Joanna Wilson, Gina M. Viola, Lisa B. Bingham

Indiana Conflict Resolution Institute
School of Public and Environmental Affairs
1315 E. 10^th St., Room 322
Bloomington, IN 47405

  Report prepared for American Arbitration Association, Indiana State Bar Association, the Indiana chapter of the Society for Professionals in Dispute Resolution

September 9, 1999

   Table of Contents

      i.    INTRODUCTION

           II.      FOCUS GROUP DESIGN                                                                           

         III.      BUSINESS SECTOR                                                                                   

        IV.      HEALTH SECTOR                                                                                     

           V.      PUBLIC SECTOR                                                                                         

        VI.      OBSTACLES AND BARRIERS TO USING ADR                                       

      VII.      WAYS TO INCREASE ADR USE IN INDIANA                                         

   VIII.      SPECIFIC RECOMMENDATIONS                                                           

  IX.     CONCLUSION                          

I.         INTRODUCTION -- In an effort to understand why ADR is not widely used, ICRI, AAA, SPIDR and the Indiana Bar conducted a focus group study

In the last decade, Indiana Courts and the Legislature have passed rules     and legislation to authorize and encourage the use of alternative dispute resolution (ADR). In 1991, the Indiana Supreme Court  created the ADR Rules governing the use of ADR in civil and domestic relations cases filed in Indiana Circuit, Superior, County, Municipal, and Probate Courts (ADR Rule 1.4).  In 1996, the Indiana General Assembly enacted S.E.A 241, the Indiana Agency Mediation Statute, which allows for a state agency, to determine whether mediation is an appropriate means of ADR to resolve a particular conflict.

Although Indiana has adopted these official rules governing the use of ADR, the methods have not been used widely throughout the state.  In an effort to identify the barriers to increased use of ADR methods to resolve disputes, the American Arbitration Association (AAA), Indiana Chapter of the Society of Professionals In Dispute Resolution (SPIDR), the Indiana Conflict Resolution Institute (ICRI), and the ADR Section of the Indiana State Bar Association jointly organized three focus group sessions.  A number of individuals contributed to the organization and facilitation  of the focus group sessions, including Jerry Pitt, Moni Draper, John L. Krauss, Cynthia Stanley, Eileen Vernon, and Tom Colosi.

The objective of these sessions was to assess perceptions, experiences, needs, and opportunities to use ADR from the perspective of both users and practitioners.  Several specific recommendations emerged from the focus group sessions.  These recommendations are detailed in the final section of this report.

II.                FOCUS GROUP DESIGN -- Three focus groups examined negotiation, mediation, early neutral evaluation, and arbitration

Approximately fifteen individuals participated in each of the three focus group sessions.  The participants represented a cross-section of each of the three focus group areas: general business, health care, and the public sector.  Participants in the business sector session included executives from medium and large companies and trade association representatives. Participants in the health care sector session consisted of leaders in medical, hospital, and managed care industry, as well as consumer groups.  Participants in the public sector session included governmental leaders and legislators, as well as representatives from private sector groups that regularly deal with governmental entities. Tom Colosi, American Arbitration Association Vice President for ADR Education, facilitated the three focus group sessions.

The focus group sessions focused on four ADR processes: negotiation, mediation, early neutral evaluation, and arbitration.  Negotiation is the exchange of promises and commitments between two or more people without the assistance of a third party.  Mediation involves an impartial third party who assists the disputants in finding a mutually acceptable solution. Arbitration is a proceeding where an impartial third party makes a decision based on the facts presented by the disputants.  Early neutral evaluation is a process where parties present a summary of their case to a third party neutral who evaluates and offers a non-binding opinion.

The participants in the focus group sessions had a wide variety of experiences with ADR.  Some participants had little to no experience with any ADR process.  Other participants were trained mediators, registered with the Indiana Commission for Continuing Legal Education.  Some participants disliked mediation and/or arbitration.  Others promoted increased use ADR processes. 

The next three sections discuss comments from participants in each of the three focus group sessions about their experiences, perceptions, and general knowledge of ADR.  The final section contains recommendations for addressing the comments and concerns that emerged from the focus group sessions.  

III.             Business Sector -- While experience with ADR varies, arbitration elicited stronger negative responses than mediation

This focus group consisted of representatives from both medium and large businesses in the Indianapolis area.  The group also contained several attorneys representing various local private organizations.  All the attorneys and one local businessperson had previous experience with at least one form of ADR.  Many of these focus group participants actively promoted using ADR techniques.  There were also several participants who had minimal knowledge of ADR.  These participants were skeptical about using ADR processes. Many of the participants shared their perceptions of ADR tended to view arbitration more negatively than mediation.

Experience

The most vocal proponents and those with the most experience with ADR processes were the attorneys and one businessperson.  Several of the participating attorneys were trained arbitrators or mediators.  Several participants are also involved in lobbying for the increased use of mediation and/or arbitration throughout the state.  One attorney incorporates ADR into contracts yet has never personally participated in ADR.  Another attorney is an advocate of putting arbitration in all contracts yet has had only limited direct experience with ADR. Another participant, an attorney and a mediator, has a supervisor who hates all forms of arbitration and will not support the use of any ADR process. 

Several focus group participants were skeptical about using the techniques.  Their judgments were based on either lack of prior involvement or bad experiences with ADR in the past.  For instance, one focus group participant prefers mediation to arbitration due to a bad arbitration experience. Some participants expressed concerns regarding negative mediation experiences.  One had a bad mediation experience due to a mediator who had not effectively facilitated the process.  Another discussed circumstances that lead to bad mediations.  For example, this participant was ordered to engage in mandatory mediation with a magistrate judge, who served as the mediator. The disputants were only present because of the judge's order.  They did not prepare well for the mediation, in part because the outcome was non-binding.  A few participants have never been involved in mediation or arbitration.  One participant expressed a desire to avoid litigation but has never resolved a conflict through arbitration or mediation.

Perceptions

In addition to experiences, participants elaborated on their perceptions of arbitration and mediation.  Arbitration elicited stronger negative comments than mediation.  One participant felt that arbitrators routinely compromise, essentially “splitting the baby”, which is not justice.  This participant believes that arbitrators want to tell both parties they are somewhat right rather than identifying a winner and a loser; thus, from a defense standpoint, if the case was big, arbitration was probably a good option because the arbitrator would be more conservative in the award of damages than a runaway jury would be.  A small case is better suited for court where there is the possibility of not having to pay.  In arbitration, the arbitrator is unlikely to let you get away without paying anything, because that would mean declaring a clear winner. In reality, there is pressure on local arbitrators to keep both parties reasonably unhappy in order to be hired again as an arbitrator.  For example, if there is a clean winner in an arbitration, then the loser will not hire that arbitrator again.

In comparison, participants generally perceived mediation in a more positive manner.  Overall, the focus group participants felt that most people thought of mediation when they heard ADR.  During the session two different forms of mediation, evaluative and facilitative, were discussed.  One focus group participant liked both forms and would like to combine them.  This individual felt that it was invaluable to hear the mediator’s opinion, especially if the mediator is capable and a retired judge.  Another participant’s perception was that the purpose of mediation is to preserve the relationship and facilitate negotiation of an agreement to resolve the dispute.  This participant perceived mediation as an opportunity to vent emotions, get the conflict out on the table, and repair the relationships.  In addition, one participant felt that mediation did not have to be an adversarial process and noted that there is no “v” between the parties in mediation, at least not in pre-suit mediation.  Similarly, another participant felt that success in negotiation and mediation arises from learning what the other side's needs are and trying to fulfill as many as possible.  One participant felt that any business relationship will lend itself to conflict and therefore ADR is an appropriate procedure for resolving business disputes. 

IV.              Health Care Sector -- Some participants were reluctant to participate in ADR since settled cases are reported in a national insurance database

The health care focus group consisted of representatives from the medical professions, hospitals, the managed care industry, and consumer groups. Some participants had no experience with ADR. Others were strong advocates of ADR processes.  Some participants were hesitant to use ADR, although less reluctant than the skeptical participants in the business and public sector. The participants who discussed perceptions of ADR expressed a preference for mediation rather than arbitration.

In general, ADR processes were familiar to most participants, however several participants had limited experience with these techniques.  A few focus group participants work in the health and welfare division of their respective companies where they deal primarily with claim issues.  They felt they were neither familiar with nor greatly exposed to arbitration or mediation.  One participant felt that historically some mediation or arbitration takes place in fully-insured HMO businesses.

Experience

Although some participants had more experience with ADR, their experience was not necessarily through a formal process and/or training.  For instance, one focus group participant informally mediates in-house disputes between physicians and between patients and physicians.  This informal mediation process brings in both sides separately without legal counsel.  The focus group participant serves as a mediator although she has no formal training as a mediator.  The outcome of the informal mediation is put in writing but it is not a binding report. 

Other participants discussed the informal use of ADR in health care settings.  A health care attorney noted that since Indiana only has a relatively small number of health care attorneys, they tend to resolve disputes through informal negotiation. The attorneys lay out the issues on the table and then try to reach common ground.  Another participant felt that her job consists of about 80% mediation. She deals with employees, doctors, and patients who have complaints and issues.  This participant had no formal training in ADR and would like techniques to help reach settlements and avoid going to court. 

Some participants have had significant experience with more formal ADR processes. One participant is involved in educating health care providers and the community about ADR processes.  In addition, this participant is lobbying the General Assembly for passage of legislation that supports the use of pre-suit ADR.  Another participant is from a labor law background and finds ADR a useful tool.  She has been trying to get mediation and arbitration implemented into contracts at her organization.  However, she has encountered problems educating insurance departments about the benefits of ADR.  The insurance departments see ADR as a negative process because it either rushes people into mediation before the administration can collect relevant information or it causes delays.  She sees voluntary mediation as much more effective in practice because users see it as a “gentle” process, rather than one that is forced upon an individual.

Although not necessarily skeptics, there were a few participants who were more hesitant about using ADR.  One attorney found that neither arbitration nor mediation was useful in medical malpractice suits.   In these cases, if the physician settles, the case is reported to the national database.  The physician’s department of insurance  retains this information and it follows the physician for the rest of his or her career.  Physicians would rather litigate and hope to win than try to settle through arbitration or mediation. This participant felt that ADR is more useful in business disputes where the  parties directly receive the bill and therefore the costs provide more of an incentive to use ADR.

Another participant is exploring whether mediation could be used in the regulatory process. Currently, the regulatory agency follows the traditional Indiana Administrative Agency Orders and Procedures Act.  Occasionally, the parties have engaged in informal settlement conferences with good results. This participant is interested in determining whether arbitration and mediation might work in this area of regulation. 

Perceptions

Two participants discussed their favorable perceptions of using mediation over arbitration.  For instance, one individual felt that mediation was better than the arbitration process since he views arbitration as similar to the Administrative Law Judge process.   Although he has had good experiences with Administrative Law Judges (ALJs), the participant felt that mediation would get people to the table sooner and lead to better resolutions.  In addition, one health care attorney thought that mediation would be a good approach for working with administrative agencies and could result in better resolutions.

V.                 Public Sector -- Opportunities for ADR use are more limited in the public sector, but group members ranged from skeptics to strong advocates

ADR is currently used differently in the private sector than in the public sector.  The Administrative Agency Mediation Statute imposes limits on the use of ADR in the public sector.  For example, the statute only authorizes the process of mediation.  It is unclear whether one can use arbitration. As a result, in the public sector, arbitration is not written into contracts.  Thus, the public sector differs from the private sector where insurance companies will use arbitration clauses in contracts.

This focus group consisted of representatives from various government agencies as well as private sector groups who regularly deal with governmental entities.  Administrative Law Judges (ALJs) and attorneys who practiced before ALJs predominately attended this session.  Some ALJs were inexperienced and skeptical of ADR, whereas other ALJs were certified mediators.  The attorneys ranged from those with little experience in  ADR to trained mediators and advocates of the process.  Similarly, employees of governmental agencies ranged from skeptics with little experience to advocates and implementers of voluntary mediation programs.  Additionally, some participants shared their positive perceptions of negotiations and mediation in general.

Experience

Of the several focus group participants who serve as ALJs for local governmental agencies, two ALJs were skeptical about the use of ADR.  These participants felt that there was a limit to how much an ALJ can do with individual parties.  For instance, depending on the situation, an ALJ can hold prehearing conferences to try to aid the parties in reaching a settlement.  There is not much else that an ALJ can do other than make a decision after a hearing.

However, three other ALJs were in favor of using the ADR process and two of the three were trained mediators.  One ALJ who is responsible for pre-arbitration discussions in labor disputes involving public employees takes an active approach.  In these cases, the parties attempted to negotiate a settlement to resolve a conflict before scheduling arbitration.  Another ALJ adjudicates cases; however the agency does have mediation available.  If the parties opt to mediate, the ALJ/mediator can remove him or herself from the proceeding.  Although a certified mediator, the participant has not had her her first case yet.  However, the participant served as an attorney for a department in a few mediations.  Overall, the participant saw mediation as more difficult than adjudication because in adjudication all one has to do is sit back and guide the evidence, whereas in mediation one must guide the parties to reach their own settlement.  A different opinion was expressed by another ALJ who is also trained as a mediator.  The participant’s agency has the authority to direct cases to mediation.  Although the participant has vastly more experience as an adjudicator, he has no problem switching hats between being an ALJ, mediator, negotiator, facilitator, or whatever the parties need.

The attorneys who practice before ALJs also ranged in their experience with ADR, from those with some limited knowledge to those who are certified mediators and advocates.  One attorney felt that the role of the ALJ is to keep things moving along, making sure both parties are progressing, and not acting as a mediator.  This attorney had never used arbitration or other forms of ADR, however most of her cases involve settlement negotiations.  Generally, she follows the administrative process where if a disagreement is not resolved, it is referred to an ALJ.  Another attorney who practices before an ALJ in health matters has been involved in federal court ordered mediation.  However, the participant has no formal training in mediation or arbitration.  Overall, the attorney feels that in Marion County more agencies are doing settlement discussions without the presence of a third party.  Another participant is an attorney in private practice who has used mediation but not in a regulatory context.  One attorney is not only a certified mediator but also an advocate, who works aggressively to get people involved in trying mediation.

Again, similar to ALJs and attorneys, agency employees vary in terms of their experience with ADR.  Some are skeptical and have had limited experience with ADR processes.  One refused to participate in the ADR process unless forced, meaning strongly recommended; otherwise, his or her division would not pursue that process.  Another participant does not get involved in ADR processes unless the division is named in a lawsuit.  In the past, the participant has drafted agreements that strongly recommended mediation at the division’s expense in order to afford the ADR process to complainants. 

However, three other participants who are agency employees are strong advocates of mediation.  One individual has worked as a mediator in family custody cases in the past and now implements a victim offender program.  The program has mediators who meet with families to develop safety plans.  The focus group participant would like to use ADR to keep cases out of the courtroom, especially since cases have doubled in the last year.  Two focus group participants have voluntary mediation programs within each of their agencies.  One state program has been in place for 10 years, and although not everyone walks away entirely pleased there has been an 85% written agreement rate.  Since federal rules prohibit any state or local official from participating, the agency had a “call for mediators”.  Out of 100 applicants 30 were selected and trained to mediate.  Currently there are 13 trained mediators who do two to four mediations per year and are paid $250 per day (per mediation).  Overall the program does not spend very much per year for mediations, probably less than $20,000-$25,000 for approximately 40 mediations per year.  If the mediation is unsuccessful, then parties can go to an ALJ. The process is voluntary and the agency pays the full cost with no additional charge to the parties involved.

Similarly, another federal agency offers a voluntary mediation program for equal employment opportunity (EEO) discrimination complaints.  As of February 1999, only one person out of 16 declined the offer to mediate; that person did not want to meet face to face with the accused.  The program incorporates a transformative style of mediation.  The ultimate goal is to transform the relationship by getting the individuals to talk to one another and resolve the conflict.  The focus group participant emphasized that the program is strictly voluntary; if the mediation does not work, the parties can go back into the regular process.  Also, there are opportunities for the parties to talk privately with the mediator during a caucus.  Currently, the focus group participant is working aggressively to get as many people as possible involved in trying mediation. 

Perceptions

In addition to sharing their experiences, participants discussed their positive perceptions of various forms of ADR.  For instance, one focus group participant’s perception was that the cases generally are settled through negotiation.  This participant works for a state agency that deals with insurance appeals.  An additional focus group participant thought that if negotiation efforts were unsuccessful, mediation with an ALJ would help to keep the parties honest and assist them in reaching an agreement. 

VI.              OBSTACLES AND BARRIERS TO USING ADR -- Common yet surmountable barriers to using ADR include: perceived threats to law practice, lack of knowledge, power imbalance, and lack of funding.

All three sectors discussed the obstacles and barriers to using ADR.  The main obstacles and barriers included the following: (1) perceived threat to the business of practicing law; (2) lack of knowledge about ADR -- for example, confusing arbitration with mediation and the perception of ADR as a delay tactic; (3) imbalance of power -- lack of due process and lack of participation by decision-makers; and (4) lack of funding for ADR initiatives.  Overall, the focus group participants felt that these obstacles were surmountable.

(1) Perceived threat to the business of practicing law. 

The participants observed that some lawyers believed ADR was a threat to their livelihood. However, in reality, focus group participants felt that there was no threat to the legal profession.  ADR is not a real threat at all, but just another mechanism by which parties and their lawyers can resolve disputes.  If the process of ADR is in place, the participants’ experience has been that most clients want a lawyer involved anyway.  Therefore, the opportunity for lawyers to participate is not necessarily lost in the ADR process.  If ADR is unsuccessful, then the parties can resort to court and lawyers will still earn their fees.  Also, there does not seem to be a real threat posed by ADR, especially since there is a serious backlog of court cases.  Ironically, most courts actually order mediation, particularly at the federal level. 

(2a) Lack of knowledge about ADR: confusing arbitration with mediation. 

The focus group sessions revealed that many individuals do not understand that mediation and arbitration are two different processes.  Contributing to the confusion are horror stories about non-lawyer arbitrators who deliver binding results that parties have limited rights to appeal.  Thus, they fear binding arbitration conducted by a person who does not know the law.  Also, there is a general fear arising from misunderstanding what ADR entails.  For instance, some people think that mediation means bringing in a third party who then has the authority to resolve the dispute and write an opinion.  These feelings are coupled with the concern that courts will begin forcing parties to accept mediation and other forms of ADR.

(2b) Lack of knowledge about ADR: perception of ADR as a delaying tactic. 

Many participants expressed concern that some people feel ADR is another court-like layer, which only hinders them from obtaining their goals.  For instance, focus group participants were concerned that implementation of ADR clauses in contracts and agreements is only seen as adding another layer.  Parties perceive that an ADR clause adds layers to keep them from suing or is used as a delay tactic.  This concern is compounded by the fact that some perceive the existing layers as unfair.

In addition, focus group participants have experienced resistance to putting ADR clauses in contracts because parties fear that the other side will see it as an invitation to a dispute.  In divorce settlements, people do not like to think about things not working out and therefore do not want to include arbitration or mediation clauses in contracts.

(3a) Imbalance of power: lack of due process. 

Focus group participants expressed a concern that many people perceive ADR as lacking in due process protections.  For instance, some state agencies have no appeal rights at this stage of the administrative process, which means if a party’s negotiation with an agency yields negative results, there is no alternative due process.  In this situation there is a need for very different negotiation skills. One focus group participant emphasized how this could potentially hurt the negotiation process.  This focus group participant suggests that there needs to be a change in the power relationship and processes.  If there is a disparity of power, then mediation, arbitration, and due process hearings should be added to the negotiation process.  Similarly, the issue of due process is confounded by confusion over the role of an Administrative Law Judge (ALJ).  For instance, many individuals feel that the ALJ must be violating constitutional separation of powers when the ALJ who hears a case is on the same payroll as the agency presenting the case.  Therefore, if there was someone from outside the agency conducting the arbitration or mediation, parties might perceive it as a fairer process.  In fact, mediation and arbitration might possibly help the public relations efforts of those administrative agencies.

(3b) Imbalance of power: participation by authorized parties or decision-makers.

The focus group participants also expressed a concern that participation in ADR processes can affect the balance of power between parties.  For instance, a few focus group participants felt that if the decision-makers did not participate, then ADR processes were a waste of time, especially since the decision-makers have the authority to settle.  Although the ADR participants can relate information back to the absent decision-makers, they can not convey the demeanor, body language, and emotions involved in the ADR process.   

(4) Lack of funding for ADR processes. 

Focus group participants observed that the Indiana Administrative Agency Mediation statute provides authority for mediation but most agencies do not fund the process.  Obviously, an absence of funds presents a serious obstacle to implementing ADR.  However, one participant who is involved in a voluntary mediation program within his agency receives funding for mediation largely through the federal government.

VII.           WAYS TO INCREASE THE USE OF ADR IN INDIANA -- A multi-faceted approach would increase the use of ADR in Indiana.

The focus group participants discussed several ways to encourage the use of ADR in general and within their respective organizations.  The methods for increasing the use of ADR included the following: (1) legislation, (2) clause in a contract or agreement, (3) institutionalization, (4) education, (5) showing cost effectiveness, (6) fairness, and (7) building trust in the process.

(1) Promoting ADR through Legislation. 

Participants discussed how legislation can increase the use of ADR by creating incentives for voluntary use, mandating ADR for certain cases, and/or expanding confidentiality in mediation.  For instance, the legislature considered a proposal to address the impending year 2000 computer problem (Y2K).  Experts projected that Y2K problems will encompass a wide spectrum of disputes ranging from minor to major, with the potential to shut down the court system.  One aspect of the introduced legislation proposes to use ADR to resolve the Y2K cases.  Another proposed bill focuses on enhancing the availability of mediation before lawsuits are filed (called pre-suit mediation).  This legislation is in direct response to a recent Indiana Court of Appeals ruling that affects businesses who want to use mediation without initially going to court.  The Court held that a mediator in a pre-suit dispute has no immunity from future lawsuits and no confidentiality protection.  The purpose of the introduced legislation is to guarantee confidentiality in pre-suit mediation and provide immunity for mediators; however, this would only apply to registered mediators.

(2) Promoting ADR through Clauses in Contracts or Agreements.

One focus group participant described how they currently include ADR in their contracts so that if something goes wrong, ADR is available to the parties.  In general, focus group participants felt that some individuals would argue against putting ADR in contracts because they think this would open a floodgate to using ADR or would invite disputes.  Yet, one focus group participant suggested that in fact the opposite resulted; fewer people used the clauses to raise disputes.  Another focus group participant raised the point that, in general, people do not like to think about what happens when things do not work out.  Therefore, parties are not as inclined to include processes such as ADR in contracts.  However, it would be particularly helpful in removing stress down the road if ADR was in a contract or schedule.  Other focus group participants stated that they have mediation and arbitration clauses in most contracts, yet they have never used them.  In fact, one participant felt that it never made a difference in the willingness or incentive to settle. 

(3) Legitimizing the Use of ADR by Institutionalization. 

One way to institutionalize ADR is through the Indiana Administrative Code Rules.  Another way is to develop a specific ADR program such as voluntary mediation.  One participant was involved in the creation of a voluntary mediation program where the relevant stakeholders, in this instance the parents, were included in establishing the program.  Because they were involved in the start-up, the stakeholders had a vested interest in and helped to build the program.  An advisory group was created to build trust and increase participation.  In addition, the agency and advisory group emphasized that voluntary mediation program was cheaper, less emotionally damaging, friendlier, and faster than the straight due process approach.  Also, the agency notified potential parties of the voluntary mediation program through letters, brochures, and telephone offers explaining the program.

Another example of a voluntary mediation program is one that resolves equal employment opportunity discrimination complaints. The implementers of the program found that the success of participants sells the program since they become its biggest advocates.  In addition, the parties have nothing to lose by going through the mediation since they can chose to go back into the “regular” process at any time.

Focus group participants expressed that while they do not want to add yet another layer, there is a need for a meaningful process.  For instance, one focus group participant felt that a mediation process would work the best at the governmental level.  As many focus group participants expressed, in the current system there are layers, which are necessary.  Therefore, one does not want to add any layers unless they are useful because getting through all the hoops is already tough and expensive. Holding out mediation as a short cut to avoid the tough and expensive government hoops would be advantageous.

(4) Encouraging the Use of ADR through Education.

ADR education should clarify the different forms of ADR. To educate someone about ADR, one must begin with that person’s frame of reference.  Only then is it possible to inform the individual about the various types of ADR.  Another way to educate individuals about ADR is through lobbying efforts.  Focus group participants suggested educating members of the Indiana General Assembly about the types of ADR and its benefits.

(5) Illustrating the Cost Effectiveness of ADR. 

In order to sell ADR to legislators or other decision-makers, focus group participants stressed the need to show how ADR is cost effective.  Specifically, there is a need for a cost-benefit analysis balancing the use of ADR against traditional methods.  In essence, what can an organization save by using ADR?  For instance, it would be helpful to quantify the fact that by implementing arbitration in contracts the number of lawsuits dropped precipitously.  Several focus group participants felt that this information would be particularly persuasive to businesspersons.  For example, benefits should be explained in terms of cost-savings, such as human resources, employee relations, customer relations, ability to continue business transactions, etc.  Another participant agreed that it would be educational to explain ADR in dollars, including the cost of hiring attorneys and cost in lost business relationships.  Any time that a lawsuit is filed, there is going to be damage to the business relationship even if the suit settles by mutual agreement. This “hurt” relationship has the potential to damage a business.  Therefore, if there is a good mediator, the parties have an opportunity to preserve the relationship. 

It would be helpful to illustrate that ADR is cost efficient, user friendly, and a very fair way to resolve problems.  One participant suggested that the reason they started doing arbitration was really based on economics. It makes sense in economic terms to use ADR since it is the cheaper alternative.  Another participant felt that it was important to note that an informal process (other than litigation) was more cost effective and potentially better.

(6) Emphasizing the Fairness of the ADR Process.  

For example, ADR can be used as an opportunity to bring in an outside person as an early neutral evaluator to determine what is fair.  Another possible role of a mediator is acting as a messenger, which parties might perceive as fairer if the mediator delivers the bad news.  Some focus group participants recommend using an outside consultant to show the decision is appropriate.  However, the dilemma is that someone has to pay for the mediator.  If one side pays for the mediator, it may appear unfair to the other parties involved.

(7) Building Trust and Belief in the ADR Process.  

It was emphasized that changing a dispute resolution process to include alternative processes such as arbitration and mediation may initially be hard for several reasons, including the fear of change.  However, individuals who have had a bad experience with litigation are more receptive to alternative means of resolving the dispute.  One focus group participant felt that even those who have had bad arbitration and mediation experiences still preferred ADR to litigation.  Basically, one needs parties who are responsive and receptive to doing something different in order to implement ADR.

VIII.    SPECIFIC RECOMMENDATIONS -- Focus group results suggest seven specific recommendations for increasing ADR use.

The ideas generated during the focus group sessions prompted the formulation of seven specific recommendations.