Alternative Dispute Resolution Act of 1998: A Twenty-Year Anniversary and Impressive Results

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By:  Donald L. Swanson

2018 marks the twenty-year anniversary of the Alternative Dispute Resolution Act of 1998 [codified at 28 U.S.C. § 651 et seq., the “ADR Act”].

Preamble

The preamble to the ADR Act contains these findings on mediation:

–“mediation . . . may have potential to reduce the large backlog of cases now pending in some Federal courts”; and

–“the continued growth of Federal appellate court-annexed mediation programs suggests that this form of [ADR] can be equally effective in . . . the Federal trial courts.”

Mandates and Directives

The ADR Act contains a number of mandates and directives regarding ADR, such as (emphasis added):

–“Each United States district court shall authorize, by local rule adopted under section 2071(a), the use of [ADR] processes in all civil actions, including adversary proceedings in bankruptcy” (§ 651(b));

–“Each United States district court shall devise and implement its own [ADR] program, by local rule . . . , to encourage and promote the use of alternative dispute resolution in its district.” (§ 651(b));

–“each district court shall, by local rule adopted under section 2071(a), require that litigants in all civil cases consider the use of an [ADR] process at an appropriate stage in the litigation” (§ 652(a);

[Editorial Note: 28 U.S.C. § 2071(a) grants rule making authority to both the U.S. district courts and the U.S. bankruptcy courts.]

–“Until such time as rules are adopted under chapter 131 of this title providing for the confidentiality of [ADR] processes under this chapter, each district court shall, by local rule adopted under section 2071(a), provide for the confidentiality of the [ADR] processes and to prohibit disclosure of confidential dispute resolution communications” (§ 652(d)); and

[Editorial Note: 28 U.S.C. Chapter 131 provides rule-making authority for Federal Rules of Civil Procedure, Federal Rules of Bankruptcy Procedure, and Federal Rules of Evidence.]

–“Each district court shall promulgate its own procedures and criteria for the selection of neutrals on its panels” (§ 653(a)).

Application to Bankruptcy Courts

The ADR Act applies to U.S. bankruptcy courts, as well as to U.S. district courts, because bankruptcy courts are defined by statute as units of the district courts:

–“In each judicial district, the bankruptcy judges in regular active service shall constitute a unit of the district court to be known as the bankruptcy court for that district. Each bankruptcy judge, as a judicial officer of the district court, may exercise the authority conferred under this chapter . . . , except as otherwise provided by law or by rule or order of the district court” (28 U.S.C. § 151).

Mandatory Mediation

Mediation has become, in many circumstances, a mandatory process: either through statute or local court rule or by court order in specific cases. The authority to mandate mediation is recognized by this phrase in the ADR Act:

–“Any district court that elects to require the use of [ADR] in certain cases may do so only with respect to mediation, early neutral evaluation, and, if the parties consent, arbitration“ (§ 652(a)).

The Mediation Impact

The impact of the ADR Act and similar state and Federal laws is impressive in the mediation realm. In the last two decades, mediation has gone from a little-used dispute resolution tool to a dominant process for resolving disputes in civil lawsuits.

–Remember back, for example, to the era between ten and twenty years ago. Discussions among litigators, back then, are about recent successes and disappointments at trial, about preparing for upcoming trials, about strategies and concerns on how to open settlement discussions, and about getting evidence into the record. Mediation is rarely mentioned.

–Today, by contrast, the same types of discussions center around mediation: they are about recent successes and disappointments in mediation, about preparing for scheduled mediations, and about preparing for trial when mediation does not achieve a settlement. This is a huge change!

Conclusion

The past 20 years have produced a major cultural shift in civil litigation strategies and tactics, with mediation moving into a central role. This shift is attributable for Federal courts, in large part, to the ADR Act.

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