Alternative dispute resolution (ADR) has come to refer broadly to a range of processes (e.g., bilateral negotiation, fact finding, mediation, summary jury trial, arbitration) that are used in transactional (e.g., design contracts, develop regulations), dispute prevention, and dispute resolution contexts. ADR processes operate in public and private settings, such as courts, government agencies, community mediation centers, schools, workplaces, and private providers, to address an array of substantive issues (e.g., custody, torts, contracts, misdemeanors, environmental issues).
This research paper focuses on a subset of ADR processes: those that involve a neutral third party and serve as an alternative to court adjudication of civil, divorce, and minor criminal disputes. The processes that are most commonly used are described in the following section.
The goals and asserted benefits of ADR include enhancing disputants’ satisfaction with the resolution process and its outcome; producing better outcomes and increased compliance; improving the disputants’ relationship and reducing future disputes; providing faster, less expensive, and confidential case resolution; increasing disputants’ access to a hearing on the merits; and reducing caseloads and the use of court resources. These goals do not all apply to, and are not of equal importance in, every ADR process and setting. Criticisms of ADR, particularly when its use is mandatory, include that it lacks procedural safeguards, decreases public participation and scrutiny, reduces the available legal precedents and reference points, creates pressures to settle, provides second-class justice, and impedes access to trial by adding another step in the litigation process. Empirical field research on the efficacy of ADR, and on the impact of process, third-party, and dispute characteristics, is discussed in a subsequent section.
Third-Party ADR Processes
Third-party ADR processes fall into two main categories. The first involves processes such as arbitration, in which the third party decides the case for the disputants. The second category involves processes such as mediation, in which the third party assists the disputants in reaching their own resolution. If the disputants reach an agreement, it is legally enforce-able; if they do not, the case continues in litigation. Although most disputes settle before trial, a neutral third party can help disputants overcome the logistical, strategic, and cognitive barriers to bilateral negotiation that often impede early or optimal settlements.
Disputants can enter ADR as the result of a predispute contractual agreement to use ADR or, after a dispute has arisen, as a result of mutual agreement, judicial referral of a specific case, or court-mandated use for an entire category of cases. In both court-connected and private ADR, the proceedings are private, and the content of any agreement reached is confidential and not reported to the court. Below is a general description of several commonly used processes. How each is implemented varies with the type of setting and disputes, as well as with the specific ADR provider.
Arbitration involves a hearing during which the disputants’ lawyers present evidence and arguments to a single arbitrator, or sometimes a panel of three arbitrators, who renders a decision. In voluntary private arbitration, the arbitrator’s decision typically is binding, but the disputants determine that as well as other features of the process by agreement. Mandatory court-connected arbitration is nonbinding: The disputants may reject the arbitrator’s decision and proceed to trial de novo. If they accept the arbitrator’s decision, it becomes a court judgment.
The arbitration hearing typically is held after discovery has been substantially completed. Compared with a trial, an arbitration hearing tends to be less formal and to permit the broader admissibility of evidence. Court-connected arbitration usually involves a single session lasting several hours; private arbitration can involve multiple daylong sessions spread over weeks. Arbitrators are either lawyers or nonlawyers with expertise in the subject matter of the dispute. Although disputants often attend arbitration hearings, their participation is limited to providing evidence.
Mediation is a process in which a mediator, or sometimes a pair of mediators, facilitates the disputants’ discussion of issues and options to help them reach a mutually acceptable resolution of their dispute. Accordingly, disputant participation in the mediation process and in determining the outcome is viewed as critical. The mediator’s approach can vary with the setting, as well as with the individual mediator’s preferences and the nature of the particular dispute. Some mediators view their primary objective as enabling the disputants to better understand their own interests and the other side’s perspective. Most mediators, however, do not consider enhancing the disputants’ understanding as an end in itself but as a means to helping them reach an agreement that meets their needs.
Mediators differ in how actively they intervene during the session: whether they focus the disputants’ discussion narrowly on the instant dispute and legally relevant issues or expand it to include broader issues and considerations and whether they help the disputants assess various options or offer their own evaluation of the merits of the disputants’ positions and proposals. The timing of mediation (e.g., before a claim is filed, shortly after filing, after discovery is completed), the number and length of sessions, who the mediators are (e.g., lay people, mental health professionals, lawyers), and whether the attendance of the disputants’ lawyers is required or prohibited vary with the setting and types of disputes.
Neutral case evaluation is used less frequently than mediation. Following each lawyer’s brief presentation of the case, the third party assesses the strengths and weaknesses of each disputant’s position and facilitates settlement discussions. The evaluator, who usually is a lawyer, also might offer an assessment of liability and a valuation of damages, suggest a reasonable settlement value, or predict the likely trial outcome to facilitate settlement. If no settlement is reached, the evaluator might explore ways to streamline pretrial discovery and motions. Neutral case evaluation typically involves a single several-hour session that is held relatively early during litigation and is attended by the disputants and their lawyers.
Judicial settlement conferences may be conducted by the judge assigned to the case or by another judge and usually take the form of neutral case evaluation or narrow, settlement-focused, evaluative mediation. A settlement conference typically involves a single session that lasts several hours and is held when the case is essentially ready for trial. Although some judges require disputants to attend, usually only the lawyers are present and participate in the discussions. Courts generally consider judicial settlement conferences to be ADR, but some commentators regard them as a component of traditional litigation.
Empirical Field Research on ADR
Few general statements about the research findings can be made that apply consistently across ADR processes, settings, and dispute types. Even within the same process and setting, the findings are mixed as to whether ADR performs better than, or simply as well as, litigation.
Most of the research has examined mediation and arbitration in court-connected programs; few published studies have examined other ADR processes or private ADR. The primary data sources include court or ADR program records and questionnaires completed at the end of the session by disputants, lawyers, and neutrals. Few studies have included observations of sessions or long-term follow-up with disputants. Many studies do not include a comparison group of non-ADR cases; those that do seldom assign cases randomly to ADR and non-ADR groups. Drawing conclusions across studies is further complicated because different studies use different non-ADR comparison groups: Some use only cases settled via negotiation, others use only tried cases, and still others include all disposition types.
The Efficacy of ADR
In divorce, small claims, and community mediation, from 50% to 85% of cases settle. In general jurisdiction civil cases, from one fourth to two thirds of cases that use mediation, neutral evaluation, or arbitration settle. A majority of studies find that the settlement rate in mediation cases is higher than in comparable cases that do not use mediation, but other studies find no differences between mediated and litigated cases in settlement rates. Studies of court-connected arbitration tend to find a lower settlement rate in arbitrated cases than in comparable nonarbitrated cases. Because arbitration hearings divert cases from settlement but not from trial, arbitration increases disputants’ access to a hearing on the merits. Studies generally find that judicial settlement conferences do not increase the rate of settlement but that lawyers think they do.
Some studies find that compared with traditional litigation, ADR resolves cases faster; reduces discovery, motions, pretrial conferences, and trials; and reduces disputants’ legal fees and litigation costs. Other studies, however, find no differences between ADR and litigation in these measures. No study has found that judicial settlement conferences resolve cases faster. In mediation and neutral evaluation, time and cost savings are more likely in cases that settle than in cases that do not settle. In court-connected arbitration, however, cases that settle before the arbitration hearing often are not resolved more quickly than cases resolved by the arbitrator’s decision; cases that appeal the decision take substantially longer to conclude, regardless of whether they eventually settle or are tried.
Most disputants and lawyers who participate in ADR have highly favorable assessments of the process (e.g., they feel that it was fair and gave them sufficient opportunity to present their case), the third party (e.g., they think that she or he was neutral, understood their views and the issues, did not pressure them to settle, and treated them with respect), and the outcome (e.g., they feel that it was fair, and they were satisfied with it). Thus, ADR tends to get high ratings on procedural justice and its correlates. Whether ADR participants’ assessments are as favorable as or more favorable than those of non-ADR participants, however, varies across studies and settings. In most settings, disputants in mediation who settle have more favorable assessments than disputants who do not settle. Disputants in arbitration who have a hearing have more favorable views of the process, but not necessarily of the outcome, than disputants who settle before the arbitration hearing.
Studies involving divorce and small claims cases tend to find that disputants in mediated cases report a higher rate of compliance with the outcome, less anger, improved relationships, and less relitigation than disputants in litigation. These benefits associated with divorce mediation tend to disappear after several years, although disputants remain more satisfied. In general civil cases, most studies find no differences between mediated and nonmediated cases in terms of postresolution compliance or relationships. Several studies suggest that postresolution outcomes are less strongly influenced by whether disputants use mediation or litigation than by antecedent characteristics of the disputants, such as their ability to pay or their level of anger or adjustment.
The few studies that have examined the relative efficacy of different ADR processes tend to find no differences among them. However, because these studies do not involve the random assignment of cases to processes, these findings might simply reflect the “correct” matching of disputes to processes for which they are best suited.
Despite ADR performing at least as well as litigation, there is relatively little voluntary use of ADR after disputes have arisen. This appears to say less about disputants’ or lawyers’ preferences regarding dispute resolution procedures and more about the logistical, strategic, cognitive, and economic barriers to using ADR once litigation has begun. Rules designed to overcome these barriers by requiring lawyers to inform their clients about ADR or to discuss ADR with opposing counsel have had mixed success in increasing early settlements or voluntary ADR use.
The Effect of Process, Third-Party, and Dispute Characteristics
The mixed research findings regarding ADR’s efficacy might reflect, in part, differences across studies in how the ADR process was implemented or in the mix of disputes handled. A small number of studies have examined the relationships between ADR outcomes and characteristics of the process, third party, and disputes, though few have systematically varied these characteristics.
Studies find that several benefits are associated with holding the ADR session sooner after the legal complaint is filed: Cases are resolved faster; fewer motions are filed; and, as found in some studies, more cases settle. Delaying ADR until after discovery is substantially completed is not associated with an increased rate of settlement. Most studies find no differences in settlement rates or participants’ assessments associated with whether mediation use is voluntary or mandatory, but some studies find that voluntary use of mediation is associated with more favorable outcomes.
A majority of studies find that when the mediator or neutral evaluator plays a more active role during the session in helping disputants identify issues and options, settlement is more likely and disputants have more favorable assessments of the process. Mediator actions associated with these positive outcomes include actively structuring the process, getting disputants to express their views and to assess different options, and providing their own views about the disputants’ positions and proposals. If the mediator recommends a specific settlement, however, disputants are more likely to settle but less likely to view the mediation process as fair. Only a few studies have examined whether the third party’s general approach or specific actions appear to be differentially effective in different types of disputes. These studies show, for instance, that some mediator approaches that are effective in resolving less intense conflicts are not effective in resolving more intense conflicts and some approaches that are effective in divorce cases are not effective in general civil cases.
Greater third-party familiarity with the substantive issues in the case is related to lawyers’ viewing the arbitration process and decision as more fair. In mediation, the third party’s substantive expertise is not related to settlement or to disputants’ or lawyers’ assessments. How well the mediator understood the disputants’ views, however, is related to their assessments. Disputants’ and lawyers’ perceptions that the third party was not biased and was prepared for the session are associated with favorable assessments of the process and outcome of all ADR processes.
Dispute and Disputant Characteristics
Research examining which dispute and disputant characteristics are associated with better outcomes has been conducted primarily on the mediation process. The contentiousness of the disputants’ relationship impedes settlement in divorce and community mediation but not in general civil and small claims mediation, which involves few intimate or ongoing relationships. In addition, divorcing couples with a more contentious relationship are more likely to be dissatisfied with the settlement, remain bitter, and bring subsequent lawsuits.
Across mediation settings, other indicators of more intense conflicts, such as poor communication, greater disparity in the disputants’ positions, and the denial of liability, also are associated with a lower likelihood of settlement.
Not surprisingly, the greater the disputants’ motivation to settle and the less disparity between the disputants in that motivation, the more likely they are to settle. Disputants who misunderstand the goals of mediation or whose goals are inconsistent with those of mediation are less satisfied and less likely to settle. Similarly, lawyers whose expectations about how the neutral case evaluation session will be conducted are closer to the approach actually used are more satisfied with the process. Disputants who are better prepared for mediation by their lawyers tend to be more likely to settle and to feel that the process is fair, perhaps because preparation modifies their expectations or their actions during the session.
Few studies have examined how antecedent dispute characteristics affect what goes on during the mediation session and how that, in turn, affects outcomes. These studies find that disputants who have a less contentious relationship or who are more motivated to settle are more likely to be cooperative and to engage in productive joint problem solving during mediation. These behaviors, in turn, are associated with disputants being more likely to settle, view the mediation process and outcome as fair, and report improved relationships. More active disputant participation during mediation also is associated with more favorable outcomes. The few studies that have examined lawyers’ impact on mediation suggest that how cooperative the lawyers are during the session is related to settlement and to disputants’ assessments of the process.
The research findings are mixed with regard to whether or not there is a relationship between settlement and dispute complexity, which has been defined in different studies as the number of disputants, the number of disputed issues, or the complexity of the issues in dispute. A majority of mediation studies find that legal case type categories (e.g., tort, contract) and the size of the monetary claim are not related to settlement or to disputants’ assessments of mediation. A majority of arbitration studies, however, find that disputants are more likely to appeal the arbitrator’s decision in cases involving larger dollar claims and in tort rather than contract cases.
- Legal Negotiation
- Procedural Justice
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