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"Alternative Dispute Resolution: How The Growth Of This Practice Has Led To A Drop In Litigation" by Francesca Altema


Alternative Dispute Resolution: How The Growth Of This Practice Has Led To A Drop In Litigation

by Francesca Altema


Alternative Dispute Resolution (ADR) has quickly become one of the most popular forms of resolving a matter between parties. With regard to civil practice, ADR has become the most reliable means of initiating a speedy, cost-effective means of resolving a matter. Although litigation is sometimes inevitable when parties contend that more facts need to be discovered, or when one or more parties refuses to compromise, ADR has become a staple factor of civil practice today. Often times parties contract to use ADR should a dispute of any sort arise between the two entities, and sometimes the parties have no other choice due to the circumstances surrounding the case.

This article will discuss some of the biggest reasons that Alternative Dispute Resolution has gained so much popularity, with a look at the influence of our nation's current economic crisis, and how that has trickled its effects into both federal and state practice. I will also discuss how legislative changes have influenced parties' decisions to use ADR as a means of resolution. In addition, I will mention the views and experiences of an anonymous prominent civil litigation attorney regarding ADR's increased popularity, and what types of cases are usually settled outside of the courtroom and which are not. Finally, I will discuss whether the increased popularity of ADR is in fact beneficial, albeit the obvious economic and timesaving benefits it provides.


Discussion


It is well-established that ADR is now the most popular means of resolving a dispute between two parties. See, e.g., Patricia Lee Refo, The Vanishing Trial, A.B.A. SEC. LITIG., Vol. 30, No. 2 (2004). This is evidenced by the steady diminution of cases that actually go to trial. See id. In federal courts, the decline in trials has been steep and dramatic. See id. In 1962, there were 5,802 civil trials in the federal courts and 5,097 criminal trials, for a total of 10, 899. Id. In 1985, total federal trials had risen to 12,529. Id. By 2002, however, trials had dropped to 4,569 civil trials and 3,574 criminal trials. Id. Thus, our federal courts actually tried fewer cases in 2002 than they did in 1962, despite a fivefold increase in the number of civil filings and more than a doubling of the criminal filings over the same time frame. See Refo, The Vanishing Trial, supra. In 1962, 11.5 percent of federal civil cases were disposed of by trial. See id. By 2002, that figure had plummeted to 1.8 percent.

The vast majority of trials -- an estimated 88,000 in 1999 -- are in state courts. For a variety of reasons, the data on state court cases, filings, dispositions, and trials is sketchier. Brian Ostrom and his colleagues at the National Center for State Courts reported on trial trends in state courts from 1976 through 2002. In the 22 states for which data is available, civil jury trials are down by 28 percent and, in 2002, represented 0.6 percent of the total civil dispositions.

One of the biggest factors that persuades parties to participate in ADR is its lower cost and speedier process. "[D]iscovery costs . . . can run into the hundreds of thousands of dollars, even in . . . single-individual . . . claim[s]." John M. Barkett, Tipping the Scales of Justice: The Rise of ADR, AM. BAR ASS'N, Vol. 22, No. 4 (Spring 2008). Whereas the litigation process has strict discovery rules (which can take more than a year and a half, and even as long as five years or more), the ADR process emphasizes significant less-rigid standards of evidence gathering. This allows parties to argue on the merits of the case faster than if they were to subject themselves to a court's procedures and rules in order to get the matter resolved. Because mediation and/or arbitration does not require the same rigid standard of disclosure as does discovery practice, ADR can often be a favorable alternative to the high cost of litigation.

ADR: Always a Conscious Decision?

In light of our nation's economic recession, a faster, cheaper way of resolving an issue seems like a no-brainer for parties that want to resolve an often-unpleasant and inconvenient dispute in the quickest, most-economic way possible. And for parties that willingly submit themselves to the process of ADR, it makes the most sense. For others, however, participating in ADR is their last option after attempting to endure the long, expensive, and judicially unavailable road to litigation. Exacerbating the problem of delays are vacancies on the federal bench. Despite the surge in cases, the number of authorized federal judgeships has risen just 4 percent since 1990. Of the 677 federal judgeships currently authorized, approximately 9.5 percent are currently vacant. See John M. Emshwiller & Gary Fields, Federal Offenses: Criminal Case Glut Impedes Civil Suits, WALL ST. J., Nov. 10, 2011, at A1. Through ADR, civil litigants can settle their disputes in a more expedient fashion rather than waiting for one of the courts to take their case.

These resolutions can be appropriate in many cases. However, there is "no shortage of plaintiffs who wind up taking inadequate settlements" or businesses that make unnecessary payments to end the expense and uncertainty of litigation, says Ian Millhiser, a policy analyst at the Center for American Progress, a liberal think tank. Our nation's economic recession directly influences parties' decisions to opt out of litigation via ADR, but it also has an indirect influence by parties who initially wanted their voices to be heard by a finder of fact, but who consent to ADR due to the lack of availability of a speedy trial. See Emshwiller & Fields at A1.

This may seem like an attempt to be fair to all litigants in terms of allowing them the opportunity to be heard in due time. Yet this also causes litigants unforeseen additional attorneys' fees, and, for plaintiffs, more delays in remedying their damages. See Emshwiller & Fields at A1. "Civil litigation, which accounts for over three-quarters of federal court cases, is getting squeezed the most. In 2007, fewer than 7 percent of civil cases were more than three years old. By last year, that percentage more than doubled, with nearly 45,000 cases in a holding pattern." Id.

Changes In Legislation and its Effects on Opting Out of Litigation

A lesser-known reason for the rise of ADR is that changes in federal criminal legislation have caused a trickling effect on the priority of federal and state civil cases. Specifically, legislation has mandated that federal judges give priority to federal criminal matters. See 18 U.S.C. ยง 3161 ("Speedy Trial Act of 1974); see also Speedy Trial Act Amendments of 1979, Pub. L. No. 96-43, Section 3, 93 Stat. 327. It is well-established that over the last several decades, our country has created a national initiative to prevent drug trafficking. See generally http://www.justtice.gov/dea/1107_fact-sheet.pdf. Post-September 11, 2001, governmental response to tighten immigration laws in hopes of preventing further terrorist activity has created an enormous addition of new crimes that previously did not exist, or were previously limited to state matters. See Emshwiller & Fields at A1. This significantly increased number of federal criminal defendants has forced the federal judiciary to constantly give priority to criminal cases, even though civil cases make up about three-quarters of all federal cases. See Emshwiller & Fields at A1.

Consequently, federal courts' duty to accommodate the constitutional rights of criminal defendants has limited state and federal judicial review of civil cases. Since federal courts are under constitutional and statutory obligations to expedite criminal proceedings, all federal civil cases suffer a delay as a result, which results in years of unresolved litigation. This also affects litigation on a state level, for if litigants were to ever appeal a state decision, the number of years before their case could be heard in front of a federal judge could be countless. If decisions on contracts, mergers, and intellectual property rights "can't be reached through quick and prompt justice, things unravel for business." Emshwiller & Fields at A1. The expedition of criminal cases likely deters potential civil litigants from ever using the courtroom as a resource, since the prospects of a court expediting their matters are slim to none. See id.

Although there exists countless policy reasons for expediting criminal proceedings, the government's attempts at safeguarding every citizen's right to a fair and speedy trial in essence has handicapped civil litigation at the financial expense of its participants. Much needs to be done with legislation in terms of resolving the disparity in judges available to expedite civil litigation, and those that are constitutionally obligated to expedite criminal litigation, both at the state and federal level.

What Types of Cases do Parties Choose To Settle Early On?

In terms of civil litigation practice, a high priority is placed on Mediation. Mediation is defined as A method of nonbinding dispute resolution involving a neutral third party who tries to help the disputing parties reach a mutually agreeable solution. Says one Senior Litigation attorney at a prominent Insurance Defense firm, "not only is there great pressure [for cases] to [be] mediate[d], but there is an even larger pressure to make cases go away, especially if the plaintiff has not alleged a particularly high amount of damages, and the merits of their claim seem relatively obscure."
"The economy definitely has an influence on the amount of cases that used to go to trial, as opposed to what's become a part of [the firm's] staple practice now of making claims that lack merit just go away," she explains. "Although our economy does play a significant role in what pushes people to settle a claim, it certainly isn't dispositive. With certain claims, no matter what the current economic situation, a case will go to trial if the plaintiff refuses to settle, and the damages alleged or level of exposure is high." The attorney went on to describe several factors that she has become acquainted with in her years of practice that influence whether or not a claim will ever go to trial.
The first is the cost-benefit analysis attorneys use in assessing whether or not it is optimal to litigate a matter or settle. One of the largest issues that influence this analysis is the value of plaintiff's alleged damages. It is during or after discovery that parties usually determine whether or not a case is worth going to trial. "Most cases," the attorney provides, "are not."
She further explained that not just the price of the claim needs to be considered when assessing whether a case should be settled, but the type of alleged damages. Specifically, there are some types of cases that are just not worth being evaluated in front of a jury for fact-finding purposes, no matter how much the plaintiff's own negligence contributed to the incident. Cases involving sexual assault on a female, especially a minor, typically are not in a defendant's best interest to rely on a trial to solve the matter. Jurors tend to be particularly sympathetic when a wrongful act of any sort occurs to a child; even if that child was the main cause of his or her injuries.
Moreover, the attorney explained that jury sympathy is not exclusive to minors. There are other types of injuries that defense attorneys should avoid having to question a victim (no matter his or her age) about in court; no matter the degree of the plaintiff's loss or fault. Lawsuits involving burns, or severed and/or crushed limbs are rarely litigated since the alleged injury would be so graphic to explain to a courtroom. An injury like this combined with a minor victim is almost always a recipe for settlement. Moreover, New York does not recognize the Negligent Parental Supervision defense, which would allow for an award to such an injury to be mitigated by the measure of the plaintiff's fault. This same type of jury sympathy extends to non-senior citizens that suffer incapacitation. The attorney describes, " . . .any type of injury which significantly disrupts the plaintiff's quality of life . . .[defense counsel is] not going to want to put that injured person on the stand. In these type of instances, settling is the best option."
Another important factor in assessing whether to settle is the nature of the parties. Rather than have a difficult client explain himself on the stand, or risk having that client cross-examined in front of a jury, often times it is in the parties' best interest to settle the matter, right or wrong. Sometimes it doesn't matter if the client himself is inarticulate, the circumstances surrounding what gave rise to the lawsuit are enough to be in the best interest of everyone involved to settle the dispute quickly.

The Ultimate Effects of ADR on Our Society: Positive or Negative?

Ultimately, it is up to the parties to choose whether they would like to go to trial over their dispute. Exercising one's right to settle solves one of the most pressing issues in a worldwide economic crisis: parties that can't afford to litigate for years on end are not obligated to, and even if trial begins, each side may decide at any point that it would be in their best interests to settle the matter. Furthermore, when parties choose to participate in an ADR proceeding, the details of the resolution are entirely confidential, another reason why the ADR process can be such an attractive alternative option to litigation.

However, there are just as many negative aspects to ADR as there are positive. First, although the confidentiality aspect of ADR ensures that whatever issue the parties choose to resolve remains confidential, this prevents our society from maintaining precedent on a majority of current disputes. Further, the widespread use of ADR encourages parties to avoid a court system that was specifically created to resolve people's disputes in the first place. Rather than encourage legislation to reform the faults of our nation's justice system, the judiciary in essence has encouraged the avoidance of its overcrowded courts by encouraging parties to settle disputes before scheduled court dates or outside the courthouse.

This practice does not solve the main problem. Rather, it provides somewhat temporary relief for our court system's biggest predicament. There seems to be no foreseeable resolution for our nation's overcrowded court problem, and this causes serious reason for concern. It is quite possible that in a few years, mediators, arbitrators, and the like may run into similar issues that judges are facing right now. There is no simple solution for our court system's problems, but diverting potential litigants from the courtroom should not be an acceptable means of resolving this ongoing issue.

Conclusions

ADR is a multi-faceted trend that has changed the manner in which people seek justice. It is now the most popular way of resolving a dispute, as well as the most economical. Parties' demands, complaints, and other pleadings are not a matter of public knowledge when they participate in ADR, and, most importantly, the ADR process is designed to be completed in a faction of the time that a public trial takes.

As voiced in the interview with the attorney I spoke with, there are certain cases that are optimal for participating in the ADR process, and certain types that are non-negotiable. Cases where a party's client would leave a negative impression on a jury, or where a plaintiff's description of the alleged incident would be so gruesome that any reasonable person would feel morally obligated to help him or her, are often instances where it would be in the defendant's best interest to settle the matter, no matter how much culpable conduct is attributable to the plaintiff. For those that intentionally seek to participate in ADR, it is an excellent alternative to courtroom litigation. For those who originally intended for a group of fact-finders to determine the outcome of their disputes, our judicial system often fails to grant civil litigants the timely opportunity to be heard that they deserve. In such instances, parties tend to consult with the ADR process, which can sometimes be binding (as in arbitration proceedings), thereby precluding them from appellate review. Such a failure results in legislation's prioritization of criminal defendants' constitutional right to a fair and speedy trial.

For equal protection purposes, civil litigants need to be afforded the same amount of constitutional protection that criminal defendants are granted. Although criminal defendants have their lives at stake, civil defendants face losing money and, often, accrued debt from the cost of lengthy litigation. Affording both avenues of our court system the same right to a fair and speedy trial would provide great equitable relief where it is long overdue.

Francesca Altema is a 2012 graduate of the St. John's University School of Law. She interned at the Civil Court of the City of New York (Housing Part)in Brooklyn, and is a member of the Metropolitan Black Bar Association. Her undergraduate education was at Rider University.



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This page contains a single entry from the blog posted on May 15, 2012 11:59 AM.

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