, case, and litigant characteristics. In all instances, although the characteristics described were found to cause real differences in litigant perceptions or case processing, these differences are small.

Setting program eligibility criteria

The pilot courts vary in the case-type and dollar-demand criteria that define cases eligible for their arbitration programs. Their choices were based

on ideas about which types of cases are most likely to benefit from the

program and assessments of how many cases the programs could handle

given available resources.

This research did not find that any particular nature of suit, jurisdictional basis, or dollar amount identified generally better candidate cases for

arbitration. None of the case features was consistently related one way or

the other to litigant perceptions of whether any goals were achieved.

However, there was some evidence that tort and civil rights cases might

benefit from arbitration in terms of increasing litigants’ options (see p.

117). Since the current legislation exempts all civil rights cases from

mandatory referral to arbitration, courts are advised to explore the option

of arbitration with litigants in civil rights cases involving only money

damages to see if they are interested in consenting to arbitration.

We did find that arbitration programs that diverted less than 15% of

the civil caseload to the program were less likely to result in a perceived reduction of court burden. Data presented in Chapter 4 (see pp. 41–42) suggest that the proportion of the civil caseload diverted to the pilot programs

depended both on eligibility criteria and on the unique features of each district’s caseload. Courts considering adoption of a court-annexed arbitration

program should first do a thorough caseload analysis to determine which
124 Court-Annexed Arbitration in Ten District Courts

eligibility requirements will divert enough cases (at least 10%) to make the

effort worthwhile, and at the same time limit the size of the program to

available resources. Programs do not necessarily have to begin with their

optimal eligibility criteria, but might choose to start more restrictively and,

if justified, expand with experience. This course was followed successfully

by Eastern Pennsylvania.

Time Limits

Answer to hearing. The pilot courts adopted time periods between

answer and hearing that range from 80 to 180 days. The selection of a particular time period depended both on the normal case processing time for

civil cases in the district and on whether the program was explicitly designed to reduce the time to disposition in cases that settled before the

hearing.

TABLE 37

Summary of Program, Case, and Respondent Characteristics Related to

Litigant and Judge Views of Arbitration

A. Party Views

Correlated Characteristics 

Rule Case Party

Party Views of: Features Feaures Characteristics

 

Procedural Fairness None None None

Hearing Fairnessa None None None

Preferred Decision-Makera None None None

Reasonable Cost None None None

Reasonable Personal Time Requirements None None None

Reasonable Time to Disposition None None + Represented by insurance company

+ Business party

– Pro se party

(continued)
Conclusions & Recommendations 125

TABLE 37, continued

B. Attorney Views

Correlated Characteristics 

Rule Case Attorney

Attorney Views of: Features Feaures Characteristics

 

Hearing Fairnessa None None + Experience as an

arbitrator

Preferred Decision-Makera + Lower hearing costs

– Litigant input to

arbitrator selection

process

– Up-front payment of

fees as de novo

disincentive

– Diversity jurisdiction None

Preferred Decision-Maker + Longer time from

answer to hearing

– Allowing only one

arbitrator

– Litigant input to

arbitrator selection

process

None + Prior experience in a

state arbitration

program

Approve Concept of Arbitration + Lower hearing costs

– Allowing only one

arbitrator

– Litigant input to

arbitrator selection

process

+ Diversity jurisdiction

– U.S. defendant

jurisdiction

+ Plaintiff

+ Experience as an

arbitrator

– Experience with

binding arbitration

Approve Program + Lower hearing costs

– Allowing only one

arbitrator

– Litigant input to

arbitrator selection

process

None + Plaintiff

+ Experience as an

arbitrator

– Experience with

binding arbitration

Attorney Time Savings – Allowing only one

arbitrator

– Litigant input to

arbitrator selection

process

None None

Client Cost Savings – Litigant input to

arbitrator selection

process

None None

Client Time Savings – Litigant input to

arbitrator selection

process

None None

Earlier Settlement Discussionsb None None + Plaintiff

Quicker Settlementsb – Longer time from

answer to hearing

None None

Delay because of Hearingc None None None

(continued)
126 Court-Annexed Arbitration in Ten District Courts

TABLE 37, continued

C. Judge Views

Correlated Characteristics 

Rule Case Judge

Judge Views of: Features Feaures Characteristics

 

Reduction of Court Burden + Diverts at least 15%

to program

+ Infrequent judge

involvement in

prehearing phase of

arbitration cases

 Not Applicable Not Applicable

 

a= Arbitrated cases only

b=Cases closed before the hearing

c=Cases closed after a de novo demand

TABLE 38

Summary of Program and Case Characteristics Associated with Case

Processing Variables

Likelihood that Rule Features Case Features

 

Hearing Was Held + Litigant input to arbitrator selec -

tion process

+ Up-front payment of fees as de

novo disincentive

+ Allowing only one arbitrator

– Lower hearing cost

– Longer time from referral to hearing

+ Tort

+ Civil Rights

– Contract

– U.S. plaintiff jurisdiction

De Novo Was

Demanded

+ Hearing by one arbitrator

– Lower hearing cost

– Longer time from referral to hearing

+ Diversity jurisdiction

 
Conclusions & Recommendations 127

We found that shorter answer-to-hearing time periods were significantly associated with lawyers’ reports of quicker settlements before the

hearing. However, shorter answer-to-hearing periods were also associated

with fewer attorneys selecting arbitration as their preferred procedure, and

with higher probabilities that the case would both reach hearing and result

in a de novo demand. Therefore, although shorter periods may speed the

settlement of those cases that close before the hearing, they may also cause

the hearing to be held a little too early in the process, thereby making settlement before the hearing, and case resolution at the hearing, somewhat

less likely.

The choice of an answer-to-hearing time should depend on the primary purpose the program is to serve. If the idea is to speed settlements in

the bulk of the cases that close before the hearing, short periods may assist

in this goal. Longer periods are more consistent with the goal of reducing

court burden.

Award to de novo demand. The first arbitration rule in Eastern

Pennsylvania provided that demands for trial de novo were to be received

within twenty days from issuance of the arbitrators’ award. Eastern Pennsylvania later increased their award-to-demand period to thirty days. They

had received complaints that the twenty-day time period was too short,

leading to unnecessary de novo demands filed by lawyers who simply

wanted to keep their options open until they could consult with their

clients.

Two of the new pilot courts, however, adopted a twenty-day period as

more consistent with other pretrial scheduling deadlines in their district.

One questions the need for the extra ten days required by the current legislation for a speedy court that emphasizes party attendance at the hearing.

Number of arbitrators

Decisions as to how many arbitrators should hear a case are based on perceptions of fairness, cost, and administrative burden. Districts that routinely conduct three-attorney hearings believe that the panel approach enhances fairness, in both appearance and fact, which should lead in turn to

a higher likelihood that participants will accept the arbitration award.

Courts that use only one arbitrator believe that careful selection of the arbitrator pool obviates the need for a panel in order to achieve fairness, and

point to the administrative advantages of one-arbitrator hearings: each arbitrator can be paid more at the same, or lower, cost per case; scheduling of
128 Court-Annexed Arbitration in Ten District Courts

hearings is simplified; and the same number of hearings can be conducted

with a smaller arbitrator pool.

Attorneys in cases referred to one-arbitrator programs were less likely

to select arbitration as their preferred method of decision making, or to

approve of either the concept of arbitration or their program. The number

of arbitrators, however, did not affect the views of parties, or those of attorneys who actually participated in an arbitration hearing, as to the fairness of the hearing or the selection of arbitration as their preferred method

of decision making. Programs that supply only one arbitrator may appear

somewhat less satisfactory, but they do not result in less satisfaction

among those who avail themselves of the opportunity for a hearing.

The effect of the number of arbitrators on the reduction of court burden is mixed. Cases in one-arbitrator districts were both more likely to be

arbitrated and to result in de novo demands. There is, however, a greater

administrative burden associated with assembling panels and scheduling

hearings before three attorneys.

Courts designing arbitration programs are advised to balance the negative appearance factor associated with using only one arbitrator with the

administrative and dollar costs associated with panels. They should also

consider the mixed method used in five of the pilot courts, which allows

for hearings by either one or three arbitrators depending on what the parties request. Mixed-model rules that specify one-arbitrator hearings unless

parties request otherwise result in the large majority of hearings being

conducted by one arbitrator. The reverse is true where the mixed-model

rule specifies a panel unless parties request otherwise.

Arbitrator fees

In determining what to pay their arbitrators, districts evaluated the resources available for the program, and what they believed was needed both

to attract top-flight members of the bar to serve as arbitrators and to keep

them involved in the programs after the initial novelty wore off. Parity

with what any other alternative federal or state programs paid their neutrals was also a consideration where pertinent.

There is no evidence that higher arbitrator fees enhance the quality of

arbitration programs. In fact, higher fees were negatively associated with

attorneys’ approval of both the concept of arbitration and the particular

program, and led fewer attorneys in arbitrated cases to select arbitration as

their preferred procedure. Since in all of the pilot courts except New Jersey

the financial disincentive for demanding trial de novo is the arbitrators’
Conclusions & Recommendations 129

fees, it is not possible to disentangle the fees, per se, from their post-hearing consequences. It is logical to assume that it is the higher cost of proceeding beyond the hearing that led to the attorneys’ more negative attitudes.

However, higher fees do not discourage litigants from either proceeding to arbitration or demanding trials de novo. Rather, cases from districts

that paid their arbitrators relatively more per case were both more likely to

be arbitrated and more likely to result in demands for trials de novo than

were other cases. Higher fees, therefore, should not be expected to translate into either litigant satisfaction or lesser burden on the court.

Courts designing arbitration programs are advised to engage in realistic

discussions with their local bars to determine what fees are necessary to

attract attorneys to their program, and to explore alternative non-monetary incentives to serving as an arbitrator. As examples, two of the current

pilot programs, Western Oklahoma and Western Texas, exempt arbitrators

from certain Criminal Justice Act appointments.

Posting of arbitrator fees with de novo demands

The requirement that any demand for trial de novo be accompanied by the

posting of the arbitrators’ fees was first introduced in Eastern Pennsylvania, and is currently a feature in eight of the ten pilot courts. The purpose

of the provision is to discourage frivolous de novo demands; the objection

is that it might also stifle demands with merit. Instead, what the provision

seems to do is increase the likelihood that cases will reach hearing without,

on average, either encouraging or discouraging de novo demands.71 This

may indicate that parties view arbitration as a more appealing option if

there is a program feature that encourages all litigants to take the award

seriously.

Litigant participation in arbitrator selection

Districts that allow litigants to select an arbitrator from the full list of

those who have been certified believe that this enhances the fairness of the

program and encourages parties to accept the arbitrator decision. Other

courts, particularly those with large programs, believe that the administra-

 

71. The two districts that operated under both procedures—Eastern Pennsylvania and

Middle Florida—believe strongly that the up-front feature did reduce frivolous demands for

trial de novo. Our design does not allow us to address the impact of such a provision in each

court. We can say only that the provision in and of itself does not guarantee a lower de novo

rate relative to that found in other pilot programs.
130 Court-Annexed Arbitration in Ten District Courts

tive burden litigant-input procedures place on the clerk’s office is unnecessary if the arbitrator pool is carefully selected in the first place. Four of the

pilot courts opted for a mixed method under which the clerk’s office selects

a limited number of names from which litigants can choose.

Providing for input to the arbitrator selection decision does not affect

parties’ ratings of the fairness of either the program or the hearing, and the

feature neither encourages nor discourages de novo demands. However,

cases in programs that allow for at least some litigant input to the arbitrator selection process are more likely to be arbitrated. Having some say in

the decision of who will hear the case, therefore, seems to make the arbitration hearing more appealing, but does not affect the likelihood that the

award will be accepted.

Litigant input was consistently related to more negative attorney attitudes toward arbitration in general, and its ability to produce time and

money savings. Parties’ ratings of the reasonableness of their cost and time

expenditures were not affected by this program feature, however.

While litigant input to the arbitrator selection process enhances the

appeal of arbitration hearings, and the parties do not seem to think that

the extra time it requires of them is unreasonable, the process appears

cumbersome to some attorneys, creates an administrative burden on the

clerk’s office, and neither increases nor decreases the probability of de novo

demands. Therefore, while litigant input may be beneficial in terms of increasing options, it is not likely to reduce cost or court burden.

Summary

Despite the accomplishments of the pilot court-annexed arbitration programs, it is important to recognize the limitations of what they can be expected to do. Program features that can enhance the attainment of certain

program goals may often do so at the expense of others, and the overall

effect of the programs on any particular goal is likely to be relatively small.

However, the selection of particular features in a purposeful way is an important first step in program implementation.

Implementing arbitration programs

It is incumbent on those who are in favor of implementing a court-annexed arbitration program to enlist the support of members of the bench

and bar. As a starting point, the programs should not be oversold in terms

of what they can be expected to do, or how enthusiastically they are likely

to be embraced by litigants and the courts. Although large majorities of lit-
Conclusions & Recommendations 131

igants were supportive of the court-annexed arbitration programs, most

were moderately so. When given the chance to “agree” or “strongly agree,”

or to “approve” or “strongly approve,” the more modest forms of support

were more common than the more enthusiastic. Furthermore, of the

ninety-three federal district courts, only thirty have ever expressed interest

in becoming pilot arbitration courts. Of these, three withdrew their initial

proposals from consideration (Northern Illinois, Southern Texas, and

Eastern Washington) and one adopted and then disbanded its program

(Connecticut).

What all this means is that court-annexed arbitration programs are not

a panacea for overburdened courts and disgruntled litigants. However, they

have shown themselves to be a useful tool if carefully designed and implemented in cooperation with other actors in the justice system.

A key to successful program planning is a full working knowledge of

existing court practices and the local legal culture into which the program

will be introduced. What attorneys are used to appears to influence their

perceptions of the pilot court-annexed arbitration programs. Those who

had previously participated in state alternative programs, and those with

prior experience as an arbitrator, were generally more favorably disposed to

the arbitration programs than others, while experience with binding arbitration led to less favorable perceptions. Program implementation may be

eased by incorporating some features of successful state programs, while a

history of unsuccessful state programs must be recognized as an obstacle

to be overcome.

It is also necessary to plan how court-annexed arbitration programs

will relate to other existing alternatives and to the broader case-management practices of the court. Failure to do so may cause dissatisfaction.

Although the reason for disbanding the Connecticut program is obscure at

this point, it appears that the court and litigants preferred a preexisting

mediation program that handled similar types of cases. Furthermore, the

arbitration program in Western Michigan, which had the least favorable—

although still high—approval ratings among attorneys, seems to have suffered from unfavorable comparison with a preexisting mediation program

which provides for attorneys’ fees sanctions if a rejected award is not bettered at trial. Here, far from finding the program a barrier to trial, the

comments offered by attorneys showed dissatisfaction with the lack of

meaningful sanctions for rejecting the arbitration award. There were also

complaints from attorneys and parties whose cases went through both arbitration and mediation procedures.
132 Court-Annexed Arbitration in Ten District Courts

These experiences should not be taken to mean that multiple alternatives cannot work. For example, Western Oklahoma, the new pilot with

the highest proportion of “strongly approve” program ratings from attorneys, also uses court-sponsored settlement conferences and summary jury

trials. The key is selecting the right cases for the right forum and avoiding

too many different attempts to resolve any particular case short of trial.

The end result should be a matching of various procedures with particular

types of cases rather than making any one individual case subject to various alternatives. There comes a point at which litigants’ rejection of pressures to settle or refusal to accept non-binding determinations should be

taken to mean that they want what only a court can offer: a final adjudicative decision.

It is also likely that there is a break-even point for the court, at least

for some types of cases, beyond which the time spent trying to resolve a

case short of trial may be just as much of a burden on judicial resources as

trying the case would be. The task for court administrators and researchers

is to continue to try to identify optimal procedures most likely to provide

the highest quality of justice at maximum efficiency for various types of

cases.
133

Appendix A

Table of Local Rules
134 Court-Annexed Arbitration in Ten District Courts
Appendix A: Table of Local Rules 135
136 Court-Annexed Arbitration in Ten District Courts
Appendix A: Table of Local Rules 137

139

Appendix B

Case Types Selected as

Initially Eligible for Arbitration
140 Court-Annexed Arbitration in Ten District Courts

Case Types Selected As Initially Eligible for Arbitration

(Entries are percentage of identified cases in the district)

(* = less than 1% of the cases)

E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Number of Eligible Cases 2,415 669 630 1951,376 596 144 579 261 423

Most Frequent Types of Cases (At Least E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

10% in At Least One District) Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Other Contract 22 34 33 50 31 47 25 20 43 41

Motor Vehicle 13 3 6 12 18 3 3 6 2 4

Other Personal Injury 11 6 5 7 16 2 11 6 3 5

Contract—Marine 1 13 18 13000 0 4

Contract—Miller Act * 12 7 2 2 1 20 * 6 3

Contract—Negotiable Instruments * 5 * 0 2 17 1 1 5 2

Civil Rights—Other 7 * * 0 * 1 1 14 3 1

ERISA 3 * * 0 * * 1 5 3 12

More Frequent Types of Cases E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

(Between 4% and 9%) Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Contract—Insurance 69775485 5 4

Civil Rights—Jobs 2 * * 0 * 2 1 9 2 *

Personal Injury, Product Liability 51556188 0 2

Foreclosure 1000080* 0 0

Marine Personal Injury 24512*0* 0 1

Other Personal Property Damage 15221241 1 4

Other Fraud; Truth in Lending 11121211 6 0

Commerce: ICC Rates 2 * * 1 5 * 0 1 1 *

Federal Employers Liability 5 1 1 1 2 * 0 2 * 2

Other Statutory Actions 1021*242 6 3

Labor Management Relations 2001*015 1 4

Motor Vehicle Product Liability 1 * 2 1 * 0 4 * 0 0
Executive Summary 141

Less Frequent Types of Cases E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

(Between 1% and 3%) Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Medical Malpractice 11223*22 2 *

Taxes 1 0 0 0 0 1 0 2 3 3

Torts to Land * * 000210 * *

Assault, Libel, Slander 1 1 * 11011 0 *

Asbestos Product Liability 20000010 0 0

Property Damage Product Liability 1 * 1 2 * 1 0 1 * *

Airplane Personal Injury * 1 * 01001 0 1

Other Real Property ***0*21* * 0

Fair Labor Standards 1 * * 00101 1 0

Other Labor 1 * * 00002 1 1

Securities, etc. 1 * * 0 * 1 1 2 1 *

Rent, Lease, Ejectments * * 0 1 0 0 0 0 * *

Antitrust * 0000*01 * 0

Bankruptcy Appeals 1 0 * 00000 0 0

Forfeiture and Penalties * * 000000 2 *

Social Security 2000*000 0 0

Infrequent Types of Cases E.D. N.D. M.D. M.D. D. W.D. W.D. W.D. W.D. E.D.

(Between 4% and 9%) Pa. Cal. Fla. N.C. N.J. Okla. Tex. Mich. Mo. N.Y. 

Real Property Product Liability * 0000*0* 0 0

Airplane Product Liability ***0000* * 0

Marine Product Liability 0 * 0 * 0000 0 0

Banks and Banking * * 0 0 0 * 0 * 0 0

Tax Challenge 00000000 * 0

IRS—Third Party 00000000 0 *

Airline Regulations * 0000000 0 0

Trademark * 0 * 0000* 0 0

Patent * 000**0* 0 0

Copyright * 0 * 0 0 * 0 * * 0

Agricultural Acts 0 0 * 0000* * 0

Appeal of Fee Determination 00000000 0 0

Substitute Trustee 0 * 000000 0 0

State Statutes * 0000000 0 0

Railway Labor Act * 0000000 0 0

Environment Matters * 000000* 0 *

Selective Service 0000000* 0 0

Land Condemndation * 0000*00 0 0

Occupational Safety 0000000* 0 0
143

INDEX

A

Access to Justice............................................................................................. 63

Administrative Office of the U.S. Courts ......................... 2, 15, 19-20, 24, 44

Agency Appeal Cases ....................................................................................... 3

Answer-to-Hearing Period

choice of period ................................................................... 9, 34, 124, 127

hearing, probability of, relation to....................................................... 127

preference for arbitration, relation to attorneys’ .............. 9, 76, 127, 129

return to regular trial calendar, rate of, relation to........ 8, 9, 116-18, 127

settlement, earlier, attorneys' views of, relation to ................ 9, 106, 127

speed with which court moves arbitration cases, relation to .............. 50

Arbitration

approval rates

of attorneys in cases referred to.................. 6, 8, 14, 19-20, 23, 77-83

AND SEE SPECIFIC HEADINGS, THIS INDEX

of judges ........................................................................ 7, 111-18, 130

AND SEE SPECIFIC HEADINGS, THIS INDEX

of parties............................................................................ 6, 23, 55-56

AND SEE SPECIFIC HEADINGS, THIS INDEX

awards

SEE MAIN HEADING, THIS INDEX

bar, support of, generally ......................................................... 32, 77, 130

benefits of .................................................................................. 59, 97, 111

proportion of cases

diverted to civil arbitration .......................... 4, 8, 41-42, 97, 120, 123

returning to court’s regular trial calendar ......... 5, 48, 57, 89, 116-18

Arbitrators

Criminal Justice Act appointments, exemption from ........... 11, 37, 129

fees, generally ..................................................................... 10-11, 118, 128

number of, per hearing

as function of approval ratings ....................................................... 10

generally ...................................................................... 4, 10, 31, 37-39

mixed method model ......................................... 10, 36, 111, 128, 130

negative appearance factor of using only one ............. 10, 82-83, 128

relation to approval of attorneys’ concept

of arbitration ............................................................ 76-77, 82, 128

relation to attorneys' preference for arbitration .................... 76, 128

relation to magnitude of fees ................................................ 4, 10, 38

relation to perception of fairness ................................. 36, 76, 127-28
144 Court-Annexed Arbitration in Ten District Courts

relation to probability that case will be arbitrated................ 10, 128

relation to return of case to regular trial calendar ............... 116, 128

pay ............................................................................................. 10, 37, 127

qualifications, setting minimum ........................................................... 31

selection, generally................................ 4, 11, 36-37, 75, 111, 116, 129-30

litigant input

SEE MAIN HEADING, THIS INDEX

Attorneys

concept of arbitration, approval of ......................... 6, 77-79, 83, 125, 128

in U.S. Defendant cases................................................................... 77

relation to litigant input...................................................... 11, 77, 82

relation to number of arbitrators ............................................ 82, 128

relation to size of arbitrator fee ................................... 10, 76-77, 128

cost savings, reporting of ................................................ 6, 85-89, 93, 125

experience, prior, with various forms

of arbitration ....................................................... 51, 53, 58, 79-80, 131

fears of arbitration ................................................................................ 120

hearing, fairness of, reports of.................................................... 6, 68, 125

preference for arbitration

opinions as to fairness of hearing ................................................... 83

relation to answer-to-hearing period ........................................ 9, 127

relation to fees.............................................................. 10, 75, 83, 128

relation to litigant input....................................................... 75-76, 82

relation to number of arbitrators ............................................ 76, 128

program, specific, approval of ............................. 6, 8, 10, 80-82, 125, 128

settlements, earlier, report of, by .................................... 103-07, 110, 125

Attorneys’ Fees Sanctions ........................................................................... 131

Automobile Negligence Cases ....................................................................... 30

Awards

acceptance of, rates of ................................................................ 5, 62, 130

negotiations, starting point for further settlement .................... 5, 61-62

outcome at trial, indicated by ................................................................ 62

rejecting, lack of meaningful sanctions for .................................... 8, 131

vindication effect .................................................................................... 62

Award-to-Demand Period, Generally ......................................................... 127

B

Bell, Griffin ................................................................................................ 14 .....

Benefits of Arbitration

civil rights cases..................................................................................... 123

generally .................................................................................... 59, 97, 111

tort cases ............................................................................................... 123
Index 145

Binding Arbitration

attorneys’ prior experience with, relation to approval of

concept of arbitration................................................................. 79-80

specific program ............................................................................. 131

Broderick, Raymond J. (judge) ...................................................................... 18

Business as Party Participant

time required to reach settlement, views on reasonableness of ........ 108

C

California, Northern District of........ 1, 5, 8, 14, 21, 25, 30-31, 41, 43, 48, 50,

53, 59, 95, 103-04, 106, 110-11, 117

Cases

agency appeals..................................................................................... 3, 32

automobile negligence ............................................................................ 30

civil rights ............................................................. 3, 9, 32, 44, 117-18, 123

contract ............................................................... 3-4, 29, 32, 43, 48, 57-58

diversity ........................................................................................ 4, 57

probability of returning to trial ............................................ 116, 118

diversity

contract .................................................................................. 4, 25, 57

generally ........................................................................... 4, 44, 57, 77

exempted ........................................................................................ 9, 46-48

federal question ................................................................................. 44, 48

Interstate Commerce Act ....................................................................... 48

labor 44 .........................................................................................................

medical malpractice ................................................................................ 30

prisoner petition ........................................................................... 3, 11, 32

tort 3, 9, 25, 29, 32, 43, 118, 123 .................................................................

U.S. Defendant ................................................................................. 44, 47

U.S. Plaintiff ...................................................................... 44, 47, 116, 118

Civil Rights Cases

benefit from arbitration ....................................................................... 123

exemption from mandatory referral ....................................................... 9

generally .............................................................................................. 9, 44

hearing, probability of .......................................................................... 117

money damages claims........................................................... 3, 9, 32, 123

return to trial, probability of ................................................................ 118

Connecticut, District of .................................................................. 14, 95, 131

Cost Savings .............................................................................................. 85-93

Criminal Justice Act Appointments ............................................... 11, 37, 129
146 Court-Annexed Arbitration in Ten District Courts

D

Date

firmness of, for hearing, factor in earlier settlement .......................... 103

De Novo Trial, Demand for

answer-to-hearing period, relation to probability of ...... 8-9, 116-18, 127

availability of ........................................................................................ 119

cost and time savings reported by

attorneys ........................................................................... 6, 85-89, 93

litigants.............................................................................. 7, 89-90, 92

cost of unsuccessful,

relation to attorneys’ preference of decision maker ...................... 76

disincentives to filing.............................................. 38-40, 75, 119, 128-29

fees, relation to ................................................................. 10, 75, 119, 129

frivolous 39, 129 ...........................................................................................

generally .................................................................................. 7, 35, 54, 62

pro forma ................................................................................................. 38

rate of

generally ............................................................ 5, 8, 11, 48-49, 57, 85

relation to judge’s perception of burden reduction ............. 116, 118

relation to number of arbitrators .......................................... 116, 128

settlements, quicker, attorneys’ reports of ............................ 106-07, 127

time from hearing to ......................................................................... 38-39

time savings ............................................................ 89-90, 93, 106-07, 127

U.S. Plaintiff cases, probability of, in ...................................... 8, 116, 118

Discovery

period ................................................................................................. 34, 59

streamlining process ............................................................................... 85

District of Columbia, District of .................................................................. 14

Diversity Cases

concept of arbitration, attorney approval in ....................................... 77

contract ............................................................................................... 4, 57

generally .................................................................................. 4, 44, 57, 77

Dollar Ceilings................................................................ 3, 31-33, 42, 44-45, 47

Duke Law School Private Adjudication Center ..................................... 24, 30

E

Eligibility Requirements

case-type................................................................................... 3, 33, 42-43

dollar-type .................................................................... 3, 33, 42, 44-45, 47

attorney certification of amount .................................................... 45

setting amount.......................................................................... 123-24

generally ............................................................................... 4, 9, 29, 31-33
Index 147

Evidence

Federal Rules of ....................................................................................... 17

relaxed rules of .................................................................................. 18, 85

Exemption .............................................................. 33-34, 46-48, 119, 121, 123

F

Fairness

hearing

attorneys’ views ................................................................ 6, 65, 67-82

parties’ views ................................ 6, 37, 63-67, 75, 82, 102, 120, 130

among those with prior trial experience ............................... 120

relation to preference of decision maker ................................. 75

procedural, generally...................................................................... 6, 63-83

parties’ views ................................................................. 63-65, 119-20

Federal Judicial Center.................................................... 1, 2, 11-13, 19, 24, 95

Federal Question Cases............................................................................ 44, 48

Fees

approximate, per hearing ................................................................... 4, 38

arbitrated, proportion of cases actually, relation to ................... 119, 120

attorneys

relation to approval of concept of arbitration ............................... 77

relation to preference for arbitration ................................ 75, 83, 128

demands for trial de novo, relation to ........................... 75, 117, 119, 129

flat ............................................................................................................ 40

generally ................................................................................... 4, 10, 37-39

higher ................................................................................................ 10 .......

incentives, other, for serving as arbitrator ............................................ 10

litigants’ satisfaction, relation to ......................................................... 129

maximum 40 ................................................................................................

parity with other programs.................................................................. 128

posting ...................................................................... 4, 39-40, 75, 117, 129

quality of program, relation to ............................................................ 128

return of....................................................................................... 4, 39, 117

relation to probability of hearing .................................................. 117

return of case to regular trial calendar, rate of, relation to .... 8, 116, 118

Florida, Middle District of............. 1, 7, 15, 31, 36, 48, 53, 98-99, 104, 110-11

G

Georgia, Middle District of ........................................................................... 15

Goals of Pilot Programs, Generally ................................. 1, 16-17, 117, 123-30

accomplishment of .............................................. 9, 102-10, 124, 126, 130
148 Court-Annexed Arbitration in Ten District Courts

H

Hearings

answer-to-hearing period, relation to, probability of ......................... 127

approval of, parties’ ................................................................... 60-61, 120

arbitrator’s office, held in ..................................................................... 111

costs and fees

generally ....................................................................................... 4, 38

relation to return to regular trial calendar ....................... 8, 116, 118

courthouse, held in ............................................................................... 111

fairness, parties’ views of .............................. 65-67, 75, 82, 102, 120, 130

litigant input, relation to probability of......................................... 116-17

notice of 4, 34 ...............................................................................................

objectives, litigants’, in going through .................................................. 60

outcome at, relation to likely outcome following trial ........................ 62

parties’ approval of .................................................................... 60-61, 130

probability of ........................................................................... 116-17, 127

I

Illinois, Northern District of ........................................................... 15, 21, 131

Indiana, Southern District of ........................................................................ 15

Input, Litigant, into Arbitrator Selection Process

SEE Litigant Input

Institute for Civil Justice, Rand............................................. 23-24, 53, 85, 95

Insurance Companies

parties represented by, views of reasonableness of time

required to settle .............................................................................. 108

Interstate Commerce Act Cases ................................................................... 48

J

Judges

arbitration program, support for ................................................ 7, 111-18

relation to levels of de novo demands .......................................... 118

relation to perceived reduction in court burden ...... 7, 111, 114, 118

relation to proportion of cases diverted to arbitration.... 8, 118, 120

expansion of arbitration program, support for .................. 7, 111-12, 114

fears of arbitration .................................................................................. 36

involvement, pre-trial ............................................................................. 34

preference for ........................................................................ 111, 120, 126

reduction in court burden, perceived.................. 7, 111, 114-16, 123, 126

Judicial Conference of the U.S. ................................................................ 12-13

Judicial Improvements and Access to Justice Act ....................................... 15
Index 149

Jurisdiction

generally ............................................................................................ 44, 47

jurisdictional basis of case

relation to attorneys’ approval of concept of arbitration ............. 77

relation to attorneys’ approval of program as implemented ........ 81

motions, relation to ................................................................................ 35

K

Kentucky, Western District of...................................................................... 15

L

Labor Cases................................................................................................ 44 .....

Law, Applicable

dispute over, generally ........................................................................ 6, 46

relation to attorneys’ preference for arbitration............................ 76

relation to attorneys’ reports of cost and time savings .......... 89, 93

Legislation, Recommended ...................................................................... 11-12

Litigant Input (arbitrator selection process)

attorneys

relation to approval of concept of arbitration ................... 11, 77, 82

relation to preference for arbitration ................................. 75-76, 130

relation to reports of cost and time savings..................... 89, 93, 130

relation to reports of cost savings................................................... 89

relation to views of program as implemented ............................... 82

awards, probability of acceptance of, relation to ............................... 130

bar, to gain acceptance from the ........................................................... 36

de novo demand rate, relation to ......................................................... 130

fears of providing .................................................................................... 36

generally ............................................................. 4, 11, 31, 36, 121, 129-30

hearing, probability of, relation to.................................................. 116-17

judges’ preference for arbitration, relation to ..................................... 111

large programs, in ................................................................................. 129

litigants

relation to perception of achievement of goals............................ 123

relation to perception of fairness ....................................... 37, 129-30

mixed model ...................................................................... 10, 36, 111, 128

qualifications of arbitrators, stringency of, relation to ........................ 31

trial calendar, rate of return to, relation to ................................... 11, 118

Litigant Preference for Arbitration .......................................................... 69-77

M

Mediation Procedures, Cases Subjected to Both Arbitration and .. 8, 48, 131
150 Court-Annexed Arbitration in Ten District Courts

Medical Malpractice Cases ............................................................................ 30

Michigan, Eastern District of........................................................................ 30

Michigan, Western District of .............. 1, 5, 7, 8, 15, 30-32, 34-35, 41, 43-45,

48, 50, 59, 63, 75, 77, 85, 90, 98,

104, 107, 110, 116, 131

Missouri State Court System........................................................................ 30

Missouri, Western District of ..................... 1, 7, 15, 31-32, 34, 36, 41, 44, 48,

90, 98-99, 103-04, 107, 110

Money Damages Claims

civil rights cases, in .......................................................................... 9, 123

eligibility of, for arbitration................................................................ 3, 32

Motions, Dispositive

access to early rulings on........................................................................ 59

North Carolina, Middle District of, in ................................................ 61

protection from filings to delay ............................................................. 35

N

National Conference on the Causes of Popular Dissatisfaction with

the Administration of Justice (Pound Conference) ................................ 14

National Institute for Dispute Resolution.............................................. 23-24

National Science Foundation ........................................................................ 23

New Jersey, District of ................... 1, 15, 23, 24, 30-33, 36, 39, 44, 51, 53-54,

63, 75, 77, 90, 101-02, 104, 128

New Jersey State Court Program .................................................................. 30

New York, Eastern District of ..................... 1, 5, 15, 21, 24-25, 31, 36, 44-45,

48, 53, 67, 90, 101-04, 116

New York, Northern District of ................................................................... 15

New York, Western District of ..................................................................... 15

Non-Monetary Claims ......................................................................... 3, 32-33

North Carolina, Middle District of 1, 10, 15, 23-25, 30-37, 45, 48, 51, 53, .....

61, 65, 67, 83, 85, 95-96, 98-99,

102,111, 117, 119-20

O

Oklahoma, Western District of 1, 8, 11, 15, 21, 30-31, 33, 37, 41, 44, 48, 50,

54, 90, 100, 102, 104, 119, 129, 131-32

Outcome of Case

cost and time expenditures, parties’ reports of reasonableness of,

relation to .............................................................................. 90-93, 109

fairness of hearing, attorneys’ views of, relation to ........................ 67-68

fairness, parties’ reports of procedural, relation to............... 63-64, 66-67

satisfaction with, parties’, generally ................................................ 55-56
Index 151

time required to settle, parties’ views of reasonableness of,

satisfaction with, relation to...................................................... 107-10

P

Parties

business as party participant................................................................ 108

characteristics of, relation to reports of reasonable cost and

time expenditures .............................................................................. 90

cost and time savings, reporting by .................................................. 89-93

relation to characteristics of party.......................................... 90, 108

relation to control over decision to end case.................... 90, 93, 108

experience, prior litigation .................................................... 54, 57-58, 65

relation to perception of fairness of procedures...................... 119-20

fairness of hearing, perception of............................................... 6, 66, 130

fairness of procedures, perception of ................... 6, 37, 61, 63-65, 119-20

relation to prior litigation experience ...................................... 119-20

hearing process, approval of, generally .................................................. 60

outcome of case, satisfaction with, generally .................................. 55-56

relation to views of reasonableness of time required

to settle ................................................................................. 107-10

personal participation of, in case-related event ......................... 54, 56-58

relation to preference for arbitration .............................................. 83

relation to rating of procedural fairness ......................................... 65

preference for arbitration as resolution method ................. 6, 70, 83, 120

sophistication .................................................................................... 57, 65

time and cost savings, reported by ................................................... 89-93

relation to characteristics of party.................................................. 90

time, required to settle, reasonableness of, views of .... 7, 90, 93, 107-10

understanding of procedures ........................................ 65, 67, 90, 93, 108

Pennsylvania, Eastern District of .. 1, 14, 18, 20, 23, 25, 29-31, 33, 36, 38, 41,

44-45, 48, 51, 53, 75, 77, 95, 103-04,

106,110, 117, 124, 127, 129

Pennsylvania State Court System ................................................................ 14

Pennsylvania , Western District of ............................................................... 15

Pound Conference.......................................................................................... 14

Preexisting Mediation Programs ..................................................................... 8

Prisoner Petition Cases .............................................................................. 3, 11

Procedures

fairness, parties' reports of, views of ................................... 63-65, 119-20

Program Characteristics

cost and time expenditures, parties’ reports of reasonableness of,

relation to ..................................................................................... 90, 93
152 Court-Annexed Arbitration in Ten District Courts

effect of, generally ................................................................................ 126

generally ................................................................................................. 3-4

participation rates ................................................................................. 120

preference for arbitration, relation to, generally............................. 75, 82

satisfaction with arbitration, parties’, relation to .............................. 123

settlement

relation to attorneys’ views of earlier ...................... 103-04, 107, 110

relation to parties’ views of reasonableness of time

to reach ................................................................................. 107-10

size .................................................................................. 9, 36, 120-21, 124

specific characteristics

AND SEE SPECIFIC HEADINGS, THIS INDEX

time and cost expenditures, parties’ reports of reasonableness of,

relation to ..................................................................................... 90, 93

time required to reach settlement, reasonableness of, parties’

views of........................................................................................ 107-10

Program Goals

SEE Goals, THIS INDEX

Pro Se Parties

time required to settle, reasonableness of, views of ........................... 108

Punitive Damages Claims .................................................. 3, 32, 41-42, 45, 47

R

Rand Corp. Institute for Civil Justice.................................... 23-24, 53, 85, 95

Rule 16 Conferences

exemptions from ............................................................................. 34, 121

S

Sanctions, Attorneys’ Fees as...................................................................... 131

Second Class Justice Issue ............................................................... 63, 82, 119

Settlement, Earlier .................................................................................. 103-10

Social Security Cases ..................................................................................... 41

Sophistication of Parties .......................................................................... 57, 65

State Programs, Generally ........................................................... 8, 48, 58, 110

Student Loan Contract Cases ....................................................................... 41

Summary Judgment Motion ......................................................................... 35

Summary Jury Trial ..................................................................................... 132

T

Texas, Eastern District of .............................................................................. 15

Texas, Southern District of............................................................. 15, 21, 131
Index 153

Texas, Western District of ............................. 1, 11, 15, 31, 33, 37, 48, 51, 54,

74-75, 90, 100, 102-04, 129

Time

between last answer and hearing

relation to attorneys' views of quicker settlements .................... 106

relation to likelihood of return to trial ............................ 116-18, 127

case disposition, required for..................................... 7, 50, 57, 60, 95-110

personal expenditure of

relation to parties’ preference for arbitration ................................ 75

relation to parties’ views of fairness of hearing ............................. 65

savings

generally ............................ 5-7, 14, 19, 59-60, 89-90, 93, 106-07, 127

reported by attorneys ................................................................ 77, 93

reported by litigants, .................................................................. 89-90

reported by parties, ..................................................................... 89-93

settlement, requirement to reach, parties’ views of reasonableness of

pro se parties .................................................................................. 108

relation to control over decision to end case.................... 90, 93, 108

relation to outcome of case ....................................................... 90, 93

relation to parties' satisfaction ................................................ 107-10

relation to program characteristics.......................................... 107-10

Tort Cases ............................................................ 3, 9, 25, 29, 32, 43, 118, 123

benefit from arbitration ....................................................................... 123

Trial De Novo

rates .................................................................................... 5, 8, 48-49, 117

reduction of number of..................................................................... 8, 118

AND SEE De Novo Trial, Demand for, THIS INDEX

U

Understanding of Procedures, Parties’ Reported

cost and time expenditures, parties’ views ofreasonableness of,

relation to ..................................................................................... 90, 93

lack of, generally ..................................................................................... 65

time required to settle, parties’ views of reasonableness of,

relation to ......................................................................................... 108

U.S. Defendant Cases .............................................................................. 44, 77

arbitration as a concept, attorneys in , views of .................................. 77

U.S. Plaintiff Cases .................................................................. 44, 47, 116, 118

return to trial calendar, probability of, relation to ..................... 116, 118

Utah, District of ............................................................................................ 15
154 Court-Annexed Arbitration in Ten District Courts

V

Venue, Motions Relating to .......................................................................... 35

Voluntary Referral .................................................................................... 11-12

W

Washington, Western District of.......................................................... 15, 131
1

District

(Local Rule) Case Type Ceiling Arbitrators

Selection of

ArbitratorsNumber of 

Arbitrator

Compensation Hearing

Time of

HearingPlace of Authority to Grant

Continuances

Disincentives to

Demanding Trial De

Novo

Days to Demand

Trial De Novo

Procedures to Re -

duce Judge Involvement

(Local Rule 500)N.D. Cal.

Miller ActAdmiralty ActActHarbor Worker’sLongshoremen &Claims ActFederal Tortitime),question, mar-(diversity, federalproperty damagePersonal injury oritime)question, mar-(diversity, federaltiable instrumentContract or nego -

damages.excluding punitiveCurrent: $150,000$100,000

choice.dant given firstence with defenin order of prefermaining six namesplaintiff; rank re -starting withstrike two names,party entitled toby clerk; eachof 10 arbitratorsRandom selection

writing.parties agree inOne, or three if

$250 and $150.member. Current:per day per panelone arbitrator; $75$150 per day for

trators.lection of arbi -days after seclerk 20 to 120Scheduled by

tor(s).lected by arbitraAny location se -

judge.proved by thewriting and apas established inipated emergenciestreme and unanticNone, except in exCurrent: None. assessed. trial costs may be able judgment at tain more favor- novo fails to ob - mands trial de If party who de - 30 None

(Local Rule 8)M.D. Fla.

FELAJones Acteralthe Attorney Gen -As approved byMiller ActClaims ActFederal Tortitime)(diversity, marproperty damagePersonal injury orquestion)(diversity, federaltiable instrumentContract or nego -

damagesexcluding punitiveCurrent: $150,000$100,000

by clerk.random selection(current: 20 days)pleted in 10 days,tors; if not comeligible arbitraties from list of allSelection by paragree to fewer. Three, parties may

day).(now at $75 perby Chief JudgeTo be determined

notice to parties.at least 20 days’of arbi trators onand des ignationdays) of selectiondays (current: 90clerk within 60Scheduled by U.S. Courthouse. None, except that

shownfor good causejudge may grant

novo trial filed.demand for dewith court whenmust be postedCurrent: Feestion.award at arbitra -greater thanaward at trial notArbitration fees if 20 (current: 30) None

(Local Rule 43)W.D. Mich.

civil rights casesrity and pro secept Social Secu -All civil cases exages. ing punitive dam - $100,000, exclud -

domly select one.clerk will ran -two names remain,may strike one; ifclerk. Each sideof three names byRandom selection One.

incurred.penses reasonablybursement for ex -$250 plus reimselection. arbitrator of discovery and days after close ing from 20 to 45 Clerk sets hear- bitrator. ignated by the ar - Any location des -

judge.proved by thewriting and apas established inipated emergenciestreme and unanticNone, except in exable than award. 10% more favor- trial judgment not may be assessed if tion, attorneys fees Current: In addi - de novo trial filed. when demand for posted with court tion. Must be award at arbitra - greater than award at trial not Arbitration fees if 30 1. Clerk schedules judgment. tions for summary fer ruling on mo- 2. Judges are to de - discovery.
2

District

(Local Rule) Case Type Ceiling Arbitrators

Selection of

ArbitratorsNumber of 

Arbitrator

Compensation Hearing

Time of

HearingPlace of Authority to Grant

Continuances

Disincentives to

Demanding Trial De

Novo

Days to Demand

Trial De Novo

Procedures to Re -

duce Judge Involvement

(Local Rule 302)W.D. Mo.

prisoner cases.tive appeals andcept administraAll civil cases ex- punitive damages. $100,000,excluding by clerk. Random selection agree to one. Three, parties may

reimbursed.sonable expenses$75 per day; rea -

fileddate last answermon ths fromclerk about fiveScheduled by

signing the case.nated in order asAny room desigrequires ap days; thereafter grant for up to 30 Arbitrator may proval

of judge.

de novo trial filed.when demand forposted with courttion. Must beaward at arbitra -greater thanaward at trial nottration fees ifde novo. 2. Arbidemand for a trialto striking of anying but not limitedingful way, includticipate in a mean -tion failure to par -Court may sanc- 30 1. Clerk schedules

30 days of hearing.tions filed withinfer ruling on mo2. Judges may de -discovery

(Local Rule 47)N.J.

FELAJones ActMiller ActActHarbor Workers’Longshoremen &Claims ActFederal Tortproperty damagePersonal injury ortiable instrumentContract or nego -

Current $100,000punitive damages.$50,000, excluding Selected by clerk. One.

for expenses.entertain petition$150 per case; will

filed.date last answermonths fromproximately sixSet by clerk ap - No mention

requires apdays thereaftergrant for up to 30Arbitrator may

proval

of judge.

questi ng returned if refor trial de novo;time of demand2. $250 deposit atde novo.demand for a trialto striking of anying but not limitedingful way, includticipate in a mean -tion failure to par -1.Court may sancpartynow $150..Current: deposit isdoes better at trial

30 Judges may defer

days of hearing.filed within 30ruling on motions

E.D.N.Y.

matters.rights cases & taxAlso excludes civilcases. Current:rity and prisonercept Social Secu -All civil cases exCurrent: $75,000 $50,000. by clerk. Random selection

writing.parties agree inThree, or one if

tor.for single arbitraber; $225 per caseeach panel mem-$75 per case for

limit of 180 days.sets an outsideCurrent: Clerkfiled.date last answermonths fromclerk about fiveScheduled by

house.room in the court -Current: court -U.S. Courthouse

requires apdays; thereaftergrant for up to 30Arbitrator may

proval

of judge.

de novo trial filed.when demand forposted with courttion. Must beaward at arbitra -not greater thanif award at trial2. Arbitration feesde novo.demand for a trialing striking of anyparticipate, includ -tion for failure to1. Court may sanc- 30 Judges may defer

days of hearing.filed within 30ruling on motions
3

District

(Local Rule) Case Type Ceiling Arbitrators

Selection of

ArbitratorsNumber of 

Arbitrator

Compensation Hearing

Time of

HearingPlace of Authority to Grant

Continuances

Disincentives to

Demanding Trial De

Novo

Days to Demand

Trial De Novo

Procedures to Re -

duce Judge Involvement

Rule 601-608Current: Local611-Local Rule 601 -M.D.N.C.

achieved.likely to bearbitration iswhich purpose ofadds cases incivil rights andCurrent: ExcludesFELAJones ActMiller ActActHarbor Workers’Longshoremen &Claims ActFederal Tortitime, interpleader)question, mar-(diversity, federalproperty damagePersonal injury oritime, interpleader)question, mar-(diversity, federaltiable instrumentContract or nego -

ages.ing punitive dam -$150,000, exclud -

fice.by the clerk’s of -ter are now doneAdjudication Cenously done by theThe tasks previ -names. Current:may strike twoparty; each partynames to eachsubmits list of fivecation Centerteen days, Adjudinot selected in fif -not an attorney. Ifperson, whether orter or of any otherAdjudication Centained by Privatefrom list mainwith choice eitherSelected by parties One.

case.mum of $800 perconference. Maxi -for post-hearingmum of $600; $80hour to a maxi -paid at $60 pertion; hearing time$120 for preparaof $500. Current:Maximum per caseing conference.$40 for post-hear-$380 for hearing;for preparation;maximums of $80$40 per hour, up to

reference order .Thirty days fromhearing to be setend of discovery;“end date” set atdate.” Current:prior to the “endclerk and parties,sultation withbitrator, in conscheduled by ar -ery. Hearingclose of discovsixty days afterarbitration”date forperiod and “endday-dis coveryestablishes 90After issue clerk

parties.with the clerk andin consultationto another locationtrator may movecourtroom, arbience room orLawyers’ confer - No mention. 1. If party who

still in effect.pro ceed sanctionscause. Failure tomade for goodthat demand wascourt determinesfore trial, or ifleast 10 days be -of settlement atif clerk is notifiedvorable judgment,obtains a more fa -demanding partyto be returned ifde novo demand,posted at time ofCurrent: Fees to bein good faith.failure to proceedpose sanctions for2. Court may im -are assessed.fees and expensestrial arbitratorable judgment attain more favornovo fails to ob -demands trial de

30 1. Clerk schedules

positive motions.are to resolve disCurrent: Judgestion).(except jurisdicpositive motionsfer ruling on dis -2. Judges are to de -discovery.

(Local Rule 43)W.D. Okla.

Miller ActAdmiralty ActActHarbor Workers’Longshoremen &Claims ActFederal Tortitime)question, mar-(diversity,federalproperty damagePersonal injury oritime)question, mar-(diversity, federaltiable instrumentContract or nego - $100,000.

determination.clerk makes finalone name andeach may selectamong themselves,cannot agreewhere all partiesmultiple partiesOr, in cases withlist of 10 names.lects from originalclerk randomly sewithin 10 days,lect arbitratorsIf parties fail to segiven first choice.names, defendantrank remaining sixing with plaintiff;two names, start -party may strikeby clerk; eachof 10 arbitratorsRandom selection

writing.parties agree inOne, or three if

member.for each panelone arbitrator or$75 per day for

tion.arbitrator selec -days afterclerk 20 to 90Scheduled by

clerk.available by thefice building madecourtroom or of -tors, includingnated by arbitra -Any place desig -

signed judge.proved by the as -in writing and apcies as establishedticipated emergenextreme and unan -None, except for

posed.costs may be im -counsel’s fees andaward, opposing10% of arbitrationproved in excess ofde novo not imwho requests trialif position of partyfiled. In addition,de novo trial iswhen request forposted with courttion. Must beaward in arbitra -greater thanaward at trial notArbitration fees if 20 None
4

District

(Local Rule) Case Type Ceiling Arbitrators

Selection of

ArbitratorsNumber of 

Arbitrator

Compensation Hearing

Time of

HearingPlace of Authority to Grant

Continuances

Disincentives to

Demanding Trial De

Novo

Days to Demand

Trial De Novo

Procedures to Re -

duce Judge Involvement

(Local Rule 8)E.D. Pa.

cases.cludes civil rightscases. Current: Ex -rity and prisonercept Social Secu -All civil cases exCurrent: $100,000. $75,000 by clerk. Random selection

agree to one.Current: MayThree.

protracted cases.compensation inconsider additional$75 per case; will

days.duced to 120for hearing reCurrent: Timefiled.date last answermonths fromclerk about fiveScheduled by

arbitration clerk.room selected byU.S. Courthouse;

requires apdays; thereaftergrant for up to 30Arbitrator may

proval

of judge.

de novo trial filed.when request forposted with courttion. Must beaward at arbitra -not greater thanif award at trial2. Arbitration feesde novo.demand for a trialto striking of anying but not limitedparticipate, includ -tion for failure to1. Court may sanc- 30 1. Clerk schedules

hearing.30 days of thetions filed withinfer ruling on mo2. Judges may de -discovery.

309)(Local Rule 300–W.D. Tex.

Jones Acteralthe Attorney Gen -As approved byMiller Actitime)(diversity, marproperty damagePersonal injury orquestion)(diversity, federaltiable instrumentContract or nego -

Current $150,000.$100,000.

strike one name.each party mayof five arbitrators;Selection by clerk Three. $75 per day. Scheduled by

selectiondays after panelclerk 20 to 40

by clerk’s office.ing made availableother office build -eral building orCourthouse, fed -

requires apdays; thereaftergrant for up to 30Arbitrator may

proval

of judge.

de novo trial filedwhen request forposted with courttion. Must beaward at arbitra -greater thanaward at trial notArbitration fees if 30 None