The Alternative Dispute Resolution Resource Serving Private Individuals, Attorneys, Business And The Insurance Community

FAQ’S

What is ADR?

Although many consider ADR as an alternative to trial, since only 5% of civil cases actually reach trial, ADR is perhaps better understood as an alternative to lengthy and costly pretrial discovery and preparation. Many commentators have suggested that ADR should stand for “appropriate dispute resolution”.

The principal advantage of ADR is its inherent flexibility, giving the parties or thier attorney the ability to tailor the dispute resolution process to the circumstances of the case and the needs or preferences of the disputing parties.

Although the ADR movement in the United States began in the 1960’s and 1970’s, in Massachusetts its impact truly began to be felt in the legal and insurance community in the late 1980’s. ADR services are now available to the claims handler or attorney from a wide variety of sources, including private ADR providers, such as our organization, Massachusetts Dispute Resolution Services, and court annexed or public agencies.

Court annexed or agency based ADR programs are generally less expensive than private ADR providers; however they are generally available only after suit is initiated and certain pretrial discovery has been completed.

The spectrum of ADR processes now available range from informal, non binding mediation to more formal, binding arbitration which involves adherence to certain rules of evidence and a written final award by an impartial arbitrator. Unfortunately, much of the well known terminology of ADR, such as mediation and arbitration, are often used interchangeably, even by attorneys who may not be fully familiar with ADR procedures, so we include below a glossary of terms used by ADR practitioners.

What is Arbitration?

Although many consider ADR as an alternative to trial, since only 5% of civil cases actually reach trial, ADR is perhaps better understood as an alternative to lengthy and costly pretrial discovery and preparation. Many commentators have suggested that ADR should stand for “appropriate dispute resolution”. The principal advantage of ADR is its inherent flexibility, giving the parties or thier attorney the ability to tailor the dispute resolution process to the circumstances of the case and the needs or preferences of the disputing parties.

Arbitration: What to Expect/Recommendations to Users

Before the Hearing

Discovery: Perhaps the most significant difference between arbitration and court proceedings is the limited discovery available in arbitrations. Indeed one of the advantages of the arbitration process is avoidance of the costs and time delays involved in open ended pretrial discovery, particularly in cases where an overzealous counsel is of the “leave no stone unturned” philosophy. Insurers are seeking ways to reduce litigation costs, scrutinizing proposed discovery tools of their counsel to assure that each step yields corresponding gains for their insured in either fostering a more favorable settlement or resulting in a trial advantage. What becomes important for ADR therefore is to provide a process that meets these legitimate concerns of the participants for discovery. So the question arises, how much discovery should be allowed in arbitration and what steps should participants consider assuring they have enough opportunity for discovery.

As a starting point, it is best to understand that little to no discovery is generally permitted once the parties submit a case to arbitration. Under the Massachusetts Uniform Arbitration Act (MUAA) an arbitrator has the authority to order document production and depositions of witnesses “who are unavailable for the hearing or cannot be subpoenaed”. The arbitrator has wide discretion in this regard and the Courts have repeatedly declined to become involved in disputes over whether or not an arbitrator exceeded his authority in permitting or prohibiting discovery. Therefore, the issue of the extent of discovery permitted is left entirely to the determination of the arbitrator.

The diligent party therefore is well advised to either complete all necessary discoveries before submitting a case to arbitration or to reach a written agreement with the opponent as to the discovery that will be permitted before submitting a case to arbitration. Even the right of an insurer to a “statement under oath” of an insured or one seeking recovery under the terms of an automobile insurance policy is not guaranteed to be allowed by certain arbitrators.

Many organizations providing ADR services have arbitration rules which will allow the arbitrator, in the event the parties are unable to agree on prehearing discovery, to decide such matters and make discovery orders if requested by the parties. The written arbitration agreement should be carefully reviewed as to provisions relating to discovery.

Initiation of Arbitration: When a case is deemed submitted to arbitration differs among ADR providers. The arbitration rules should be closely examined in this regard. Some ADR providers deem that arbitration is initiated by receipt of written submission forms signed by the parties. In cases where parties are bound by an arbitration clause in an ongoing contract, arbitration may be deemed initiated by serving a demand on the opposing party. It is important for the user to determine and be sure that the opponent has bound himself to arbitration however, since occasions arise when parties wish to opt out of arbitration at the last minute, and if a binding arbitration agreement is not properly signed, the opposing party may have no recourse.

Selection of Arbitrators, Disclosure of Conflicts of Interest: The utmost care should be given to the selection of the arbitrator. The arbitrator is the decisive element in any arbitration. His or her ability, experience and fairness are at the base of the arbitration process.

The most common method of arbitrator selection is from a panel offered by the ADR provider. The user should request biographical materials concerning each arbitrator available for selection. Inquire of co-workers or associates as to the arbitrator’s qualifications. If the parties cannot agree on an arbitrator, the arbitration rules of the provider often provide an alternative selection process. For example, the parties may be requested to number the proposed panelist(s) by order of preference and the ADR organization may administratively appoint the arbitrator most highly sought by both parties. If the parties cannot agree on an arbitrator, the Massachusetts Uniform Arbitration Act permits court appointment of an arbitrator upon request to the Court.

Once selected, the user should insist that the arbitrator disclose in writing to the parties any circumstances that would suggest a lack of impartiality, conflict of interest or require disqualification. If, after full disclosure, a party fails to object to an arbitrator, the objection is generally deemed waived and subsequent challenge to an arbitration award on these grounds will likely fail.

Written Briefs: Briefs may be submitted to the arbitrator both prior to and, at times, after the arbitration hearing. If the user wishes to submit a brief after the hearing, the arbitrator and the opposing party should be informed, since the arbitrator may hold his decision pending receipt of briefs, or allow the opponent a certain amount of time to file their brief. The arbitration rules should be carefully reviewed in this regard.

Admissibility of Documentary Evidence: Many ADR providers have arbitration rules that require a party who wishes to present documents at a hearing to produce them to the other side within a certain number of days in advance of the hearing, (i.e., 10 or 20 days). These arbitration rules should be carefully reviewed and complied with. Examples of documents that often are admissible in this fashion are medical reports, medical bills, expert’s reports, and affidavits of witnesses. If these documents are not produced in advance according to these rules the arbitrator often will prohibit their introduction, particularly if failure to produce them has prejudiced the other side in their ability to prepare for the hearing.

What to Expect at the Arbitration Hearing

Conduct of the Hearing: All arbitrators do not all conduct the arbitration hearing in a similar manner. The arbitration rules should be carefully reviewed in this regard. If these rules are vague as to how the hearing will be conducted, as many are, the user should request further information from the ADR provider on the process to be used in advance of the hearing.

Arbitrations resemble trials. Usually they take place in a large private conference room. Parties can be represented by counsel or can represent themselves. Insurance claims representatives can appear on behalf of their insurers at the arbitration hearing, or they can have defense counsel appear, often depending on the value and legal complexity of the case.

Stipulations: The arbitrator often starts by making introductory remarks and explains the process he or she wishes to follow during the course of the hearing. Any stipulations that can be entered into by the parties should be made prior to the commencement of the hearing. For example, the defendant may wish to stipulate as to liability with the only issue submitted to the arbitrator being the extent of damages. Or, the parties may be able to stipulate as to offsets that are to be taken from a gross award, such as for Personal Injury Protection benefits received by the claimant in an automobile bodily injury claim being arbitrated.

Opening Statements: Usually both parties, their counsel or representative are given an opportunity to make a brief opening statement outlying the evidence they expect to present at the hearing.

Presenting The Case: The claimant presents his or her case first. The arbitrator is empowered to administer oaths to all witnesses and the witnesses generally testify under the direct examination or questioning of their counsel or representative first. The opposing party or his counsel or representative will have the opportunity then to cross examine each witness. At times the arbitrator may also question the witnesses.

During the course of the claimant’s case all relevant documentary evidence may be submitted, such as, in personal injury cases, medical bills, medical records, lost wage information and, in certain instances, expert’s reports or affidavits. Expert witnesses, such as doctors or engineers, may testify in person at the arbitration. As stated above, the arbitration rules must be reviewed carefully concerning admissibility of testamentary and documentary evidence so as to comply with all notice requirements well in advance of the hearing.

After the claimant submits his case, the respondent has the opportunity to present witnesses and submit documents in support of his case. The claimant, or his counsel or representative, shall also have the right to cross examine any witness presented by the respondent.

Evidentiary Objections: The user should make any objections they deem warranted to evidence that their opponent seeks to admit. The arbitrator shall rule on each objection. Although the rules of evidence are generally more relaxed at an arbitration hearing, objections have value in that they may alert the arbitrator to deficiencies in the opponent’s evidence.

Closing Statements: After all of the evidence has been submitted by both parties, each party is generally allowed to make closing statements outlining their positions as to liability and damages, with the respondent going first and the claimant last. It is generally considered inappropriate to request a precise monetary amount in the closing statement or during the course of the arbitration hearing, nor to tell the arbitrator what offers or demands may have been made prior to the arbitration.

What is Mediation?

Mediation is a voluntary process in which a neutral mediator assists the parties in resolving their own dispute. The mediator has no authority to impose a settlement and the parties are under no obligation to reach agreement. The mediator may, but need not, suggest settlement terms. Mediation proceedings are private and confidential and the substance of the discussions in mediation is generally considered privileged.

Written Summary: Before mediation convenes most mediators request a brief written summary of the case from each party. In personal injury cases, the summary should discuss the issues of liability, focusing on the key evidence in support of the parties’ position, and on damages, discussing, for example, such issues as the extent of disability, causal relationship and the extent of special damages or economic loss. If the issues of liability or damages can be best highlighted by attaching pertinent portions of medical records, statements, or other documents, you may wish to do so in advance of the mediation to assist the mediator.

Preparation: Be prepared; carefully review your case before the mediation. Although mediation is informal, be prepared to discuss the facts of your case in detail. Identify and pull out all documents, or portions thereof, that may be helpful to show the mediator so as to avoid wasting time at the mediation by having to pull through a large file. Attorneys should spend time with their clients preparing them for the mediation. Determine who will speak and encourage the client to come with an open mind. Discuss in general terms what settlement options they feel may be acceptable to them if they became available at the session.

Know the Mediator: Spend some time finding out about your mediator, his background and experience. Discuss with your co-workers how the mediator generally conducts his mediations.

The Parties To the Dispute Must Attend: All parties to the dispute and all persons with needed settlement authority should attend the mediation in person. Research and experience have shown that when a person with needed settlement authority does not attend the mediation, even if available by telephone, the chances of settlement are significantly diminished, since that person cannot be addressed directly by the mediator nor observe the dynamics of the mediation session.

Be sure that all persons with settlement authority on behalf of the opposing party will be present. Parties should disclose to thier opponents well in advance of the mediation session that a person with needed settlement authority will not be present, even when available by telephone.

What Happens at the Mediation?

Joint Session: At the start of the mediation session, most mediators bring all the parties, their counsel and/or claims representatives together in a large conference room for a joint session. The mediator generally will describe the process he intends to follow, and should emphasize his impartiality and that all communications made at the mediation are confidential. Often the parties are then given an opportunity, in an uninterrupted manner, to explain the key issues in the case from their standpoint and state where the parties are in terms of settlement of their dispute. At times it may be advisable however to reserve settlement discussions until in private caucus with the mediator and a skillful mediator may encourage the parties to do so.

Private Caucuses: Often after a joint session the mediator will have private caucuses (meetings) with each party to explore flexibility for settlement. In private, a party may be willing to indicate possibilities that he does not wish to express to the other side just yet, or indeed at all, unless the party can be sure it may lead to settlement. These private discussions should be kept in confidence by the mediator, and only those proposals that a party specifically authorizes a mediator to share with the opposing party should be divulged by the mediator. Parties to mediation should insist that the mediator pledge that these discussions in private caucus will remain confidential. This confidential information is critical to the mediator since with this information in his mind he can begin to focus in on a target or range of possibilities for settlement.

Tools of the Mediator: Mediators are trained to deal with many issues likely to arise at mediation, including intense emotions, lack of trust and communication failures. A skilled mediator, particularly in private sessions, is likely to discuss with each party in detail the realities and alternatives facing them, for example, if they decide to go to trial, what the chances are of a verdict in their favor, what is a likely award, how long it would take to get to trial and how much it would cost financially and emotionally to go through trial. Mediators may wish to focus the party on the weaknesses of their case. Some parties are resistant to hearing such messages and have overly optimistic assessments of what a trial may result in should they decide not to accept settlement, even when they are represented by counsel. The mediator can be effective, as an impartial and experienced neutral, in dealing with such unwarranted optimism.

Many skilled mediators will avoid indicating their opinion about the value of the case early on in the mediation session, which distinguishes mediation from a case evaluation. Rather, mediators are experts in the process of settling the dispute. However, a good mediator will often steer the parties and, as the session proceeds, may offer settlement suggestions, most often in private caucuses, i.e., “What would your response be if the defendant expressed willingness to pay $5,000.00 and dismiss their counterclaim?”

Confidentiality: The parties should be sure that the written mediation agreement contains a confidentiality clause, wherein the parties and the mediator agree that any communication made in the course of the mediation relating to the subject matter being mediated shall be a confidential communication and not be subject to disclosure in any subsequent judicial or administrative proceeding. This is to assure that if the case does not settle their negotiations are not disclosed to a judge, jury or arbitrator.

The Massachusetts Confidentiality Statue, M.G. L. Ch. 233, s. 23C provides that documents exchanged in connection with mediation and the substance of discussions in a mediation are not “subject to disclosure” in any judicial or administrative proceeding. However the protection of the statute only applies if the mediator has satisfied certain requirements of training and experience. Further, the statute has been little used or interpreted by the Courts, so that parties are well advised to embody their confidentiality agreement in a written mediation agreement.

Settlement or Other ADR Alternatives: If settlement is reached, it is advisable to sign settlement agreements and releases while all parties are present at the mediation. Although mediation is often referred to as “non binding”, an agreement reached in a mediation is as binding and enforceable as any other agreement. Statistics show that the vast majority of cases (approximately 85%) submitted to mediation reach settlement. If settlement is not reached but progress has been made, it may be suggested that the parties return again for a second mediation. In many cases where the differences of the parties have been significantly narrowed but settlement not reached, arbitration then is selected by the parties to reach a final resolution. The parties then may wish to take advantage of the progress made in mediation by agreeing to submit the dispute to binding high low arbitration, setting a minimum and maximum award, for example, perhaps at our near where their negotiations reached an impasse.

What is a Mini-Trial

Mini-trial is a two-step process to facilitate

settlement. In the first step, the attorneys for each party present

to a neutral in the presence of individuals with decision-making

authority for each party a summary of the evidence and arguments

they expect to offer at trial.

Then, the individuals with decision making authority meet with or

without the neutral to discuss settlement of the case. If settlement

is not reached, the neutral may offer, as a further aid to settlement,

a prediction of the likely outcome if the case goes to trial. User’s Guide

Our new User’s Guide explains ADR in detail. The guide is available in Adobe PDF format. For More Information

* Massachusetts

Office of Dispute Resolution

* Massachusetts

Bar Association Section on Alternative Dispute Resolution

Why Use MDRS?

Massachusetts Dispute Resolution Services (MDRS) provides a full range of out of court mediation and arbitration services to assist parties in resolving their disputes without the time, expense and uncertainty of trial in the court system. MDRS is one of the first ADR providers in Massachusetts and we have resolved thousand of cases effectively for our clients.

Virtually any type of dispute can be submitted to MDRS. Our professional panel of neutrals include experienced attorneys and retired judges who are available at convenient locations

throughout Massachusetts and other adjoining states in New England.

Our mediation and arbitration services offer

many benefits to the parties, whether or not they are represented

by counsel.

* TIME: Most cases are completed within 30 days, sometimes sooner,

if requested by the parties.

* MONEY: Our simplified procedures mean lower attorneys’ fees

and accrued expenses than are usually required from the more formal

procedures of preparation and trial in the court system.

* CONVENIENCE: The parties select a mutually convenient time

and place, throughout Massachusetts, for hearings. This avoids

costly and time-consuming delays often experienced in the court

system when postponements are needed due to the participant’s

unavailability or backlog of the court itself.

* FLEXIBILITY: At MDRS, the parties decide which dispute resolution

process will work best for them. From non-binding mediation

to binding arbitration, MDRS works to provide parties with the

most comfortable and direct means of resolving disputes.

* PRIVATE AND FINAL: Parties interested in keeping their disputes

confidential can do so in the privacy of an MDRS conference room

- out of the public courtroom. And, disputes decided by

binding arbitration are final, which eliminates the lengthy and

often costly process of appeal.

* REASONABLE AND FAIR: Our services are provided by mediators

and arbitrators with extensive legal experience in the specific

area of law involved in each case. At Massachusetts Dispute

Resolution Services, fairness and balance yield reasonable decisions

and equitable solutions.

* COURT COMPLIANCE: Both the state and federal court systems

in Massachusetts are now directing parties to consider submitting

their cases to alternative dispute resolution programs such as

Massachusetts Dispute Resolution Services to relieve the court

backlog and reduce the delay and expense now associated with trial

in the court system.

Why Use ADR?

Although ADR is worth considering in most cases, there are certain cases where ADR is clearly better suited than others? Since the vast majority of civil cases are resolved by settlement and without trial, the issue confronting insurance representatives, attorneys and parties is not whether ADR is preferable to trial but rather whether ADR offers some advantage over the ordinary course of negotiation, litigation and pretrial discovery to reach a settlement. Factors relevant to that decision are discussed herein.

Advantages of ADR:

Cost Savings: The primary reason why litigation is so expensive in Massachusetts is well known: pre-trial discovery and discovery related motion practice. According to a recent study of the federal courts by the Brookings Institute, 60% of the cost of litigation is attributable solely to pre-trial discovery. Further, the cost for the personal appearance of expert witnesses at trial, generally required by the trial court’s evidentiary rules, is extremely high. ADR’s simplified procedures, which allow in many cases for the presentation of expert testimony and other documentary evidence by affidavits and written submissions, generally result in lower legal costs and accrued discovery expenses. The fees for a standard arbitration hearing can range anywhere from $400.00 to $600.00 per party, depending on the ADR provider selected.

Time Savings: Litigation in the Courts is often delayed by backlog of pending cases. A 1986 study of the Massachusetts Superior Court showed that the average time for disposition of suits filed was 21.3 months. Although most Court’s have improved their efficiency by reducing their case backlogs over the past years, most by adopting mandatory or recommended ADR procedures, parties still must wait a year or two for trials in many courts. On the other hand, cases submitted to mediation or arbitration can often be scheduled for hearings within days of submission, particularly if a private ADR provider is selected. Most ADR providers render final and binding arbitration decisions anywhere from 10 to 20 days from the close of the hearing.

Convenience: Unlike the scheduling of a trial by the Court, with ADR the parties select a mutually convenient time and place for a hearing. Last minute postponements and delays, often resulting when a Court is not ready for the case to commence as scheduled, are generally avoided by using ADR.

Flexibility: Using ADR, the parties can tailor a dispute resolution process that will work best for them based on each individual case, whether, for example, non-binding mediation, binding arbitration or perhaps binding high low arbitration. Using ADR, the parties often can retain greater control over the manner in which their dispute is resolved than they would if they opted for trial in the Courts.

Choice of Neutral: Using ADR, the parties mutually select the arbitrator(s) who will decide the case, or the mediator who will assist them in resolving their dispute, usually after being provided with detailed background materials. In the Courts, the parties do not know which judge their case will be assigned to or what experience that judge may have in the particular field of law that their case involves. If a jury trial is requested, ordinarily the decision makers on the jury have no experience in the law or in the valuation of cases. ADR providers generally offer retired judges or experienced attorneys as neutrals who have training and experience in the particular area of law involved in each case.

Privacy and Finality: For many parties an important advantage of ADR is the private resolution of their dispute. This is often the case where reputational interests are involved or where the parties wish to limit public access to documents, exhibits, pleadings and testimony. A related concern of some parties (such as product manufacturers) is avoiding a reported decision where an adverse precedent would encourage the filing of additional cases against the party. Another important advantage of ADR to many parties is that except in certain rare circumstances, the arbitrator’s decision is final and is not subject to appeal, which could be time consuming and costly through the Court system.

Preserving Ongoing Relationships: To many, no experience can be more adversarial than trial in the court system. Prior relationships that may have existed between disputants, i.e., whether former business associates, neighbors, employers and employees, etc., seldom survive the strain of protracted litigation. In contrast, the informality of the mediation process, the mutual decision to elect mediation, the mutual selection of a mediator, and the focus of the mediator on the existing relationship often can help resolve the immediate dispute and often increases the parties’ ability to resolve future disagreements in a non-adversarial manner. Even the process of binding arbitration is less likely to further damage once beneficial relationships that may have existed between parties.

Risk Management: ADR proceedings can be structured in a manner that controls risk by setting limits on the range of outcomes, for example, by using a high-low arbitration format. Such controls are particularly useful where there is a risk of a runaway jury or where the amount in controversy is such that a wholly adverse decision could be ruinous to one of the parties. In mediation, of course, risk is always controlled because a party is free to refuse any offer until a satisfactory one appears.