Useful Information About Dispute Resolution

Business Disputes

CPR Institute For Dispute Resolution

• "Mediation success rates for business disputes, i.e. cases that result in settlement during or shortly after the mediation, quoted by CPR and other leading ADR organizations, generally are in the 80%-90% range." - Kaskell, Peter H. "Is Your Infringement Dispute Suitable for Mediation?" (Alternatives March 2002)
• 4,000 operating companies have signed CPR's Corporate Policy Statement on ADR.
• 1,500 law firms have signed CPR's Law Firm Policy Statement on ADR.
• Almost all federal and state courts now use some form of ADR.

Ford, John. "Workplace Conflict: Facts and Figures." Mediate.com (available as of 7/15/03)

• A survey conducted by Price Waterhouse and Cornell's PERC Institute on Conflict Resolution of over 530 corporations in the Fortune 1000 category revealed the following trends:

  • 90% of respondents view Alternative Dispute Resolution (ADR) as a critical cost-control technique.
  • 54% of respondents indicate that cost pressures directly affected their decision to use ADR.
  • 88% of respondents reported using mediation in the last three years [data from 1997]."

• "Corporations that have developed collaborative conflict management systems report significant litigation cost savings:"

  • Brown and Root reported an 80% reduction in outside litigation costs.
  • Motorola reported a 75% reduction over a period of six years.
  • NCR reported a 50% reduction and a drop of pending lawsuits from 263 in 1984 to 28 in 1993.NCR reported a 50% reduction and a drop of pending lawsuits from 263 in 1984 to 28 in 1993.

Employment

Gibbs, David H. "After Waffle House, Arbitration Gets 'New Trilogy' of Employment Law." Alternatives February 2002.

• "The court notes that out of about 80,000 employment discrimination charges filed in 2000 with the EEOC [Equal Employment Opportunity Commission], the agency found reasonable cause in only 8,248 [10.3%]. In 2000, the EEOC filed 291 lawsuits and intervened in 111 others."
• "The number of employment discrimination cases tripled during the last decade."
• "The average litigation cost for a single plaintiff case is estimated at more than $93,000 and that of a class action $462,000."

Phillips, F. Peter. "Current Trends in Management and Resolution of Employment Disputes." For the Defense July 2002.

• Discusses the classic three-stepped ADR program and its modifications (1. Local Management Review, 2. Nonbinding Mediation, and 3. Binding Arbitration) as used in companies such as Anheuser-Busch, United Parcel Service (UPS), UBS PaineWebber, Texaco, and GE Corporate.

• "Nearly all disputes submitted to systematic employment dispute resolution programs are resolved by agreement, prior to the arbitration stage."

  • Halliburton, Johnson & Johnson: fewer than 2% of disputes proceed to the third stage, arbitration.
  • GE: in 1998-9, few disputes went to formal mediation and only one went to arbitration.
  • U.S. Air Force: in 2000, [2,728] disputes were subject to ADR; 79% were resolved before arbitration.
  • U.S. Postal Service (mediation-only): since 1997, formal complaints to the EEO [Equal Employment Opportunities Trust] have decreased by 26%, 76% of the claims were resolved or not pursued, and "participant satisfaction on a variety of parameters measured, on average, substantially above 90%."
  • EEOC: "of 7,490 charges mediated during FY99, 5,254 (70%) were successfully concluded."

Federal Agencies

Conflict Prevention and Resolution Center. "Executive Summary of the Conflict Prevention and Resolution Centerfor the USDA (FY 2001)." Mediate.com (available as of 7/15/03).

• 5,000+ USDA employees received training in ADR and conflict management.
• 5,000+ USDA employees received services from an ADR program for a workplace conflict.
• 83.7% of conflicts that used any form of ADR at the early intervention stage were successfully resolved.
• 79.3% of all workplace conflicts that used mediation at the early intervention stage were successfully resolved.
• 82% of the 4,400 program conflicts handled by the USDA Certified State Mediation Program resulted in an agreement.
• 67.1% of all formal EEO complaints that went through ADR were settled.
• 54.5% of all informal EEO complains that went through ADR were settled.

Ford, John. "Workplace ADR: Facts and Figures from the Federal Sector." Mediate.com (available as of 7/15/03)

• Department of Agriculture:

  • Overall resolution rate: 82%
  • Time from request for mediation to actual mediation: 24 days
  • Estimated savings in staff resources, investigation, and litigation costs over two years: $1,000,000+

• Federal Election Commission:

  • The agency resolved 100% of 26 issues brought voluntarily before the EEO Director.
  • Total cost to process an EEO complaint from pre-complaint counseling to litigation: $162,390 - $310,390 (based on 1996 figures).

• Treasury (Alternative Dispute Resolution Pilot Program):

  • For cases in which employees agreed to use mediation or fact-finding processes, 83% were resolved within 25 days, versus 180+ days through traditional complaint processes.
  • Pilot resulted in annual savings of approximately $42,000 in 1996, plus an anticipated cost avoidance of approximately $300,000 - $700,000 in FY 1997.

• IRS - Kansas City Service Center:

  • "Reports completed for each informal complaint filed at the service center show approximately a 2:1 benefit in terms of resolution rates, cost of resources, and time spent when comparing the ADR program with traditional counseling."

• U.S. Mint:

  • Since its inception in 1998, 88 cases have been handled through the ADR process and of that total, only three progressed to arbitration for resolution."
  • The number of EEO complaints at pilot facilities decreased by 38%.
  • "As a result of the ADR program, the Mint estimates that it has avoided approximately $2 million in costs from cases that could have progressed through the normal litigation channels."

• Veterans Integrated Service Network 22:

  • Savings to date are approximately $1,050,000 in dismissed EEO claims and $420,000 in averted EEO complaints.
  • Resolution rate: 85%

Trial And Civil Courts

"Report to the Legislature on the Impact of Alternative Dispute Resolution on the Massachusetts Trial Court." Prepared by the Supreme Judicial Court/Trial Court Standing Committee on Dispute Resolution for the Chief Justice for Administration and Management of the Trial Court. February 2, 1998.

• Middlesex Multi-Door Courthouse (MMDC), 1992. Study compared the success of cases from a control group (traditional litigation) and experimental group (Multi-Door: case evaluation, mediation, standard arbitration, complex case management, summary jury trial, mini trial) on a variety of dimensions. Cases were randomly assigned to control or experimental group.

  • Higher satisfaction rate for MMDC participants in terms of case processing time, litigant and court costs, and resource requirements.
  • Over 25 more attorney hours were spent on control group than MMDC cases.
  • One-third (33%) more motions were filed in control group cases; more documents per case were processed for control group cases.

• Massachusetts Motor Vehicle Tort Litigation Case Evaluation Program, 1992. Study assessed degree of user satisfaction, amount of attorney time spent on case, and time to proc ess the case in comparison to a control group (traditional litigation). Cases were randomly assigned to control or experimental group.

  • Average scores for user satisfaction were higher for the experimental group.
  • "In terms of median time from filing to "disposition", experimental cases had median time more than thirty (30) days shorter than control group cases."

• Haverhill Juvenile Mediation Program (pilot), 1993. Study assessed number of court appearances and user satisfaction in comparison to a control group (traditional litigation). Cases were randomly assigned to control or experimental group.

  • Average number of court appearances was lower for experimental group (two) than control group (four and four-tenths).
  • Average time to complete process was lower for experimental group (18.6 days) than for control group (117 days).
  • $3,227,798 would be saved by instituting juvenile mediation services.

• Suffolk Superior Court Pilot Mediation Project for the Trial Court (pilot)

  • Group experiences 68% success rate during the first year of operation.
  • According to conservative formula, disputants saved and average of $10,035 per case mediated, or $5,017 per disputant

• Findings of ADR Studies

  • high user satisfaction
  • improves pace of litigation
  • high settlement rates
  • more stable agreements over time
  • may reduce course workload
  • may reduce litigant costs

"Statistical Report: Office of Dispute Resolution, United States Department of Justice: Total Number of ADRProcesses Completed, FY 95-FY 02." Office of Dispute Resolution, United States Department of Justice (available as of 7/15/03)

• Civil Division: number of cases per year rose 450%, from 60 to 269, between FY 95 and FY 02.
• Civil Rights Division: number of cases per year rose 189%, from 121 to 229, between FY 95 and FY 02.
• Environment & Natural Resources Division: number of cases per year rose 286%, from 45 to 129, between FY 95 and FY 02.
• Tax Division: number of cases per year rose 721%, from 14 to 101, between FY 95 and FY 02.
• Executive Office for U.S. Attorneys: number of cases per year rose 795%, from 269 to 2,138, between FY 95 and FY 02.

Personal Injury

Hogarth, John and Kari D. Boyle. "Is Mediation a Cost-Effective Alternative in Motor Vehicle Personal Injury Claims? Statistical Analyses and Observations." UBC Program on Dispute Resolution April 13, 2002 (89pages).

• KEY FINDINGS

  • For the year 2000, the average number of pending (unresolved) represented bodily injury claims was 31,200. During 2000, 4,200 claims (13%) were referred (by either side) to mediation and approximately 2,400 mediations were held (7.5%).
  • Settlement rates on mediations that go ahead are "extremely high" (80-90%), regardless of the type or complexity of the claim.
  • There is a linear relationship between the complexity of the claim (regardless of method of resolution) and time to resolution. The more complex the claim, the longer each step took. Also, this relationship is strongest for litigated claims.

  • The mean number of days between Mediation and Resolution were small. In other words, the settlement rates at mediation are very high for all levels of complexity. If mediation was attempted, it resolved the vast majority of claims within 14 days of the mediation date.Although results indicate that files take longer to resolve using mediation than negotiation, the margin between the two means diminishes as complexity increases. However:

    • Mediation, within this program, is often used as a "last resort," after attempts to litigate have failed.
    • Mediation was used on more complex files, and more complex files take longer to resolve.
  • "The most cost effective method of resolution for all parties is early direct negotiation. All parties benefit from early and fair resolution."

• Settlement Rates of All Files that Proceeded to Mediation

  • Percentage of cases that settled on mediation date: 66%
  • Percentage of mediation cases that settled within 14 days after mediation date: 20.5%
  • Percentage of cases that settled beyond 14 days after mediation date: 11%
  • Total percentage of cases settled: 97.3%

Divorce and Family Law

The Journal of Consulting and Clinical Psychology (2001, Vol. 69, No.2, 323-332) has reported a study on families who had been randomly assigned to mediate or litigate their child custody disputes. In comparison with parents who litigated custody, parents not living with their children who mediated custody maintained more contact with their children and had a greater influence in co-parenting 12 years later. The 12-year follow-up data indicate that, even in contested cases, mediation encourages both parents to remain involved in their children's lives after divorce without increasing co-parenting conflict.

Reactive Devaluation and the Value of Mediation

Researchers at the Stanford Center on Conflict and Negotiation have investigated reactive devaluation, that is, people assess and respond to conflict resolution proposals differently depending on the source of the suggestion. Reactive devaluation has implications for how each negotiation party is likely to respond, depending on whether a proposal originated from the parties themselves, from a mediator, an outside expert, etc. Some interesting clues come from their initial sidewalk survey on nuclear disarmament in 1986. When the researchers told one group of Americans that a US leader had proposed an immediate 50% reduction in all missile stockpiles, 90% of the Americans rated the proposal as favorable to the US. When another group of Americans was told that a neutral party had proposed this idea, the number approving dropped to 80%. And when a Soviet leader was identified as the source, only 44% supported the proposal. (In reality, Soviet leader Gorbachev had proposed such missile reductions and the idea was dropped in part because it was so poorly received by the American public.)