Alternatives to Litigation: Do They Have

a Place in the Federal District Courts?

Donna Stienstra and Thomas E. Willging

Federal Judicial Center

1995

This Federal Judicial Center publication was undertaken in furtherance of

the Center’s statutory mission to conduct and stimulate research and development for the improvement of judicial administration. The views expressed are those of the authors and not necessarily those of the Federal

Judicial Center.
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iii

Acknowledgments

In writing this paper, we benefited greatly from the counsel and

review of Judge William W Schwarzer and Russell Wheeler. We

gratefully acknowledge their contributions to our work.

We are also pleased to acknowledge those who commented on

an earlier draft of the paper, some in vigorous disagreement with

the paper’s arguments or approach. Though not all will find the

outcome completely to their liking, each has sharpened our thinking and prose. We thank Judges Ann C. Williams and William O.

Bertelsman; Magistrate Judges Wayne D. Brazil and John L. Wagner; ADR Administrators Stephanie Smith, Mimi Arfin, Nancy Stanley, and Kent Snapp; Professor Judith Resnik; Elizabeth Plapinger,

Esq., Jonathan A. Weiss, Esq., and Linda Singer, Esq.; and our colleagues at the Center, William B. Eldridge, Gordon Bermant, Molly

Treadway Johnson, and Robert J. Niemic. We also thank Charles

Sutelan, who assisted with computer analyses, and Martha Kendall,

who edited the paper. Errors of fact or interpretation are, nonetheless, ours alone.
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v

Contents

Acknowledgments iii

Introduction 1

Definitions and Context 3

Summary of the Arguments, Responses, and Points of Agreement 9

The Arguments and Responses 13

1. A core function of the courts as public institutions is to serve the

needs of individual litigants and thereby to maintain public

confidence in society’s capacity for peaceful dispute resolution. 13

2. Courts have a responsibility to use ADR when it can help save

litigant and public resources while preserving fair procedures and

outcomes. 27

3. To provide all litigants with access to alternative procedures and to

guarantee the procedural protections litigants rightfully expect

from courts, ADR should be available through publicly funded

court-based programs. 43

4. Alternative dispute resolution procedures should be presumptively

mandatory in appropriate cases, but the right to trial must be

preserved in all cases. Courts should establish procedures to assist

parties in selecting the appropriate procedure for managing and

resolving their case. 51

Endnote 61

Appendix 63
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1

Introduction

Is there a proper place in the federal courts for alternative methods

of dispute resolution? Is it appropriate to compel litigants to participate in such procedures as arbitration and mediation? What is the

proper role of courts in resolving disputes? And what is their

proper role in society?

In this paper we examine the place of court-based, presumptively mandatory, nonbinding alternative dispute resolution (ADR)

in the federal district courts. By its nature, the inquiry involves—

indeed, in this paper the inquiry begins with—a debate about the

role of the courts in society. We then examine whether ADR procedures enhance or undermine that role and whether these alternatives provide any benefits to individual parties, to courts, or to

society.

Although the current rapid implementation of ADR in the federal courts may seem to make these issues moot, that very implementation is prompting policy makers—whether at the level of the

individual court, the Judicial Conference, or Congress—to take

note of the phenomenon, to ask basic questions about its value and

effects, and to distinguish between the different kinds of ADR with

their different procedures and objectives.

We address the questions about the role of the courts and

ADR’s value and effects through a series of arguments in support of

and in opposition to court-based ADR programs. The purpose of

the paper is not to come to a conclusion on the value of courtbased ADR, but to inform the reader and policy maker through a

fair summary of the points that can be made on each side of the issue.

This paper is one of a series of papers prepared by the Federal

Judicial Center to assist the judiciary in considering questions that

are critical to its future.1 The Center has prepared these papers as

1. Previous papers in the series are Gordon Bermant et al., Imposing a Moratorium on the Number of Federal Judges (1993), William W Schwarzer and Russell

R. Wheeler, On the Federalization of the Administration of Civil and Criminal Justice (1994), and Wheeler and Bermant, Federal Court Governance: Why Congress

Should—and Why Congress Should Not—Create a Full-Time Executive Judge,
Alternatives to Litigation

2

part of its statutory mandate to “conduct research and study of the

operation of the courts of the United States, and to stimulate and

coordinate such research and study on the part of other[s] . . . and

to provide . . . planning assistance . . . .”2 This paper, like the others

in the series, does not take sides or state a Center position. Its

purpose is to encourage and inform discussion about the role of

the courts and the appropriate place of ADR in fulfillment of that

role.

The arguments for and against providing alternative dispute

resolution methods in the federal courts are the heart of the paper.

Before turning to those arguments, we first define the object of our

discussion—court-based alternative dispute resolution—and describe the context in which the ADR debate is taking place today.

Abolish the Judicial Conference, and Remove Circuit Judges from District Court

Governance (1994).

2. 28 U.S.C. § 620(b)(1), (4).
3

Definitions and Context

Although the debate about the proper role of ADR has recently intensified, the idea of alternatives to litigation is neither novel nor

especially recent in the federal courts. The first formal recognition

of ADR’s role was stated in the 1983 amendments to Federal Rule

of Civil Procedure 16, which provided for the use of “extrajudicial

procedures to resolve the dispute.”3 Adoption of this language followed by several years the federal courts’ initial experimentation

with court-based ADR, in the form of mediation and nonbinding

mandatory arbitration programs. Since then a number of other

forms of ADR have been established as court-based programs. It is

this segment of ADR—the court-based programs—that we argue

for and against in this paper.

Although ADR’s vocabulary is not yet fixed, basically “courtbased alternative dispute resolution procedures” are (1) administered by the court and (2) different from the traditional litigation

process.4 While ADR methods are often thought of as alternatives

to trial, the very small percentage of cases that are tried indicates

that ADR procedures serve primarily as alternatives to traditional

forms of pretrial dispute resolution and not as alternatives to trial.

(Thus, this paper does not treat the judge-hosted settlement conference, a long-standing component of the traditional adjudication

process, as a form of alternative dispute resolution.) In administering a court-based ADR program, a court generally provides a roster

of neutrals who conduct the sessions, establishes criteria for inclusion on the roster, and adopts rules regarding such matters as case

selection, methods for assigning neutrals to cases, confidentiality

guarantees, and guidelines for conducting the ADR session.5 As

3. Fed. R. Civ. P. 16(b)(7).

4. We make this distinction recognizing that categorization is problematic in

the field of ADR, where neither “ADR” nor “traditional adjudication” have firm

definitions.

5. Throughout the paper we use the term “neutral” to denote the person who

is appointed to a court roster and provides the ADR services. Depending on the

type of ADR program under discussion, the neutral may be an arbitrator, a

mediator, or an early neutral evaluator. The neutral is usually an attorney, al-
Alternatives to Litigation

4

suggested in the definitions of ADR programs in the Appendix, at

this point in their development, court-based alternatives involve a

fairly limited number of ADR methods: arbitration, mediation,

early neutral evaluation, and summary jury trial.6

Some court-based programs automatically refer certain types of

cases to the ADR process—a so-called “mandatory” referral

(“presumptively mandatory” is more precise, since parties can request that their cases be removed from the program). In other

programs, cases enter the ADR process only after referral by a

judge or through voluntary participation by the parties. In all federal court ADR programs, the outcome is nonbinding—that is, the

parties are not bound by it unless they agree to be—and thus

“mandatory” and “voluntary” describe only how cases enter an ADR

program, not what happens during the ADR process or the type of

outcome reached.

Federal district court experimentation with court-based ADR

began in the late 1970s. Three district courts implemented presumptively mandatory arbitration programs in 1978, requiring parties in cases that met certain criteria to participate in arbitration

unless they could show why it would be inappropriate. In 1988,

Congress authorized ten courts to implement presumptively

mandatory arbitration programs and an additional ten to offer, but

not require, arbitration.7 During the late 1970s and the 1980s, a

number of courts also developed mediation programs, Judge

Thomas Lambros in the Northern District of Ohio invented the

though some rosters also include other professionals, such as engineers, psychologists, and accountants.

6. Some courts that do not provide ADR services through a court-based program nonetheless make it available by authorizing individual judges to refer cases

to ADR providers outside the court.

7. 28 U.S.C. §§ 651–658. The arbitration courts are often referred to as “pilot”

courts. Their status is temporary, and current authorization will expire at the end

of 1997 unless Congress acts before then to extend it (see the Federal Courts

Improvements Act of 1994, Pub. L. No. 103-420). The Judicial Conference has

voted to support continued authorization for the current twenty programs and

extending to all courts the authority to adopt voluntary, but not mandatory, arbitration programs (Report of the Proceedings of the Judicial Conference of the

United States, Sept. 1993, at 45; and Report of the Proceedings of the Judicial

Conference of the United States, March 1993, at 12 [hereinafter JCUS Report,

with month, year, and page]).
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5

summary jury trial, and the Northern District of California created

the first early neutral evaluation program.8

In 1990, the Report of the Federal Courts Study Committee

urged Congress to make clear the authority of district courts to establish ADR programs, including presumptively mandatory procedures.9 Two years later, a survey of all federal district judges showed

that many supported, at least in principle, the use of ADR

procedures in the federal courts: 66% disagreed with the proposition that courts should resolve litigation through traditional procedures only; 86% disagreed with the proposition that ADR should

never be used in the federal courts; and 56% said that ADR should

be used in the federal courts because in some cases it produces a

fairer outcome than traditional litigation.10 However, the Judicial

Conference has refused to endorse mandatory use of ADR—at least

in the form of arbitration—by voting not to endorse legislation that

would extend mandatory arbitration beyond the ten pilot courts

authorized in 1988 and limiting its support to voluntary arbitration.11

Passage of the Civil Justice Reform Act of 1990 (CJRA) undoubtedly quickened the pace of federal district court ADR development.12 The CJRA, as part of its effort to reduce civil litigation

cost and delay, requires thirteen district courts to implement alternative dispute resolution procedures—ten “pilot” districts and

three “demonstration” districts—and instructs all other district

courts to “consider” adopting ADR procedures. At least two-thirds

of the district courts now authorize use of one or more forms of

8. See, e.g., Karl Tegland, Mediation in the Western District of Washington

(Federal Judicial Center 1984); Thomas D. Lambros, The Summary Jury Trial and

Other Alternative Methods of Dispute Resolution—A Report to the Judicial Conference of the

United States Committee on the Operation of the Jury System, 103 F.R.D. (1984); and

Wayne D. Brazil, A Close Look at Three Court-Sponsored ADR Programs: Why They Exist,

How They Operate, What They Deliver, and Whether They Threaten Important Values, 1990

U. Chi. Legal F. 303, 331–34 (discussion of the development of the early neutral

evaluation program in the Northern District of California).

9. Report of the Federal Courts Study Committee, April 1990, at 83.

10. Planning for the Future: Results of a 1992 Federal Judicial Center Survey

of United States Judges (Federal Judicial Center 1994), at 43.

11. JCUS Report, March 1993, at 12, and Sept. 1993, at 45.

12. 28 U.S.C. §§ 471–482 (1995).
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6

ADR, and perhaps as many as a third of the courts have in place or

intend to establish court-based programs.13

The context in which the federal courts are now debating

ADR’s merits has also been changed by growing receptivity to ADR

outside the federal courts. Consider, for example, the following developments:

• Programs are proliferating in state courts, and a number of

states are moving beyond general authorization to comprehensive state-wide programs that provide litigants with a

range of ADR options.14

• The 1990 Administrative Dispute Resolution Act requires

each federal agency to consider ADR for resolving disputes,

and a 1991 executive order directs agencies to consider

ADR as one of a number of methods for improving civil justice.15 A number of agencies, many with the assistance of the

Administrative Conference of the United States, have

developed ADR programs for internal as well as external

disputes.

• In 1984, the Legal Program of the Center for Public Resources (now known as the CPR Institute for Dispute Resolution), a nonprofit organization established to publicize

ADR, initiated a program to seek corporate pledges to use

ADR. By 1994, almost 700 of the nation’s largest companies

and more than 2,000 of their subsidiaries had signed the

pledge. A similar program begun in 1991 to seek law firm

pledges to counsel clients about ADR had garnered 1,500

signatories by the end of 1993.

• In 1993, the American Bar Association Standing Committee

on Dispute Resolution became a full-fledged ABA section—

13. This information was compiled at the Federal Judicial Center and is based

on review of the CJRA cost and delay reduction plans and on an ADR survey sent

to the courts in 1993. The information will be more fully reported in a district-bydistrict ADR Sourcebook to be published by the Center in 1995.

14. See, for example, Minnesota General Rules of Practice, Rule 114: Alternative Dispute Resolution, which requires litigants in eligible cases to select one of

nine ADR options.

15. Administrative Dispute Resolution Act, 5 U.S.C. §§ 581–593 (1990); Exec.

Order No. 12,778, 55 Fed. Reg. 55,195 (1991).
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7

the Dispute Resolution Section—established to promote responsible use of ADR methods.

These developments have been driven by a variety of goals and

circumstances, among them a search for lower costs and quicker

dispositions in civil cases, the changing economics of legal practice,

the demands imposed on judge time—particularly trial time—by a

rising criminal caseload, and a conviction that ADR can, in some

cases, provide a better process and a better outcome.16

This substantial incorporation of ADR into the dispute resolution process, both inside and outside the courts, presents the federal court system with many questions, such as

• Should ADR have a role at all in the federal courts?

• What should that role be?

• How can ADR fulfill that role most effectively?

• What weight should be given to the preferences of the public and the bar?

• How will adoption of ADR change the role of the courts?

• How will it change the role of the judge?

Embedded in these questions is a far more basic one: What is a

court and what values does it serve? This paper will not answer

these questions, but it will, we hope, provide arguments and information that will inform the debate.

16. For a discussion of some of the reasons given for adopting ADR, see Carrie

Menkel-Meadow, Pursuing Settlement in an Adversary Culture: A Tale of Innovation Coopted or “The Law of ADR,” 19 Fla. St. U. L. Rev. 1, 6–13 (1991).
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9

Summary of the Arguments, Responses,

and Points of Agreement

The arguments and responses presented in the next section are the

heart of this paper. Here we offer a short guide to what lies ahead:

(1) the proposition that is the subject of this paper’s debate; (2) a

summary of the arguments and the responses to those arguments;

and (3) a listing of points of agreement.

The arguments and responses in this paper debate the merits of

the following proposition:

To fulfill their mission while using both litigant and court resources

wisely, each federal district court should at an early point in each

civil case help litigants identify the procedure most appropriate for

managing and resolving the case. The procedures available to litigants should include, in addition to traditional litigation procedures, an array of court-based, publicly funded nonbinding processes, such as mediation, arbitration, and early neutral evaluation. There should be a presumption that parties in appropriate

cases will use one of these processes, but the right to trial must be

preserved in every case.

More specifically, we consider the following questions:

1. Given that a core function of the courts as public institutions is to serve individual litigants and thus maintain public

confidence in society’s capacity for peaceful dispute resolution, does ADR

• enhance that function by meeting litigant needs

through a wider variety of dispute resolution methods,

or frustrate it by diverting resources from the declaration and application of the law to programs designed

solely to aid parties in settling their disputes?

• enhance that function by providing litigants with

greater opportunities to tell their story to a neutral, or

compromise the courts’ role and resources by substituting court-based programs for functions properly carried

out by litigants’ own counsel?
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2. In respect to the courts’ responsibility to use their own and

litigants’ resources wisely,

• should courts use ADR to provide additional forums for

pretrial preparation and settlement explorations, or

should such activities be limited to judges under Federal

Rule of Civil Procedure 16?

• does ADR have the potential to save litigants, or courts

themselves, time, money, or both, or are such savings illusory and achievable only at the expense of the trial by

jury?

3. Should ADR be available through publicly funded, courtbased programs as a means of providing all litigants with access to these procedures and of guaranteeing the procedural protections litigants rightfully expect from courts, or

would ADR develop better through private-sector experimentation with flexible rules and practices?

4. Should federal courts have the authority to mandate that litigants in appropriate cases participate in ADR, or do

mandatory programs distort the benefits of ADR?

In the course of debating the proper role of ADR in the federal

courts, we identified several points of agreement:

• Although there is considerable evidence about user perceptions of ADR, research findings are currently insufficient on

the cost and time consequences of ADR and cannot fully inform that part of the debate that revolves around cost and

time. Research should not in any case displace other

sources of guidance, such as logical analyses, individual and

social values, and intuitions, but where the debate about the

proper role of ADR can be informed by empirical analyses,

that research should be undertaken promptly.17

• ADR provides substantial benefits to litigants by satisfying

their need to tell their story to a neutral. Courts should be

responsive to the importance litigants place on a meaning17. The lack of data is reflected in the small number of empirical studies we

cite and their concentration on arbitration.
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ful and fair forum, whether they provide that forum

through ADR or in some other way.

• Efficiency should not be the overriding principle when a

court considers whether to implement an ADR program.

• Fair procedures and case outcomes as well as litigant and

public satisfaction with the courts require that any courtbased ADR programs provide high-quality service. Essential

to that quality is the effective training and performance of

the attorneys who serve as mediators, arbitrators, and early

neutral evaluators. Ensuring such quality requires resources.

• The use of multiple ADR procedures in a single case can be

duplicative and unnecessarily costly and should not generally be imposed on parties.

• There appears to be value in an early screening process to

determine case needs and party preferences and to educate

attorneys and litigants about their case processing and dispute resolution options.

• The outcomes of court-based ADR procedures, particularly

mandatory procedures, must be nonbinding and must preserve access to trial without penalty, unless the parties voluntarily agree to a binding outcome.

One additional point of agreement—that district judges should

not serve as neutrals in court-based ADR programs—deserves

slightly more discussion because many will disagree with our position. A district judge’s involvement as the ADR neutral poses a serious risk—or at least an appearance of risk—to that judge’s independence and neutrality by exposing the judge to the parties’ private pretrial assessments of their case and to their negotiating postures.18 This is particularly true in cases that, if tried, will be tried by

18. A judge’s participation as the ADR neutral is rare in any event. Data from

the Federal Judicial Center’s 1987–1989 District Court Time Study indicate that

Article III judges spent 0.14% of their case-related time on matters that were

clearly connected with ADR. Approximately half of that time was spent on arbitration matters, including deciding the eligibility of cases for arbitration. In comparison, judges devoted 2.33% of their time to settlement conferences. Magistrate

judges spent 0.48% of their time on ADR and 9.17% on settlement conferences.

See Table 1 in the Appendix.
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the judge (this risk arises also when judges participate in settlement

conferences in cases they, rather than a jury, will decide19). Can a

judge who places a value on a case as a neutral evaluator, or a judge

who learns the details of each party’s situation and concerns as a

mediator, serve as the impartial decision maker at trial—or perhaps

even when deciding other matters in the case? Although judges

may insist that they can remain neutral, parties may justifiably be

worried that they cannot. As a consequence, litigants may be

reluctant to participate fully in the ADR process. These concerns

can be set aside, of course, if a judge serves as the mediator or evaluator in another judge’s cases, but is such an approach a wise use

of the justice system’s scarcest resource? We believe the answer is

no.

19. D. Marie Provine, Settlement Strategies for Federal District Judges 28–30

(Federal Judicial Center 1986).
13

The Arguments and Responses

We proceed now to the arguments in support of and responses in

opposition to the proposition presented above. We believe that

some of the arguments offered below, both pro and con, are

stronger than others. We lay them out in this format to provide the

judiciary, the bar, and others involved in federal court policy making with an opportunity to assess the many conflicting points of

view.

1. A core function of the courts as public institutions is to serve the

needs of individual litigants and thereby to maintain public

confidence in society’s capacity for peaceful dispute resolution.

a. To serve litigant needs and preserve public confidence in the

justice system, courts must provide dispute resolution procedures that fit the variety of disputes and needs brought to them.

The argument

Federal courts provide a forum for the peaceful resolution of

disputes and thus serve the core governmental responsibility of ensuring society’s safety and stability. Federal courts also preserve the

rule of law and develop and refine legal norms through public adjudication, conducted according to written rules and resulting in

recorded decisions that preserve individual rights, sustain public

values, and provide a written law to guide future behavior. Courts

cannot, however, fulfill their dual functions of peace maker and law

giver if they are not available to disputants or do not have the confidence of the public.20 To be available, courts must be affordable

and must provide the assistance of a neutral decision maker or facilitator in a timely fashion. To generate public confidence, courts

must provide both a process and an outcome that are seen as fair

by litigants and the public.

20. Both of these functions of courts are stated in the first sentence of the

Long-Range Planning Committee’s Draft Mission Statement for the Federal

Courts: “The mission of the federal courts is to preserve and enhance the rule of

law by providing to society a just, efficient, and inexpensive mechanism for resolving disputes . . . .”
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For many cases over many years, the traditional adjudicatory

process has provided the means for peaceful and fair resolution of

disputes. The courts’ procedural rules and public proceedings have

afforded individual parties due process, and their written decisions

have established and reinforced public values.

In adhering solely to traditional dispute resolution methods,

however, courts impose on all cases a stringent process whose purpose is preparation for trial. Yet most cases do not proceed to

trial—some because the court cannot provide a timely trial date,

but many more because the parties cannot or do not want to try the

case. For some, the traditional adversarial framework, although

providing a resolution, does not provide the conciliation they seek.

For others, the procedural rules make the process too costly to pursue. Even for those who intend to proceed to trial—to seek, for example, a new precedent or to resolve an important public policy issue—the traditional process may impede or prolong case resolution, rather than promote it. When courts cannot meet litigants’

needs, they risk becoming an esoteric and distant institution in citizens’ lives. To retain the confidence of the public and to preserve

their role as peace maker and law giver, the courts must change as

the needs of those they serve change.

For many litigants, alternative procedures provide benefits or

opportunities not available to them through traditional adjudication. Instead of adjudication’s exclusive focus on legal and factual

contentions, mediation—to take one form of ADR as an example—

helps parties clarify and address the interests driving (and sometimes stalling) the litigation. Instead of adjudication’s “winner take

all” outcome, appropriate in some but not all cases, mediation

permits parties to fashion more creative and mutually satisfactory

outcomes. Where adjudication is rigid, mediation is flexible. And

where adjudication reserves control for the judicial decision maker,

mediation provides parties with greater control over the dispute

resolution process and outcome.21

21. Many other benefits are asserted for ADR, including confidentiality of the

outcome, preservation of relationships among the parties, and resolution of

psychological issues as well as legal issues. See generally Carrie Menkel-Meadow, Toward Another View of Legal Negotiation: The Structure of Problem Solving, 31 UCLA L.

Rev. 754 (1984).
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“Common sense” alone, Professor Maurice Rosenberg has said,

“suggests that meeting the standards of the ideal system will require

deploying a whole battery of dispute resolving mechanisms . . . .”22

The constraints of traditional adjudication and the need for greater

flexibility are illustrated by a case described by Judge Joseph Weis:

Two parties [in a state court case] had a dispute over whether they

had an agreement to share the proceeds of a winning lottery ticket.

The amount involved was in the millions of dollars. Because the parties had no writings, the decision whether there was a contract depended solely on their testimony. After deliberating for some hours,

the jurors sent a note to the judge asking if they could award less

than half to the plaintiff. The judge advised them that under the law

the plaintiff got either half or nothing. The judge was correct, but I

could not help wondering whether it would have been better if the

law had given the jury the freedom to award a compromise.23

The rising call for alternative procedures from the bar, judges,

Congress, the public, and litigants presents a fundamental question: What is the role of courts and how can it best be fulfilled?

Even if a court’s most important role is to declare and preserve the

law, this function can be carried out only through real cases and

real litigants who bring disputes to court. And it is the litigants’

perceptions of their case’s outcome and process that form the basis

for much of the public’s faith in the courts. In the individual case

lies the legitimacy of the courts and the preservation of a just and

ordered society.

Some litigants are best served by the traditional adjudicatory

process. Others need a less elaborate, less costly, or less adversarial

procedure. These needs have probably always been present, but are

augmented today by a greater diversity of case types in federal

courts compared with twenty years ago and a greater diversity of litigants. Many litigants, for example, are in prison; many come from

countries where dispute resolution is not adversarial.24 When substantial numbers of litigants in federal courts cannot satisfactorily

22. Maurice Rosenberg, Resolving Disputes Differently: Adieu to Adversary Justice?,

21 Creighton L. Rev. 801, 809 (1988).

23. Joseph F. Weis, Jr., Are Courts Obsolete?, 67 Notre Dame L. Rev. 1385, 1396

(1992).

24. See, e.g., [California Supreme Court Chief Justice] Malcolm M. Lucas, The

1992 Frank E. A. Sander Lecture at the American Bar Association Annual Meeting, NIDR

Forum 3, 7 (Summer/Fall 1993).
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resolve their disputes—or when the public believes this is true—the

courts have failed in their most fundamental functions.

Some will argue that if courts shift their focus to meeting the

needs of individual litigants, they will retard development of the

law by removing law-making cases from judicial decision making.

Even in the absence of alternative procedures, however, less than

5% of cases go to trial, the traditional forum for law declaring in

the district courts (see Figure 2 in the Appendix). An additional

unknown, but undoubtedly small, percentage of pretrial dispositions, such as summary judgment motions, also establish law. Furthermore, in the traditional adjudicatory system, as in alternative

procedures, potentially lawmaking cases settle because the parties

choose to do so. No judge would force the parties in such cases to

trial because a new legal principle might be set.

Moreover, legal rules alone do not ensure societal well-being.

Unwritten norms, too, are powerful guides for behavior, and

courts, like other institutions, help establish and maintain important norms. In doing their work, for example, courts present to citizens a model for how to resolve disputes. The adjudication model,

while teaching much that is good, emphasizes conflict rather than

cooperation, secrecy rather than openness, and dependence on authorities rather than oneself for resolution of problems.

It is possible to conceive of a different kind of federal court,

one in which mediation would be required in most civil cases, one

in which those in disagreement would be directly involved in the

resolution of their case.25 One purpose of such a court, indeed a

central purpose, would be to promote self-determination and a

consideration for others, to “produce moral individuals and to find

the common good.”26 Mediation would serve not only the needs of

the individual litigant but critical public values as well, and the

courts would serve as models for an alternative way to deal with

problems, substituting cooperative problem solving and party-generated solutions for adversarial interactions and judge-imposed

outcomes.

25. Robert A. Baruch Bush, Mediation and Adjudication, Dispute Resolution and

Ideology: An Imaginary Conversation, J. of Cont. Legal Issues 1, 3 (Fall 1989/Spring

1990).

26. Id. at 14.
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The response

Federal district courts should not divert resources from their

primary public mission—to declare and apply the law—to secondary, alternative programs designed solely to aid parties in settling their disputes.

Declaring and applying the law is the primary function of federal

courts. The claim that the courts must provide an array of dispute

resolution services raises the core issue in this debate: What are

courts for? or, more specifically, What are federal courts for? Proponents of court-based ADR would have federal courts become

whatever today’s litigants want them to become. Their call for the

courts to expand their public service role boils down to calling for

the courts to provide whatever it takes to resolve pending disputes

between private parties.

Courts exist first and foremost to establish, interpret, and apply

the law, not simply to resolve private disputes. When a court resolves a dispute publicly, either through a jury verdict or findings of

fact and conclusions of law, or through a ruling on a motion, the

court not only serves litigants’ private interests but also serves the

public interest by creating a visible precedent or, in the case of a

jury verdict, a visible case evaluation. When a court or its representative in an alternative proceeding evaluates a case privately and facilitates a confidential settlement, the court primarily serves individual, short-term interests of the litigants.

The methods courts use in declaring the law give the public

confidence in the law. Such procedural traditions as carefully attending to factual development in depositions and trials, articulating reasons in public decisions, and relying on juries for fact-finding and law applying enhance public acceptance of case outcomes

and legal rulings.27 Yet these traditions are the very targets of ADR

proponents, who view trials as too expensive, discovery and evidence rules as too complicated and formal, juries as too uneducated to understand complex cases, and impartial umpiring as too

constricting a role for judges.

27. See generally Charles Nesson, The Evidence or the Event? On Judicial Proof and

the Acceptability of Verdicts, 98 Harv. L. Rev. 1357 (1985) (discussing evidentiary and

procedural aspects of judge and jury fact-finding that are likely to affect public

acceptability of verdicts and compliance with them).
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18

By declaring the law, courts resolve disputes and serve a higher

purpose by ruling publicly in concrete cases. Reasoned decisions

give meaning and context to abstract rules of law, empowering individuals in later instances to apply the law to their own situation

and to avoid disputes or settle them privately, often applying a settled rule in the shadow of a scheduled trial. Even jury verdicts,

while not formally declaring the law, serve as visible, public guides

that others can use to predict how future juries will apply the law.

Jury verdicts may also have the effect of opening the door for

precedent-setting appellate rulings28 and of precluding relitigation

of the same issue by a losing party.

Alternative processes thwart the formal dispute resolution and

law-declaring processes by siphoning disputes away from them.

When court-based ADR rules establish alternative treatment for

large blocks of cases, such as contracts and torts claiming less than

$150,000, the effect may be, as observers of private ADR put it, to

remove “whole categories of cases . . . from public scrutiny,” raising

the question of “how appropriate changes in the common law and

in statutory interpretation might be accomplished.”29 By no means

should or could all cases filed in court lead to trials and precedentsetting judicial opinions. In most cases, parties settle their claims

with little or no formality. Referring such cases to ADR, however,

removes them from the careful pretrial processes that allow the

parties and the court to assess their importance to the development

of the law.

In 1986, Judge Harry Edwards wrote that “we must determine

whether ADR will result in an abandonment of our constitutional

system in which the ‘rule of law’ is created and principally enforced

by legitimate branches of government . . . .”30 Some ADR advocates

have acknowledged the tension between law-declaring and dispute28. See, e.g., Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th Cir.

1974) (affirming the first jury verdict for a plaintiff in asbestos litigation, ruling

that the jury was properly instructed on the legal standards and could have found

that asbestos products are unreasonably dangerous and that manufacturers’ warnings were inadequate).

29. Erik Moller et al., Private Dispute Resolution in the Banking Industry 29

(Rand Institute for Civil Justice 1993).

30. Harry T. Edwards, Alternative Dispute Resolution: Panacea or Anathema?, 99

Harv. L. Rev. 668, 671 (1986).
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19

resolving functions, but they have not developed precise guides to

assist courts in identifying cases of precedential value.31 The

eligibility requirements of the typical court-based ADR program

sweep into such programs cases involving legal principles along

with cases involving pecuniary interests.32 By forcing parties to

expend resources preparing for and participating in ADR, courts

diminish resources that these parties might prefer to devote to advancing the law.

b. To serve the needs of litigants and preserve public confidence in

the justice system, courts should provide litigants with an opportunity to tell their story to a neutral third person. This opportunity is of great importance to litigants but is available to only a

small number when the traditional settlement conference or trial

is the only forum offered by the court. ADR programs increase

the availability of this opportunity.

The argument

In the traditional adjudicatory process, the litigants themselves

seldom participate in the two most common forms of dispute resolution, attorney-negotiated settlements and judge-facilitated settlements. Only the few litigants whose cases proceed to trial will enter

the courthouse or see the judge. Most will receive a settlement ne31. See, e.g., Susan Keilitz, Court-Annexed Arbitration, in National Symposium on

Court Connected Dispute Resolution Research 35, 46 (National Center for State

Courts 1994) (“Most of the research has found no differences in the success of

arbitration in handling torts and contract disputes, or relatively low value ($15,000

and under) and higher stakes cases ($150,000 or more in Hawaii and several

federal district courts).”); Barbara Meierhoefer, Court-Annexed Arbitration in Ten

District Courts 43–48 (Federal Judicial Center 1990) (Practices vary widely among

the ten pilot courts; the probability that a case would be exempted from

mandatory assignment to arbitration was as dependent on the practices of the

court as it was on the type of dispute.).

32. For example, the ten original pilot federal court-based arbitration programs “limit eligibility to [contract and tort] 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.” Meierhoefer, supra note 31, at 32. Many of the

courts set presumptive eligibility criteria and fail to account for cases in which one

or more parties seek to establish precedent, leaving it to the parties to move for

exemption from the program. Id. at 33–34.
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20

gotiated by their attorneys through meetings the litigants themselves do not attend.

Most litigants express little satisfaction with either of the two

most common forms of dispute resolution—particularly judicial

settlement conferences, which they rank as the least fair method

for resolving cases.33 Research has consistently shown, however, that

litigants are highly satisfied with and give high ratings to the

fairness of traditional trials and ADR procedures.34 Litigants value

trial, arbitration, and mediation because these procedures permit

them to tell their stories, assure them that they and their dispute

have been taken seriously by the court, and help them maintain

control over the process through involvement in it. And the effect

appears to be the same whether or not the opportunity is actually

exercised. Many parties who are referred to arbitration, for example, settle their dispute before the arbitration hearing is held, yet

they and their attorneys—as well as those who actually have a hearing—express high satisfaction with this ADR method.35 Furthermore, those who express such satisfaction include litigants who

33. E. Allan Lind et al., In the Eye of the Beholder: Tort Litigants’ Evaluations of

Their Experiences in the Civil Justice System, 24 Law & Soc’y Rev. 953, 965 (1990)

(Litigants whose cases were resolved by trial or arbitration gave their procedures

higher ratings for fairness than did litigants whose cases were resolved by attorney

negotiations. Litigants whose cases were resolved through judge-hosted settlement

conferences gave these procedures the lowest ratings for fairness.).

34. See Lind et al., supra note 33; Keilitz, supra note 31, at 48–49 (Review of the

research literature on arbitration shows that “[l]itigants and attorneys are generally very satisfied with arbitration . . . . Perhaps the most salient aspect . . . is its

potential to provide a third party review to cases that otherwise would settle with

no intervention.”); Meierhoefer, supra note 31, at 6 (also finding high litigant and

attorney ratings for fairness, which for parties meant a hearing that provides “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.” Half the litigants and a plurality of the attorneys selected arbitration as their preferred

method when asked to compare it with a decision by a judge or jury.); Susan

Keilitz, Civil Dispute Resolution Processes, in National Symposium on Court Connected Dispute Resolution Research 5, 11 (National Center for State Courts 1994)

(mediation was rated higher than the traditional trial process, and litigants in mediation had a greater sense they were heard).

35. In the ten federal mandatory arbitration programs, for example, between

a quarter and a third of the cases eligible for arbitration closed after referral but

before the hearing. Meierhoefer, supra note 31, at 49.
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21

have a basis for comparing ADR with court experience—for example, half of those who had cases in the federal mandatory arbitration programs had observed or participated in a trial36—and

lawyers with sufficient experience to permit comparison, such as

those in the federal court arbitration study, who found the process

as a whole satisfactory and the hearings themselves fair.

Attorney-negotiated settlement, in contrast, suggests to litigants

that their case was not important enough to receive the court’s attention. Perhaps even more important, because settlement generally focuses on only money, litigants may believe that critical issues

of right and wrong have been trivialized.37 This problem can be

even more severe in judge-hosted settlement conferences, where

judicial intervention is generally focused more on making litigants

aware of the costs and uncertainties of litigation than on providing

them with an opportunity to tell their story.38

This litigant dissatisfaction with traditional pretrial procedures

renders largely irrelevant the claims that ADR is unnecessary because most cases settle anyway or at least settle once a firm trial date

is set. The point is that settlement by traditional procedures is not

what litigants want. What litigants want—and what ADR provides—

is a forum they would not otherwise have.

Why not, then, provide more opportunities for trial? More trials

are not a realistic possibility for many courts, where a limited number of trial slots are available for civil cases. Nor are trials a realistic

possibility for many litigants, as Magistrate Judge Wayne Brazil has

argued in the context of a discussion of arbitration:

The choice in the real world for [cases of modest economic value is] not

between jury trial and arbitration, but between arbitration and no hearing of

any kind . . . . When assessing the value and role of arbitration programs, it is essential to keep sharply in focus what the real alternative

to them is for most small and moderate-sized civil cases. The way

most such cases are resolved is not by trial or any other formal or

36. Meierhoefer, supra note 31, at 65.

37. Lind et al., supra note 33, at 965.

38. See Provine, supra note 19, at 15–16. There are a number of reasons why

judges may not encourage litigants to tell their stories, not the least of which is the

amount of time such conferences would take.
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22

semi-formal adjudicative process, but through informal, secret settlement negotiations between two lawyers.39

Less than 5% of cases filed in federal courts are tried, and that

percentage has been declining steadily (see Figure 2 in the Appendix). Whatever the cause of this decline—the high cost of litigation, too few judges, the rise in criminal filings and their priority in

the trial queue—the reality is that many cases do not receive the attention of a judge. Alternative dispute resolution can provide a satisfactory—indeed, superior—option for many of these cases by providing more, not less, process. The benefits can be seen in a simple

measure like the relatively high percentage of arbitration cases that

go to a hearing compared with the percentage in traditional litigation that go to trial.40 In other words, litigants in arbitration make

use of—and are able to make use of—the forum provided for them.

Given the critical importance to litigants of an opportunity to

be heard and given the extent to which this opportunity shapes litigants’ perceptions of judicial system fairness, traditional procedures

alone cannot fulfill the courts’ obligations to individual litigants

and the public. Because they cannot—even if in only a portion of

the cases—the courts must provide alternatives.

The response

Parties’ desire for an opportunity to tell their story is an undiscriminating standard because parties also appear to be satisfied

when they do not take advantage of that opportunity. Moreover,

parties voluntarily settle the vast majority of cases without ADR.

Programs motivated by litigant dissatisfaction with lawyers’ settlement practices draw the courts into addressing problems beyond

their roles and resources.

Party satisfaction is an undiscriminating measure. It is impossible to

structure effective civil dispute resolution procedures based on

39. Statement Regarding Court-Annexed Arbitration presented to the Subcomm.

on Courts and the Administrative Process of the Senate Comm. on the Judiciary,

103rd Cong., 1st Sess., at 3–4 (1993) (statement of Wayne D. Brazil) (emphasis in

original).

40. See, e.g., Meierhoefer, supra note 31, at 49 (across ten courts, 12%–42% of

cases referred to arbitration had an arbitration hearing; less than 5% of cases in

traditional litigation go to trial).
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23

party satisfaction with ADR programs. Parties’ evaluations of the pilot federal arbitration programs, for example, showed similar rates

of approval41 across the ten courts despite significant differences in

program characteristics, such as the types of cases eligible for referral, the standards for exemption from arbitration, the number of

hearings, and the rates of requests for trial de novo.42 Evaluations

of the early neutral evaluation program in the Northern District of

California also showed similar rates of satisfaction with the traditional and alternative approaches.43 Such undiscriminating approval provides no basis for distinguishing effective programs from

ineffective ones and leads one to suspect that traditional settlements might receive similar approval.

Party satisfaction is an undiscriminating measure in another

sense. If party satisfaction is the primary standard and if parties are

more satisfied with alternatives than with traditional trials or courtsponsored settlement conferences, does this mean that policy makers should abolish the less satisfying traditional approaches? Abolishing traditional approaches seems to be the logical outcome of

taking overall litigant satisfaction as the primary measure of what

the mission of the courts should be. The minority who want to pursue traditional trials could simply be considered outvoted.

Litigants are satisfied with traditional processes. Before adopting

widespread use of a new procedural system to let litigants tell their

41. In ten federal court programs, approximately four out of five respondents

thought the arbitration hearings were fair, and there were no statistically

significant differences in respondents’ appraisals of the programs in the ten

courts. Meierhoefer, supra note 31, at 64–65.

42. Id. at 29–50. For example, the percentage of cases that settled before an

arbitration hearing ranged from 58% to 87%. Id. at 49. The demand for trial de

novo ranged from 46% to 74% in arbitrated cases. Yet these differences did not affect the litigants’ ratings of the programs. Id. at 65.

43. “When asked how satisfied they were with the way their case was handled

in the Northern District and with the final result in their case, attorneys’ responses

showed no significant differences between the ENE and the non-ENE groups.”

Joshua Rosenberg et al., Report to the Task Force on Alternative Dispute

Resolution, Regarding the Early Neutral Evaluation Program of the United States

District Court for the Northern District of California, December 1, 1992, at 22. See

also Joshua D. Rosenberg & H. Jay Folberg, Alternative Dispute Resolution: An Empirical Analysis, 46 Stanford L. Rev. 1487 (1994) (published report of the authors’

study of the ENE program in the Northern District of California).
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24

story, there should be no doubt that the current system is wanting.

In fact, over the years, parties have settled the vast majority of civil

cases, presumably because they saw the certainty of a settlement as

superior to the uncertainties and costs of a trial. By definition,

these voluntary settlements produce outcomes that both sides see

as advantageous. Voluntary settlements appear to reflect satisfaction with court procedures that leave the parties in control. The

high rate of voluntary settlement shifts to those who would change

the current system the burden of showing dissatisfaction with it.

Like the alternatives, traditional settlement processes afford litigants an opportunity to tell their story and to control the process.

In the ten pilot arbitration programs, for example, only a minority

of participants had an arbitration hearing,44 yet four out of five

participants were satisfied that the arbitration procedures were fair.

Their responses imply that litigants are satisfied with traditional settlement negotiations.

Having an opportunity to tell one’s story to a lawyer affords litigants an acceptable level of satisfaction with both the outcome and

procedural fairness of the process. An exploratory study in state

courts, for example, found marginal differences in litigant satisfaction with the outcomes of traditional settlement procedures as

compared with the outcomes of trials, arbitration hearings, and judicial settlement conferences.45 Furthermore, most litigants in the

pilot arbitration programs expressed satisfaction when their cases

settled informally, presumably through attorney negotiations before referral to the arbitration program. Perhaps party control of

the process through representation by counsel is an overriding litigant value that has a major impact on satisfaction.

The observation that parties settle cases without ADR underscores a limitation on what is known about party satisfaction with

ADR. How does the level of litigant and lawyer satisfaction in cases

that settle with help from court-based ADR compare with lawyer

44. Meierhoefer, supra note 31, at 48, 49 (Table 9). “In all districts, the majority of cases closed prior to an arbitration hearing . . . . ” In half of the participating districts, fewer than one in four assigned cases went to a hearing. At least onefourth of the cases in the ten districts settled before referral to the program; in

four districts, more than half of the cases settled before referral.

45. The data are from Lind, supra note 33, at 966 (Table 1).
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25

and litigant satisfaction in cases that settle without court-based

ADR? We know very little about this issue.46 Yet ADR proponents

would conclude that litigants and lawyers view the alternatives as a

superior route to litigant satisfaction.

Furthermore, ADR may be more expensive to litigants than traditional settlements, which are likely to have lower transaction costs

than participation in ADR would have. ADR studies have generally

not approached the issue from this perspective, and there is insufficient evidence to determine whether, in effect, litigants would be

satisfied if they knew they would have to pay more in terms of their

time or lawyers’ fees to have an opportunity to tell their story to

someone other than their lawyer.

Preliminary reports of lack of success with voluntary federal arbitration

programs suggest that litigant support for ADR programs is weak. Voluntary arbitration programs in federal courts—especially those that

call for parties to “opt in”—have had little success.47 When parties

have been informed that they can take affirmative steps to opt in to

an arbitration program, they have declined to do so. This suggests

that reported satisfaction rates from mandatory arbitration programs are due to differences between the mandatory arbitration

courts and the lawyers who practice in them and other federal dis46. The data available are from studies of programs in various state courts.

Proponents cite Keilitz, Civil Dispute Resolution Processes, supra note 34, at 8–10, for

the proposition that litigants are more satisfied with mediation than with traditional settlement negotiations. Keilitz looked at mediation programs in three state

courts and found that both “litigants and attorneys find mediation to be fair and

satisfactory.” This is not a finding that mediation is superior to unassisted negotiation. In one jurisdiction, litigants found mediation to be superior to unassisted negotiation, but attorneys found the traditional process to be superior. In another

jurisdiction, Keilitz found that mediation was rated superior in the cases that did

not settle. In a third jurisdiction, no comparison was done, but satisfaction with

mediation varied with the mediator and was greater in cases that concluded more

quickly. See also Lind, supra note 33, at 966, discussed supra at note 45.

47. David Rauma & Carol Krafka, Voluntary Arbitration in Eight Federal

District Courts: An Evaluation (Federal Judicial Center 1994). For example, “optin” programs in four courts generated twelve arbitration cases during a period

when 13,239 civil cases were filed in those courts. Id. at 17–19 (Table 4). In “optout” programs in four federal district courts (Arizona, Georgia Middle, Ohio

Northern, and Pennsylvania Western), in many cases (34%–55%) one or more of

the parties took affirmative steps to remove the case from the arbitration process.
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26

trict courts and their lawyers.48 Policy makers should not presume

that there is a great demand for ADR based on the results from ten

districts that were committed to ADR before implementing mandatory arbitration pilot programs. We do not know whether either the

voluntary courts or the mandatory courts are typical of other districts, and we should not presume that litigants in other districts,

who may be steeped in a different litigation culture, will be as satisfied as those in the mandatory courts.

The ADR solution is not designed to resolve the problem of lawyer–client

relations. ADR proponents assume that traditional litigants often

have not had an opportunity to tell their story and, citing Magistrate Judge Wayne Brazil, that a primary cause of this lack of opportunity is the secrecy of settlement negotiations between the lawyers.

If courts are to alleviate this problem, judges will have to intervene

early and directly. Simply referring cases to ADR will not work because, as we have seen,49 lawyers can and often do engage in settlement negotiations before the ADR procedures start. Policing all

settlements would require substantial district or magistrate judge

time and would draw judges away from their primary roles of

preparing cases for trial and trying them. Moreover, it appears that

litigants may not view judicial intervention in the settlement process

as improving the situation or providing a fair opportunity for them

to tell their story.

50

48. The ten pilot arbitration districts studied by Meierhoefer appear to be

atypical of other districts because they volunteered to participate in the program.

Data from their programs should not be generalized to districts with different local

legal cultures. Only eighteen of ninety-four federal district courts applied to participate in the mandatory court-annexed arbitration program created and funded by

Congress. Two dropped out and ten were selected by the Administrative Office.

Meierhoefer, supra note 31, at 20–21. Two “important” considerations used to select the districts were “evidence of bar acceptance and the enthusiasm demonstrated by judges and clerks.” Id. at 21. Meierhoefer found that courts applying for

the pilot programs either had experience with local forms of ADR or were familiar

with successful national pilots in Northern California and Eastern Pennsylvania. Id.

at 30. Lawyers and litigants in those jurisdictions may well have been predisposed

to be satisfied with mandatory ADR programs because they were familiar with similar programs.

49. See discussion at notes 40–42, and 44–45.

50. According to Lind, “[j]udicial settlement conferences were more likely to

leave litigants feeling uncomfortable about the process than were bilateral set-
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27

If parties want to have an opportunity to tell their stories in an

informal way, they can arrange their own procedure, using private

firms that provide arbitration, mediation, mini-trials, and the like.

Public agencies, such as consumer protection programs and neighborhood justice centers, have been designed to give people unable

to afford private programs access to a forum for telling their stories

and for obtaining meaningful relief without engaging the formal

judicial apparatus. Perhaps these agencies should be expanded.

2. Courts have a responsibility to use ADR when it can help save

litigant and public resources while preserving fair procedures

and outcomes.

a. Alternative dispute resolution procedures can save litigants time

and money and ensure fair treatment.

The argument

ADR programs can be an important tool in courts’ efforts to

help litigants resolve their disputes more quickly and less expensively. Courts should use ADR programs that can serve this goal,

taking care to ensure that they are well designed and managed so

they are fair and do not increase litigation cost and time.

Three federal court programs provide evidence of ADR’s savings for litigants and of the fairness of the procedures. The first is

the early neutral evaluation (ENE) program in the Northern District of California, which brings parties and a volunteer neutral together early in the litigation to discuss and plan the case and in doing so addresses one of the major sources of litigation costs—discovery.51 In an evaluation of the ENE program, one-third of the

tlements.” Lind et al., supra note 33, at 967. The authors speculate that the discomfort may relate to a lack of attention from the court or from a reduction of a dispute to monetary terms. Id. at 981.

51. In place since 1985, the ENE program provides parties in cases with

substantial stakes (over $150,000) an early evaluation of their case, as seen through

the eyes of a neutral evaluator with expertise in the case’s subject matter. At a

conference held within 150 days of case filing, each side presents its case to the

evaluator, who then identifies the issues in dispute, assesses the strengths and

weaknesses of each side, places a value on the case, assists in settlement discussions

if the parties request it, and helps plan a discovery schedule if necessary. Northern

District of California General Order 26.
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28

attorneys in cases in the program reported decreased costs, and

another third reported either no impact on costs or no knowledge

of an impact.52 Although the remaining third reported increased

costs, on average the net savings estimated by those who reported

savings were ten times as high as the net costs estimated by those

who reported increased costs. The median savings reported by attorneys was $10,000, by parties $20,000.

As to savings in time, about half the participants in the ENE

program said the process shortened the time to disposition and reduced the time they personally spent on the case. Actual case-tracking data also show reduced disposition time: ENE cases closed

more quickly at all stages of the litigation. Although ENE, in providing an explicit assessment of the case’s value to each party in the

presence of the other parties, is a significant departure from traditional pretrial procedure, it also receives high approval for fairness.

Two-thirds of the attorneys who participated in the procedure said

it was fair, whereas only half of the attorneys who participated in

the court’s regular case management procedure said that procedure was fair.53

Mediation, when it occurs early in a case, can have the same effects as early neutral evaluation and can provide substantial savings

in cost and time. The primary evidence on this point comes from

the Early Assessment Program (EAP) in the Western District of Missouri, where cases in the program have a median disposition time

of 7.7 months, and similar cases not in the program have a median

disposition time of 10 months.54 The termination rate also supports

the conclusion that the EAP disposes of cases more quickly than

52. Rosenberg et al., supra note 43. Cost and time data are reported at pages

26–39.

53. Id. at 21.

54. Because the court established the program as an experiment, cases subject

to the program can be compared with cases not subject to it. Established in 1992

by the court’s CJRA plan, the program requires, within thirty days of the filing of

an answer, a conference between the attorneys, clients, and the EAP administrator

(an experienced litigator on the court’s staff), at which the parties must select one

of the court’s ADR options. Most choose to mediate the case with the EAP

administrator at the initial meeting. Data cited in this paper are from the court’s

most recent internal report, dated November 30, 1994.
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29

the court’s regular procedures: 60% of the EAP cases and 52% of

the control-group cases terminated during the same time period.

The program has also been effective in reducing litigation costs:

Nearly half the attorneys in cases in the program said it was “very

helpful” in reducing costs, and 22% said it was “somewhat helpful”

(10% said it was “detrimental”). A subset of 216 attorneys who were

asked to estimate the impact of the program on litigation costs reported a total of $4,890,750 in cost savings and $39,050 in cost increases. Altogether, 84% of the attorneys who have participated in

the early assessment meetings have found them fair.

Decisions reached through arbitration can also provide litigants

with both savings and a sense of fair treatment. A majority of attorneys in each of the ten mandatory arbitration pilot courts reported

that arbitration saved money for their clients. Although cost savings

were less likely when there was a request for trial de novo, a dispute

over legal issues, or party selection of the arbitrators rather than

court selection, the majority of litigants in all cases reported that

the overall cost of litigating their case was reasonable.55 And in the

one district in which arbitration cases could be compared with a

control group of nonarbitration cases and in which attorneys were

asked to provide actual cost estimates, there was a 20% reduction in

litigation costs.56

Seventy percent of the litigants also thought the time to disposition in their case was reasonable. Even when there was a de novo

demand, a majority of the litigants thought the time was reasonable

and 70% of the attorneys said the de novo demand did not delay

the case.57 Although arbitration provides a procedure significantly

55. Meierhoefer, supra note 31, ch. 7.

56. E. Allan Lind, Arbitrating High-Stakes Cases: An Evaluation of CourtAnnexed Arbitration in a United States District Court 39–41 (RAND Institute for

Civil Justice 1990).

57. Meierhoefer, supra note 31, ch. 8. Some have pointed to arbitration courts

with above average median times from issue to trial to argue that arbitration delays

trials and thus amounts to little more than another hurdle on the way to trial.

Another plausible explanation, however, is that these courts’ shorter and easier

cases have settled through the arbitration process, leaving only the most difficult

cases, those with the heaviest and longest pretrial demands, for trial.
Alternatives to Litigation

30

different from traditional procedures, litigants and attorneys give it

high ratings for fairness.58

To use ADR effectively, however, courts must be aware of the

variations among programs and the interplay between the type of

ADR proceeding, the type of case, specific ADR program characteristics, and the characteristics of the district, such as the caseload

mix, the volume of civil and criminal filings, and the degree of collegiality of the bar. Some program features may substantially enhance the effectiveness of programs, whereas others may reduce it.

In the early neutral evaluation program in the Northern District of

California, for example, the identity of the evaluator has proven to

be one of the most important factors in parties’ assessments of program effectiveness. In the Western District of Missouri, the cost of

the ADR service is very likely a factor, as nearly all parties choose

the free mediation assistance of the program administrator rather

than the for-fee service of non-court mediators or evaluators. And

in the mandatory arbitration programs, experience has shown that

arbitration is more likely to reduce litigation time when referrals

occur early in the litigation, when the court controls and monitors

scheduling, and when the hearing date is linked to discovery completion. Conversely, arbitration may increase cost and time when

parties proceed to trial, underscoring the importance of selecting

appropriate cases for these proceedings.

In addition to these factors, one other is very important for litigant evaluations of ADR’s effectiveness, and that is the fairness of

the procedure. For litigants, fairness is realized through a procedure that is dignified and attentive to their need to tell their story.59

Even when litigation cost or time is saved, procedures that give too

little attention to the litigant’s need to be heard will not be seen as

fair or effective. But when cost and time are reduced and fairness is

not compromised—as in the federal court ADR programs

described above—courts should use these dispute resolution tools.

58. Meierhoefer, supra note 31, ch. 6.

59. Lind et al., supra note 33, at 984.
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31

The response

ADR programs are ill-suited to prevent excessive costs and delays; for litigants seeking a trial, ADR increases costs and delays trial

scheduling.

Although there may be some marginal evidence of cost savings

in some ADR programs, the aggregate figures are deceptive. Typical analyses do not consider whether injecting alternative dispute

resolution procedures into traditional pretrial processes increases

the cost of getting a disposition. Requests for trial de novo were

made in more than 60% of the cases, for example, in six of the ten

pilot mandatory arbitration courts. Almost two-thirds of the attorneys requesting trial de novo reported that referral to arbitration

caused them to spend more time on the case than they otherwise

would have.60 Examination of caseload statistics showed little time

savings from filing to disposition. Nor did the attorneys believe arbitration prompted earlier settlements.

Common sense alone tells us that adding new procedures is

likely to add costs.61 ADR procedures do not usually apply formal

rules of evidence or otherwise focus on evidence that will be useful

at trial.62 For example, time spent in listening to lawyers’ summaries

of witnesses’ expected testimony, as may be the case in arbitration,

may have little relevance to trial63 and therefore may increase the

cost of getting through pretrial barriers with little commensurate

benefit. If the ADR process does not lead to resolution and the case

is tried, the ADR products (e.g., an arbitration award, settlement

offers) do not fit into the trial process. Settlement discussions and

offers are specifically excluded from evidence under Federal Rule

60. Meierhoefer, supra note 31, at 48–49, 88.

61. See Lisa Bernstein, Understanding the Limits of Court-Connected ADR: A Critique of Federal Court-Annexed Arbitration Programs, 141 U. Pa. L. Rev. 2169, 2215

(1993) (“CAA [court-annexed arbitration] programs that do not have strong disincentives to requesting a trial do not reduce either the potential litigation costs or

the amount of delay the parties can threaten to inflict on each other, and may well

increase such costs, especially when a trial is demanded.”).

62. Id. at 2181 (“One district bans live testimony altogether.”); see also Kathy L.

Shuart, The Wayne County Mediation Program in the Eastern District of Michigan

6–7 (Federal Judicial Center 1984).

63. ENE is the exception in this regard in that it focuses on narrowing the

issues, evaluating their merit, and preparing the case for trial.
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32

of Evidence 408. The resulting duplication impedes the traditional

law-declaring role of the courts by placing a costly barrier in front

of litigants who want to have a public trial before a district judge.

Wealthy litigants can hurdle these barriers; those with fewer

resources cannot.

Even when the statistical approach most favorable to ADR is

used—comparing ADR cases with cases that include trials—the results have been mixed.64 Sometimes ADR proponents compare cost

and delay data from ADR with data from traditional settlements

and trials combined.65 The result is that trials, which are beyond a

doubt more expensive and time-consuming than ADR proceedings,

skew the statistics. Studying costs and delays in this way ignores the

unique role of trials in our common-law system and defines the

issues in a way that is likely to find ADR to be less costly and timeconsuming. In examining cost and delay data, it is more

appropriate to compare the cost and time of ADR with the cost and

time of traditional pretrial settlement. This, after all, is the comparison contemplated by the argument that secret settlement negotiations represent the evil to be addressed by ADR.66

64. In seven of the pilot mandatory arbitration courts, there was “very little

difference overall in the speed with which” comparable cases terminated before

and after the arbitration program was instituted. Meierhoefer, supra note 31, at 97.

In the controlled experiment in the Middle District of North Carolina, data indicated that “the arbitration program . . . is encouraging the pursuit of some cases

that otherwise might have been dropped.” Id. at 96.

65. Data from the mediation program in the Western District of Missouri,

supra note 54, illustrate the point. In that study, 4% of the cases in the control

group went to trial, compared with 2% of the cases in the experimental group and

2% of the cases in a voluntary mediation group. In the calculation of the times

from filing to disposition, the trial cases are included, inflating the median times

by an unknown amount.

66. See discussion at notes 38–40. Cases that continue to trial after ADR should

be compared with cases that proceed to trial without ADR.
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33

b. Alternative dispute resolution procedures can reduce pretrial

demands on judges and can help them allocate trial time more

effectively.

The argument

The question of ADR’s potential for conserving court resources

has become caught up in a larger debate over whether the federal

district courts face a caseload crisis and the nature of any such crisis.67 Although this is not the forum in which to resolve that debate,

it is important to note several related facts before assessing ADR’s

ability to assist the courts.

First, in the aggregate, federal civil caseloads have been decreasing in recent years,68 even though some districts are feeling

the consequences of extended judgeship vacancies and the rigorous prosecution of complex multidefendant criminal cases. Nevertheless, with current information it is not possible to measure in a

very sophisticated way the demand of a case on a court or on a

judge’s time because demand is dependent on so many more factors than the simple caseload numbers used in arguments about

the issue. While the demand of different case types, for example, is

to some extent measured by the federal courts’ case-weighting

scheme, factors such as the contentiousness of discovery within a

district are not easily measured.

Second, the civil trial rate in the federal courts is already very

low and has been steadily declining for the past decade in nearly all

federal courts, those with ADR and those without ADR alike. Between 1970 and 1993, the number of authorized judgeships increased and the number of civil filings decreased, but the percentage of civil cases terminated after a jury or bench trial decreased

67. See, e.g., Robert A. Parker & Leslie J. Hagin, “ADR” Techniques in the Reformation Model of Civil Dispute Resolution, 46 SMU L. Rev. 1905 (1993). A response is

in G. Thomas Eisele, Differing Visions—Differing Values: A Comment on Judge Parker’s

Reformation Model for Federal District Courts, 46 SMU L. Rev. 1935 (1993).

68. Civil filings per authorized judgeship declined from 411 in 1987 to 354 in

1993. Weighted civil and criminal filings, which take into account the relative

burdens that different types of cases impose on the courts, also declined during

the same time period. Administrative Office of the U.S. Courts, Federal Court

Management Statistics 167 (1993). These data are aggregates; some courts had increases in civil filings per authorized judgeship during that period.
Alternatives to Litigation

34

substantially. In 1970, more than 7% of all civil cases were terminated after a trial; in 1993, less than 4% of all civil cases were terminated after a trial.69 This drop represents a steady annual decrease over this time period in the percentage of civil cases with trials. Comparable data for jury trials show a similar downward trend,

from less than 3% of all civil cases terminated in 1970 to about

1.5% of all civil cases terminated in 1993 (see Figure 2 in the Appendix).

Third, because the trial rate is so low, it is difficult to detect

ADR’s effects, if any, on the trial rate. The most effective method

for determining an impact from ADR—random assignment of cases

to alternative and traditional dispute resolution procedures—is infrequently used or used for too short a period of time because

courts have been either unable or unwilling to create the long-term

experimental programs necessary for testing the effect of ADR.

Also, so many factors affect trial rates—for example, the nature of

the caseload, relationships among members of the bar, the number

of judges—that it is difficult to sort out the effect of any single one.

Beyond these facts, however, is the more important point that

by and large the purpose of ADR is not and should not be to reduce trial rates. Neither individual cases needing trial nor the development of law is served by a preoccupation with lowering the

number of trials. Rather, the essential goal, after ensuring that litigants have a fair process and outcome, should be to ensure that

trial time is available for cases that need a trial or that will contribute to the development of law. A growing proportion of trial

time is now demanded by criminal cases, as shown in Figure 1 in

the Appendix. Because courts can do little to reduce this demand

and because a sizable expansion of the judiciary is neither likely

nor preferred as a matter of Judicial Conference policy, courts and

individual judges must try to expand judges’ trial time. They can do

so by reducing judge time spent in other activities and by identifying cases that can be resolved before trial. Alternative dispute resolution procedures can help courts do both.

69. See Figure 2 in the Appendix. The percentages refer only to cases that were

terminated after the completion of a trial before a district judge, magistrate judge,

or jury.
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35

Most ADR procedures expand the time available for trials by

reducing pretrial demands on judges. Early neutral evaluation, for

example, reduces this demand by helping parties narrow issues and

plan discovery. Mediation programs can be particularly effective in

reducing pretrial demands by removing from judges the burden of

the often lengthy participation required for settlement discussions.

And arbitration programs reduce judges’ pretrial responsibilities in

a number of ways. In some districts, for example, local rules permit

the clerk of court to schedule pretrial events in cases referred to

arbitration. In other districts, the demands of motions, particularly

dispositive motions, are reduced because judges are permitted to

set them aside until after the arbitration hearing. Across the ten

federal arbitration courts, 96% of the judges agreed that their

court’s arbitration program had reduced their caseload burden,

and 58% of them agreed strongly.70

Alternative dispute resolution procedures can also expand the

time available for trials by helping courts screen out cases that can

be resolved without trial. Rather than providing trials only to cases

that can hold out until a trial slot is available, courts should actively

assist parties in determining whether trial is the only method or the

best method by which their case can be resolved. Not only will some

cases be better and less expensively resolved if decided without

trial, but also court time will be better used when applied only to

cases that can be disposed of in no other way. Furthermore, by

identifying cases that need trial and screening out those that do

not, ADR helps produce trial calendars that are “real” and can be

relied on, permitting judges to allocate their time more effectively.

ADR can, in sum, help courts provide more trial time by using trial

time better.

The response

Instead of reducing burdens, ADR creates additional burdens

on courts. Moreover, any ADR-induced reduction in overall de70. Meierhoefer, supra note 31, at 34–35. Judges were asked for their perceptions of arbitration’s impact on their burden. Judges whose programs diverted

the greatest percentage of cases to arbitration and judges whose programs decreased judicial involvement in the pretrial process were the most likely to agree

that the program had reduced their burden.
Alternatives to Litigation

36

mands on court resources is likely to reduce the already declining

rate of federal jury trials.

Conserving judicial resources by reducing the number of civil trials

threatens to displace the role of civil trials in the federal system. The decline in trial rates cited earlier is a cause for serious concern. This

decline cannot and should not be attributed solely to ADR. (Some

of the decline is due to growing criminal caseloads and strict

Speedy Trial Act deadlines, as well as to changes in the mix of civil

cases that may result in more cases that are likely to settle.) It is

clear, however, that ADR does not contribute to reversing or stopping the decline in trials. Some ADR programs were designed, in

fact, specifically to relieve caseload pressures by reducing the number of trials.71 The convergence of the ADR movement, the rising

criminal caseload, increasing complexity of some civil cases, and

judicial vacancies could lead to the gradual disappearance of civil

trials from the federal courts unless priorities are rearranged to

protect this tradition.

ADR may, in fact, facilitate and encourage increases in civil

caseloads by resolving cases, thus reducing the judge’s role in their

termination and making it appear that the courts can handle more

cases. The result may be a decline in the trial rate and apparent accommodation of all cases. The long-term effect may be to reduce or

displace the role of trials in our legal system.

ADR programs demand additional resources. The best evidence indicates that arbitration cases impose burdens on court resources

that are comparable to those imposed by ordinary case management procedures. The estimated costs, including judge time, in the

only experiment that compared arbitration cases with a control

group of nonreferred cases, were $1,209 for the average arbitration

case and $1,240 for the average nonarbitration case. The trial rate

was higher for the traditional group, but savings from fewer trials in

the arbitration cases were offset by higher costs of responding to

motions and conducting pretrial conferences in those cases. Finally,

the arbitrators’ fees of approximately $7,500 per year were paid by

the court and the court’s contractual costs for the administration of

the program were $14,500 per year. Clerical support and judge

71. Meierhoefer, supra note 31, at 16–18.
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37

involvement in the creation and administration of the program are

not included in those cost figures.72

The same experiment showed that during the first nine months

after filing, fewer cases terminated in the arbitration group than in

the traditional group. Overall, the time from filing to termination

was the same, but the data suggest the arbitration option may have

induced some parties to keep alive cases they might otherwise have

settled. We do not know whether this was good for the parties. We

can surmise, however, that delays in terminating cases imposed additional demands on court resources.

No researcher has been able to detect, either through case

studies or quasi-experiments, any effects of an arbitration program

on the caseload.7 3 Testimonials from judges based on personal

experience74 and surveys suggesting that almost all judges in the

arbitration pilot courts believed that their court’s programs assist

with their caseload burdens should be interpreted cautiously. Such

assertions may be no more than self-fulfilling beliefs. The judges

who attest to savings from arbitration established the programs in

question because they believed the programs would help with the

caseload. Furthermore, most judges have little information about

the baseline rate of terminations. They do not see the many cases

that settle or are otherwise terminated without judicial action.

The findings from early mediation and early neutral evaluation

programs suggest that those programs have reduced the time from

filing to disposition when compared with cases handled by traditional methods. These results, however, should not be overstated.

They do not show a lower demand on court resources, and they

may only reflect the effects of a concentrated effort to force the

parties to confront their cases at an early stage and a shift from using judicial resources to using nonjudicial resources. Costs to the

courts may have been shifted to the front end of the process and to

nonjudicial personnel.

72. See Lind, supra note 56, at 39–43.

73. See Meierhoefer, supra note 31; Lind, supra note 56, at 39–43.

74. A number of judges who have designed ADR programs or used ADR have

written of its benefits for the courts. See, e.g., Lambros, supra note 8; McKay v.

Ashland Oil, Inc., 120 F.R.D. 43, 49 (E.D. Ky. 1988); Raymond J. Broderick, CourtAnnexed Compulsory Arbitration: It Works, 62 Judicature 218 (1989).
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38

ADR programs divert resources away from traditional programs. The

judiciary is in a period of sustained resource shortfalls. From 1987

to 1994 the court system received noticeably smaller proportions of

its budget requests.75 The judiciary’s budget for fiscal 1994 was

funded at 87% of the requested level. (In 1995, the trend was at

least temporarily reversed with funding at 97% of the requested

level.76) In 1990, the judiciary requested 96 new judgeships to meet

increases in cases filed. Congress created only 74 new judgeships.77

In fiscal 1993, the initial appropriations to pay civil jurors ran out

months before the end of the fiscal year.78

At a time when federal courts are understaffed in terms of both

judges and staff, and when money to pay the modest fees of civil jurors is in jeopardy, it misplaces priorities to spend public money on

ancillary programs designed primarily to satisfy private litigants.

Long-term analyses of federal courts’ caseloads show that the courts

have been able by and large to accommodate the demands of an

increasing workload.79 Their ability to do so can be explained in

75. William W Schwarzer & Russell R. Wheeler, On the Federalization of the

Administration of Civil and Criminal Justice 3, 53 (Federal Judicial Center 1994).

76. President Signs FY 94 Appropriation Bill for Judiciary, 25 The Third Branch 1–

3 (November 1993); FY 95 Judiciary Budget Bill Signed, 26 The Third Branch 1–2

(September 1994).

77. Bill Creates 85 Judgeships for Bush to Fill, 1990 CQ Almanac 520–23. Congress

created eighty-five judgeships, but eleven were for districts that were not included

in the judiciary’s request.

78. See Funds for Civil Jurors Run Short, 25 The Third Branch 1 (April 1993)

(reporting that funds to pay jurors in civil cases “will run out on May 12, 1993”).

79. During the period 1971–1986, years that included claims of a “litigation

explosion,” annual filings of private civil cases in the federal courts experienced

almost a fourfold increase. Terence Dungworth & Nicholas Pace, Statistical

Overview of Litigation in the Federal Courts 8–9 (RAND Institute for Civil Justice

1990). During the 1980s, however, “the number of cases terminated in any given

year was roughly equal to the number filed in the previous year. As a consequence,

the pending caseload has grown in most years by about the same amount as annual

filings have increased over the previous year.” Id. at 17. During the period 1971–

1986, the median time from filing to disposition rarely strayed from the level of

nine months, the same time that applied in four of the six years from 1988 to

1993. In 1993 the time from filing to disposition was eight months. Id. at 19–21. See

also Administrative Office of the U.S. Courts, 1992 Federal Court Management

Statistics 167 (1992). In 1991, the median time from filing to disposition was ten

months.
Alternatives to Litigation

39

part by increases in the number of judges and the size of chambers

and court staff as well as by changes in the statutory and rule-based

authority given judges to manage their caseloads. Resources

claimed for ADR could better be used to support judges in their

traditional role, either by creating new judgeships or by creating

staff positions to assist judges in pretrial management. Assigning

magistrate judges to preside at ADR programs, as some courts do,

renders them less available to assist with pretrial litigation matters

or with consent trials. Using members of the jury pool for summary

jury trials undermines the argument for full funding of civil jury

trials. Dollars used to support dispute resolution administrators are

dollars that will not be available to fund pretrial case management

or trials.

c. To expedite litigation from the outset, courts should provide

assistance in early case evaluation and early settlement

discussions.

The argument

Clarification of issues and facts will always be an important part

of a case at its outset. The earlier and more effectively this is done,

the more efficiently litigation will proceed. Innovative procedures

adopted in two federal district courts challenge the conventional

view that alternative dispute resolution is an event that should occur late in a case after discovery has been taken or the case has

ripened. Early neutral evaluation seeks to expedite litigation

through an early evaluation of the strengths, weaknesses, and value

of the case.80 Early assessment tries to compel parties to examine

their case early and to select an ADR procedure appropriate for the

case.81

In both the Northern District of California and the Western

District of Missouri, these early evaluation programs have resulted

in significant litigation efficiencies and high participant satisfaction.

In California Northern, for example, although the conferences

occur early in the case, they have led to settlement of one or more

issues in a substantial number of cases and have prompted many

80. See program description at supra note 51.

81. See program description at supra note 54.
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40

attorneys to change their expectations of the appropriate settlement amount for their case.82 At every stage of litigation, cases

subject to ENE close more quickly than cases handled through the

court’s regular procedures. Overall, attorneys rank the procedure

as more useful than Rule 16 conferences.83

ENE is effective because it helps attorneys arrive at a more realistic assessment of their case’s value, and it does so at the outset of

the case. Without this understanding, as the attorneys themselves

report, costs and fees can be unnecessarily high. And cases can go

on much longer than they ought to. Indeed, when attorneys fail to

evaluate their cases early and realistically, settlements may occur

much later than they should and, in some cases, trials that need not

have taken place do.84

Contrary to the conventional wisdom that settlement cannot

occur until discovery has been completed, over a third of the cases

in Missouri Western’s Early Assessment Program have settled at the

initial assessment conference, held within thirty days after answer is

filed, or at a second meeting held a short time later. Another 17%

settle within a month of the first or second meeting.85 The program’s value lies partly in the simple step of bringing parties together with a neutral who will discuss the strengths and weaknesses

of the case and partly in the compelled presence of clients, who not

only are encouraged to participate but also can see for themselves

the opposing party’s view of the case.86 Of the attorneys whose cases

82. See supra note 43. Nineteen percent of the attorneys surveyed reported

settlement of one or more issues because of the ENE conference. A third reported

changed expectations regarding the value of their case. These and other data cited

in this section are from pp. 19–26 of this report.

83. Id. When asked to rank procedures they believed would be helpful, more

attorneys placed ENE in first or second place than placed a Rule 16 conference

with a judge in first or second place (183 versus 145).

84. For a discussion of some of the consequences of postponed case evaluation, see, e.g., Wayne D. Brazil, Effective Approaches to Settlement: A Handbook

for Judges and Lawyers 8–9 (1988).

85. See supra note 54.

86. Id. In the 88% of the cases in which parties did attend, 67% of the attorneys reported that the party’s presence helped resolve the case (only 1% said it

hindered resolution).
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41

were placed in the early assessment program, 93% believe the

program should be continued.

The success of these ADR procedures reveals the substantial information and case evaluation hurdles attorneys must get over before a case can move forward. The Rule 16 conference, which

might be suggested as a solution, is not an adequate means for

helping attorneys over these initial hurdles. Even the most committed judge is handicapped in three significant ways. First, many do

not consider it appropriate for judges to give an assessment of the

case’s value, which is a major reason these programs are useful to

attorneys and parties. Second, many cases may benefit from the assessment of someone with expertise in the subject matter of the

case, but judges cannot be experts in every subject that comes before them. And third, many judges cannot give each civil case on

their docket the two to four hours given by the non-judge neutral

evaluators in the ENE and EAP programs.

Because an early understanding of the case is critical, courts

should provide at the outset a mechanism to help all parties evaluate their case and seriously discuss settlement. Because judges cannot and should not be involved in such discussions, courts should

establish programs that provide this early assistance.

The response

If early case evaluation is conducted, it should be conducted by

judges as part of their responsibilities under Federal Rule of Civil

Procedure 16.

To avoid pretrial confusion, the trial judge should perform the

valuable functions of narrowing the issues and ruling on pretrial

matters. When non-judge neutrals do so with the court’s blessing,

they can become in effect a private judge. If the case does not settle

and the non-judge expert’s views differ from those of the trial

judge, the parties may be enticed to rely on the neutral’s opinions

rather than the judge’s, which will result in either the parties being

misled or the judge being left with the task of redefining the issues

for trial. Pretrial preparation could easily end up on two conflicting

tracks, one set by the neutral and the other set by the judge.

Except for intensive case evaluation, judges can and do perform

the same functions in Rule 16 conferences that evaluators perform
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42

in ENE.87 Attorneys are as satisfied with traditional pretrial processes as they are with ENE.8 8 Marginal, if any, gains from an

elaborate new program can hardly justify transferring case management from judges to non-judge evaluators. Moreover, the data

presented do not directly support the conclusion that ENE helps

parties understand their cases better and earlier.89 Besides, finding

volunteer lawyers to help parties understand their cases seems an

odd role for courts to play. Understanding the case, after all, is

what parties pay lawyers to do. If the parties want or need a second,

neutral opinion, they should pay for it. Private litigants should not

expect courts to recruit or pay for non-judge neutrals to evaluate

their cases. To the extent that evaluations by neutrals are free to litigants, one should not be surprised to find satisfied litigants. The

parties gain a second opinion without paying the expert for the advice. A true test of litigant satisfaction would be to ask whether the

litigants are willing to volunteer for the program and pay for it.

Proponents of ENE do not discuss program costs, such as program administration or neutrals’ fees for work done after the initial

consultation. Neutrals volunteer for four hours per case.90 To what

alternative uses, such as appointment of counsel in civil cases,

might these pro bono efforts be put?

87. Rosenberg et al., supra note 43, at 20. In the attorneys’ ratings of the

helpfulness of the procedures, 275 indicated that ENE would be helpful, and 268

indicated that Rule 16 procedures would be helpful.

88. Id. at 22.

89. Rosenberg’s data indicate that ENE helps the parties understand their

cases, but those data do not compare ENE participants’ understanding with the

control group’s understanding. The fact that ENE cases settled earlier than the

control cases does not necessarily indicate better understanding of the case, but

could result from ENE’s forcing the parties to prepare their cases sooner because

of the timing of the ENE sessions. Presumably the later settlements were also a result of improved understanding of the case, albeit at a later time.

90. See Northern District of California General Order 26.
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3. To provide all litigants with access to alternative procedures and

to guarantee the procedural protections litigants rightfully expect

from courts, ADR should be available through publicly funded

court-based programs.

a. Courts have an obligation as public institutions to provide ADR

services.

The argument

Private dispute resolution options are numerous and growing.

Courts should support the development of these options and citizens’ use of them instead of or before filing cases in court.

Courts should also, however, establish alternatives that are located in and monitored by the courts themselves. They should do

so for three reasons—equal access, fair process, and maintenance

of a broad-based public-sector justice system.

First, the courts’ public function is, in significant part, to help

citizens resolve disputes. In doing so, the courts should provide all

citizens with access to whatever process is appropriate to the case,

be it a trial, an early ruling on a legal issue, or an early neutral evaluation of the case’s merits. Whatever the appropriate method, citizen–litigants would rightfully be shocked if this public institution

told them to turn to the private market for assistance. This is particularly true for litigants who cannot afford either the alternative

procedures offered by the private market or the lengthy and costly

process of traditional litigation. The courts owe these litigants in

particular the opportunity and protections of a court-based alternative procedure. To ensure this opportunity, the procedure should

be publicly funded.

Second, the courts have a responsibility to guarantee a fair process and just outcome to litigants. As Judge Alfred P. Murrah, the

Federal Judicial Center’s second director, told new judges in the

Center’s orientation seminars, “Until a case is filed, it’s the parties’

business. Once it’s filed, it’s the public’s business.” When a court’s

dispute resolution methods include referral to alternatives, such as

mediation or arbitration, the court must guarantee the quality of

those methods and can best do so by establishing them as part of its

own system of case resolution. For example, the court can specify

how cases are to be selected for ADR and whether certain types of
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44

cases are to be exempt because they are inappropriate for ADR. It

can spell out the procedures for assigning neutrals to cases and establish training and certification requirements for these neutrals. It

can specify as well how the ADR sessions are to be conducted and

can protect the confidentiality of information exchanged at these

sessions.91

In establishing these and other procedures and safeguards, the

courts provide the same kind of protections to litigants that they

provide through traditional pretrial rules. In both contexts the

purpose is to ensure that both the stronger and the weaker parties

in a case have equal access to information and equal power to negotiate a resolution. The courts can protect parties from pressure

to settle and protect one party from another’s refusal to negotiate

in good faith. The courts’ involvement, in turn, is likely to bolster

the parties’ faith in the process, motivate the neutral to provide superior service, and allow ongoing evaluation by which the court can

track whether certain types of cases fare better than others in ADR,

whether ADR affects parties’ costs, and whether ADR time limits

are honored. Furthermore, should the day come that attorneys are

no longer willing to serve as neutrals for free or for token honoraria, it is important to have public funding in place for maintaining the programs.

Some will object that administration of ADR is too intrusive a

role for courts, that it attempts to regulate the interactions between

attorneys and clients. Once parties have chosen to file a case in

federal court, however, and once the court has determined that alternative dispute resolution procedures are appropriate, the court

has an obligation to provide parties with the same protections afforded by traditional procedures. These protections do not neces91. See, e.g., Northern District of California General Order 26 and General

Order 34. Civil Justice Reform Act Plan, Western District of Missouri; Civil Justice

Reform Act Plan, Northern District of Ohio. See also the local rules for the twenty

courts authorized to use arbitration. Guidelines for developing rules and procedures can be found in Center for Dispute Resolution, The Institute of Judicial

Administration, National Standards for Court-Connected Mediation Program

(Washington, D.C., 1993).
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45

sarily exist in the private market, which may be one of the reasons

litigants choose to come to court.92

The third reason courts should provide ADR services is to fulfill

their role as public institutions established to resolve citizens’ disputes and to declare and apply the law. To suggest that citizens

should take their disputes elsewhere, or that they can come to federal court but are unlikely to have a chance to present their cases to

neutrals, can only prompt public doubt in the justice system. And

to close the courthouse door on many cases that, if screened

through a court program, might be identified as important for the

development of the law is to undermine the courts’ law-making

function as well. Confining ADR to the private sector would result

in creation of a private justice system, whose effect would be to undermine courts’ peace-keeping and law-making functions far more

drastically than court-based ADR possibly could.

The response

Bringing ADR into the courts and expanding procedural protections for litigants threatens to impede ADR’s development; leaving it in the private sector encourages experimentation with flexible rules and practices.

Court-supervised and publicly funded ADR programs pose

three closely related dangers: (1) they will create a public bureaucracy without the creativity and flexibility of the private market;93

(2) they will preempt private citizens’ efforts to manage their own

affairs; and (3) they will be a drain on public resources.

First, court-annexed and publicly supported ADR systems would

create a public bureaucracy. Private ADR is flexible and nonbureaucratic, unrestricted by formal due process in making and

92. Stephen B. Goldberg et al., Dispute Resolution: Negotiation, Mediation,

and Other Processes 422 (1992).

93. See also the assessment of one commentator:

Private ADR tribunals have a number of features that parties consider important, but which cannot be fully replicated in mandatory, non-binding CAA [courtannexed arbitration] programs. These features include secrecy, informality, speed,

finality, the right to select a trier of fact with specialized knowledge or expertise,

and, in some trade industry arbitration, the ability to specify the rule or decision

that will be used to resolve the dispute as well as the avoidance of litigation costs.

Bernstein, supra note 61, at 2239.
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46

changing its rules.94 In contrast, when courts establish court-based

ADR programs, they commit themselves to selecting, training, and

assigning neutrals, guaranteeing their impartiality and expertise,

directing the conduct of ADR proceedings, protecting parties from

pressures to settle, policing a party’s refusal to negotiate in good

faith, controlling the conduct of attorneys presiding over the sessions, and conducting ongoing program evaluation. While the

breadth of the proposed protections far exceeds that of any protections currently in place, the proposed protections are a logical outgrowth of court annexation and public funding and accountability.

Courts can be expected to take their own institutional needs into

account, which may shift their focus from litigant savings to reduction of court expenditures. Courts may also be vulnerable to

charges that court programs bring pressure on parties to waive

their Seventh Amendment rights, whereas private ADR providers

clearly have no power to do so.95

To illustrate some of these concerns, consider the selection of

neutrals. When courts select individuals for the court’s roster of

neutrals, these individuals come to be seen as representatives of the

courts, and thus courts must screen them; must impose high, but

sometimes artificial, standards for selection;96 and must certify their

credentials, all at considerable expense to the public. Private

organizations also screen applicants at the outset, but then can use

94. See generally Jerold S. Auerbach, Justice Without Law? (1983). The private

sector can even create a system of precedent that will govern continuing relationships. For example, in labor–management arbitration, the parties define their own

“statutory” standards in a collective bargaining agreement and hire specialized arbitrators to interpret and apply that agreement and issue reasoned decisions. The

hundreds of volumes of “Labor Arbitration” reported decisions attest to the ability

of the private sector to meet its own needs for fair, economical, and reasoned decisions. Influenced by lawyers, commercial arbitration developed in a relatively formalistic manner in the United States during the early twentieth century. Id. at 95–

114.

95. See generally Eisele, supra note 67.

96. See, e.g., James J. Alfini, Trashing, Bashing, and Hashing It Out: Is This the End

of “Good Mediation”?, 19 Fla. St. U. L. Rev. 47, 56–59 (1991) (discussing a state

court rule limiting mediators to experienced lawyers and retired judges).
Alternatives to Litigation

47

market forces to control who stays on the list.97 Private providers

have a continuing economic interest in presenting high-quality services to the public. If they fail to do so, they will not be selected by

parties or by attorneys. Courts may also find it important to assign

the neutral in a particular case so as to spread activity evenly among

those on the court’s roster.98 In addition, courts as public bodies

face due process limits on their decisions about listing or not listing

a neutral, limits the private sector does not face. Notice, reasons,

and a hearing may have to be provided before removing attorneys

from a roster.

Likewise, court control over confidentiality may differ from private control. The right of public access to ADR proceedings takes

on a different cast when the parties agree privately to use their own

funds to hire a neutral or to conduct a mock trial using paid volunteers. When a court invokes its power to order closed proceedings,

that order must pass First Amendment muster.99 When a court

decides to use court resources for a program, that decision must

have statutory authority.100

The second reason to prefer private provision of ADR services

over public provision is that court provision of such services undermines society’s fundamental assumption that adults are capable

of managing their own affairs and threatens to displace the traditional means of gaining access to the justice system—through

lawyers. If secret settlements are disfavored and courts control access to informal dispute resolution, cases that might otherwise be

resolved amicably will be drawn into court for referral to courtbased dispute resolution or perhaps even for appointment of coun97. For a discussion of the competitive forces involved in recruiting and

training private mediators, see Karen Donovan, Searching for ADR Stars, Nat’l L.J.,

March 14, 1994, at A1.

98. Court control of the assignment also keeps down the costs to the parties.

Meierhoefer, supra note 31, at 88–89. But the monetary savings come at the

expense of giving the parties an opportunity to assess the qualifications of arbitrators.

99. Cincinnati Gas & Electric Co. v. General Electric Co., 854 F.2d 900 (6th

Cir. 1988) (summary jury trial may be ordered closed to the public).

100. See, e.g., Hume v. M & C Management, 129 F.R.D. 506 (N.D. Ohio 1990)

(federal courts have no authority to summon citizens to serve as jurors in summary

jury trials).
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sel.101 A central assumption of ADR programs, or in some instances,

an explicit rationale, is that the judiciary has a duty to provide

citizens with an opportunity for a better form of consensual dispute

resolution than secret settlements negotiated by lawyers. That

assumption posits that federal courts are responsible for policing

agreements between competent adults who are represented by

counsel.

Third, turning the courts into full-service dispute resolution

centers will be expensive.

102 These budget items come on the heels

of a shortage in funds to pay for jurors in civil cases.103 The choice

facing policy makers is stark: Should current resources be used to

pay for ADR services or juror services? Public funding of alternative

dispute resolution programs serves as a public subsidy of a

primarily private benefit. As discussed earlier, private resolution of

a dispute without a public, reasoned opinion primarily serves the

interests of the parties in that dispute. One commentator has raised

questions about public subsidies for litigation by calling them

“public welfare benefits.”104 Traditional litigation at least presents

the possibility of producing a public verdict or a published opinion.

ADR procedures produce no such public benefit to justify the subsidy.

101. Public programs for delivery of legal services have addressed the need to

expand access to those with limited means, and the current administration has

proposed expansion of that program. Addressing the need for legal services at the

personal and community level makes more sense than adding a new regulatory

duty to the federal courts’ already full agenda.

102. In the early days of the ADR movement, Professor A. Leo Levin, then

director of the Federal Judicial Center, pointed out that a “program of court-annexed arbitration requires that substantial costs be paid from the public fisc.” A.

Leo Levin, Court-Annexed Arbitration, 16 J. L. Reform, 537, 545 (1983). Some of the

costs include fees of arbitrators and administrative personnel, and judicial time in

drafting rules and monitoring program operation. Id.

103. See discussion at notes 75–79.

104. Rex E. Lee, The American Courts as Public Goods: Who Should Pay the Costs of

Litigation?, 34 Cath. U. L. Rev. 267, 269 (1985). The author, a former Solicitor

General of the United States, raised the question this way: “Why, for example,

should the public subsidize a lawsuit between Greyhound and IBM, or between

Litton Industries and AT&T? Surely others are more in need of public welfare

benefits.”
Alternatives to Litigation

49

The novelty of alternative programs threatens to attract resources that might otherwise be available for traditional court programs, such as jury and bench trials. The judiciary needs to clarify

that its primary civil justice mission is to declare the law and then to

obtain funding to do so before seeking and spending funds on secondary programs like ADR. Without a clear statement from the judiciary, Congress and the public will most likely continue to divert

new funding to alternative programs.

b. It is impractical for courts to rely on magistrate judges or private

ADR services instead of publicly funded, court-based ADR

programs.

The argument

Some have proposed that the costs of ADR programs could be

avoided if magistrate judges performed the role of mediator or

evaluator. Magistrate judges, however, have many other duties, duties that cannot be performed by neutrals and should not be performed by judges. To give magistrate judges ADR responsibilities as

well would require either shifting their current duties to judges,

and thus appointing more judges, or appointing additional magistrate judges. Either would be more costly than hiring one or two

staff members to administer an ADR program that relies on attorneys and other professionals to conduct the ADR sessions, or appointing an experienced mediator to the court staff, as in Missouri

Western.

Others have proposed that courts refer parties to programs

administered by entities outside the court. Aside from the fact that

dispute resolution is a public obligation, referral to private entities

raises difficult questions about quality, ethics, and appearances. To

make referrals to high-quality providers, for example, judges would

have to know something about the providers. This would be difficult without ongoing monitoring by the court or personal acquaintance between the judge and the providers, both of which compromise the appearance, if not the reality, of independence. To ensure quality, judges may find that they prefer certain providers over

others, but routine referral to such providers will give the appearance of channeling money-making work to selected profit-making

organizations. These problems underscore the wisdom of providing
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ADR services—for cases that are filed in court—through the auspices of the court itself.105

The response

Private alternatives to publicly funded programs are available

and can be used by litigants without formal referrals from the

courts.

One can agree that it is impractical for courts to use magistrate

judges or other existing court personnel to staff alternative procedures without agreeing that court-based programs are the only way

to give parties access to ADR. It does seem to misallocate the talents

of most magistrate judges to divert them from pretrial case management to staffing ADR programs. The fundamental question,

however, is whether the courts have a role in administering such

programs at all.

As we have noted, private ADR programs are flourishing. The

success of private ADR programs seems in no way dependent on receiving referrals from the courts. A practical alternative for the

courts is to allow litigants to find and use private ADR programs as

they see fit. Litigants and their lawyers are generally quite capable

of deciding how and when to use private ADR programs without relying on the courts for referrals. Courts need not agonize over establishing impartial referral programs to provide information that

parties can readily obtain from private sources, including a number

of national newsletters,106 several academic publications,107 and a

myriad of local sources. If necessary, a court could serve as a

clearinghouse for information about dispute resolution options

without making referrals or endorsements.

105. If, during the court process, litigants want to seek the assistance of an

outside neutral, the court should not stand in their way, but the court should retain oversight of the case. For example, to prevent delay in a case in which litigants

have sought assistance from an outside mediator, the court should set a date by

which the private ADR process must conclude.

106. See, e.g., Alternatives to the High Costs of Litigation (published by the Center

for Public Resources), World Arbitration and Mediation Reports (published by the

Bureau of National Affairs), and Dispute Resolution Alternatives (published by the

ABA Section on Dispute Resolution).

107. See, e.g., the Journal of Dispute Resolution (published by the University of

Missouri at Kansas City) and the Ohio State Journal on Dispute Resolution.
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51

4. Alternative dispute resolution procedures should be presumptively mandatory in appropriate cases, but the right to trial must

be preserved in all cases. Courts should establish procedures to

assist parties in selecting the appropriate procedure for managing and resolving their case.

The argument

Despite the demonstrated benefits of ADR and litigants’ satisfaction with it, parties who have filed their cases in federal court

seldom volunteer to use alternative procedures, even when these

procedures are readily available through the court.108 Why, if litigants find alternative methods so satisfactory, do they not use them

voluntarily?

Opponents of mandatory ADR suggest that parties come to

court for a trial, and recognizing that an alternative form of resolution will deprive them of their right to a trial, they reject any such

alternative. This explanation simply cannot be reconciled with the

well-documented litigant and attorney satisfaction with each of the

three principal forms of ADR—arbitration, mediation, and early

neutral evaluation. Parties and their attorneys do not experience a

deprivation of rights when ADR is imposed on them. The Center’s

analysis of the pilot arbitration districts, for example, found no

“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

who had prior trial experience, 84% agreed that the procedures

were fair.” Litigants in state court programs report similar experiences.109

108. Recent experience in seven federal district courts authorized in 1988 to

adopt voluntary arbitration programs shows that the number of cases using the

programs varies with the degree of voluntariness. In courts in which parties are

simply informed of the existence of the arbitration program and their right to use

it, almost no cases have used arbitration. Use is highest in courts in which cases are

automatically referred to arbitration and then permitted to opt out for any reason

and with no explanation. Even then, use is lower than in the mandatory arbitration

courts. Rauma & Krafka, supra note 47, at 9.

109. Meierhoefer, supra note 31, at 119–20. Keilitz, supra note 31, at 42.
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Why, then, do parties not volunteer? Because, as Magistrate

Judge Wayne Brazil has said, “there are a great many barriers to doing much of anything on a purely voluntary basis once a case is in

litigation.”110 He cites nine factors that may prevent attorneys from

volunteering to use an alternative form of dispute resolution,

among them the following:

• Attorneys and clients may suspect an ulterior motive if ADR

is suggested by the opponent and thus refuse the suggestion. Since voluntary programs require agreement by all

parties, refusal by one ends the possibility.

• Attorneys or clients may not be familiar with ADR or know

how to use it.

• Attorneys and clients are accustomed to the familiar and resist the new.

• Attorneys fear that they will appear weak in suggesting ADR

to their clients or to opposing counsel.

• Attorneys fear that in suggesting something new to their

clients, they may become subject to criticism, second-guessing, or even a malpractice claim by the client.

• Many attorneys are unlikely to act against their perceived

economic self-interest.111

Because of the resistance to cooperation that is instilled in attorneys by the adversarial nature of litigation, attorneys’ instincts

are against voluntary use of alternatives to traditional litigation. To

realize the benefits these alternatives clearly can provide to litigants, courts should establish a presumption that ADR will be used

and should create procedures that break down the barriers to participation.112 Perhaps such a presumption is needed only tem110. Brazil, supra note 39, at 13.

111. Id. at 13–15.

112. This point was also made recently by two seasoned litigators:

One of the greatest impediments to the commencement of meaningful settlement

discussions in many cases has always been the concern that the party initiating the

discussion will be perceived as weak, uncertain about the outcome, or lacking in

resources or commitment to try the case. As a result, the parties in many cases engage in an elaborate game of posturing when they really should be confronting

the issue of settlement. Any reforms which compel parties to talk about settlement

sooner and more frequently should improve the current situation.
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53

porarily—that is, only until there is sufficient cultural change to

permit voluntary participation without risk.113 But clearly some

mechanism is needed at this stage to prompt greater use of viable

alternatives for dispute resolution.

Court-based ADR programs already in place provide models for

such a mechanism. The Early Assessment Program in Missouri

Western, for example, requires the parties—clients as well as attorneys—to attend an early meeting at the court to discuss their case,

to select one of the court’s ADR options, and, if possible, to attempt

resolution of the dispute.114 A new experimental program in California Northern, the Multi-Option Pilot Program, requires parties

who haven’t selected an ADR process to discuss their case and the

court’s ADR options with the court’s ADR administrators and then

to select an appropriate ADR method. When the parties do not or

cannot select an option and the assigned judge believes ADR is appropriate, the judge may order the parties to use ADR.115 In both

the Missouri Western and California Northern programs, early discussion of each case’s needs permits a reasoned decision about the

suitability of ADR for that case. And in both programs, when ADR

is determined not to be appropriate, the case proceeds through the

traditional pretrial and trial process.116

Robert Haig & Warren Stone, Does All This Litigation Reform Really Benefit the Client?,

8 Inside Litigation 20, 24 (1994).

113. Such cultural change may occur more rapidly than many might expect.

The most recent report on Missouri Western’s Early Assessment Program, for

example, shows that over the three years the program has been in effect, the percentage of cases not assigned to the program but whose parties are asking to be included has climbed to nearly 30%. See Missouri Western report, supra note 54.

114. See Argument 2a in this paper for a discussion of this program and early

indications of substantial benefits to litigants, as measured by disposition time,

litigation costs, and fairness of process and outcome.

115. Northern District of California General Order 36. Five judges are participating in the experimental program.

116. These programs resemble in purpose the “multidoor” courthouse first

conceptualized by Professor Frank Sander in 1976 in an address to the National

Conference on the Causes of Popular Dissatisfaction with the Administration of

Justice (the Pound Conference) (Frank E. A. Sander, Varieties of Dispute Processing,

70 F.R.D. 79 (1976)). The multidoor concept is based on the premise that the

needs of each individual case should determine the procedure used to resolve it. A

number of state courts of general jurisdiction have become multidoor court-
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54

It is clear from these programs, as it is from the mandatory arbitration programs, that mandatory ADR does not undermine the

right to a jury trial.117 All federal court programs are only presumptively mandatory and permit parties to seek removal from

them. Likewise, all mandatory programs preserve the right to trial

de novo.

Opponents argue that this right to a trial is a right in theory

only because with the exercise of this right comes the risk of monetary penalties (in arbitration) and the certainty of additional litigation costs. In fact, the risk of monetary penalties has no effect on

the rate of requests for trial de novo in the mandatory arbitration

programs, indicating that these penalties do not burden that

right.118 This should not be surprising, given that the penalties are

very low, both in absolute dollars and relative to the cost of trial.119

Regarding litigation costs, when opponents claim that ADR

increases costs, they do not acknowledge the research findings that

show cost savings. Although the issue is not completely settled, as

we stated in Argument 2a, there is evidence of substantial savings to

litigants from a variety of mandatory ADR methods.

Finally, not only do litigants and attorneys find mandatory participation acceptable and beneficial, there are no legal barriers to

mandatory participation in arbitration, mediation, and early neutral evaluation. At their inception, mandatory arbitration programs

were challenged on several constitutional grounds, including right

to a jury trial and due process. The challenges were not successful,

primarily because the programs preserved the right to trial de

novo.120

houses, including those in the District of Columbia and Minnesota. In Minnesota,

new rules that went into effect July 1, 1994, require all civil litigants to consider using ADR and permit judges, where parties do not choose ADR and the judge believes it would be appropriate, to order parties to use court-based or private ADR

(Minnesota General Rules of Practice, Rule 114).

117. See, e.g., Eisele, supra note 67.

118. Meierhoefer, supra note 31, at 116–17.

119. These penalties appear to be neither necessary nor useful. Given their

insignificant effect and the appearance they give of barring access to trial, they

should be eliminated as a matter of policy.

120. See Riggs v. Scrivener, Inc., 927 F.2d 1146, 1147–48 (10th Cir.), cert.

denied, 112 S. Ct. 196 (1991) (upholding local rule mandating participation in ar-
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Even so, programs requiring mandatory participation in ADR

should be adopted with care. When designed and administered

thoughtfully, programs that presume participation can help parties

over the hurdle of appearing weak or uncommitted. And by offering litigants a choice among dispute resolution methods and a

means for bypassing ADR when it is inappropriate, a presumptively

mandatory ADR program can meet important needs while protecting essential rights.

The response

Mandatory programs distort the benefits of ADR by defining it

negatively and bypassing the opportunity to create a voluntary,

binding system that would require participants in each case to select either an ADR track or a trial track at an early stage in the case.

Proponents of mandatory ADR say that voluntary programs will

not work. They argue that lawyers will not volunteer cases for a host

of reasons. However, in “opt-out” programs in four federal district

courts (Arizona, Georgia Middle, Ohio Northern, and Pennsylvania

Western), many of the reasons listed by Judge Brazil do not apply

because the courts automatically refer cases to the program, and in

many cases (34%–55%) one or more of the parties or their attorbitration and providing for de novo trial by jury); Rhea v. Massey-Ferguson, Inc.,

767 F.2d 266, 268–69 (6th Cir. 1985) (upholding mandatory case evaluation by a

panel of lawyers, in an arbitration-like procedure known as “Michigan mediation”);

Davison v. Sinai Hospital of Baltimore, Inc., 462 F. Supp. 778 (D. Md. 1978),

affirmed, 617 F.2d 361 (4th Cir. 1980) (upholding mandatory submission of

medical malpractice claims to an arbitration panel before filing in court and holding that making the arbitration findings presumptively valid in a trial de novo did

not deprive plaintiff of the Seventh Amendment right to a trial by jury); Kimbrough v. Holiday Inn, 478 F. Supp. 566 (E.D. Pa. 1979) (upholding mandatory

arbitration program in one of ten pilot courts and rejecting Seventh Amendment

challenge).

The summary jury trial has not fared as well as mandatory arbitration when

subjected to legal challenge. The only courts of appeals to address the issue

squarely have held that district courts do not have authority to order lawyers or litigants to participate in a summary jury trial. In re NLO, 5 F.3d 154 (6th Cir. 1993);

Strandell v. Jackson County, 838 F.2d 884 (7th Cir. 1987). Several district judges in

other circuits have come to contrary conclusions. See, e.g., Arabian American Oil

Co. v. Scarfone, 119 F.R.D. 448 (M.D. Fla. 1988); Home Owners Funding Corp. of

America v. Century Bank, 695 F. Supp. 1343 (D. Mass. 1988).
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neys take affirmative steps to remove the case from the program.121

To avail themselves of ADR in these courts, attorneys do not have

to step forward, take personal responsibility, or otherwise show

weakness or scrutinize their opponents’ motivations. While some

opponents of mandatory ADR would also object to opt-out

programs, a right to opt out seems to answer the primary objection

to mandatory programs—that they impose an unnecessary financial

burden on exercising the right to a jury trial.

The experiences of the voluntary arbitration programs suggest

that a large percentage of lawyers and litigants in cases eligible for

arbitration see no need for it, regardless of the form in which it is

packaged. But these experiences suggest more: Acceptance of the

presumptive assignment to arbitration by 45% to 66% of the litigants indicates that arbitration need not be mandated. The hearing

rate is unknown, but if half of those who accepted the presumptive

assignment had an arbitration hearing, the hearing rate in the voluntary programs would be comparable to the hearing rate in the

mandatory programs. Moreover, one should not infer that the limits of voluntary arbitration programs would also apply to mediation

or early neutral evaluation programs. Evidence from the Western

District of Missouri suggests that many litigants opt in to that program.122

A comment by an attorney on the difference between voluntary

and mandatory programs sums up the argument for voluntary programs:

I think down here [mediation has] been distorted a little because it’s

mandatory. . . . I think people, a lot of times, just go through the motions whereas if you have the choice to mediate, you’re there because

you want to be and because you think it will help.123

Mandatory ADR erects financial barriers to exercising the right to a jury

trial and threatens its viability. In contrast to voluntary programs,

mandatory referral to ADR has the purpose and effect of coercing

many parties to forgo their right to trial by jury. It gives any party

the option of stringing out proceedings beyond their normal

121. Rauma & Krafka, supra note 47, at 17–19.

122. Missouri Western report, supra note 54, at 9 (nearly 30% of cases eligible

for voluntary mediation opted in to the program).

123. Alfini, supra note 96, at 62.
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course and forcing their opponents to expend resources that might

otherwise be used to participate in a trial. It is not the modest sanctions courts might impose—for example, in arbitration—that impede access to jury trials. It is, rather, the mandatory expenditure of

party resources, including the cost of counsel, that imposes a barrier to financing the expense of a jury trial.

Mandatory ADR arose out of concern for rising civil caseloads

and the concurrent increase in demands for criminal trials.124 Although many ADR programs have shifted away from an initial tendency to focus exclusively on cases that seek a modest amount of

money damages (say, less than $150,000), one might expect that

such damages cases still generate a great deal of attention from

ADR administrators. Often judges see cases with modest monetary

damages as routine, whereas the parties or their insurers may see

them as having potential for high jury awards.

Mandatory ADR amounts to tort reform under the guise of

court reform and has the subtle effect of diminishing opportunities

for jury trials for most litigants by reallocating court resources to alternatives. ADR proceedings become accessible; jury trials, remote.

Many litigants, especially plaintiffs bringing cases for damages of

$150,000 or less, do not have the resources to survive a gauntlet of

procedures to reach the jury trial guaranteed by the Seventh

Amendment.

Mandating ADR procedures can add cost to the proceedings at

at least two different points. The first point is when the case is referred to ADR. A party may object and seek to opt out, but the objection itself is subject to dispute and requires a ruling from the

court. And the court may dismiss the objection and require that the

objecting party participate in good faith, adding further cost.125

The second point at which additional costs may be incurred is

in the parties’ preparation for and attendance at a mandatory ADR

124. The concerns were generally stated as “[decreasing] the time and expense required to dispose of civil litigation.” E. Alan Lind & John E. Shapard,

Evaluation of Court-Annexed Arbitration in Three Federal District Courts xii

(Federal Judicial Center rev. ed. 1983); see also Meierhoefer, supra note 31, at 16–

18. From a court’s perspective, the major burden of civil litigation involves preparing for and conducting trials.

125. Edward F. Sherman, Court-Mandated Alternative Dispute Resolution: What

Form of Participation Should Be Required?, 46 SMU L. Rev. 2079 (1993).
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proceeding, which may contribute little or nothing to a later trial.

Informal procedures that rely on inadmissible evidence or on

lawyers’ off-the-record declarations about the evidence are not usable at trial. The informal proceedings may even be misleading.

Lawyers can assert claims that they cannot back up at trial, knowing

that they will not be held accountable because the ADR proceedings are not admissible into evidence.

Not only does mandatory ADR press litigants to forgo a jury

trial, if only because their resources have been exhausted, it does so

in an uneven fashion by delaying a trial date, putting the burden of

duplicative expenditures on the plaintiff, and permitting the defendant to reserve its resources for the trial. The lack of a clear trial

date creates pressure to settle when the plaintiff has a pressing

need for prompt compensation. As we have shown, if either party

files for a trial de novo, that act by itself is likely to inflate the cost

of going to trial.126

Mandating ADR suggests that it is distasteful and, in mandating

ADR, the courts miss an opportunity to attract parties to voluntary, binding

ADR programs. Although some ADR programs may be attractive to

litigants because they promise a quick and inexpensive resolution

of the dispute, in reality, forcing litigants to pursue a nonbinding

forum carries the risk of adding to the costs and delays of the litigation. The implicit message is that ADR is distasteful medicine that

parties, if given the choice, would avoid. That message may have

some basis in reality: All too often the opposing party learns the

outcome of the alternative procedure and demands a trial de novo.

The danger of the multidoor courtroom is that some litigants will

want to try all the doors.

Private ADR users who are motivated to avoid the costs and delays of litigation address the potential multiplicity of proceedings by

agreeing at the outset that the alternative they choose will be final

and binding.127 Making that choice at an early stage prevents par126. Meierhoefer, supra note 31, at 89–90.

127. See generally Lucy V. Katz, Compulsory Alternative Dispute Resolution and

Voluntarism: Two-Headed Monster or Two Sides of the Coin?, 1993 J. Disp. Resol. 1, 3–

20; for an example of such a choice, see Frank W. Morgan, ADR: Pitfalls and

Promises, 4 Inside Litigation 15 (July 1990) (Lawyers for both sides in a case choose

a binding ADR procedure because “it would not be in the best interests of our
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ties from using the bias of hindsight to frustrate the goals of reducing delays and costs. Forcing the choice of a binding procedure

also reduces the opportunities for a wealthy party to manipulate the

process to the disadvantage of a less wealthy party.

Following this approach to a logical application, the only

mandatory ADR procedure should be one that is designed to lead

directly to a binding outcome. For example, the court could, by local rule or pretrial order, direct the parties to meet and confer

early in a case to seek agreement on a form of ADR. If both parties

agree, they can select an adjudicatory procedure, such as arbitration or summary jury trial, and agree to be bound by it. If both

sides agree, they can also choose a nonadjudicatory procedure,

such as mediation or ENE, to help them pick an adjudicatory procedure or to settle the case entirely. And they can continue in this

mode as long as both sides are agreeable. If either party objects to

further proceedings or insists on a jury trial, the case can be placed

on a trial track. In this way, a court could give a mandatory start to

the process, give incentives to the parties to pursue voluntary, binding activity, and give each party the power to avoid manipulation by

the other.

In sum, authorizing courts to impose mandatory forms of ADR

continues the wasteful, manipulative practices that have accompanied mandatory arbitration (such as de novo hearing demands after ADR awards) and that could be expected to accompany other

forms of ADR (such as parties using mediation to learn about the

other side’s case). Courts should be encouraged to highlight the

positive features of ADR and assist the litigants in choosing a single,

binding option. Courts can do so by confronting the jury trial issue

early and not allowing the parties to use the slight prospect of a jury

trial to delay proceedings and waste resources.

clients to devote potentially significant resources to undertaking a non-binding activity.”).
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Endnote

Not for many years has even a sizable minority of cases filed in the

federal courts been tried, yet the essence of a court is, in most

citizens’ minds, the trial. And all the procedures attached to courts

are built around that central image. Now, however, a growing

number of voices, some of them powerful ones, are questioning the

value of the adjudicatory process.

The debate about the role of ADR in the federal courts is, in

essence, a debate about the values and assumptions that guide the

public justice system. In this debate, assumptions about the benefits

of the adversary process collide with assumptions about what litigants really want. But this debate is about more than process. It is at

its heart a debate about what courts—and judges—are for, about

the value of adjudication and the value of its opposite, settlement.

When should one value be observed and when should the other

be? And who should make these decisions?

These questions have many subsidiary questions that seem at

first glance to be more practical and pedestrian, but at a closer look

they, too, raise important questions of policy and values. Should

users of court-based ADR programs, for example, pay for that service? Who, then, will have access to these programs and who will be

denied? Should rules of procedure be written to protect the rights

of those who use court-based ADR programs? Or will regulation of

the process re-create the inflexibility and burdensomeness thought

to afflict traditional adjudication? How can a sufficient number of

pro bono neutrals be recruited and monitored? Will their ADR role

be a barrier to future client relationships? Will it garner them inappropriate benefits from the court?

As the federal courts, individually and collectively, plan for their

future, the advent of ADR presents a challenge. How will the

courts, the litigation process, and the law be changed by the

movement toward ADR?

At this time, only a few conclusions seem tenable. We have

stated these in the introduction as points of agreement. Most other

issues remain open to debate.
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Appendix

Definitions of Principal Types of Court-Based ADR Programs

Table 1. District Judge and Magistrate Judge Time Reported for ADR

and Settlement Activities, FJC District Court Time Study

Figure 1. Civil and Criminal Trials Completed as a Percentage of All

Trials Completed: Statistical Year 1980 to Statistical Year 1993

Figure 2. Civil Trials Completed as a Percentage of All Civil Terminations: Statistical Year 1970 to Statistical Year 1993
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Definitions of Principal Types of Court-Based ADR Programs128

Arbitration

In court-based arbitration, one or more arbitrators listen to

presentations by each party to the litigation, then issue a

nonbinding judgment on the merits. The arbitrator’s decision

addresses the disputed legal issues and applies legal standards.

Either party may reject the nonbinding ruling and request a

trial de novo in the district court.

Early neutral evaluation

Early neutral evaluation brings all parties and their counsel

together early in the pretrial period to present summaries of

their case and receive a nonbinding assessment of the case from

an experienced neutral with expertise in the subject matter of

the case. The neutral also provides case planning guidance and,

if requested by the parties, settlement assistance.

Mediation

Mediation is a flexible, nonbinding dispute resolution process

in which a neutral third party—the mediator—facilitates

negotiations among the parties to help them reach settlement.

A hallmark of mediation is its capacity to expand traditional

settlement discussions and broaden resolution options, often by

going beyond the legal issues in controversy.

Summary jury trial

The summary jury trial is a flexible, nonbinding process

designed to promote settlement in trial-ready cases headed for

protracted jury trials. The process provides litigants and their

counsel with an advisory verdict after a short hearing in which

counsel present the evidence to a jury in summary form, and no

witnesses appear. The jury’s nonbinding verdict is used as a

basis for subsequent settlement negotiations.

128. Definitions are derived from the Judges’ Deskbook on Court ADR, ed.

Elizabeth Plapinger et al. (CPR Institute for Dispute Resolution 1993). This publication was prepared for the National ADR Institute for Federal Judges, held

November 12–13, 1993. Judges and court personnel may request copies of the

Deskbook from the Federal Judicial Center. Others may contact CPR.
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65

Table 1

District Judge and Magistrate Judge Time Reported for ADR and Settlement Activities, FJC District Court Time Study

(N = 8,805 cases)

Type of Judge

Type of ADR &

Settlement Activity

Number of

Hours Spent

% of All CaseRelated Hours

Spent on ADR

and Settlement

District judges ADR 27.5 0.14

Arbitration 11.8 0.06

Early neutral evaluation 

(ENE)

0.5 0.002

Mediation 5.4 0.03

Mini-trial 4.5 0.02

Summary jury trial 5.3 0.03

Settlement 566.1 2.80

Settlement (approval, etc.) 93.8 0.46

Settlement conference 472.4 2.33

All ADR and settlement 593.6 2.93

Magistrate judges ADR 39.2 0.48

Arbitration 2.6 0.03

Early neutral evaluation 

(ENE)

18.0 0.22

Mediation 1.9 0.02

Summary jury trial 16.8 0.20

Settlement 769.7 9.37

Settlement (approval, etc.) 16.3 0.20

Settlement conference 753.4 9.17

All ADR and settlement 808.9 9.85

Source: Federal Judicial Center District Court Time Study. During the time study, all district

and magistrate judges recorded the time they spent on a sample of cases, which were tracked

from filing to disposition. The sample was selected from cases filed between November 1987

and January 1990. The numbers reported in the table reflect all reported district and magistrate judge time spent on ADR and settlement in 8,805 civil cases.
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66

Figure 1

Civil and Criminal Trials Completed as a Percentage of All Trials

Completed: Statistical Year 1980 to Statistical Year 1993

0

10

20

30

40

50

60

70

80 81 82 83 84 85 86 87 88 89 90 91 92 93

Civil Trials Criminal Trials

Percentage

Statistical Year

Source: Unpublished data tapes of civil and criminal trials maintained by the Administrative

Office of the U.S. Courts.
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67

Figure 2

Civil Trials Completed as a Percentage of All Civil Terminations:

Statistical Year 1970 to Statistical Year 1993

0

1

2

3

4

5

6

7

8

All Civil Trials Completed Jury Trials Completed

Percentage

70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93

Statistical Year

Source: The Federal Judicial Center’s Integrated Database, a standardized database of all terminated civil cases, SY 1970–SY 1993, based on information provided by the courts to the

Administrative Office of the U.S. Courts.