Alternative Dispute Resolution
The Proposed New Court Rules—Modern Dispute Resolution for Michigan
*The author wishes to express appreciation to Michael P. Coakley, immediate past chairperson of the ADR Section, and to Doug Van Epps of the Supreme Court Administrative Office for their valuable assistance in the preparation of this article.
Jurisprudence at the turn of the century requires state-of-the-art dispute resolution processes. Courts here and around the country have begun to recognize the vital importance of this need. This article will outline the steps taken recently in Michigan toward promulgating wider use of facilitative mediation and other up-to-date dispute resolution methods by the courts and disputants.
As might be expected, this is a work in progress. During the past decade, many state courts have adopted alternative dispute resolution (ADR) programs in both their trial and appellate divisions.1 The recently enacted Dispute Resolution Act of 19982 requires all federal district courts to adopt an ADR program for civil actions, and numerous federal district courts across the country have implemented ADR programs of various types.3
In Michigan’s trial courts, ADR processes such as arbitration, facilitative mediation, and summary jury trials have been available for some time to litigants on a voluntary basis but have been used sparsely. The principal method of court-sponsored ADR has been evaluation under MCR 2.403, which is designed to provide an independent assessment of the value of a case for settlement purposes shortly before trial.
More and more, Michigan disputants, their lawyers, and adjudicatory bodies are promoting and employing facilitative mediation and other nonbinding settlement processes to resolve all manner of disputes. For example, some Michigan courts, such as the 2nd (Berrien County), the 6th (Oakland County), the 13th (Antrim, Grand Traverse, and Leelanau Counties) and the 16th (Macomb County) have experimented with their own dispute resolution programs, principally involving facilitative mediation on an ad hoc basis.4 The Michigan Court of Appeals implemented a mandatory facilitative mediation program in 19985 and many Michigan courts have referred cases to trained volunteer mediators from the state’s Community Dispute Resolution Program administered by the State Court Administrative Office.6
THE SUPREME COURT TASK FORCE
Noting the trend toward expanding court-annexed ADR, and mindful of the desirability of decreasing the cost of litigation and increasing the involvement of parties in the process of resolving their own disputes, the Michigan Supreme Court appointed a task force in 1998 to study the use of ADR in Michigan courts. The task force, composed of judges, practitioners, and court administrators from throughout the state (see box on page 486), was asked to provide recommendations for new and amended court rules, guidelines, standards, and statutory amendments that would facilitate the integration of dispute resolution processes in the Michigan trial courts. After convening several times during 1998, the task force submitted a report to the Michigan Supreme Court in January 1999.7 The report contained a series of court rule proposals and recommendations for developing, implementing, and monitoring ADR services in the trial courts.
On May 10, 1999, the Court ordered publication of the proposed court rules and invited public comment. After comments were received, the task force reconvened in October 1999 to study them. The issues in the initial report that generated the most comments were: whether a judge should have the power to order litigants to attempt mediation, whether nonlawyers should be permitted to serve as neutrals in a court-sponsored program, and whether the proposed rules adequately provided access to dispute resolution services for low-income persons.
Following a review of the comments, the task force prepared an Addendum Report dated January 2000, which addressed the major comments and other concerns. Specifically, the Addendum Report:
•reaffirmed language authorizing judges to order parties to attempt a nonbinding ADR process, but included in the report the majority and minority statements on this issue drafted by task force members
•unanimously reaffirmed that nonlawyers should be able to serve as mediators on court rosters
•expanded the requirements that each trial court adopt an ADR plan by local administrative order that identifies, among other issues, how access to ADR processes will be provided for indigent persons, and broadened the provisions to be incorporated in the local ADR plans
•reaffirmed the intended flexibility of the ADR rules by emphasizing that parties may design and implement their own ADR processes outside of those contemplated by the rules
•added protection in domestic relations cases that persons subject to personal protection orders, or who are involved in child abuse and neglect matters, may not be referred to mediation without a hearing before the court
The Supreme Court has held public hearings on the proposed rules in Grand Rapids, St. Joseph, Flint, and Gaylord. Although the formal written comment period closed on September 1, 1999, the Court continued to accept comments on the rule proposals through the period for public hearings.
OVERVIEW OF THE RULES
The highlights of the proposed ADR court rules are as follows:8
•All contested civil matters may be ordered to a nonbinding ADR process either enumerated in the rules or created by the parties and approved by the judge. Proposed MCR 2.410(F); amended MCR 2.401(B).
•Each trial court that submits cases to ADR processes under the rules must establish a written ADR plan adopted by local administrative order, which must identify the list of persons available to serve as ADR providers and how they will be assigned, how information about the operation of the ADR program will be disseminated to litigants and the public, how access to ADR processes will be provided for indigent persons, the qualifications of nonmediator ADR providers, and other specifics of the ADR process. Proposed MCR 2.410(D).
•Parties may move for exemption from participation in an ADR process for good cause shown. Proposed MCR 2.410(F)(5).
•Parties are encouraged to select their own ADR process and ADR provider, but if they do not, the court selects one pursuant to a procedure developed by the court. Proposed MCR 2.410(F) and (G).
•Trial counsel and persons with full settlement authority may be required to attend ADR proceedings. Proposed MCR 2.410(J).
•The cost of ADR proceedings will normally be divided equally among the parties. Proposed MCR 2.410(K).
•To qualify as a court-appointed facilitative mediator, individuals must meet certain educational, experience, and training requirements and comply with standards of conduct set forth in the rules. Proposed MCR 2.411.
•Domestic relations mediation is governed by a separate rule that provides for specific qualifications for mediators in that field. Amended MCR 3.216.
•The MCR 2.403 process is retained, but its name is changed to ‘‘Case Evaluation’’ to more accurately reflect its nature and avoid confusion with the universally recognized concept of true mediation. Proposed MCR 2.410(B)(9); amended MCR 2.403, 2.404.
The heart of the task force recommendation is contained in proposed new rule 2.410, which provides that all civil cases will be subject to alternative dispute resolution processes unless otherwise provided by statute or court rule. Defining ADR broadly as ‘‘any process designed to resolve a legal dispute in the place of court adjudication,’’ this rule requires the parties and the court to consider the selection of a nonbinding ADR process ‘‘as soon as reasonably practical.’’9 If the parties cannot agree on an ADR process, or if the court does not approve of the parties’ selection, the rule gives the court the power to order the parties to utilize a nonbinding ADR process and set a deadline for initiating the procedure, or to order that ADR is inappropriate under the circumstances. The rule further provides that upon motion by any party, or on the court’s own initiative, the court may at any time issue an order for parties to participate in any nonbinding ADR process, subject to a party’s right to move for exemption from participation in the ADR process ‘‘for good cause shown.’’
Under proposed MCR 2.410(D), the court is required to adopt a plan that establishes a list of approved ADR providers. However, in both general civil mediation under proposed MCR 2.410 and domestic relations mediation under amended 3.216, the parties may initiate their own ADR process in which they need not select an ADR provider from the court’s roster but may choose a neutral of their own, whether or not that person meets the minimum qualifications established for court-appointed mediators. While it is essential that the court be prepared to provide qualified neutrals to ensure that the process goes forward under the rules, it was thought important to reserve the parties’ right to choose their own settlement processes and providers if they wished.
THE COURT’S POWER TO ORDER ADR
The provisions authorizing a court to order parties into nonbinding ADR was the subject of intense debate by the task force. Numerous concerns in opposition to the provisions were expressed during task force deliberations:
(1)ADR should be voluntary; forcing parties into settlement negotiations has never worked well, and, in fact, is likely to alienate and discourage rather than encourage the use of appropriate ADR processes
(2)some courts may misuse the new power to ‘‘dump’’ what they view as difficult or undesirable cases into a never-never land of stagnated settlement status, or misuse the provisions as a docket control device
(3)ADR is not appropriate in all circumstances
(4)Forcing parties into a procedure they don’t need would simply add cost and aggravation to the already burdensome litigation process
On the other hand, those who supported the rule argued that many lawyers and litigants in Michigan are not fully aware of the benefits of such methods as mediation, minitrials, and summary jury trials. This leads to a concern that parties may decline to participate voluntarily in those processes through ignorance and fear of the unfamiliar rather than by informed choice. The ability of a court to order the initiation of such a process in appropriate cases will likely increase the awareness of ADR and promote its use in situations where agreement cannot be obtained voluntarily because of misunderstanding about, or ignorance of, the process.
Proponents also noted that often lawyers are reluctant to suggest an ADR process or even to agree to one suggested by the court because of the fear of demonstrating weakness. The ability of a court to order ADR in appropriate cases would relieve the lawyer of the concern of ‘‘blinking first’’ and will create a settlement event that otherwise may not occur until the parties reach the courthouse steps. Since most civil cases settle anyway, the rules will allow judges in appropriate cases to advance the resolution process, which would otherwise languish, stalled by posturing tactics.
Finally, supporters pointed out that the rule is flexible. It provides the courts sufficient discretion not to order ADR in cases that are inappropriate, or to provide relief upon motion by the parties for good cause that ADR should not be used or should not be used at a particular time. The cost involved in a nonbinding ADR process is not significant when compared to the cost of full litigation, and the potential savings to the parties by early settlement greatly outweigh the cost of the process. In any event, the court has discretion under the proposed rules to provide the process to those parties unable to pay or to impose other cost conditions that are equitable under the circumstances.10 Thus, given appropriate judicial oversight, cost should be neither an impediment to use of ADR processes, nor an undue burden on a party to a dispute.
Eventually, those task force members in favor of granting courts authority to order nonbinding ADR processes prevailed by a substantial majority. However, there is widespread acknowledgment that voluntary ADR is ultimately preferable to mandatory ADR and that the subject should be revisited once there is sufficient experience to evaluate its use and after Michigan attorneys and litigants become more familiar with the nature and benefits of settlement negotiations utilizing the assistance of a neutral third party. Those members who advocated a voluntary process drafted and filed a minority statement that has been incorporated into the Addendum Report.
PRESERVING LOCAL AUTONOMY
One of the challenges of drafting new court rules is resolving the tension between the desirability of providing uniform procedures statewide and the recognition that Michigan’s various trial courts need flexibility in administering programs. The proposed rules represent a compromise between this desirability for statewide uniformity and the need for local autonomy. For example, uniformity is provided by those provisions of the rules that subject all civil cases to alternative dispute resolution, require the court to adopt an ADR plan and designate an ADR clerk, provide parties with information about ADR processes, ensure the confidentiality of statements made during the ADR process, and establish minimum qualifications and standards of conduct for court-appointed mediators. In accordance with the Access to Justice Program of the State Bar, the ADR plan must include provisions for providing ADR services to those unable to pay.
On the other hand, each court has latitude in administering the rules by tailoring its own ADR plan. Each trial court plan must set forth its method of maintaining a list of persons available to serve as ADR providers, assigning ADR providers to cases and removing providers from the list, as well as other details of the program. The court may determine the timing and selection of any ADR process in a particular case. The court has the discretion to identify the parties and counsel who must attend an ADR session, impose sanctions for failing to attend, and to enforce or waive payment of fees.11 A local court also retains full discretion to determine whether an ADR process is appropriate or not for a particular case and to manage the case in the manner the court deems to be in the best interest of the parties and the administration of justice.
SEPARATE TREATMENT OF DOMESTIC RELATIONS MEDIATION
Mediation of domestic relations cases is governed by amended MCR 3.216.12 The task force elected to treat domestic relations mediation separately because there was an existing rule covering it and because they believed that domestic relations cases present unique challenges for mediation not present in other general civil matters.
The proposed domestic relations mediation rule changes the present rule in several respects. For example, rather than mandating a written report and recommendation if settlement is not reached, the amended rule permits one of the parties to request an ‘‘evaluative’’ mediation process in which the mediator sets forth his or her proposed recommendations for settlement purposes only if a settlement is not reached during mediation.
This provision of the amended rule could be controversial. There is substantial debate among mediation practitioners and academics as to whether ‘‘evaluation’’ (proposing solutions or predicting the outcome of a case) is ever appropriate in mediation practice.13 Another problem is that the parties may not really know whether they want or need evaluation as opposed to facilitative mediation, and the rule may require them to make an uninformed choice that may not be appropriate in the circumstances. Some argue that the delivery of a recommendation by the mediator may coerce the parties into an inappropriate or unfair settlement, even though the rule provides that there will be no sanctions against either party for rejecting the recommendation. It appears that by providing for evaluative mediation, the drafters sought to combine an assisted negotiation process with case evaluation, but critics contend that requiring an evaluation on request of one of the parties may be unwise.
The amended rule also permits mediation of child custody matters (the present rule prohibits the court from submitting a case to mediation if there is a dispute regarding custody), sets forth the grounds for exemption from mediation, and establishes qualifications for serving on a court-approved list of mediators. All persons serving as domestic relations mediators are subject to the standards of conduct for mediators set forth in proposed MCR 2.411(E).
In reaction to concerns expressed on the initial Report, a provision was added to the rule requiring a hearing before referral to mediation if the parties are subject to a personal protection order or involved in a child abuse or neglect matter. Amended MCR 3.216(C)(4).
ADDITIONAL TASK FORCE RECOMMENDATIONS
As part of its Report, the task force also made several separate recommendations to the Supreme Court regarding alternative dispute resolution that were not expressed in the text of the proposed rules. Some of those recommendations are as follows:
•The Supreme Court should appoint a standing oversight committee to provide recommendations on the implementation, delivery, and evaluation of ADR services in the trial courts. There are likely to be many ongoing design, implementation, and evaluation issues regarding court-annexed ADR. A successor group to the task force appointed by the Supreme Court could continue the work and provide ongoing recommendations for further development of ADR services, including the training and credentialing of ADR providers and the development and approval of training programs.
•Mediators should be afforded the status of quasi-judicial immunity from suit. It is anticipated that mediators will play an integral role in the state’s judicial system under the proposed court rules. Those mediators will be subject to the constraints of ethical rules and regulations and act under the supervision of the courts. The task force felt mediators, like other judicial officers, should not be subject to lawsuits for breach of ordinary care in their performance in their duties. Granting immunity to court-appointed mediators may require legislative action.
•Courts should make ADR processes available during prefiling and throughout the course of litigation. The task force believes that courts could play an important role in promoting the use of ADR before disputes are filed and after cases are concluded. There may be benefits to opening court-connected ADR programs and services to disputants before they file lawsuits or when post-judgment contested matters arise. The task force recognized that this may present the need to modify court statistical methods in order to encourage prefiling ADR so that the courts receive recognition for the services provided.
•Court-based ADR programs and services should be monitored to ensure and enhance the quality of services and evaluated to measure effectiveness. Any new program needs adjustment based on experience and evaluation. The local courts, the State Court Administrative Office, the oversight committee appointed by the Supreme Court, or a combination of them, should engage in the collection and analysis of information regarding the effectiveness of court-annexed ADR programs and recommend desirable changes. Experience may provide a better understanding of which aspects of the ADR programs should be uniform throughout the state and which are better left to local courts to reflect local needs and values.
•The Legislature should provide funding to the Supreme Court for the development, implementation, and evaluation of ADR processes in the trial courts. There are numerous cost implications of continuing the development of ADR services in the Michigan courts, such as providing those services regardless of the ability to pay, ensuring proper credentialing and training, and funding the continued oversight and evaluation of the programs. Without additional funding for these efforts, the development of court-annexed ADR may stall or become unmanageable.
•The Supreme Court should explore the application of the mediation process in criminal proceedings and, in particular, concepts and practices of restorative justice. One of the fastest growing applications of ADR is in the criminal justice system, particularly in the field of victim and offender community based conferences and juvenile justice. The success of these programs in other states suggests that complementing traditional court services in this area could be very worthwhile in restoring some harmony and order to the lives of offenders and victims.
Like most other states, the court system in Michigan has been geared to resolve civil disputes solely through litigation. To a large extent, those engaged in processing court cases have presumed that litigation must follow a tortuous, somewhat ineffective path aimed at the battle rather than the solution. This approach has not necessarily been in the best interests of the litigants. While some civil cases need to be litigated, the vast majority settle prior to, or during, trial after the parties have experienced substantial costs, broken relationships, and personal disruption. The offering of court-sponsored dispute resolution programs through duly-adopted court rules may help turn the court program from what many believe has become a destructive, adversarial process to a more constructive, problem solving one, thereby saving litigants a good deal of time, money, and stomach acid.
The final product of the task force represents a careful and considered proposal for formalizing alternative dispute resolution in Michigan’s trial courts. The Michigan Supreme Court is treating the report with due care and deliberation as evidenced by its extension of the period of time for public comment and the holding of multiple public hearings to discuss the proposed rules. The careful consideration of these proposed rules reflect their significance as a potentially major change in approach from the way courts have traditionally resolved disputes. Michigan’s citizens deserve state-of-the-art dispute resolution processes. If adopted, the proposed court rules should go far towards accelerating the settlement of cases while conserving the court’s resources for those disputes in which judicial determination is truly required.
(This article was originally accompanied by a table listing members of the task force. To see the table, refer to page 486 of the May issue.)
1See e.g., Fla R Civ P 1.700 (1997); Indiana Rules of Procedure, Burns Ind. ADR 2.1 (1997); Rule 1:18 of the Rules of the Supreme Judicial Court of Massachusetts (1998); Tenn. Sup. Ct. Rule 31 Alternative Dispute Resolution.
228 USC 652.
3See Plapinger and Stienstra, ADR and Settlement in the Federal District Courts, Federal Judicial Center and CPR Institute for Dispute Resolution (1996). The U.S. District Court for the Western District of Michigan has adopted a comprehensive, court-annexed ADR program by local rule that deals with early scheduling conferences, voluntary facilitative mediation, early neutral evaluation, court-annexed arbitration, and summary jury trials. The voluntary facilitative mediation program in that court, which was commenced in 1996, utilizes trained mediators and has been sufficiently successful to warrant expanding the program to include the upper peninsula (Northern Division).
4Oakland County has perhaps the most extensive procedure with a paid staff person committed to administrating the ADR process. The Oakland County Court maintains a large roster of attorneys who have undergone facilitative mediation training for use in connection with its court-annexed facilitative mediation process.
5See MCR 7.213(A).
6The Community Dispute Resolution Program was established by MCL 691.1551.
7Michigan Supreme Court Dispute Resolution Task Force Report to the Michigan Supreme Court, January 1999. Copies of the original Report and the Addendum Report are available from the State Court Administrative Office, 309 N. Washington Square, P.O. Box 30048, Lansing, Michigan 48909.
8The proposed and amended rules are:
2.410 (Alternative Dispute Resolution)
2.411 (Qualifications of ADR Providers)
Amendments to MCR 2.401 (Pretrial Procedures)
Amendments to MCR 2.403 (Mediation)
Amendments to MCR 2.404 (Selection of Mediation Panels)
Amendments to MCR 3.216 (Domestic Relations Mediation)
Amendments to MCR 5.403 (Mediation, Probate Court)
9Proposed MCR 2.410(F). The rule lists and defines several commonly used ADR processes such as arbitration, summary jury trial, neutral fact finding, and mediation; the rule makes clear that these terms are not meant to restrict or limit the use of ADR processes created by agreement of the parties. The present widely-used ‘‘Michigan mediation’’ under MCR 2.403 is retained as a form of ADR available in the courts, but under the new rules its name would be changed to ‘‘case evaluation.’’ ‘‘Mediation’’ is defined in the new rule as a forum in which a neutral third party facilitates communication between parties, assists in identifying issues, and helps explore solutions to promote a mutually acceptable settlement but has no decision-making power. Proposed MCR 2.410(B)(12). This latter process has been referred to in Michigan as ‘‘facilitative mediation’’ to distinguish it from ‘‘Michigan mediation,’’ but should now simply be called ‘‘mediation’’ in light of the MCR 2.403 name change.
10Proposed MCR 2.410(K).
11The rules do not, however, authorize the courts to judge the quality of a party’s participation once they attend or to force the parties to settle the case.
12The rule applies only to mediation. Other ADR processes utilized in domestic relations cases would be governed by proposed MCR 2.410
13For contrasting views on this issue compare Kovach and Love, Evaluative Mediation is an Oxymoron, 14 Alternatives to the High Cost of Litigation 31 (1996) with Arnold, How Much Evaluation Should be Mixed Into a Mediation Session?, 16 Alternatives to the High Cost of Litigation 54 (1998).