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ADR – Ethically Speaking

This article was first published by the Missouri Lawyers Weekly (July 31, 2000)

I recently had a conversation with an attorney who did not know the difference between early neutral evaluation and mediation. I meet many lay people, often the clients of other attorneys, who do not know the difference between arbitration and mediation. “So what,” you say. Take a minute to consider whether practicing attorneys have an affirmative ethical duty to know more about alternative dispute resolution (ADR). Do they have an ethical duty to advise clients of the different ADR options available? Do the rules of court or the rules governing professional conduct require the greater use of ADR procedures to resolve a client’s disputes? The answer to these questions seems to be yes.

Try It, You’ll Like It

A recent study by the ABA Committee on Dispute Resolution examined what factors affect an attorney’s advice to clients to try ADR. At least sixty percent of the 2,330 attorneys surveyed had served as an advocate on behalf of a client in a case using ADR or they had served as a third-party neutral. The survey concluded that if an attorney had any experience with ADR, he or she was much more likely to recommend ADR to a client. The article concluded by recommending that more attorneys be encouraged to participate in ADR, with the message of the study seeming to be “try it, you’ll like it.”

ADR Can Not be Ignored

ADR is all around us. It cannot be ignored. The United States District Court for the Eastern District of Missouri referred 571 cases to mediation or early neutral evaluation in 1999. Judges Weber (87 cases), Sippel (77 cases) and Hamilton (53 cases) referred the greatest number of cases. Most of the cases referred by the District Court were civil rights cases (294 cases), with tort cases following next (136 cases), and contracts (69) and “other” cases (72) representing the balance of the referred matters. Thus, the court referred to mediation 20% of its docket. During 1999, 213 of the referred cases settled in ADR and 166 cases did not settle. The balance of the referred cases were handled in ADR the following year and will be captured in the statistics for 2000. From January through June 2000, the court referred 312 cases to ADR. If that rate is consistent through the year, the court will refer more cases in 2000 to ADR than it referred in 1999.

Chief Judge Jean Hamilton noted: “Mediation gives the parties control over the outcome in the case. I think mediation is fabulous.” Judge Sippel said: “I talk about mediation at the Rule 16 conference. I have a presumption in favor of mediation. I also believe that everyone has to understand how mediation works for it to be effective. The right parties must be present at the mediation and they must have settlement authority. Experienced lawyers can evaluate the case and reach a resolution in mediation.” Sherry Compton, the District Court’s ADR Coordinator, said: “Settlement rates are going up. In 1996 the settlement rate was about 45%. Last year the rate was 55%. I think it reflects parties’ greater understanding of the mediation process. They are better prepared for mediation sessions than they were before.”

The St. Louis County Circuit Court is also using ADR, with some judges using it more frequently than other judges. The court does not keep statistics on the number of cases referred to mediation but anecdotal evidence suggests that Presiding Judge Robert S. Cohen and Judges Wallace and Seigel are making the most referrals to mediation. The Presiding Judge has also permitted volunteer mediators to mediate some of the small claims cases on the dockets of Judges Crancer, Lofton and Schroeder. Judge Cohen said: “The attitude among lawyers about mediation has changed significantly in the last 18 months. Two years ago, not many attorneys accepted mediation as a means for resolving a dispute or narrowing the issues for trial. Now most attorneys are willing to give it a try. Mediation may not be as great a contribution to mankind as sliced bread, but it is close.”

The St. Louis City Circuit Court intends to use ADR on a regular basis as soon as September 2000. The local rules committee is currently developing the rules that will guide the ADR referral process. Presiding Judge Michael B. Calvin explained that mediation will be mandatory, but parties will be given an opportunity to “opt out” after showing that the case is not suitable for mediation or another ADR process. The court intends to prepare a list of qualified neutrals. Referrals will be made by the judges to neutrals on the list who possess the expertise needed for a successful ADR process. Judge Calvin has been making ADR referrals for some time in Division 1. He explained: “My policy is to strongly urge all parties to include dates for mediation in the proposed discovery schedules.”

ADR is also used on appeal in the form of assisted settlement negotiations or mediation. In eleven months of 1998, the Missouri Court of Appeals for the Eastern District held 426 settlement conferences or mediations and settled 188 appeals. In short, the courts are expecting attorneys to know about ADR.

The Rules of Court and of Professional Conduct Require Consideration of ADR

Missouri Supreme Court Rule 17.02(b) provides that “counsel shall advise their clients of the availability of alternative dispute resolution programs.” (Emphasis added.) Thus, Missouri rules of court obligate attorneys to make clients aware of ADR.

The Missouri Rules of Professional Conduct establish at least an implied duty to know, understand and use ADR procedures. The lawyer owes the client a duty of competence. The lawyer must have the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Mo. Sup. Ct. Rule 4-1.1 The comment to this rule states that “[c]ompetent handling of a particular matter includes…use of methods and procedures meeting the standards of competent practitioners.” It also states that an attorney “should engage in continuing study and education” to maintain his or her competency.

Rule 4-1.2 provides that a lawyer must abide by the client’s decisions concerning the objectives of the representation and “shall consult with the client as to the means by which they are to be pursued.”

Rule 4-1.3 governs diligence. It provides that “[a] lawyer shall act with reasonable diligence and promptness in representing a client.” The comment to the rule explains that the lawyer must act with commitment and dedication and should avoid procrastination. “Unreasonable delay can cause a client needless anxiety and undermine confidence in the lawyer’s trustworthiness.”

Rule 4-1.4 requires the attorney to explain matters to the client in a way that permits the client to make informed decisions regarding the representation.

Rule 4-3.2 requires the lawyer to make reasonable efforts to expedite litigation consistent with the interest of the client.

As a counselor or advisor, the lawyer shall “render candid advice.” Rule 4-2.1. He should consider legal as well as “other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.” Id.

While these ethical obligations do not directly implicate ADR, they certainly suggest that an attorney can not fully meet his or her obligations under the Rules of Professional Conduct without a working knowledge of ADR. See generally S. Schmitz, “Giving Meaning to the Second Generation of ADR Education: Attorneys’ Duty to Learn About ADR and What They Must Learn,” 1 J. of Disp. Resol. 29 (1999) and other articles cited at n. 45.

What Must a Lawyer Know about ADR?

A knowledge of ADR processes and techniques will serve your clients in the following ways:

1. Preventing a Bigger Dispute:
An attorney can assist a client in the early referral of problems to facilitated negotiations, mediation or non-binding early neutral evaluation. The use of these ADR processes may prevent a small dispute from becoming a bigger dispute that is much more costly in time and money.

2. Using an ADR Clause in Contracts:
Early dispute resolution mechanisms, like facilitated negotiations, mediation or early neutral evaluation, can be incorporated in the contracts your client uses. Most agreements now include provisions for binding arbitration. Arbitration clauses were the ADR clauses of the 1970s and 1980s but are a bit old fashioned now that greater ADR options exists and more sophisticated neutrals with broader skills are available. It is time for attorneys to determine whether other ADR alternatives should be included in contracts. The attorney must also be aware of the statutes, rules and case law governing ADR clauses and whether a particular clause will likely be enforced.

3. Educating Clients about Available ADR Processes:
Obviously it is difficult to sell to your client on a new approach to early conflict resolution or a new contract clause if the recommending attorney is not familiar with the advantages and disadvantages of each type of ADR and how each process works.

4. Helping to Decide which Forum to Use Once a Dispute Arises:
An attorney must be able to advise a client whether to use a binding or non-binding ADR procedure and whether to use a private or court-annexed ADR program. Does it matter whether the chosen forum has mandatory or voluntary ADR programs? Will the court designate the neutral? If so, does the client want to pursue a course of action that allows the parties to control the method by which the neutral is chosen?

5. Persuading Opposing Counsel to Use ADR:
An attorney must be able to sell ADR to the other side. Opposing counsel may be willing to use ADR in the following circumstances:

  • When he or she has an unrealistic or highly emotional client that has unreasonable expectations about the outcome at trial.
  • When the opposing party has a policy of settling cases faster and thereby reducing administrative costs.
  • When the opposing party prefers to settle cases rather than to incur unnecessary litigation expenses.
  • When the party wants to avoid the next phase of discovery which includes very expensive discovery of the opinions of experts.
  • When the parties are faced with the complex, time consuming and expensive final trial preparation.
  • When the opposing counsel’s position on the trial calendar causes uncertainty or repetitive preparation for trial.
  • When the other party realizes that the case should settle but the parties’ last offers are too far apart.
  • When opposing counsel is representing multiple parties who may benefit from confidential intra-group negotiations.
  • When the opposing party is a public person or public body that prefers private negotiations to excessive publicity surrounding a public trial.
  • When the opposing party wants to keep the facts of the case confidential.
  • When the parties seek a remedy that a court has no power to order.
  • When the parties wish to preserve an on-going relationship.

6. Selecting a Competent Neutral for the Case:
An attorney must also be able to select a competent neutral for the case. For instance, is the attorney familiar with the three major types of mediation styles: transformative, facilitative and evaluative? Does the attorney know the risks of using any particular mediation style? Does the attorney understand which style may work best given the nature of the dispute? Is it more important that the neutral have significant experience in mediation or significant experience in the area of law in dispute? Does the attorney know the ethical issues facing a mediator and when an ethical lapse may have occurred? What process will you use to pick that mediator, early neutral or arbitrator when the parties cannot agree on a neutral? What do private neutral provider services offer over other means of locating a neutral? What are the rules of the private neutral providers and what fees and expenses do they charge to the parties? Is it important that the neutral belong to trade or professional organizations? Does the mediator prefer joint sessions or private caucuses? Does the mediator look at the narrow issues presented by the parties or is the mediator’s approach more broad, considering the parties underlying interests and needs? Do you want an early neutral evaluator to have the profile of a typical appellate judge? Do you want an arbitrator that may be slightly biased in your favor or one that both parties will deem impartial?

7. Determining the Ground Rules for the ADR Process:
A contract provision may already control some of the ADR procedures the parties will use. The parties, however, may wish to establish other ground rules for the proceeding. What should be considered given the nature of the dispute?

8. Preparing for the ADR Proceeding:
To be adequately prepared for an ADR proceeding, the attorney must have knowledge of the process, what is expected of him and what the neutral prefers. The attorney will also want to consider the following:

  • Deciding when to hold the ADR process in relation to other aspects of discovery and trial preparation.
  • Having a game plan prepared beforehand.
  • Having settlement authority in the hands of the client’s representative.
  • Discussing potential contingencies.
  • Deciding who will present what information to the neutral.
  • Considering options to “expand the pie.”
  • Considering non-economic factors that may lead to a resolution of the matter in facilitated settlement negotiations or mediation.
  • Picking a central theme and building the presentation around it.

9. Representing the Client in the ADR Process:
The role of the attorney may be governed by the ADR process used. In an arbitration, the lawyer may take a more active role in presenting the case to the neutral. In a family mediation, the lawyer may think it wise to play an advisory role, allowing the client to make the presentation to the other parties. Again, the attorney must be familiar enough with each ADR process to know which role will best serve his client.

10. Evaluating any Proposal Reached in the ADR Process:
Mediators will often ask parties to (1) seek the advice of an attorney on a particular matter that has arisen in the negotiations or (2) review any tentative agreement the parties have reached in the mediation. In the first instance, the role of the attorney is relatively simple. In the second situation, an attorney reviewing a proposed settlement agreement should be familiar with the concepts of client empowerment and self-determination, as set forth in the Code of Professional Conduct, and as an underlying value in mediation or facilitated negotiations. At the same time, these ADR processes are subject to criticism when the agreement is the result of a severe power imbalance between the parties. The agreement may be so unfair that the attorney feels compelled to advise a client to walk away from it and, instead, to secure the protections of due process and appeal afforded by the courts. An attorney must know how to balance these conflicting interests when reviewing a tentative agreement and recommending to a client that the client accept, modify or reject that agreement.

11. Helping Implement and Enforce any Agreement Reached:
Many agreements reached in mediation may involve non-monetary performance. In enforcing the agreement, an attorney must know which courts have the power to order specific performance of those contractual obligations.

12. If no Agreement or Resolution is Reached in ADR, Preparing the Client for Further Proceedings in Another ADR Process or in Court:
Just because one ADR process has failed, does not mean another process would not be helpful. An attorney should be familiar with the process of “med-arb” or “arb-med” or some other combination of ADR processes. I am currently involved in an early neutral evaluation involving a $250 million claim against an insurer for environmental losses. The parties intend the neutral to provide non-binding determinations of fact and law that will then serve as a basis for either negotiations or mediation of the dispute. If this mixed ADR process does not result in an agreement, the parties will go to court.

Lawyers must learn about, recommend and use ADR to meet the expectations of courts and clients. Missouri Supreme Court Rule 17.02(b) requires lawyers to advise clients of the options available. To give that advice competently, as required by the Rules of Professional Conduct, an attorney must have knowledge of the ADR procedures and the advantages and disadvantages of each procedure. If a client decides to use an ADR procedure, the lawyer must be able to competently guide the client through that process.


Paula Young

Paula M. Young is an associate professor at the Appalachian School of Law located in Virginia teaching negotiation, certified civil mediation, arbitration, and dispute resolution system design.  She received in 2003 a LL.M. in Dispute Resolution from the top ranked program in the U.S.   She has over 1400 hours of… MORE >

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