Unconventional ADR Options in the Modern Era (Part I)

By Dr. Gary Deel, Ph.D., J.D.
Faculty Director, School of Business, American Public University

Note: This article is the first in a two-part series on unconventional alternative dispute resolution (ADR) options.

Over the years, unconventional changes to the mainstay alternative dispute resolution options of arbitration and mediation have emerged in some legal contexts. In this article, I want to discuss some of the less common ADR options, including non-binding evaluation, mixed or hybrid approaches, and multimodal strategies.

Non-Binding Evaluation in ADR

Non-binding evaluation, generally, is a type of ADR in which a neutral third party evaluates the merits of the disputants’ respective arguments and positions for the sake of predicting possible outcomes should the dispute go to trial. The result is usually delivered in the form of an advisory opinion.

As the name betrays, non-binding evaluation is not binding on either party. In this sense, it is similar to mediation. However, the primary distinction is that with non-binding evaluation, the intent is not to push a compromise and agreement; instead the intent is to assess the issues in contention and render an opinion on their merits. There are several different kinds of non-binding evaluation:

• Non-Binding Arbitration – This type of non-binding evaluation proceeds in the same way as traditional arbitration, with an arbitrator hearing arguments and then rendering a decision, except that this decision is advisory.
• Minitrial – In a minitrial, a neutral moderator presides over oral arguments, and at the conclusion renders an assessment of the best alternatives to trial based on the merits of the cases.
• Summary Jury Trial – The summary jury trial is similar to the minitrial except that, in addition to a neutral moderator, members of a potential jury also sit in on proceedings to adjudicate the case. The outcome is still non-binding, but the result gives the disputants a sense not only of their positions’ legal merits, but also of the expected jury response.
• Neutral Evaluation – Neutral evaluation is another type of case assessment where either attorneys or individuals with technical expertise relevant to the dispute serve as moderators to the proceedings.
• Dispute Review Board – This type of evaluation is commonly used for construction-related disputes. With dispute review boards, a panel of leaders or experts with knowledge relevant to the construction dispute provide an assessment of argument merits. The intent of this process is to reduce costs and expedite resolution in order to avoid unnecessary delays in building projects.

Hybrid ADR Solutions

In addition to non-binding evaluation, a variety of mixed method or hybrid ADR solutions have also been developed to extract the best aspects of each of these more established practices:

• Med-Arb – In the Mediation-Arbitration model, the disputants agree to participate in mediation first, with the understanding that if mediation should fail, the parties agree to subsequently subject themselves to arbitration. This particular type of ADR may be useful for parties who wish to avail themselves of the opportunity to negotiate and compromise. But they also want the assurance of a legally binding decision should such efforts fail. In some cases, the same neutral party may serve the role of mediator and arbitrator (in the event that arbitration is necessary). In others, the mediator and arbitrator may be different individuals.
• Arb-Med – Arbitration-Mediation is the less common inverse of med-arb. In arb-med, disputants submit their case to arbitration. But at the conclusion of arbitration proceedings, the arbitrator’s decision is kept secret and the matter then proceeds to mediation where the parties attempt to negotiate and settle. Only if the disputants fail to compromise in mediation is the arbitration decision revealed and enforced. The advantage to this process is that it allows the parties to present all evidence and hear all arguments in a quasi-trial context before making decisions about settlement.
• Mediation Windowing – Mediation windowing operates like a traditional arbitration proceeding, except that at intervals during the process – either by issue or by time – the disputants are given opportunities to negotiate and are encouraged to settle. In some such cases, the arbitrator may serve as the mediator, but in other cases the mediation opportunities are facilitated by a separate individual.
• Incentive Arbitration – Under incentive arbitration, which I discussed in a previous article, there is a traditional arbitration proceeding except that the decision of the arbitrator is non-binding. However, if either party chooses to reject the decision of the arbitrator, that party incurs a penalty going into litigation. This penalty is usually monetary. The penalty may also require be conditioned upon the rejecting party winning at trial by a certain margin. If he or she does not prevail, then the penalty might be payment for the opposing party’s legal fees or some other forfeiture.

Multimodal Strategies in Alternative Dispute Resolution

Unlike mixed or hybrid ADR models, multimodal ADR strategies make use of original and distinctive tactics to try to achieve dispute resolution. There are several types of multimodal ADR.

• Ombuds – Ombuds (often known as ombudsmen) is an idea taken from Scandinavian ADR practices. They are individuals within large organizations who serve as proverbial ‘one-stop shops’ for dispute management. They are typically high-ranking members of the company, who are intentionally removed from the corporate chain of command so as to mitigate any pressure – or perception of pressure – from corporate decision-making. An ombud may be inward-looking and address employee complaints or concerns. He or she may also be outward-facing and address client/customer complaints or threats of litigation. Even though ombuds are on the payroll of the organizations for which they work, their role in theory is one of neutrality and confidentiality on both sides of any given dispute. However, because of the perception of bias, they are typically less popular in the area of external organizational disputes.
• Dispute Resolution Systems – Dispute resolution systems are an attempt to standardize the dispute resolution process within organizations for the sake of consistency and efficiency. Dispute resolution systems often look like flow charts, wherein processes are outlined step-by-step in terms of which resolution efforts are to be utilized and in which order. That order begins with the origin of a conflict, running through all possible contingencies including internal management, mediation, arbitration, and so forth, eventually ending with a settlement or litigation. By establishing these strategies, companies ensure that disputes are handled with care, and that all options are exhausted systematically before resorting to trial.
• Online ADR – The internet has made traditional ADR options available to a wider populous through communication technology and the ability to share information digitally. Mediation, arbitration, and unconventional methods of ADR are all available in online formats, either through synchronous or asynchronous communication platforms. Depending on the facts, circumstances, and disputants involved, the online ADR option may be more or less appealing than traditional forms of face-to-face ADR.

In the second half of this article, we’ll look at how these various forms of unconventional ADR compare with one another, and how they stack up against the more well-established options of arbitration or mediation.

About the Author

Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.