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Alternative Dispute Resolution: Answering Your Legal Questions

Alternative Dispute Resolution

Disputes can arise in any area of our lives, in the workplace, in the neighborhood, in school, in business, and in families. Some of those disputes escalate to the point at which one side or the other looks to the court system for resolution, by starting a lawsuit.

Beginning in the 1970s, professionals from a variety of backgrounds collaborated to develop processes for resolving disputes outside of the court system. These processes were known collectively as "alternative dispute resolution," or simply "ADR." Now, these processes are widely used and simply referred to as "dispute resolution" (DR). They are even used long before the court process is sought.

The most commonly used DR processes are arbitration and mediation. There are, however, other forms of DR, including early neutral evaluation, moderated settlement conferences, focus groups, summary jury trials, mini-trials, and direct negotiation.

What are the DR processes?

Mediation: In mediation, the parties to a dispute meet in a "mediation session" to discuss ways to resolve their dispute, assisted by an impartial third party called a "mediator." The mediator listens to each party's viewpoint of the dispute and then helps them to communicate with each other. The parties work with the mediator to identify the issues that need to be decided and to reach a settlement that is satisfactory to each of them. Mediation is a confidential process. Statements made during a mediation session generally are not allowed to be revealed in any later court proceeding between the parties.

Although participating in mediation is usually voluntary, if a settlement results, it becomes binding on all parties.  Mediators are expected to be impartial and should neither advise the parties, who often are represented by their own lawyers, nor make any decisions for them. Individuals who serve as mediators may or may not be lawyers, but may be specially trained to provide assistance in resolving disputes. Mediation is an informal DR process. It can be structured to meet the needs of a specific dispute.

Arbitration: This is the DR process most closely related to a lawsuit. In arbitration, a neutral decision maker, known as an "arbitrator," is selected by the parties or by a neutral DR service provider. Sometimes arbitration takes place with a panel of three arbitrators, rather than a single arbitrator. Evidence is presented to the arbitrator(s) at a formal hearing similar to the presentation of evidence in a lawsuit, although the rules that apply in court are somewhat relaxed. Parties in arbitration may be represented by lawyers, who present evidence and legal arguments to the arbitrator(s) on behalf of their clients.  The arbitrator(s) then make a decision, most often called an "award." An arbitration award generally is a final decision, subject only to limited review by a court as allowed by law.

Early neutral evaluation usually occurs in the early stages of a lawsuit. Lawyers and their clients meet with a neutral third party to present summaries of their respective cases. The third party "evaluator" asks questions and assesses each side's position and the likely outcome of the case in court. To encourage negotiation and settlement, the evaluator also may identify areas of common ground, help each side understand the case from the other's perspective, and offer to facilitate settlement discussions. Early neutral evaluation sessions are confidential, and the evaluator's recommendations are nonbinding. Even if this process does not result in a settlement, it may serve to narrow the issues in dispute and to give the parties a more realistic view of their prospects in the event of a trial.

The moderated settlement conference is closely related to mediation and early neutral evaluation. In this method, one or more neutral third parties receive information concerning each side of a dispute and discuss it with the parties, often providing some evaluation of the likely effects of that information on a judge or jury. Attorneys and their clients participate together in a moderated settlement conference.

Three DR processes used less frequently are the focus group, the summary jury trial, and the mini-trial. A focus group is a panel of individuals selected by the parties to hear abbreviated presentations of each case and to give an advisory opinion as to how the dispute could be resolved. A summary jury trial is an advisory (nonbinding) trial, in which a jury, with a judge presiding, hears a summary of evidence from the parties, and renders an advisory verdict which is then discussed with the parties and their lawyers. The parties may choose to accept or decline the advisory verdict. In a mini-trial, a summary of each party's case is presented to a panel that the parties select and authorize to negotiate a settlement of the dispute after hearing the presentations. A neutral third party may be involved to facilitate the panel's settlement negotiations.

Direct negotiation is a process involving an exchange of offers and counteroffers by the parties, without the assistance of an impartial third party. Negotiations may be conducted directly between the parties, but may also include their lawyers.

In the right situation, any of these DR processes can be effective in resolving disputes, and they generally can do so faster and less expensively than if the dispute were processed in the court system.

Your attorney can help you select the DR process that is best suited to your situation, and if you are not represented by an attorney, you can contact one of the resources listed below.

What are the benefits of DR?

The principal benefits of DR are that it:

  • saves time;
  • saves legal expenses;
  • provides the parties an opportunity for greater control over the dispute resolution process;
  • allows parties to resolve their conflict in a more creative way than might be possible if it were left to a decision by a judge or jury;
  • gives the parties greater privacy in resolving their dispute than is afforded in a public courtroom;
  • reduces the emotional toll a lawsuit can take on everyone concerned;
  • can permit valued relationships among the parties to be preserved; and
  • communications in the DR process are, by law, not permitted to be used as evidence in court so that settlement is encouraged.

When is it appropriate to use DR?

DR can be effective at almost any point in the life of a dispute, including:

  • when a dispute first arises, even before a lawsuit has been filed;
  • at any point during the course of a lawsuit;
  • after a trial has taken place and a decision has been rendered; or
  • during or after an appeal.

In Wisconsin, if you are already involved in a civil lawsuit, you may ask the judge in your case to consider referring your case for DR. In some counties, for example, parties in all small claims cases are given the opportunity to participate in DR at no or a modest charge, with trained mediators provided by court-related conflict resolution centers. The judge has the power under section 802.12(2) (a) of the Wisconsin Statutes to order the parties in any kind of civil lawsuit in Wisconsin to participate in certain forms of DR. In that circumstance, the parties may still have an opportunity to select the form of DR and the DR service provider. The judge will step in to order the parties to participate in certain forms of DR only if they cannot agree among themselves on a DR method. Many counties also have foreclosure mediation programs and family court mediation programs.

How much will DR cost?

The amount you pay for DR services will vary depending on the nature of the dispute and the time required by the neutral third party who is hired to provide the service. The professional services of a neutral third party most frequently are charged on an hourly basis, with the cost shared equally among the parties to the dispute. No matter what method of DR is selected, significant cost savings should result.

How do I select the appropriate DR process for my case?

Generally, the best way to start is to ask your attorney. He or she knows your situation and should be able to recommend the most suitable DR process for you. If you are unrepresented, you may raise the question with the judge or court commissioner at the initial court appearance or the scheduling conference, or contact one of the organizations below.

How do I select a DR practitioner for my case?

You may contact any of these organizations for information about DR services, and ask your attorney for his or her recommendations as well:

In addition, some Wisconsin counties have nonprofit conflict resolution centers associated with the court system. Contact the courthouse in your county to determine if such a service is available in your area.

Last revised: 10/2012

This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.

The State Bar publishes a series of online consumer pamphlets addressing common legal issues that many people face sooner or later in their lives, such as buying a home, going through a divorce or small claims action, and preparing a will or estate plan. Each pamphlet conveys basic legal information and answers frequently asked questions in easy-to-understand language. 

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