The Present and Future of ADR

At the recent ABA Dispute Resolution Section conference in Chicago a panel that included myself, Debbie Masucci, past president of the DR section; India Johnson, CEO of AAA; and Dale Matschullat of Schiff Hardin, discussed “The present and Future of ADR.” The primary topics included the financial crisis in the courts, international ADR, online dispute resolution and diversity in ADR.

The budget cuts to the court system have perhaps been felt more severely in California. In March, California Chief Justice Tani Cantil-Sakauye lamented in a speech to the state legislature, “our judicial branch budget has been cut greater and deeper than any other court in the United States.” The roughly $1 billion in reductions have led to closure of a large percentage of civil courtrooms. The impact on ADR, however is less clear. The panel generally felt that the desire for swift justice would increase the demand for mediation and arbitration, but that hasn’t always been the case.

On the international front, there is a similarly mixed message. Changes like the 2007 Mediation Directive passed by the European Union have had little impact on the demand for ADR in Europe. In other parts of the world, arbitration has seen slow but steady growth, while mediation has yet to become a significant part of the ADR process.  Brazil was cited by the panel as a prime example of a rapidly expanding economy with an active and growing litigation market, but a lack of interest in commercial mediation.

Online dispute resolution (ODR) has become a hot topic in ADR. A number of ADR providers are exploring piloting online offerings. Although the panel was clear on the inevitable growth in ODR, interest and momentum is more apparent in smaller commercial disputes where human facilitators are often not involved.  The panel also felt that the use of ODR in more complex disputes will become more common as technologies and offerings improve.

The panel concluded with a robust discussion of diversity in ADR, highlighted by a recognition that the ADR industry reflects the same challenges as most law firms where women and minorities represent a small percentage of equity partners. JAMS, for example, recruits its neutrals primarily from the judiciary, but also from the senior ranks of law firms where the vast majority of partners are white males.  ADR providers have focused diversity programs in place, but are struggling to achieve as much progress on the demand side of the equation, where women and minority neutrals are not chosen proportionately to their population in those organizations.

We found it difficult to draw any single conclusion about the future of ADR. However, the message of slow, steady growth stood out as well as the need for ADR organizations to innovate in terms of efficiency, cost effectiveness and flexibility to adapt to changes driven by a more sophisticated clientele and an anemic domestic economy.