Review of Alternative Dispute Resolution



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Settlement rates 32

Satisfaction 33



FOREWORD


Civil problems and disputes can have adverse consequences for people, affecting their confidence, well-being, financial situation and health. We include in our definition all civil matters which raise a legal issue or which, if not resolved earlier, could ultimately result in legal proceedings. For example, issues with welfare benefits, debt, housing, employment, family disputes and consumer rights. Problems and disputes can escalate from simple, minor issues into major, complex challenges. The early resolution or avoidance of these problems can improve people’s lives
This report is a review of the literature on Alternative Dispute Resolution (ADR) in five jurisdictions besides Scotland. It looks, in particular, at how each has formally institutionalised ADR into family law and to what extent ADR has been effective. For the purposes of Making Justice Work Project 3, ADR is defined as a method of resolving a dispute including the use of mediation, conciliation, adjudication, ombudsmen or arbitration. The aim of Project 3.4 of the Enabling Access to Justice Project is to identify the role ADR can play in advancing the wider interests of the justice system and system users alongside other forms of dispute resolution. The focus throughout has been on whether ADR is an appropriate and proportionate means of resolving different types of disputes in different areas of law.
This literature review of ADR in five jurisdictions focuses on how each has formally institutionalised ADR, particularly mediation, into family law and the extent to which this has been effective. The review was commissioned following early findings from the Project 3.4 ADR Overview study which identified family mediation as one of the prominent ADR initiatives funded by Scottish Government. Improving and sustaining the wellbeing of children in Scotland is a core policy priority of Scottish Government. Family disputes and separation have considerable potential to undermine the wellbeing of the children involved in such disputes. Ensuring that the processes used to deal with those disputes do not in themselves undermine children’s wellbeing is therefore also of considerable importance. The cross-jurisdictional paper was commissioned to start a reappraisal of how family justice could achieve this aim by investigating what other jurisdictions had tried and to identify what, if anything, Scotland could learn from this. The paper looks at five jurisdictions (England and Wales, Canada, the United States, Australia, and New Zealand), all of which have given greater priority than Scotland to mediation within their family justice system and gives us some context for our own work on family justice.
The next stage of the Enabling Access to Justice Project will take the form of a family law workstream (Project 3.5) which will build on the work carried out under Project 3.4 (ADR). This will focus on the key question for publicly funded family justice which is whether it helps or hinders the achievement of outcomes for children that the Scottish Government is seeking through the Early Years Framework, GIRFEC and the Children and Young People (Scotland) Bill.
Jan Marshall, Deputy Director, Civil Law and Legal System Division, Scottish Government
Lindsay Montgomery, Chief Executive, Scottish Legal Aid Board

Executive summary



  1. Alternative Dispute Resolution (ADR) is any means of resolving a dispute outside formal litigation. This report is a review of the literature on ADR in five jurisdictions besides Scotland. It looks, in particular, at how each has formally institutionalised ADR into family law and to what extent ADR has been effective.1




  1. The most common forms of ADR are evaluated: mediation, arbitration, collaborative law, and early neutral evaluation.2 Effectiveness is measured by traditional indicators: settlement rates, party satisfaction, cost savings, and time to disposition. The five jurisdictions are: England and Wales, Canada, the United States, Australia, and New Zealand.




  1. There are certain problems common to most if not all empirical studies of ADR that should be kept in mind when considering the findings of this paper. Studies of ADR are very often based on limited data (because ADR conferences are nearly always held in private); are sometimes conceptually muddled (they do not always compare like with like); often use self-selecting samples (as opposed to randomised samples);3 and typically compare ADR with litigation (a premise that is flawed because in reality only a small fraction of all civil cases filed proceed to trial).4 Because there is no true baseline to measure from and no way to submit the same dispute to two ‘treatments’, one controlled and the other not, most cases are not directly comparable, which means it is difficult to assess real differences in effectiveness.5 Even so, the best available studies were selected for this review.




  1. The first part of this report looks at how ADR has been formally institutionalised by statute, rule and other means, in the five chosen jurisdictions. The second part assesses the effect of ADR on court caseloads and the phenomenon of the ‘vanishing trial’. The third, fourth, fifth and sixth parts review the empirical research on the four main forms of ADR, evaluating their effectiveness.




  1. The main findings of the report are as follows:




  1. ADR (usually mediation) is mandatory for some types of civil cases in Australia, England and Wales, and many parts of the US and Canada, but is voluntary in most of Europe. Some programs make mediation compulsory for a defined class (e.g., Ontario); some give discretion over referrals to a judge (Florida); some make mediation a condition of legal aid (England); some use sanctions for unreasonable non-compliance (England); others make mediation mandatory if one party elects to mediate (British Columbia). Australia has invested heavily in Family Relationship Centres, which are intended to replace court as the point of entry into the family justice system. In New Zealand, mediation conferences are commonly chaired by judges.




  1. ADR has grown at the same time that the rate of civil trials has decreased, but no study has been able to decisively credit the former with the latter.




  1. Mediation is the most common form of ADR and the best researched. The majority of studies reviewed here compared mediation favourably with trial. Settlement rates varied, but generally were above 40 per cent and in some studies reached 80 per cent. Satisfaction was generally very high, the chief exception being those cases that involved violence. Mediated cases generally cost less (but only if mediation was successful) and took significantly fewer days.




  1. Empirical studies of arbitration, the second most common form of ADR, are as a rule limited to employment disputes in the US. These studies produced mixed findings. Compared with litigation, arbitration generally led to higher win rates for employees and resolved in significantly shorter time (as much as half the time). Two studies found median monetary awards were lower after arbitration; one study found awards were higher.




  1. Early neutral evaluation (ENE), an amalgam of mediation and non-binding arbitration, has not been subject to rigorous empirical testing, but a few published studies reported positive results. ENE sample groups took fewer days to complete than comparator groups, and reported high levels of satisfaction. Settlements rates were inconsistent, but settlement is not the primary purpose of ENE.




  1. The defining principal of collaborative law is the ‘disqualification agreement’, in which lawyers must agree to withdraw if their clients fail to settle and instead proceed to court. A few published studies of collaborative law suggested that clients typically came from a wealthy demographic and that collaborative settlements were cheaper and speedier. The settlement rate was very high (over 80 per cent in all studies) and satisfaction levels were high.

Institutionalising ADR


  1. This part of the report considers the trend towards institutionalising ADR in each of the five chosen jurisdictions, using specific examples. ‘Institutionalising’ here refers to the means by which each country has progressed beyond the pioneering stage of developing ADR programs, to the stage of formally incorporating ADR into the civil justice system—by statute, by rule, or by other means, such as the implementation of minimum professional standards. The literature covered here typically refers to mediation but does not necessarily exclude other forms of ADR. Before reviewing each jurisdiction, one of the most controversial issues of the institutionalisation of ADR is discussed, namely: to what extent should parties be compelled by the court to resort to alternatives to trial.

Voluntary vs. mandatory
  1. In Australia and many parts of the US and Canada, mediation is compulsory for separating couples who have disputes over the custody of children. But in most European countries, mediation is voluntary.6 (Recommendation R (98) 1 of the Council of Europe says that ‘mediation should not, in principle, be compulsory’.)7 McAdoo et al. argue that voluntary mediation programs are rarely well used, whereas mandatory mediation programs attract much higher rates of use.8 They add that, according to research, mandatory referral does not appear to adversely affect litigants perceptions of procedural justice or settlement rates. Bullock and Gallagher report that voluntary mediation programs tend not to be cost-effective because they generate only small caseloads.9 Genn, however, argues that cases are more likely to settle at mediation if the parties enter the process voluntarily rather than under duress.10



  1. There are shades between ‘voluntary’ and ‘mandatory’. ADR may be made mandatory by a statutory or court rule for all cases in a defined class; made mandatory by an order issued at the court’s discretion in cases thought likely to benefit; made mandatory by one party electing for ADR; or made a condition of procuring legal aid. ADR may also be voluntary but encouraged by a court backed up with sanctions for unreasonable refusal; or entirely voluntary, with the role of the court reduced to the provision of information and facilities. Quek positions the degree to which different jurisdictions make mediation compulsory along a scale from one to five; one being the most liberal regime, five being strictest.11
Scale and description
Example
  1. Categorical or discretionary referral with no sanctions12.
In England, an automatic referral to mediation pilot scheme at the Central London County Court was attempted in 2004–2005. Although cases were automatically referred to mediation, disputing parties had the option to object. In the event, 81 per cent of those referred did object and the scheme was abandoned.
  1. Requirement to attend mediation orientation session or case conference
In Virginia, US, parties are required to attend mediation orientation sessions before deciding whether or not to attempt mediation.

  1. Soft sanctions
English courts actively encourage ADR, and take into account a party’s conduct—including any unreasonable refusal of ADR or uncooperativeness during the ADR process—when determining the proper order of costs. Parties seeking legal aid must first attend a meeting to determine whether mediation is appropriate.
  1. Opt-out scheme
The mandatory mediation program in Ontario, Canada, refers all civil cases, except family cases, to mediation unless the court exempts a party by order.
  1. No exemptions
Courts in some Australian states, such as South Australia, Victoria and New South Wales, are empowered by legislation to refer parties to mediation with or without their consent.



Canada
  1. The nature of Canada’s constitution means that dispute resolution initiatives are organised by province. Although some statutes, such as the Divorce Act 1985, are enacted by the federal government and apply nationwide, the Supreme Court (also known as the Superior Court or Court of Queen’s Bench) of each province has jurisdiction over most disputes, including divorce.13 Five provinces have introduced laws with respect to mediation, each of them different.
  2. In 1999, Ontario introduced mandatory mediation (‘Rule 24.1’ of the Civil Procedure Rules) for civil, non-family actions, with a provision for the parties to opt-out of filing a motion. Parties in all cases had to undergo mediation within 90 days of filing the first defence. Parties in standard cases could get an extension of 60 days, but all other extensions had to be obtained through formal court orders. After a two-year independent evaluation—which found that although lawyers and litigants initially disliked being compelled to mediate, they soon began to accept its results—mandatory mediation became a permanent fixture of Ontario’s civil justice system, in 2001.14 The program currently operates in Toronto, Ottawa and Windsor.
  3. Since 1999, Family Mediation and Information Services have been set up across Ontario in 17 sites of the Family Court branch of the Superior Court of Justice. In 2011, the service was expanded across the province. Onsite court mediation services are available for parties on a given days court list to deal with a narrow range of issues, and are free of charge. For parties with more complex issues or who require more than one session, off-site mediation services are available for a fee linked to income and number of dependants. Off-site services are available to all clients regardless of whether they filed a court application.15
  4. Under British Columbia’s Family Law Act 2013, one party in a family law proceeding at the Supreme Court in may compel the other party to enter mediation under ‘Notice to Mediate’ regulations. The notice can be used at any time between 90 days after filing and 90 days before the date of trial.
  5. A number of professional organisations in Canada have drafted minimum standards for ADR practitioners.16 In 1995, Family Mediation Canada published both Practice Standards, Training and Certification of Competent Family Mediators, and Standards for FMC Endorsement of Family Mediation Training Programs. The ADR Institute of Canada Inc., which formed in 2000, developed its National Mediation and Arbitration Rules, and Code of Conduct for Mediators and Arbitrators.The nature of Canada’s constitution means that dispute resolution initiatives are organised by province. Although some statutes, such as the Divorce Act 1985, are enacted by the federal government and apply nationwide, the Supreme Court (also known as the Superior Court or Court of Queen’s Bench) of each province has jurisdiction over most disputes, including divorce. Five provinces have introduced laws with respect to mediation, each of them different.

England and Wales
  1. Mediation did not become established in England and Wales until prompted by Lord Woolf’s 1996 ‘Access to Justice’ report. Although he stopped short of making mediation compulsory,17 Woolf recommended that litigation be commenced only as a last resort and that mediation be used before the issue of court proceedings in order to attempt early settlement.18
  2. The Family Law Act 1996 decreed that a person could not be granted legal aid for representation for proceedings relating to family matters unless they had attended a meeting with a mediator or their case had been assessed by a mediator who deemed it unsuitable for mediation.19
  3. Woolf’s report was followed by the introduction, in 1999, of the Civil Procedure Rules, which placed a duty on the courts to encourage the use of ADR, with cost sanctions for litigants who failed to comply. The court could take into account the party’s conduct (including unreasonable refusal of ADR or uncooperativeness during the ADR process) in determining the proper costs order. Several English cases have since seen cost sanctions imposed because a party unreasonably refused to consent to participate in mediation.20
  4. In 2011, a fundamental review of family justice in England and Wales reaffirmed that mediation was the preferred approach for dealing with disputes following relationship breakdown, and that judges should retain the power to order parties to attend a mediation information session, and make cost orders where one party behaved unreasonably.21 The Government’s response, the Children and Families Bill, was read in the House of Commons in February, 2013. It would require parents in dispute to consider mediation as a means to settlement by making attendance at a mediation information and assessment meeting a statutory prerequisite to starting court proceedings.
  5. In 1999, the Lord Chancellor’s department’s discussion paper on ADR suggested criteria for approving ADR schemes, including training, quality control (monitoring the performance of neutrals), transparency (including complaints) and access. The paper supported self-regulation and noted that codes of practice had been developed by several ADR associations.22 For instance, the Family Mediation Council’s (the members of which are the national family mediation organisations in England and Wales) published a Code of Practice for Family Mediators, in 2010.

The United States
  1. In 1990, Congress passed the Civil Justice Reform Act, which encouraged federal district courts to develop programs using ADR. The Alternative Dispute Resolution Act of 1998 required each of the 94 districts in the US to ‘authorise’ the use of ADR in civil actions. Each district was empowered to design its own ADR program, but was required to adopt procedures for making neutral facilitators available to all parties.23 In 2001, the Uniform Mediation Act was enacted, defining the limits of mediation confidentiality in legal proceedings and protecting communications made during the mediation process. By 2011, more than one-third of all federal trial courts had authorised multiple forms of ADR, and all federal courts had authorised some form of ADR. The program of each jurisdiction evolved in a slightly different way. Some states created state offices to administer court-annexed ADR; others developed state-wide programs without a central administrative authority; others left it to local jurisdictions to decide whether to participate in such programs.24
  2. The first US state to make mediation compulsory for separating couples with custody disputes was California, in 1981. By 2001, mediation had been mandated in 13 states and many others had statutes giving judges discretionary power to order mediation. In these mandatory programs, parents had to attend at least one mediation session, which was provided free of charge. Subsequent legislation provided for some opt-outs, separate sessions and special assessments for cases where domestic violence was alleged.25
  3. Florida has the most extensive court mediation and ADR system in the US. In 1987, trial judges were given the authority to refer any civil cases to mediation or arbitration ‘if the judge determined the action to be of such a nature that mediation could be of benefit to the litigants or the court’. By 2003, Florida had 11 citizen dispute settlement centres, 41 country mediation programs covering all circuits in the state, 23 family mediation programs, 11 circuit civil programs, 22 dependency mediation programs, an appellate mediation program, and several court-connected arbitration programs.26 It has been estimated that more than 100,000 cases in Florida are diverted from court process to mediation each year. Under the Florida Rules of Civil Procedure, the first mediation session must take place within 60 days of the court referral, but parties are able to request that mediation be dispensed with by filing a motion within 15 days of referral. The number of applications for exclusion from mandatory mediation has been relatively low. Florida has been successful, Quek argues, because its programs ensure that the parties are given flexibility and autonomy over many aspects of the mediation process, and clarity over the requirements for opting out and for fulfilment of the obligation to mediate.27
  4. In Ohio, local courts have authority to write local rules to manage their courts according their own discretion. In order to encourage judges to provide dispute resolution services and recommend these services to litigants, the Supreme Court of Ohio, which created a Dispute Resolution Section in 1992, adopted a two-pronged approach. First, it sought to educate local judges and lawyers on the benefits of mediation. Under the lawyer’s creed, lawyers in Ohio have a duty to inform clients about alternative methods to resolve disputes, so the Supreme Court provided training events to help them meet their obligation. Second, it offered resources to the courts, such as technical assistance with program development, budgets, processes, forms and marketing tools. The statewide initiative has been successful at establishing ADR: around two hundred local courts have mediation rules in place. Each local court may decide how it provides mediation services. A large proportion of (but not all) civil (including family) and small claims cases are automatically-referred by local courts before filing. A case is more likely to be automatically-referred when children involved. Cases filed in municipal court that meet pre-determined criteria may be referred to mediation at any point before final judgment. When a post-filed case is referred by the court, either party may opt out of mediation by filing a motion. Conversely, if a case is not referred by the court, either party may request mediation by filing a motion. Cases with a history of domestic abuse are referred by the court to mediation, but only if there are procedures in place to ensure the safety of everyone involved.  28


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