What is alternative dispute resolution (ADR)?
Alternative dispute resolution in Wisconsin is governed by statute 802.12. The statute provides a mechanism for the parties to agree to mediate their dispute, and to agree to arbitrate their legal dispute. The court has authority under 802.12 to order the parties to mediate a personal injury lawsuit.
I have been practicing long enough that in my early years, there wasn’t a mechanism in place for the parties to mediate their dispute. As a personal injury lawyer, you would simply attempt to negotiate a settlement with the insurance adjuster. If you could not reach a settlement, lawsuit was commenced. There were occasions that cases could still be settled between the lawyers, but more likely than not, once a lawsuit was started, you wound up in a jury trial because a settlement impasse had been reached.
Under the current system, when a personal injury lawsuit is commenced, the court will order a status conference, which the attorneys for both sides must attend. At the status conference, the court will enter certain deadlines when certain legal matters need to be completed prior to trial, such as discovery cutoffs, naming of witnesses and filing of motions. Routinely, included in those pre-trial scheduling orders is a requirement that the parties must go through mediation.
Mediation is a system where the attorneys and the parties meet with a neutral third party who is experienced in conflict resolution, to try to resolve the case with a settlement. The mediator is usually an experienced personal injury trial lawyer or a retired judge. If a settlement cannot be reached, all the discussions that occur at mediation are completely confidential. The mediator cannot be brought to court to testify to tell the court what transpired at mediation. There are some exceptions to these rules, but they are quite complicated and limited in scope. Mediation is designed to enable the parties to attempt to settle their lawsuit, knowing that everything discussed at mediation, should mediation fail, remain confidential if the case proceeds to trial.
Mediation has helped settle countless personal injury lawsuits over the years. The number of cases proceeding to final jury trial has been dramatically reduced over the years, since ADR was put in place. There is a very strong likelihood that with a skilled mediator, a personal injury lawsuit will be successfully settled.
The cost can vary, but it is not unusual for the mediator to be paid $500 to $1,000 for their time, which is usually divided between the two sides. The average length of mediation is anywhere from several hours to an all day session, depending on the complexity of the case and the amount of money involved. Logic would dictate that smaller cases take less time and more complicated, large damage lawsuits require more time.
Arbitration is also allowed under Sec. 802.12, if the parties stipulate. The court cannot order arbitration. Arbitration is a system that essentially takes the right of a trial in court away from the parties. The parties agree in writing in a formal stipulation that goes to the court for approval, that they wish to hire an arbitrator to resolve their case. The case is heard at time convenient for the parties, usually at the arbitrator’s office. The arbitrator would either be an experienced trial lawyer, or a retired judge. Arbitration is less formal than a trial in court either to a jury or to the court. The rules of arbitration are laid out by the arbitrator and adhered to by the attorneys and the litigants. Once the arbitrator hears the case and makes a decision, that decision is binding on the parties. The trial judge ultimately also has to give their approval to the arbitration award. The arbitration decision can only be challenged under some very limited circumstances. Arbitration proceedings in personal injury cases, is not as common as mediation, which is usually required in every civil lawsuit scheduling order. If you are considering arbitration as an alternative in your case, instead of having a jury trial or trial to the court, you should have a serious discussion with your lawyer on the advantages and disadvantages of arbitrating your case. Arbitration certainly offers parties in a lawsuit, a more expedited hearing date, less formal and stressful than going to trial. The cost of the arbitrator is usually split between the parties. The cost of paying the arbitrator will vary depending on who the arbitrator is, the complexity of the case and the amount of time necessary to hear the case and reach a conclusion.