ALTERNATIVE DISPUTE RESOLUTION
ADR in the COURTS
Professor John Barkai
William S. Richardson School of Law
University of Hawaii at Manoa
2515 Dole Street, Honolulu, Hawaii 96822
Phone (808) 956-6546
ADR IN HAWAII and THE COURTS
Hawaii has been a leader in the field of ADR.
The Neighborhood Justice Center of Honolulu (NJC), a non-profit community mediation
center, was founded in 1979 and was the first major organization involved in mediation
and other non-binding ADR processes in Hawaii. NJC has been called the "primal mud"
from which ADR evolved in Hawaii. Professor Barkai was in the first group of people
trained to mediate at NJC, which is now called the Mediation Center of the Pacific (MCP).
In 1985 the Program for Conflict Resolution (PCR), an organization involved in research
and ADR training, was founded at the University of Hawaii. Professor Barkai is a
founding member of PCR.
In 1985, Former Chief Justice Herman Lum founded what was then the Program for
Alternative Dispute Resolution. In 1989, the Legislature created CADR, see HRS 613,
and the Program for ADR became the Center for ADR (CADR). CADR designs ADR
systems, assists to resolve disputes, systematically promotes ADR, and oversees the
mediation services provided to the judiciary by various community mediation centers on
ADR is used at all levels of the judiciary. Mediation programs range from mediation of
cases in small court to an appellate mediation program for cases in the Intermediate
Court of Appeals and the Supreme Court.
The American Arbitration Association is a national non-profit ADR organization
(www.adr.org) which used to have a regional office in Honolulu. Historically, AAA has
concentrated mainly on arbitration, but has increasingly used mediation. In the early
years of ADR in Hawaii, the AAA was the primary ADR provider for ADR in lawsuits.
Dispute Prevention and Resolution (DPR) is now the major ADR provider in the State of
Hawaii. Keith Hunter, formerly the Regional Director of the American Arbitration
Association's Hawaii office is the CEO and a major provider of ADR services in Hawaii.
Visit the web site at www.dpr4adr.com
There is a series of statutes, court rules, and informal policies that govern ADR and the
court related ADR processes in Hawaii. The most important rule is probably circuit Court
Rule 12, which governs settlement conferences and other ADR requirements.
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Alternative Dispute Resolution (ADR)
Circuit Court Rule 12
1. SCOPE. All civil cases in the Circuit Court.
2. DEADLINE FOR PRETRIAL STATEMENT. The Plaintiff must file and serve a
Pretrial Statement within eight (8) months after the complaint has been filed.
Rule 12 (b).
3. CONTENTS. The Pretrial Statement shall include the following:
o Verify that each party (or lead counsel) has met face-to-face with the
opposing party (or lead counsel) to discuss ADR options. Rule 12 (b)
o Identify the ADR process to which the parties have agreed, or if any party
objects to ADR, indicate which party and the reasons for objecting. Rule
12 (b) (7).
4. STATUS CONFERENCE. Within 60 days of the initial Pretrial Statement, the
plaintiff shall schedule a trial setting status conference. Rule 12 (c).
5. ADR OPTIONS DISCUSSED WITH JUDGE. The Civil Administrative Judge, or
his or her designee, shall conduct the status conference which will be attended
by each party (or lead counsel), and at which the Judge shall discuss ADR
options. Rule 12 (c) (1) (B).
6. COURT MAY ORDER ADR. The Court, in its discretion or upon motion by a
Party, may order the parties to participate in an ADR process (except binding
arbitration) subject to conditions imposed by the Court. Rule 12.2.
7. COMPLEX CASES. The Rules also establish criteria for designation and
handling of complex cases. The judge assigned to a complex case shall
determine deadlines for the parties including a meeting with the Judiciary Center
for Alternative Dispute Resolution. Rule 12 (k) (3) (i) (aa).
Source: DPR web page
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HAWAII CIRCUIT COURT RULE
Rule 12. READY CIVIL CALENDAR.
(b) Pretrial Statement. No case shall be placed on the "Ready Calendar" unless a
"Pretrial Statement" has been filed and served in accord with Rule 5 of the Hawai`i
Rules of Civil Procedure. The pretrial statement shall be filed within 8 months after a
complaint has been filed or within any further period of extension granted by the court.
It shall contain the following information:
(6) A statement that each party, or the party's lead counsel, conferred in person with the
opposing party, or with lead counsel for each opposing party, in a good faith effort to
limit all disputed issues, including outstanding discovery, and considered the feasibility
of settlement and alternative dispute resolution options. A face-to-face conference is
required under these rules and shall not be satisfied by a telephone conference or
written correspondence. The face-to-face conference shall take place in the judicial
circuit where the action is pending unless otherwise agreed by counsel and/or the
(7) A statement identifying any party who objects to alternative dispute resolution and
the reasons for objecting. If the parties have agreed to an alternative dispute resolution
process, a statement identifying the process.
(c) Selection of Trial Date and Consideration of Alternative
(1) Except in cases which have been designated as complex litigation, within 60 days of
the filing of the initial pretrial statement, the plaintiff in all cases filed in the First Circuit
shall schedule a trial setting status conference that shall be attended by each party or
each party's lead counsel and shall be conducted by the Civil Administrative Judge, or
the Civil Administrative Judge's designee. The Civil Administrative Judge, or designee,
(B) Discuss alternative dispute resolution options. The court may consider other
matters which may be conducive to the just, efficient and economical
determination of the case.
Rule 12.1. CIVIL SETTLEMENT CONFERENCE; SETTLEMENT CONFERENCE
(a) Settlement Conference. A settlement conference may be ordered by the court
at any time before trial. Any party may also file a request for settlement conference at
any time prior to trial. A settlement conference in civil cases shall be subject to the
(1) If a party settles or otherwise disposes of any action prior to a scheduled
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settlement conference, the party shall immediately notify the judge who scheduled the
(2) Each party to the action shall attend the conference or be represented by an
attorney or other representative who has authority to settle the case;
(3) For each party represented by counsel an attorney who is assigned to try the
case shall attend the settlement conference. It is expected that the attorney will have
become familiar with all aspects of the case prior to the conference;
(4) Each party to the action shall have thoroughly evaluated the case and shall
have discussed and attempted to negotiate a settlement through an exchange of written
bona fide and reasonable offers of settlement prior to the conference;
(5) The judge conducting the settlement conference may, at the conclusion of said
conference, continue said conference to another time and date, and from time to time
thereafter for continued settlement negotiations if he has reason to believe a settlement
can thereby be effectuated;
(6) Sanctions. The failure of a party or his attorney to appear at a scheduled
settlement conference, the neglect of a party or his attorney to discuss or attempt to
negotiate a settlement prior to the conference, or the failure of a party to have a person
authorized to settle the case present at the conference shall, unless a good cause for
such failure or neglect is shown, be deemed an undue interference with orderly
procedures. As sanctions, the court may, in its discretion:
(i) Dismiss the action on its own motion, or on the motion of any party or hold a
party in default, as the case may be;
(ii) Order a party to pay the opposing party's reasonable expenses and attorneys'
(iii) Order a change in the calendar status of the action;
(iv) Impose any other sanction as may be appropriate.
(b) Settlement Conference Statement. In all civil cases, including those which
have been designated as Complex Litigation, a settlement conference statement shall
be filed not less than 5 working days prior to the date of the settlement conference. The
settlement conference statement shall be filed with the clerk of court and a file-marked
copy shall be delivered to the office of the judge conducting the settlement conference,
and copies served upon all other parties. The statement shall set forth, wherever
applicable, the following information:
(1) For the plaintiff:
(i) The name, age, marital status and occupation of all non-corporate plaintiffs;
(ii) The relief claimed by each plaintiff;
(iii) A factual summary of the case;
(iv) Plaintiff's theories of liability against each defendant;
(v) The name, address, field of expertise and summary of substance of testimony
of each expert witness who supports plaintiff's theories of liability;
(vi) The name, address and summary of substance of testimony of all other
witnesses who support plaintiff's theories of liability;
(vii) A statement of plaintiff's position on general damages, including a statement
of all injuries and damages claimed by plaintiff, together with the names of plaintiff's
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expert witnesses, including doctors, and copies of their reports;
(viii) Plaintiff's claim of special damages including an itemized statement of all
special damages claimed by plaintiff;
(ix) The name, address, field of expertise and summary of substance of testimony
of each expert witness who supports the plaintiff's claim of special damages;
(x) The name, address and summary of substance of testimony of all other
witnesses who support plaintiff's position on damages; and
(xi) A statement of the status of settlement negotiations.
(2) For the defendants:
(i) The age, marital status, occupation and corporate or other legal status of each
(ii) The name of applicable insurance carriers and the stated policy limits;
(iii) A factual summary of the case;
(iv) The defense to each of plaintiff's theories of liability;
(v) The name, address, field of expertise and summary of substance of testimony
of each expert witness who supports the defenses to plaintiff's theories of liability;
(vi) The name, address and summary of substance of testimony of all other
witnesses who support the defenses to plaintiff's theories of liability;
(vii) A statement of the defense position on general damages, including a
statement of all injuries and damages disputed by defendant, together with the names
of defendant's expert witnesses, including doctors, and copies of their reports;
(viii) The defendant's position on special damages including a statement of which
special damages are disputed;
(ix) The name, address, field of expertise and summary of substance of testimony
of each expert witness who supports the defense position on special damages;
(x) The name, address and summary of substance of testimony of other witnesses
who support the defense position on damages; and
(xi) A statement of the status of settlement negotiations.
(c) Confidential Settlement Conference Letter. At least five (5) working days
before the settlement conference, each party shall deliver directly to the settlement
conference judge a confidential settlement conference letter, which shall not be filed or
served upon the other parties. The confidential settlement conference letter shall not be
made a part of the record and confidential information contained in the letter shall not
be disclosed to the other parties without express authority from the party submitting the
letter. The court will destroy the confidential settlement conference letter no later than
entry of final judgment in the case.
The confidential settlement conference letter shall include a forthright evaluation of
the parties' likelihood of prevailing on the claims and defenses, a description of the
major issues in dispute, including damages, counsel's good faith evaluation of the case,
and other information requested by the court.
Rule 12.2. ALTERNATIVE DISPUTE RESOLUTION.
The court, in its discretion or upon motion by a party, may order the parties to
participate in an alternative dispute resolution process subject to conditions imposed by
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the court. (Added September 11, 1996, effective January 1, 1997.)
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THE ABC'S OF ADR: A DISPUTE RESOLUTION GLOSSARY
13 Alternatives to High Cost Litigation 147
Center for Public Resources Institute for Dispute Resolution
Experts know that ADR encompasses a wide range of practices for managing and
quickly resolving disputes at modest cost and with minimal adverse impact on
commercial relationships. These processes, marked by confidentiality when desired,
significantly broaden dispute resolution options beyond litigation or traditional
Some ADR procedures, such as binding arbitration and private judging, are similar
to expedited litigation in that they involve a third-party decision- maker with authority to
impose a resolution if the parties so desire. Other procedures, such as mediation and
the minitrial, are collaborative: a neutral third party helps a group of individuals or
entities with divergent views to reach a goal or complete a task to their mutual
Arbitration, mediation and the minitrial tend to be the mechanisms most often used
and, for many people, are synonymous with the term, "ADR." But to respond to specific
needs, parties often craft hybrid procedures that combine elements of one or more
dispute resolution methods.
The following glossary is designed to help parties communicate about this rapidly
changing field. Definitions are not standardized, but flexible and creative like ADR itself.
And with all aspects of ADR, it is most important not that the parties use exactly the
same terms, but that they understand each other.
We have divided the glossary into private and court-related ADR processes. Most
of these working definitions are derived from prior publications of the CPR Institute for
Dispute Resolution, a number of which address particular ADR processes in depth....
PRIVATE ADR PROCESSES
Arbitration. The most traditional form of private dispute resolution. It can be
"administered" (managed) by a variety of private organizations, or "non-administered"
and managed solely by the parties. It can be entered into by agreement at the time of
the dispute, or prescribed in pre-dispute clauses contained in the parties' underlying
business agreement. Arbitration can take any of the following forms:
Binding Arbitration. A private adversarial process in which the disputing parties
choose a neutral person or a panel of three neutrals to hear their dispute and to render
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a final and binding decision or award. The process is less formal than litigation; the
parties can craft their own procedures and determine if any formal rules of evidence will
apply. Unless there has been fraud or some other defect in the arbitration procedure,
binding arbitration awards typically are enforceable by courts and not subject to
Non-binding Arbitration. This process works the same way as binding arbitration
except that the neutral's decision is advisory only. The parties may agree in advance to
use the advisory decision as a tool in resolving their dispute through negotiation or
"Baseball" or "Final-Offer" Arbitration. In this process, used increasingly in
commercial disputes, each party submits a proposed monetary award to the arbitrator.
At the conclusion of the hearing, the arbitrator chooses one award without modification.
This approach imposes limits on the arbitrator's discretion and gives each party an
incentive to offer a reasonable proposal, in the hope that it will be accepted by the
decision-maker. A related variation, referred to as "night baseball" arbitration, requires
the arbitrator to make a decision without the benefit of the parties' proposals and then
to make the award to the party whose proposal is closest to that of the arbitrator.
"Bounded" or "High-Low" Arbitration. The parties agree privately without informing
the arbitrator that the arbitrator's final award will be adjusted to a bounded range.
Example: P wants $200,000. D is willing to pay $70,000. Their high-low agreement
would provide that if the award is below $70,000, D will pay at least $70,000; if the
award exceeds $200,000, the payment will be reduced to $200,000. If the award is
within the range, the parties are bound by the figure in the award.
Incentive Arbitration. In non-binding arbitration, the parties agree to a penalty if
one of them rejects the arbitrator's decision, resorts to litigation, and fails to improve his
position by some specified percentage or formula. Penalties may include payment of
attorneys' fees incurred in the litigation.
Confidential Listener. The parties submit their confidential settlement positions to a
third-party neutral, who without relaying one side's confidential offer to the other,
informs them whether their positions are within a negotiable range. The parties may
agree that if the proposed settlement figures overlap, with the plaintiff citing a lower
figure, they will settle at a level that splits the difference. If the proposed figures are
within a specified range of each other (for example 10 percent), the parties may direct
the neutral to so inform them and help them negotiate to narrow the gap. And if the
submitted numbers are not within the set range, the parties might repeat the process.
Fact-finding. A process by which the facts relevant to a controversy are
determined. Fact-finding is a component of other ADR procedures, and may take a
number of forms.
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In neutral fact-finding, the parties appoint a neutral third party to perform the
function, and typically determine in advance whether the results of the fact-finding will
be conclusive or advisory only.
With expert fact-finding, the parties privately employ neutrals to render expert
opinions that are conclusive or non-binding on technical, scientific or legal questions. In
the latter, a former judge is often employed.
Federal Rules of Evidence 706 gives courts the option of appointing neutral expert
fact-finders. And while the procedure was rarely used in the past, courts increasingly
find it an effective approach in cases that require special technical expertise, such as
disputes over high-technology questions. The neutral expert can be called as a witness
subject to cross-examination.
In joint fact-finding, the parties designate representatives to work together to
develop responses to factual questions.
Mediation. A voluntary and informal process in which the disputing parties select a
neutral third-party to assist them in reaching a negotiated settlement. Parties can
employ mediation as a result of a contract provision, by private agreement made when
disputes arise, or as part of a court-annexed program that diverts cases to mediation.
Unlike a judge or arbitrator, a mediator has no power to impose a solution on the
parties. Rather, mediators assist parties in shaping solutions to meet their interests and
objectives. The mediator's role and the mediation process can take various forms,
depending on the nature of the dispute and the approach of the mediator. The mediator
can assist parties to communicate effectively; can identify and narrow issues; crystallize
each side's underlying interests and concerns; carry messages between the parties;
explore bases for agreement and the consequences of not settling; and develop a
cooperative, problem- solving approach.
By learning the confidential concerns and positions of all parties, the mediator
often can identify options beyond their perceptions. The process is sometimes referred
to as "facilitation" to structure participation in the mediation process, or "conciliation" in
the international arena.
The mediator's role can take various forms. Some mediators, who favor a
"facilitative" style, encourage parties to generate their own settlement options, and will
not suggest settlement terms. At the other end of the spectrum are "evaluative"
mediators, who will propose settlement options and try to persuade parties to make
To guide negotiations in major commercial disputes, parties sometimes ask the
mediator to assume an evaluative role. The mediator might assess the merits of claims
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or defenses, liability or damages, or predict the likely outcome of the case in court.
Generally, mediators need substantive law background or expertise to make such
Med-Arb. A short-hand reference to the procedure mediation-arbitration. In
med-arb, the parties agree to mediate with the understanding that any issues not
settled through the mediation will be resolved by arbitration using the same individual to
act both as mediator and arbitrator. However, that choice may have a chilling effect on
full participation in the mediation portion. A party may not believe that the arbitrator will
be able to discount unfavorable information learned in mediation when making the
Co-Med-Arb addresses the problem by having two different people perform the
roles of mediator and arbitrator. Jointly, they preside over an information exchange
between the parties, after which the mediator works with the parties in the absence of
the arbitrator. If mediation fails to achieve a settlement, the case (or any unresolved
issues) can be submitted to the arbitrator for a binding decision.
Minitrial. A structured process with two distinct components. Parties engage in an
information exchange that provides an opportunity to hear the strengths and
weaknesses of one's own case as well as the cases of the other parties involved,
before negotiating the matter.
In the minitrial, an attorney for each party presents an abbreviated version of that
side's case. The case is heard not by a judge, but by high-level business
representatives from both sides with full settlement authority. It may be presided over
by these representatives with or without a neutral advisor, who can regulate the
information exchange. Following the presentations, the parties' representatives meet,
with or without the neutral, to negotiate a settlement. Frequently, the neutral will serve
as a mediator during the negotiation phase or be asked to offer an advisory opinion on
the potential court outcome, to guide negotiators.
Multi-Party Coordinated Defense. A coordinated joint defense strategy in which a
neutral facilitator helps multiple defendants negotiate, organize, and manage
cooperative joint-party arrangements that are ancillary to the main dispute. In the
process, they streamline the steps toward resolution. Coordinated defense efforts
include agreements to: limit infighting among defendants; use joint counsel and experts;
assign and share discovery and research tasks; coordinate and share the results of
procedural maneuvers; and apportion liability payments, should they be imposed.
Multi-Step ADR. Parties may agree, either when a specific dispute arises, or earlier
in a contract clause between business venturers, to engage in a progressive series of
dispute resolution procedures. One step typically is some form of negotiation,
preferably face-to-face between the parties. If unsuccessful, a second tier of negotiation
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between higher levels of executives may resolve the matter. The next step may be
mediation or another facilitated settlement effort. If no resolution has been reached at
any of the earlier stages, the agreement can provide for a binding resolution--through
arbitration, private adjudication or litigation.
One form of multi-step ADR is the wise man procedure, typically used when
problems arise in long-term partnerships such as those in the oil and gas industry.
Sometimes called "progressive negotiation" or "mutual escalation," this procedure
refers matters first to a partnership committee which oversees the day-to-day
operations of the project. If the problem cannot be resolved at that level, the wise-man
option--the next ADR step--is employed.
The wise men (or women) are respected senior executives of each company who
are uninvolved in the project. These officials are given a fairly short time frame
(sometimes just 30 days) to investigate the dispute. If that fails, the matter goes to a
third step, usually binding arbitration. While pioneered in the oil industry, the wise man
approach could also be useful in the high- technology field and other areas involving
close and continuing business relationships.
Negotiated Rule-Making. Also known as regulatory negotiation, this ADR method
is an alternative to the traditional approach of U.S. government agencies to issue
regulations after a lengthy notice and comment period. In reg-neg, as it is called,
agency officials and affected private parties meet under the guidance of a neutral
facilitator to engage in joint negotiation and drafting of the rule. The public is then asked
to comment on the resulting, proposed rule. By encouraging participation by interested
stakeholders, the process makes use of private parties' perspectives and expertise, and
can help avoid subsequent litigation over the resulting rule.
Ombudsperson. An organizational dispute resolution tool. The ombudsperson is
appointed by an institution to investigate complaints within the institution and either
prevent disputes or facilitate their resolution. The ombudsperson may use various ADR
mechanisms such as fact-finding or mediation in the process of resolving disputes
brought to his or her attention.
Partnering. Typically used as a dispute-prevention method for large construction
projects, this method is capable of being transposed in other settings, particularly in
joint ventures. Before the work starts, parties to the project generally assemble for a
several-day retreat away from their organizations. With the help of a third-party neutral,
they get to know each other; discuss some of the likely rough spots in the project; and
even settle on a process to resolve misunderstandings and disputes as the project
Predispute ADR Contract Clause. A clause included in the parties' business
agreement to specify a method for resolving disputes that may arise under that
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agreement. It may refer to one or more ADR techniques, even naming the third party
that will serve as an arbitrator or mediator in the case. Predispute agreements requiring
arbitration of consumer disputes, or entered into as a condition of employment, have
generated substantial backlash lately from people who argue that these clauses are
Two-Track Approach. Involves use of ADR processes or traditional settlement
negotiations in conjunction with litigation. Representatives of the disputing parties who
are not involved in the litigation are used to conduct the settlement negotiations or ADR
procedure. The negotiation or ADR efforts may proceed concurrently with litigation or
during an agreed-upon cessation of litigation. This approach is particularly useful in
cases when: it may not be feasible to abandon litigation while the parties explore
settlement possibilities; or as a practical matter, the specter of litigation must be present
in order for the opposing party to consider or agree to an alternative mechanism. It also
is useful when the litigation has become acrimonious or when a suggestion of
settlement would be construed as a sign of weakness.
COURT ADR PROCESSES
Court-Annexed Mediation. In mediation, a neutral third party--the mediator--
facilitates negotiations among the parties to help them settle. The mediation session is
confidential and informal. Disputants clarify their understanding of underlying interests
and concerns, probe the strengths and weaknesses of legal positions, explore the
consequences of not settling, and generate settlement options. The mediator, who may
meet jointly or separately with the parties, serves solely as a facilitator and does not
issue a decision or make findings of fact. A hallmark of mediation is its capacity to help
parties expand traditional settlement discussions and broaden resolution options, often
by going beyond the legal issues in controversy.
Mediation works much the same in courts and in private settings, with a few
important differences. A court mediation program may be based in the court, or may
involve referral by the court to outside ADR programs run by bar associations, nonprofit
groups, other local courts, or private ADR providers. Some courts require litigants to
use mediation in what are known as mandatory mediation programs. The purpose of
the mediation session is unchanged whether litigants enter the program voluntarily or
by court mandate. The court mediator may be a lawyer trained in mediation and
compensated by the parties, or serve as a volunteer. Judges, magistrate judges, or
court ADR professionals also serve as mediators in some court programs.
Mediation is the primary ADR process in federal, state and local courts, second
only to the traditional judicial settlement conference. Mediation has proved useful in so
many kinds of disputes that some experts favor its use in all civil cases, to improve case
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management and settlement.
In the federal system, more than 40 of the 94 district courts and almost all the
circuit courts have mediation programs using judges or lawyers as mediators. Mediation
programs are also underway in more than one-third of the state courts and in many
Early Neutral Evaluation. Like mediation, ENE is applicable to many types of civil
cases, including complex disputes. In ENE, a neutral evaluator--a private attorney
expert in the substance of the dispute--holds a several-hour confidential session with
parties and counsel early in the litigation to hear both sides of the case. Afterwards, the
evaluator identifies strengths and weaknesses of the parties' positions, flags areas of
agreement and disputes, and issues a non-binding assessment of the merits of the
Developed during the mid-1980's in the San Francisco federal court, ENE is now
used in 18 federal district courts and several state courts. Usually, attorneys trained by
the court serve as evaluators; in some courts, including the Southern District of
California, magistrate judges conduct ENE sessions.
Originally designed to make both case management and settlement more efficient,
ENE has evolved into a pure settlement device in some courts. Used this way, ENE
resembles evaluative mediation, in which the mediator uses case evaluation as a
Court-Annexed Arbitration. An adjudicatory dispute-resolution process in which
one or more arbitrators issue a non-binding judgment on the merits, after an expedited,
adversarial hearing. The arbitrator's decision addresses only the disputed legal issues
and applies legal standards. Either party may reject the non-binding ruling and proceed
Court annexed arbitration is used mainly in small- and moderate-sized tort and
contract cases, when litigation costs are often disproportionate to the amounts at stake.
Twenty-six federal district courts have established mandatory or voluntary arbitration
programs and arbitration is common in many state courts. In some courts, about a third
of all civil cases are referred to arbitration. Still, new court-annexed arbitration programs
are rare these days. Once the premier court ADR process, it has lost popularity in
recent years. Most court ADR development focuses on mediation.
Summary Jury Trial. The summary jury trial is a non-binding ADR process used to
promote settlement in trial-ready cases headed for protracted jury trials. Usually a judge
or magistrate judge presides over the SJT; occasionally, a neutral attorney conducts the
process. Part or all of a complex dispute may be submitted to a summary jury trial. After
an abbreviated hearing in which counsel present evidence in summary form, the jury
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renders an advisory verdict. Non-binding, it becomes the basis for subsequent
settlement negotiations. If the parties do not reach a settlement, the case proceeds to
Because they are costly, SJTs are used relatively rarely. Typically, the SJT is
reserved for large cases when other settlement efforts have failed and litigants differ
significantly about jury outcome.
Appellate ADR. Mediation programs have become increasingly popular among the
nation's appeals courts. Each of the 12 federal circuits either has a settlement office or
plans to open one shortly. One the state level, at least 50 appeals courts have used
mediation at some time, and approximately 25 courts currently have active programs.
Unlike trial-level ADR, which ranges from mandatory arbitration to multidoor
courthouses, appellate programs tend to look very similar. In most programs, staff
attorneys or outside lawyers conduct mandatory, pre-argument conferences in those
cases that seem most likely to settle. Some appellate programs are geared exclusively
toward settlement, while other programs also address case management and
Judge-Hosted Settlement Conferences. The most common form of ADR used in
federal and state courts is the settlement conference presided over by a judge or
magistrate judge. Almost 94 of the federal district courts use judicial settlement
conferences routinely, and nearly one-third of the courts assign this role almost
exclusively to magistrate judges.
The classic role of the settlement judge is to articulate judgments about the merits
of the case and to facilitate the trading of settlement offers. Some settlement judges
and magistrate judges also use mediation techniques in the settlement conference to
improve communication among the parties, probe barriers to settlement, and assist in
formulating resolutions. In some courts, a specific judge or magistrate judge is
designated as settlement judge. In others, the assigned judge (or another judicial officer
who will not hear the case) hosts settlement conferences at various points during the
litigation, often directly before trial.
Court Minitrial. The minitrial is a flexible, non-binding settlement process primarily
used out of court. During the past decade, some federal district judges have used their
own version of the minitrial. Like the summary jury trial, the court minitrial is a relatively
elaborate ADR method generally reserved for large disputes.
In a typical court minitrial, each side presents a shortened form of its best case to
settlement-authorized client representatives--usually senior executives. The hearing is
informal, with no witnesses and a relaxation of the rules of evidence and procedure. A
judge, magistrate judge or non-judicial neutral presides over the one- or two-day
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hearing. Following the hearing, the client representatives meet, with or without the
neutral adviser, to negotiate a settlement. At the parties' request, the neutral advisor
may assist the settlement discussions by acting as a facilitator or by issuing an advisory
opinion. If the talks fail, the parties proceed to trial.
Case Valuation ("Michigan Mediation"). This hybrid ADR process provides litigants
in trial-ready cases with a written, non-binding assessment of the case's judgment
value, delivered by a panel of three attorneys with subject- matter expertise after a very
short hearing. If the panel's valuation is accepted by all parties, the case is settled for
that amount. If any party rejects the panel's assessment, the case proceeds to trial.
Used only in the federal and state courts in Michigan, the arbitration-like valuation
process is known widely by the misnomer "Michigan Mediation." Established in the
Michigan state courts almost 20 years ago, today the process is used mainly for
money-only contract, personal injury and civil rights cases.
Multidoor Courthouse or Multi-Option ADR. This term describes courts that offer
an array of dispute resolution options or screen cases and then channel them to
particular ADR methods. Some multidoor courthouses refer all cases of certain types to
particular ADR programs, while others offer litigants a menu of options in each case.
Multidoor courthouses have been established in state courts in New Jersey, Texas,
Massachusetts, and the District of Columbia. On the federal level, courts in the Western
District of Missouri, the Northern District of California, the District of Rhode Island, and
others now have multi-option ADR.
Settlement Week. In a typical settlement week, a court suspends normal trial
activity and, aided by bar groups and volunteer lawyers, devotes itself to the mediation
of long-pending civil cases. Mediation is the mainstay ADR method in a typical
settlement week. Volunteer lawyers conduct mediations in courtrooms, conference
rooms and other areas of the courthouse. Sessions may last an hour or two, with
additional sessions held as needed. Unresolved cases return to the court's docket.
Settlement weeks are used regularly only in two federal district courts. The
process is used more widely in state courts and a few federal courts send cases to
settlement weeks sponsored by local state courts.
Private Judging. Private judging is a general term used to describe a private or
court-related process in which disputing parties empower a private individual to hear
and decide their case. The procedure may be exclusively a matter of contract between
the parties or may be undertaken in connection with an authorizing statute. When
authorized by statute, the process is sometimes referred to by the colloquial term,
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 15 -
COURT-ANNEXED ARBITRATION PROGRAM
FINAL EVALUATION REPORT
Professor John Barkai
Professor Gene Kassebaum
During the past few years, virtually all state and federal jurisdictions have
considered various alternative dispute resolution (ADR) methods to treat the two major
problems with their court systems: high cost and excessive delay. Court-annexed
arbitration is one of the most popular innovations. Arbitration programs are currently
operating in at least twenty states and ten United States Federal District Courts.
Program Description and Goals
Hawaii's Court Annexed Arbitration Program (CAAP) is a mandatory, non-binding
arbitration procedure for tort cases with a probable jury award of $150,000 or less. The
program has the highest dollar jurisdiction of any mandatory state arbitration program in
the country. Approximately 1,500 such Hawaii tort cases are eligible for CAAP each
The major goals of the Hawaii arbitration program are to:
1) reduce costs for private litigants by managing and reducing pretrial discovery;
2) move cases through the courts at a faster pace;
3) provide litigants with a fair, just, and satisfactory "day-in-court;"
4) encourage early settlements; and
5) prevent backlogs and delays.
CAAP seeks to achieve these goals by eliminating unnecessary pretrial discovery
and setting time deadlines for arbitration. The arbitrators are volunteer lawyers with five
or more years of practice experience. The program encourages the early settlement of
cases and yet offers litigants a low-cost "day-in-court" in the form of an arbitration
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 16 -
hearing. Litigants who are not satisfied with the arbitration award may "appeal" the
award and request a trial de novo. The case is then returned to the regular litigation
track and moves toward trial.
Researchers from the University of Hawaii's School of Law and Department of
Sociology collected data on CAAP cases in the First Circuit from when the program
began in 1986 until late 1991. During that time period more than 4,500 First Circuit tort
cases entered CAAP and over 3,300 terminated. Data for the evaluation came
primarily from surveys of lawyers and the case record databases of the First Circuit
Court and the Arbitration Administrator. Surveys to lawyers and arbitrators were the
heart of the evaluation process. Nearly 5,000 surveys were sent out and over 3,000
surveys were returned. The evaluation design randomly assigned approximately one-
half of the cases to CAAP and the other half to a comparison group that went through
the regular litigation process. In every fourth CAAP case that settled and in every
CAAP award, all lawyers and the arbitrator were surveyed when the case closed.
Overview of Critical Evaluation Issues
The major goals of CAAP are 1) to reduce litigant costs, 2) to increase the pace of
disposing of tort cases, and 3) to improve or at least maintain the level of satisfaction
for litigants and attorneys.
A. Litigation Costs
The high cost of litigation is often cited as the number one problem with American
courts. The Hawaii program may be the only arbitration program in the country that has
made the reduction of litigation costs its major goal. The plaintiff's and defendant's
costs of litigating are called "private" litigant costs. On the other hand, the costs of
maintaining the court and the costs of processing the cases through the court are called
"public" litigation costs. CAAP was designed primarily to reduce the litigation costs of
private parties, although it also may reduce public costs. Public cost savings are most
likely to be time savings for judges and other court personnel.
Litigation costs for private parties in a lawsuit are comprised of two components:
(1) pretrial discovery costs, and (2) lawyers' fees. CAAP was designed to reduce
pretrial discovery, and thereby reduce litigation costs. The evaluation indicates that
CAAP has significantly reduced pretrial discovery expenses for both plaintiffs and
defendants. In CAAP the average plaintiff saves $496 in discovery expenses and the
average defendant saves $266 in discovery expenses. It has also reduced defense
lawyers' fees by an average of $159 per defendant. Plaintiffs' lawyers' fees are
unchanged because these lawyers work by contingent fees.
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 17 -
B. The Pace of Litigation
The slow pace of litigation is considered to be the second major problem in
American courts. Increasing the pace of litigation is a major goal of virtually every
arbitration program. The problem is often referred to as pretrial delay even though
most cases end in voluntary settlements between the parties and not end in trials.
An analysis of court records indicates that CAAP is more than four months faster
(133 days) than regular litigation, which is a 29 percent increase in the pace of litigation.
The majority of lawyers who were surveyed also believed that their CAAP case
terminated sooner than if the same case had been in regular litigation.
CAAP rules provide a nine-month deadline for the filing of arbitration awards.
Over half of CAAP settlements do make the nine-month (270 day) deadline, but only 10
percent of the awards do.
C. Satisfaction with the CAAP Process
If any arbitration program is going to be successful, it must be acceptable to the
1. Satisfaction with the Program
The majority of lawyers were satisfied with CAAP. Most lawyers indicated that
they were very satisfied with how their case was handled in regular litigation. They
were more satisfied with settlements than awards. Defense lawyers were less satisfied
with both settlements and awards than were plaintiffs' lawyers. Lawyers who handled
the most cases in CAAP were the least satisfied with CAAP.
2. Satisfaction with the Arbitrators
Although there have been persistent, informal concerns about the quality of the
arbitrators, responses to the surveys indicate an almost overwhelming endorsement of
the arbitrators who are actually appointed to the cases. The average arbitrator had
14.6 years of law practice experience.
Caveat to Comparing CAAP with Regular Litigation
There is one caveat to the conclusion that CAAP is faster and less expensive then
regular litigation. Sixteen percent of all tort cases filed are exempted from CAAP
because they are over the jurisdictional limit of $150,000. Twenty-four percent of the
cases assigned to CAAP are later dismissed, exempted, or removed from CAAP for
other reasons. This second group of 24 percent includes complex cases which might
be more expensive to litigate and have high trial rates. Hence, it is possible that some
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 18 -
of the slow moving cases with high litigation costs are removed from CAAP even
though such cases still would appear in the comparison sample.
Summary of Research Findings
Hawaii's Court-Annexed Arbitration Program has met each of its major goals.
- reduced pretrial discovery;
- reduced litigation costs for private litigants;
- increased the pace of litigation;
- provided litigants with a fair, just, and satisfactory "day-in-court";
- encouraged early and less expensive settlements;
- increased the percentage of cases that terminate each year; and
- may have reduced the number of trials.
A Profile of CAAP Cases:
The ratio of settlements to awards is 2.2 settlements to 1 award. Slightly more
than 50 percent of awards are appealed.
Sixteen percent of tort cases are exempted from CAAP because they are
potentially above the jurisdictional amount of $150,000. CAAP services 72 percent
of the cases assigned to it. Twenty-eight percent of the cases are exempted,
dismissed, or removed from CAAP. Hence, CAAP actually serves 60 percent of all
Although CAAP is designed for cases up to $150,000, the average CAAP case
terminates at approximately $30,000, and 88 percent of all CAAP cases terminate
at $50,000 or less.
Although some people thought that the higher valued cases in Hawaii's $150,000
arbitration program would be complex and probably inappropriate for arbitration,
lawyers only rated 7 to 14 percent of CAAP cases as complex.
Both lawyers' survey data and court records indicate that CAAP has reduced
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 19 -
CAAP averaged about one half the depositions per case as did regular litigation
(2.53 in CAAP to 4.9 in regular litigation).
The average CAAP plaintiff saves $496 in discovery expenses; the average CAAP
defendant saves $266 in discovery expenses.
For a case with one plaintiff and one defendant, pretrial discovery has been
reduced 32 percent.
A defendant saves $159 in lawyers' fees in the average CAAP case. Plaintiffs'
lawyers' fees are not affected by CAAP because these plaintiffs' lawyers use a
CAAP has had very little impact on lawyers' fees which is the largest component of
litigation costs. In the average regular litigation case that terminates at $30,000,
the total lawyers' fees of both the plaintiff and defendant are $14,740 or 86 percent
of all costs. In CAAP, the total lawyers' fees are reduced $159 to $14,581 but are
90 percent of all costs.
Pattern of Settlements, Awards, and Appeals:
One of every three CAAP cases go to an award. One of every six CAAP cases is
appealed. Appeals are much slower and much more expensive than settlements.
Awards significantly reduce CAAP's advantage over regular litigation.
The pattern between settlements, accepted awards, and appealed awards is
consistent across all evaluation measures. Settlements are faster and less
expensive than accepted awards, and accepted awards are faster and less
expensive than appealed awards.
CAAP creates an opportunity for an arbitration award. However, if the case
actually goes to an award hearing instead of settling before the award, the average
award is slower and more expensive than the average case in regular litigation.
Taking a case to an award hearing increases litigation costs substantially. Even if
the CAAP case terminates after the award hearing without an appeal, the cost
savings from CAAP completely disappear.
CAAP had four fewer documents filed per case than did cases in regular litigation
(27.4 for CAAP to 23.3 for regular litigation).
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 20 -
CAAP cases required fewer appearances by lawyers in court for Status, Pre-trial,
and Judicial Settlement Conferences. However, CAAP created a new proceeding
- the award hearing - which requires the presence of lawyers and usually the
clients, before an arbitrator.
Overall Costs of Litigation:
After deducting CAAP administrative costs ($256 per case), the average CAAP
case, which has 1.6 defendants, is $920 less expensive than the average case in
Although pretrial discovery is significantly reduced in CAAP, the impact of this
discovery reduction on total litigant costs is relatively small. Lawyers' fees, not
pretrial discovery, are the major component of litigation costs. CAAP reduces
pretrial discovery by 32 percent, but the increase in total net recovery is only 2.6
percent for the plaintiff and savings for the defense is only 1.2 percent of the total
payout (the sum of discovery costs, lawyer's fee, and the amount paid to the
The Pace of Litigation:
The median CAAP case is more than four months (133 days) faster than the
average regular litigation case.
The pace of CAAP cases is 29 percent faster than the pace of regular litigation
In about 75 percent of the CAAP cases, the lawyers were of the opinion that their
case in CAAP ended sooner than if it had been in regular litigation.
Reducing the Backlog of Cases:
The increase in the pending case rate has decreased significantly since CAAP
began. However, there are still more cases filed than terminated each year.
The Trial Rate:
Since CAAP began, the percentage of cases going to trial has decreased.
However, the rate of trial was already so low before CAAP began that statistically it
cannot be said that CAAP has decreased the trial rate.
Satisfaction with CAAP:
The majority of lawyers were satisfied with CAAP.
Lawyers were generally more satisfied with settlements than with awards.
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 21 -
Defense lawyers were less satisfied with both settlements and awards than were
Lawyers who handled the most cases in CAAP were the least satisfied with CAAP.
The arbitrators averaged almost 15 years of law practice experience, and 80
percent of the arbitrators were in private practice.
The arbitrators generally had high, positive opinions of the arbitration program.
Most lawyers had high, positive opinions of the arbitrator who handled their case.
Lawyers rated the arbitrators as impartial and experienced enough to handle the
arbitration in 88 to 96 percent of the cases.
Lawyers' satisfaction with their arbitrator was unaffected by whether the arbitrator
was a litigator or not, and unaffected by whether the arbitrator was a personal
injury specialist or not.
The majority of lawyers thought that the arbitrators made decisions based upon
the merits of the cases and did not simply "split-the-difference" between the
plaintiff's and defense's position.
Early and Less Expensive Settlements:
CAAP has encouraged early and less expensive settlements.
- The median time for a CAAP settlement is almost six months (178 days)
faster than the disposition time for regular litigation cases.
- The average CAAP settlement is $4,541 less expensive than the average
regular litigation case.
The time committed by the volunteer arbitrators constitutes a major donated cost
of the program. Arbitrators averaged almost 9 hours per case (5 hours for
settlements and 15 hours for awards). If the donated time of the arbitrators was
valued at market rates, almost all of CAAP savings would be eliminated.
The majority of arbitration hearings took four hours or less. The average hearing
time was 4.6 hours.
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 22 -
The CAAP caseload places severe demands on the supply of available arbitrators
and may be a long term problem.
Providing A "Day-In-Court":
CAAP provides litigants with a "day-in-court." Plaintiffs testified in 85 percent of
the award hearings, and defendants testified in 60 percent of the hearings.
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 23 -
Data on Hawaii's Court Annexed Arbitration Program
John Barkai and Gene Kassebaum, University of Hawaii 1992
Median Pace of Litigation
Time: Filing until Termination
Regular CAAP Accepted Appealed All ALL
Litigation Settlements Awards Awards CAAP CAAP
Pace 451 273 320 623 461 318
Savings over 178 131 -172 -10 133
Average Litigation Costs for CAAP Options
Regular CAAP Awards Awards All
Litigation Settle- Accepted Appealed CAAP
Discovery - Plaintiff $1,307 $508 $1,192 $1,440 $811
Discovery - Defendant 1,086 479 1,213 1,533 820
Fees - Defendant 4,740 3,008 6,541 7,577 4,581
Total Litigation Costs $7,133 $3,995 $8,946 $10,550 $6,212
Savings over comparison $3,138 $-1,813 $-3,417 $921
The Hawaii data is both more extensive and more precise than prior evaluations.* In the Hawaii
evaluation the number of cases reviewed for the evaluation of pace was 2-3 times more than
the number of cases reviewed for the other evaluations. The Hawaii evaluation had 3-4 times
more survey data on litigation cost than did previous evaluations.
Number of Cases or Surveys used in the Evaluations
New Jersey North Carolina Hawaii
Pace 504 304 1,085
Fees & Costs 180 203 749
* E. Lind, Arbitrating High-Stakes Cases: An Evaluation of Court-Annexed Arbitration in a
United States District Court (1990); R. MacCoun, E. Lind, D. Hensler, D. Bryant & P. Ebener,
Alternative Adjudication: An Evaluation of the New Jersey Automobile Arbitration Program
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 24 -
Fitting the Forum to the Fuss:
A User-Friendly Guide to Selecting an ADR Procedure,
Frank E.A. Sander and Stephen B. Goldberg, 10 Negotiation Journal 49 (January 1994)
Objectives Mediation Mini-trial Summary Early Arbitration, Court
Jury Trial Neutral Private
0 = unlikely to satisfy objective
1 = satisfies objective somewhat
2 = satisfies objective substantially
3 = satisfies objective very substantially
Professor John Barkai --- University of Hawaii Law School - ADR in the Courts p. 25 -