The Alternative Dispute Resolution Act Exposed

The Alternative Dispute Resolution Act was adopted by ALEC's Health and Human Services Task Force in 1992, amended for the 1995 Sourcebook of American State Legislation, and amended again in 2002. According to ALEC.org, it was re-approved by the Board of Directors on January 28, 2013. Any language removed from the original version is indicated with strikethrough text and additions are given in bold. (Accessed on 2/10/2016).

ALEC Bill Text

Summary

This Act promotes voluntary nonbinding arbitration or mediation as an alternative to formal court proceedings. This bill would provide parties to a lawsuit with choices for resolving their disputes that save time and money compared to formal court proceedings. The use of alternative dispute resolution would also save taxpayers money and reduce demands on the over-burdened judicial system. The Multi-Door Courthouse Act provides parties to a lawsuit with choices for resolving their dispute that save time and money, when compared to formal court proceedings, by encouraging alternative dispute resolution (ADR) procedures – limited discovery, confidential proceedings, and nonjudicial assistance in evaluating the parties’ claims. The Alternative Dispute Resolution Act permits the parties to choose from a variety of alternative dispute mechanisms, including early neutral evaluation, mediation, arbitration, minitrial, and summary jury trial. Although the parties may elect from an assortment of ADR procedures, they are not required to do so. This voluntary approach avoids the danger of creating an additional, and costly, barrier to justice in those instances when ADR is inappropriate.

Model Legislation

{Title, enacting clause, etc.}

Section 1. This act is entitled shall be known and may be cited as the Alternative Dispute Resolution Act.

Section 2. {Creation of Multi-Door Courthouses for Use of Alternative Dispute Resolution Procedures.}

(A)

(1) The Chief Justice shall establish within each district court of the lower courts a MultiDoor Courthouse general jurisdiction an alternative dispute resolution program not later than six months after the effective date of this Act. Such programs shall include an alternative dispute resolution plan.

(2) The alternative dispute resolution plan shall include but not be limited to:

(a) procedures for limited discovery

(b) confidentiality of proceedings as to possible subsequent pretrial and trial actions; and

(c) the selection, use, and payment of non-judicial personnel, also referred to as neutrals, mediators, or arbitrators, who may be selected to conduct alternative dispute resolution procedures.

(3) The plan shall also establish standards for determining which cases are appropriate for alternative dispute resolution, considering such factors as whether factual issues predominate over legal issues, whether the case involves complex or novel legal issues requiring judicial action, and any other factors the court considers relevant.

(4) Each judge shall conduct a conference with counsel within 120 days after an action is commenced or a complaint is filed to review non-binding, voluntary alternative dispute resolution procedures that may be used in lieu of litigation to resolve the claims in controversy.

(5) Each plan shall authorize the parties, if they so choose, to utilize non-binding alternative dispute resolution procedures that may be used in lieu to of litigation to resolve the claims in controversy.

(a) These non-binding, voluntary alternative dispute resolution procedures shall include, but are not limited to, early neutral evaluation, mediation, outcome-determinative mediation, mini-trials, summary jury trials, and arbitration.

(b) Outcome-determinative mediation under this section means a procedure in which either a single mediator or a panel of three mediators selected by or under the direction of a court provides the parties with a binding determination as to the outcomes of the case. dollar amount determination that the mediator(s) believe(s) would be awarded if the case were tried.

(6) The parties may choose to utilize the alternative dispute resolution procedures and neutrals made available under by the Act court or may, if all parties and the court agree, utilize the services or of other neutrals not designated in accordance with the Act. court’s alternative dispute resolution plan.

(7) Each plan shall also provide that if the parties choose outcome-determinative mediation and in the event a determination is reached:

(a) any party may give notice that it intends to accept that determination, while the other parties remain free to reject the determination and continue with the litigation;

(b) a plaintiff in an action seeking monetary relief, who rejects the determination and fails to obtain a final judgment that is at least 10 percent greater than the determination, shall pay the defendant’s costs and reasonable attorneys fees incurred after the rejection of the determination; and

(c) a defendant, in an action seeking monetary relief, who rejects the determination and fails to obtain a final judgment that is at least 10 percent less than the determination shall pay the plaintiff’s reasonable costs incurred and reasonable attorneys’ fees after rejection of the determination.

(B) {Implementation.} In carrying out its plan, the Multi-Door Courthouse court is authorized to utilize the volunteer services of non-judicial personnel (also known as neutrals, mediators, or arbitrators) to conduct alternative dispute resolution procedures. The courts are also authorized to establish and pay the amount of compensation, if any, that each neutral shall receive for services rendered in each case.

Section 3. {Severability Clause.}

Section 4. {Repealer Clause.}

Section 5. {Effective Date.}

Adopted by the HHS Task Force in 1992. Ammended for the 1995 Sourcebook of American State Legislation and again in 2002.