What is ADR?

Alternative dispute resolution (ADR) generally refers to a closed, confidential proceeding in which a neutral third party facilitates the resolution of a dispute. ADR may be used in a variety of disputes a few of which include civil law suits, business and contract disputes, employment grievances, peer review in schools, and administrative disputes before government bodies.

What types of ADR exist?

ADR refers to various forms of dispute resolution methods. The common form which is binding on the parties is arbitration under the Texas General Arbitration Act or the U.S. Arbitration Act.
Non-binding forms include mediation, mini-trial, moderated settlement conference, nonbinding arbitration and summary jury trial. Other types of nonbinding ADR procedures can be created by agreement of parties.

What is the difference between mediation and arbitration?

Mediation is the ADR method used whereby a neutral third party (the mediator) directs and facilitates the mediation process. The mediator is not a decision-maker and has no opinion or interest in the dispute or its outcome.

Arbitration is the ADR method used whereby the neutral third party (the arbitrator) listens to brief presentations of the cases of the respective “sides” to the dispute and renders a decision.

What are the benefits of ADR?

ADR processes tend to be informal, quick, economical, flexible and less traumatic than more formal procedures. Because parties generally participate more directly in resolving the disputes, ADR generally yields practical and creative agreements and more satisfied clients.

If 90% of cases settle prior to trial, why the need for ADR?

Parties tend to wait until shortly before trial to commence serious negotiations. Earlier settlements save time, money, and emotional expenditure. The ADR process can also aid attorneys seeking an appropriate way to illustrate for clients the practical possibilities and limitations of a case. ADR also provides attorneys the opportunity to advocate a process that is likely to preserve ongoing relationships between parties and lead to creative and practical solutions.

Why is it that ADR tends to result in voluntary settlements?

Under the 1987 Texas ADR Act, ADR is a confidential and nonadversarial process for constructive negotiations. The ADR neutral, acting as an agent of reality, facilitates negotiations by ensuring that all points of view will be considered, establishing other procedures which free attorneys and clients to focus on mutually acceptable settlements.

How do you obtain participation of the other side in an ADR procedure?

The appearance of the other side for an ADR procedure can be obtained by personal request or by court order subject to the right of the other side to make timely and reasonable objection. The actual participation in good faith at an ADR proceeding is essentially at the discretion of the other side.

What if a party is unable to pay its share of ADR costs?

Many ADR neutrals accept some pro bono cases; others will adjust their fees on a sliding scale or on a case-by-case basis. Dispute Resolution Centers are available in many communities to provide ADR services at minimal cost. Some government agencies provide staff neutrals, at no cost, for cases pending before the agency.

How often does use of ADR lead to settlement?

Settlement rates vary depending on the type of ADR process used, the point in litigation when the ADR referral occurred, and the time, commitment and skills brought to the table by the parties. Nationally, approximately three-quarters of the cases brought to community dispute resolution centers reach agreement.

Formal settlement is not the only criteria for the success of an ADR proceeding. Even when a written agreement is not finalized, the ADR process often clarifies or limits the issues and sets the stage for continued and constructive negotiation. And, even when agreements are not reached, client satisfaction with ADR tends to be high, especially in ADR processes that rely on client participation.

What if ADR is ordered before discovery is completed or before the judge has ruled on legal issues such as motions for summary judgment?

Sometimes ADR is most effective when commenced before discovery is underway. If discovery is partially complete, the court may ask that no further discovery be completed pending the outcome of the ADR case. The timing of the ADR process can usually be worked out with the court, the ADR neutral, and the other party. Most judges are sensitive to the need to rule on any legal issues essential for case evaluation prior to an ADR Procedure.

What cases are not appropriate for ADR?

Most civil disputes and administrative law disputes are appropriate for referral to an ADR proceeding. However, it is generally believed that cases involving a gross disparity in bargaining power (such as cases involving spouse or child abuse) should not attempt an ADR procedure. Also, cases involving questions of constitutional rights or other test cases may not be suitable for ADR.

Is ADR part of a movement to do away with jury trials?

No, ADR will never replace the right to jury trial. In fact, the efficacy of ADR under the 1987 Texas ADR Act depends on the parties’ right to trial if the negotiations fail. The jury trial then becomes the alternative against which a proposed settlement is tested.

What is the attorney’s role and responsibility in ADR?

Lawyers are obligated to assist clients in evaluating and preparing settlement options, including ADR. Attorneys prepare for and participate with clients in ADR procedures. If no settlement is reached, they try their cases in court. Attorneys are obligated to advise clients to comply with a court order for ADR subject to the right to object under Section 154.022 of the Texas Civil Practice and Remedies Code.

Does a request for or participation in an ADR hearing imply weakness?

No. A settlement initiative based on careful research of the case is generally considered a strong move. Further, no adverse inference whatsoever can be drawn from participation in a court-ordered ADR proceeding under the ADR Act.

What if the other side participates in an ADR procedure but does not make any offer?

Under the ADR Act, there is no requirement that ADR participants make any offer and there are no consequences for not doing so.

What is the State Bar of Texas Alternative Dispute Resolution (ADR) Council?

The ADR Council is the 18-member governing body of the State Bar ADR Section. The Council provides program and policy leadership for approximately 1200 attorney and non-attorney Section members across the state. The purpose of the ADR Section is to “promote the use and quality of ADR in Texas.”

In what activities can Council members participate?

The Council is involved in a variety of activities and committees. Although specific activities and priorities change each year, Council members typically focus on such areas as continuing education, the Section newsletter, ADR legislation, arbitration, mediation credentialing, rural outreach, and school mediation programs.

What type of commitment is required for Council members?

Council members are asked to attend each of the 5 to 6 Council meetings and two Section meetings annually. In addition, members are asked to spend approximately six hours in Council activities or committee work between meetings. Council member terms are generally for three years.

What financial commitments are involved in Council membership?

Funds for the Section are raised through Section membership dues, training programs, and sale of publications. Council members are reimbursed for travel expenses associated with each Council meeting, pursuant to State Bar guidelines.