With Trial Court Funding in Trouble, You Better Have an ADR Plan for Every Case

Regardless of your news source, it would be difficult not to know that the California economy is down.  Whatever your indicator – the Dow, S&P 500, your own portfolio, or your business – reduced public services are an inescapable truth.

Like every other sector that relies on public funding, the trial courts have not been able to escape the results of the economic downturn.  Alameda County no longer provides court reporters for civil hearings – if you want one, it’s BYOCR.  San Francisco Superior Court has simply done away with its alternative dispute resolution program altogether.  I learned last year that the ideal staff-to-bench-officer ratio is 10:1, including file clerks, clerks, research attorneys, deputies, court reporters, etc.  In the last year, Contra County Superior Court has been operating at a ratio of 7:1.  In the coming year, with continuing budget cuts, the court may have to reduce that ratio to 6:1.

So what, you ask?  How does this affect my litigation practice?  Good question.  I think the answer is that trial attorneys had better start preparing for less trials, and look even more to alternative ways to settle their cases.  The ADR plan needs to start from the first meeting that a litigator has with the client.  What alternatives should you consider for the case, and offer to your client?  Good question.  The answer is:  look to the programs which the court offers.

Mediation

Mediation has become sufficiently popular that this option may “go without saying.”  Therefore, I’ll mention it first.

The court encourages counsel and parties to mediate their cases.  In addition to private mediation, the Court’s ADR Program offer the parties a panel of experienced mediators who have agreed to provide the parties one-half hour of preparation time, and the first two hours of mediation time, at no charge.  The Court’s website offers information for each of the neutrals, allowing counsel to perform plenty of due diligence regarding the prospective mediators, including areas of expertise, rates, and information which would allow you to search further if you’re inclined, such as viewing individuals’ websites.

Arbitration

Many years ago, judges encouraged the parties to utilize non-binding judicial arbitration (not mediation, can you believe it?).  Although this method has less of a following now, it is still a useful tool to consider.  Judicial arbitration (which probably should be more accurately called judicially-supervised arbitration) allows the parties to obtain a neutral evaluation of their case without giving up the right to trial, and often forms a basis upon which to consider settlement ranges and negotiations.  If you use the court’s Judicial Arbitration Panel, the cost of the arbitrator is only $150 per day or per case.

For those of you drafting contracts for your clients, consider including binding arbitration clauses for prospective disputes.  Contracting parties might want to insure some certainty in their future knowing that if a dispute arises regarding their contract, they have agreed in advance to submit disputes to a binding arbitrator for resolution.  Parties who have agreed to binding arbitration obtain the benefit of a faster opportunity to resolve their dispute.

Neutral Case Evaluation

Neutral case evaluation is a bit of a hybrid between arbitration and mediation, and benefits from utilizing a neutral who has experience in the particular subject matter of a case.  This process can be as formal or informal as the parties like.  They present their case to the neutral in a fashion of their design, but similar to arbitration–possibly including briefs, live witnesses, witness declarations, documents, etc.  and at the end of the presentation of evidence, the neutral gives the parties feedback regarding the strengths and weaknesses of the case.  The neutral can provide this feedback orally or in writing, at which time parties can decide whether to continue working with the neutral to negotiate a settlement, converting the process into more of a meditative effort.

The court’s NCE program’s panel members give one-half hour of preparation time and two hours of hearing time at no charge.  Statistically, this method is less used than mediation or arbitration; however, I think it is under-utilized as a tool for obtaining neutral feedback regarding a case, and providing an opportunity to immediately use that feedback for settlement negotiations.

Settlement Mentor

So, for those of you who weren’t able to resolve your case prior to trial, the Court has yet another settlement opportunity (it is almost as if the court wants you to resolve your own case).  At either the issue conference or on the day of trial, the Judges select cases which they believe are good opportunities for settlement, and call in a Settlement Mentor to conduct settlement negotiations.  The Mentor, an experienced trial attorney, provides 2-3 hours of time at no charge to the parties.  The Mentor’s approach is usually much more evaluative and directive compared to mediation.  Approximately one-half of the cases set for trial resolve by this method.

Trial

If all else fails, there is still this tried and true method of resolving disputes.  However, as can be seen above, the Contra Costa courts will urge and encourage parties to resolve their disputes as much as possible without utilizing the court’s diminishing resources.  (Please review http://www.cc-courts.org/index.cfm?fuseaction=Page.viewPage&pageId=6956 for more information on the options described above.)

I’m no economist, but there does not appear to be an end in sight to these difficult economic times.  Clients seek lawyers in order to resolve problems.  Given the continuing reduction in services available through the courts, lawyers must consider what their client’s goals are and form a plan to achieve them.  While every case will have its own factual and procedural twists and turns, the lawyer must have an ultimate plan for resolution-  and that plan should include an analysis of HOW to get to the end result.

Dave Miller is an experienced mediator, special master, discovery referee and arbitrator, providing services throughout Northern California.  He can be reached atdmiller@millermediation.com.