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Briefs Surveys show increasing ADR use.

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Vol. 1.5, No. 6
June 1997
CPR Institute for Dispute Resolution
Alternatives 89
Briefs: Surveys Show Increasing ADR Use
Survey #I:
ADR Use is Rising
The use of alternative dispute resolution is rising, though the steady increases are occurring slowly, according
to Price Waterhouse LLP’s 1996 Law
Department Spending Survey.
The study found that 37% of the
survey’s 177 respondents, from law
departments at companies nationwide,
increased the number of matters for
which they used ADRvoluntarily in the
reporting year, 1995.
“That’s a healthy increase,” says
Jonathan P. Bellis, national practice
leader in Price Waterhouse’s law firm
and law department consulting group.
Only 17% decreased their ADR use,
with 45% remaining the same.
Bellis also noted that 51 companies
reported 10 or more voluntary uses of
ADR in the 1996, and 12 companies
reported 50 or more uses.
But Bellis says that ADR is “one of
those things where everybody is expecting to do more, and then they do
a little more.” He says, for example,
that the median number of ADR matters rose a statistically significant one
matter-to three in 1995 from two a
year earlier. “That has fallen well short
of the potential,” he says.
Nevertheless, in-house lawyers’ expectations are high. Of 151 respondents, 77% reported that their
company expected “to make more frequent use of ADR in the next two years.”
The highest usage along industry
lines was in telecommunications, followed by energy companies and banking and financial services institutions,
according to Bellis.
The data indicate that ADR appears
to be helping cut costs. Litigation costs
rose among survey respondents 4%,
but more than half of the participants
said there was an overall decrease in
litigation spending as a percent of the
amount spent for outside counsel’s
services. The report’s conclusion:
“Outside counsel cost control and litigation management techniques may
be taking hold.”
Alternative dispute resolution, says
Bellis, “issomething that has now been
systematically instituted throughout
corporate America.”
Survey #2: Same
Thing, With More
An unpublished survey of 139 attorneys by the accounting firm of Deloitte
& Touche LLP, also shows strong support for ADR among the in-house respondents. Law firm lawyers were less
enthusiastic about using ADR, but the
survey revealed a lot of participation.
The survey, conducted in 1995 and
prepared in the past year, was a followup to a 1993 survey in which Deloitte
& Touche found wide acceptance and
satisfaction with ADR.
The firm’s draft report noted that
the latest study had similar findings as
the 1993 study. One big difference:
Mediation is now the “dominant form
of ADR.”
In 1993,company counsels said that
41% of their ADR activity was mediation, with 51% for arbitration and 8%
for other ADR forms. In the new survey, however,mediation soared to 65%,
while arbitration matters declined to
28% of the total.
There is still some indication that
ADR is a tough sell in the law firm environment. The survey found that 59%
of the law firms’ ADR matters occur
because of court mandates. Company
counsels said that voluntary and mandatory ADR was evenly split.
The survey, which was based on responses from 62 corporate counsel and
77 law firms, was not published because the sampling was smaller than
in the earlier study, according to Allan
Ripp, a spokesman for the Deloitte &
(continued on following page)
“So, are you prepared f o r your salary arbitration meeting?”
86 Altrrtiatives
Touche litigation group. He adds, however, that some of the study numbers
were released because of strong interest; two members of the firm prepared
a March National Law Journal article
based on the study.
Most of the corporate respondents
were Fortune 1,000 companies, with
35% having revenue between $1 billion and $4 billion.
Federal Court Pilot
Program Backs ADR
One of the federal court study districts
under the 1990 Civil Justice Reform
Act released an analysis of ADR early
this spring. The results strongly supported the effectiveness of alternative
dispute resolution.
The study of the U S . District Court
based in San Francisco, which found
that its ADR program “has substantial,
positive effects on the conduct of litigation,” comes on the heels of the
Rand Institute for CivilJustice’s reform
act study. The Rand report, released
in January, found little evidence
among the six federal court pilot ADR
programs Rand studied that ADR significantlyaffected costs or timing. The
northern California district was not
to the High Costs of Litigation
publishes an
index for the
preceding year
every February.
The index includes listings
by subject and author.
Newer and back issues are
searchable on WESTLAW@
See back page for
online details.
CPR Iiistitiitr for Disputc Resolution
part of the Rand study. [See page 79
for the Rand view.]
T h e northern California district
study, released in March by the Federal Judicial Center, a Washington,
D.C.-based research agency for the federal judiciary, found thatjudges, attorneys and neutrals believe that ADR
works. In a survey of 425 attorneys and
neutrals who participated in an ADR
session in the district, 61% said the
session decreased the time to disposition. Only 11% said it increased the
length of the case, while 23% said it
had no effect.
The results were similar when attorneys and neutrals were asked about
costs. It reported a median $25,000
savings per party among the 62% who
said they saved money. “Substantial
majorities” also said their ADR session
prompted settlement of the case, provided a satisfactory outcome, a n d
treated parties fairly, according to the
The study found that 94% of the
attorneys and neutrals would volunteer
a future case for ADR and 83% said
the benefits outweighed the costs.
In interviews conducted for the
study, the district’sjudges said that the
court’s ADR program was achieving its
intended effects, and that it is beneficial for the court to be able to offer a
range of ADR programs. The judges
also said that the program leads to and
encourages early resolution.
Arbitration is Changed
in Baseball’s New
Labor Agreement
Nearly lost amidst the relief over the
long-anticipated March signing of
Major League Baseball’s labor agreement were the substantial changes to
the salary dispute arbitration process.
Baseball’s arbitration proceedings,
launched two decades ago after the
Curt Flood case led to free agency,
were the first many in the U S . heard
of arbitration principles.
T h e new agreement may mean
more opportunities for neutrals -unless the sides can resolve the dispute and avoid arbitration altogether,
VOI. 15, No. (i ,lutle 199i
which the collective bargaining agreement encourages.
Up until now, one arbitrator sat between the sides and decided the cases.
Under the new agreement, three-man
salary arbitration panels will be used
in 50 percent of the cases next winter.
Thatwill increase to 75% in 1999. The
single arbitrator will be gone in 2000,
when all salary cases will be decided
by three-man panels.
Neither side will be allowed to refer to potential “luxury tax” payments during the proceedings, and
the results of the arbitrators’ voting
will not be revealed until after the
luxury tax payments a r e made.
Teams must pay a tax to the league if
their team payrolls exceed a n
amount set under baseball’s new revenue-sharing plan.
To encourage agreements to avoid
the arbitration process, the collective
bargaining agreement does not count
current players’ salary extensions negotiated during a baseball season in
the determination of the luxury tax,
which must be paid, if owed, each
ADR Moves Into
The principles of alternative dispute
resolution that work among businesses
to encourage agreement and defeat
hostilities are now being applied to city
high school students.
The American Bar Association earlier this year announced a 13-city
project to use ADR to head offviolence
among high schoolers. The program,
called Project Reach-Out, is sponsored
by two ABA practice sections, including the dispute resolution section, and
the young lawyers division. In the program, ABA volunteers are helping students run school-based peer mediation
According to the ABA Journal, the
prqject is being introduced in schools
in Atlanta; Chicago; Columbia, S.C.;
Denver; Hartford, Conn.; Milwaukee;
Minneapolis; Philadelphia; Phoenix;
Portland, Ore.; St. Louis; San Antonio;
and Tampa, Fla.
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