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Wednesday, April 8, 2015

Mediation and Complementary Dispute Resolution

Mediation and Complementary Dispute Resolution

         Compiled by Kenneth Vercammen, Esq.

         To reduce court costs, many Civil cases in New Jersey are being submitted to Mediation. According to the New Jersey Administrative Office of the Courts, Mediation is a dispute resolution process in which an impartial third party - the mediator - facilitates negotiations among the parties to help them reach a mutually acceptable settlement. The major distinction of mediation is that a mediator does not make a decision about the outcome of the case. The parties, with the assistance of their attorneys, work toward a solution with which they are comfortable.

What is the Program?

         The New Jersey Supreme Court Committee on Complementary Dispute Resolution developed this mediation program, for use in Civil, General Equity and Probate cases.

How is a Mediator Selected a Case?

       Mediators participating in the program have been approved for inclusion on a roster by a subcommittee of the Committee on Complementary Dispute Resolution. Mediators meet training requirements set forth in Court Rule 1:40-10 and other criteria adopted by the subcommittee. When a case is referred to mediation, the parties have the opportunity to agree on a mediator from the roster, or they may select any other individual they feel is suitable. If they cannot agree, the judge will assign a mediator to the case.

How Much does Mediation Cost?

      Under Court Rule 1:40-4(a), the mediator provides the first 2 hours on a case without charge, which would include a first session. Thereafter, mediators will generally be paid their market rate fee (to be shared by the parties). Fees will be waived in any case covered by Rule 1:13-2(a).

What Happens in Mediation?

         There are certain ground rules the mediator will ask participants to follow in mediation. The first, and most important, is that with a few exceptions covered in Court Rule 1:40-4(b), what goes on in mediation is confidential. That is, what is said in mediation cannot be discussed outside of the mediation process unless the parties consent. Prior to mediation, the mediator will usually ask the attorneys to prepare a brief summary of the issues in dispute. Then, at the mediation session, the mediator will ask attorneys and their clients to make brief presentations about the issues from their own perspectives. After that, the mediator will help the parties to explore areas of possible compromise and to develop a solution that meets everybody's interests. Sometimes the mediator may meet with the parties separately for a private discussion that might help move the parties toward a resolution. If an agreement is reached, the mediator will notify the court and a document will be drawn up specifying the agreement. When everybody signs the agreement, the attorneys should request the court to dismiss the case.

What Are the Roles of Counsel and Litigants in Mediation?

         Attorneys and their parties are required to make a good faith effort to cooperate with the mediator and engage in constructive dialogue regarding ways to meet client interests in a mutually acceptable settlement. Attorneys should prepare their clients prior to mediation by explaining what will happen, and what the roles of attorneys and clients are. They should also agree on who will be the principal spokesperson in presenting the party's view early in the mediation session. For example, attorneys may make brief opening summaries of the issues as they see them, but clients should also be given an opportunity to speak. When it comes to discussing terms of settlement, the litigants must play an active part, for it is their case and their settlement. During this process, attorneys should provide counsel on the advisability of settlement options, suggest options and be available for any other consultation with their clients.

How Does a Case Get Into Mediation?

      Appropriate cases for referral can be identified by judges, court staff, or the parties themselves, at any point in the life of a case. A form of order for referral is prepared and signed by the judge.

 What Kinds of Cases Could Benefit from Mediation?

          Mediation has been used successfully in a broad range of cases which exhibit characteristics such as: the parties have an ongoing business or personal relationship or have had a significant past relationship; communication problems exist between the parties; the principal barriers to settlement are personal or emotional; parties want to tailor a solution to meet specific needs or interests; cases involve complex technical or scientific data requiring particular expertise; the parties have an incentive to settle because of time, cost of ligation, or drain on productivity; the parties wish to retain control over the outcome of the case; or the parties seek a more private forum for the resolution of their dispute. While there isn't any case type that couldn't potentially benefit, commercial, construction, products liability, environmental and Law Against Discrimination (LAD) cases, and certain General Equity and Probate cases are particularly suited to mediation because they tend to exhibit some of the characteristics described above.

At What Time in the Process Should a Case be Referred to Mediation?

        The earlier that a case can be referred to mediation, the greater the likelihood that parties can resolve their dispute at cost savings to themselves and the court. Parties should feel they have enough information to discuss the dispute, which may mean that some discovery should be completed. Mediators can also help the parties to determine just how much discovery is needed. Even if discovery has been completed, settlement negotiations have been unsuccessful, or the parties are close to a trial date, the mediation process may still help the parties reach a mutually acceptable agreement.

What if the Case Isn't Resolved in Mediation?

      Sometimes the parties are unable to reach agreement, or only agree on certain aspects of the dispute. If certain aspects are still unresolved, the parties may wish to submit that portion to an expert for an opinion (binding or non-binding) or use some other creative means. The case can also be returned to court, and continue on track towards trial. Even in these cases, the mediation process may have helped the parties move toward an ultimate settlement.

Complementary Dispute Resolution Programs (CDR) provided for by these rules are available in the Superior Court and Municipal Courts and constitute an integral part of the judicial process, intended to enhance its quality and efficacy.

The following are some of the Court Rules in Mediation:

1:40-2. Modes and Definitions of Complementary Dispute Resolution

Complementary Dispute Resolution Programs (CDR) conducted under judicial supervision in accordance with these rules, as well as guidelines and directives of the Supreme Court, and the persons who provide the services to these programs are as follows:

(a) "Adjudicative Processes" means and includes the following:

(1) Arbitration: A process by which each party and/or its counsel presents its case to a neutral third party, who then renders a specific award.. The parties may stipulate in advance of the arbitration that the award shall be binding. If not so stipulated, the provisions of Rule 4:21A-6 (Entry of Judgment; Trial De Novo) shall be applicable.
(2) Settlement Proceedings: A process by which the parties appear before a neutral third party or panel of such neutrals, who assists them in attempting to resolve their dispute by voluntary agreement.
(3) Summary Jury Trial: A process by which the parties present summaries of their respective positions to a panel of jurors, which may then issue a non-binding advisory opinion as to liability, damages, or both.

(b) "Evaluative Processes" means and includes the following:
(1) Early Neutral Evaluation (ENE): A pre-discovery process by which the attorneys, in the presence of their respective clients, present their factual and legal contentions to a neutral evaluator, who then provides an assessment of the strengths and weaknesses of each position and, if settlement does not ensue, assists in narrowing the dispute and proposing discovery guidelines.
(2) Neutral Fact Finding: A process by which a neutral, agreed upon by the parties, investigates and analyzes a dispute involving complex or technical issues, and who then makes non-binding findings and recommendations.

(c) "Facilitative Process" means and includes mediation, which is a process by which a mediator facilitates communication between parties in an effort to promote settlement without imposition of the mediator's own judgment regarding the issues in dispute.

(d) "Hybrid Process" means and includes:
(1) Mediation-arbitration: A process by which, after an initial mediation, unresolved issues are then arbitrated.
(2) Mini-trial: A process by which the parties present their legal and factual conditions to either a panel of representatives selected by each party, or a neutral third party, or both, in an effort to define the issues in dispute and to assist settlement negotiations. A neutral third party may issue an advisory opinion, which shall not, however, be binding, unless the parties have so stipulated in writing in advance.

(e) "Other CDR Programs" means and includes any other method or technique of complementary dispute resolution permitted by guideline or directive of the Supreme Court.

(f) "Neutral": A "neutral" is an individual who provides a CDR process. A "qualified neutral" is an individual included on any roster of neutrals maintained by the Administrative Office of the Courts or an Assignment Judge. Neutral evaluators, neutral fact finders, and settlement program panelists are not required to comply with the training requirements of Rule 1:40-12 or to be on any roster of neutrals maintained by the Administrative Office of the Courts or an Assignment Judge.

1:40-3. Organization and Management

(a) Vicinage Organization and Management. Pursuant to these rules and Supreme Court guidelines, the Assignment Judge of each vicinage shall have overall responsibility for CDR programs, including their development and oversight, continuing relations with the Bar to secure the effectiveness of these programs, and mechanisms to educate judges, attorneys, staff, and the public on the benefits of CDR. The Assignment Judge shall appoint a CDR coordinator to assist in the oversight, coordination and management of the vicinage CDR programs. The Assignment Judge shall maintain, pursuant to these rules, all required rosters of neutrals except the roster of statewide civil, general equity, and probate action mediators.

(b) Statewide Organization and Management. The Administrative Office of the Courts shall have the responsibility (1) to promote uniformity and quality of CDR programs in all vicinages, (2) to monitor and evaluate vicinage CDR programs and assist CDR Coordinators in implementing them; (3) to serve as a clearinghouse for ideas, issues, and new trends relating to CDR, both in New Jersey and in other jurisdictions; (4) to develop CDR pilot projects to meet new needs; (5) to monitor training and continuing education programs for neutrals; and (6) to institutionalize relationships relating to CDR with the bar, universities, the Marie L. Garibaldi ADR Inn of Court, and private providers of CDR services. The Administrative Office of the Courts shall maintain the statewide roster of civil, general equity, and probate action mediators.

1:40-4. Mediation-General Rules

(a) Referral to Mediation. Except as otherwise provided by these rules, a Superior Court or Municipal Court judge may require the parties to attend a mediation session at any time following the filing of a complaint.

(b) Compensation and Payment of Mediators. Parties in Superior Court, except in the Special Civil Part, assigned to mediation pursuant to this rule shall equally share the fees and expenses of the mediator on an ongoing basis, subject to court review and allocation to create equity. Any fee or expense of the mediator shall be waived in cases, as to those parties exempt, pursuant to Rule 1:13-2(a). A party may opt out of the mediation process after the mediator has expended three hours of service, which shall include preparation and the first mediation session, and which shall be at no cost to the parties. Fees shall be as determined by the mediator and the parties. Failure to pay the mediator may result in an order by the court to pay and imposing appropriate sanctions.

(c) Confidentiality. Except as otherwise provided by this rule and unless the parties otherwise consent, no disclosure made by a party during mediation shall be admitted as evidence against that party in any civil, criminal, or quasi-criminal proceeding. A party may, however, establish the substance of the disclosure in any such proceeding by independent evidence. A mediator has the duty to disclose to a proper authority information obtained at a mediation session on the reasonable belief that such disclosure will prevent a participant from committing a criminal or illegal act likely to result in death or serious bodily harm. No mediator may participate in any subsequent hearing or trial of the mediated matter or appear as witness or counsel for any person in the same or any related matter. A lawyer representing a client at a mediation session shall be governed by the provisions of RPC 1.6.

(d) Limitations on Service as a Mediator.

(1) Mediators shall be qualified and trained in accordance with the provisions of Rule 1:40-12.

(2) No elected official, or candidate for elected office, shall serve as a CDR mediator within the geographic boundary of the elected office.

(3) The approval of the Assignment Judge is required for service as a mediator by any of the following: (A) appointed public officials; (B) police or other law enforcement officers employed by the State or any local unit of government; (C) employees of any court; (D) government officials or employees whose duties involve regular contact with the court in which they serve; or (E) elected officials, or candidates for elected office, who wish to serve outside the geographic boundaries of the elected office.

(4) The Assignment Judge shall also have the discretion to require prior review and approval of the Supreme Court of prospective mediators whose employment or position appears to the Assignment Judge to require such review and approval.

(e) Conduct of Mediation Proceedings. Mediation proceedings shall commence with an opening statement by the mediator describing the purpose and procedures of the process. Non-party witnesses may be heard in the discretion of the mediator, and other non-parties shall be permitted to attend only with the consent of the parties and the mediator. Multiple sessions may be scheduled. Attorneys and parties have an obligation to participate in the mediation process in good faith in accordance with program guidelines.

(f) Termination of Mediation.

(1) The mediator or a participant may terminate the session if (A) there is an imbalance of power between the parties that the mediator cannot overcome, (B) a party challenges the impartiality of the mediator, (C) there is abusive behavior that the mediator cannot control, or (D) a party continuously resists the mediation process or the mediator.

(2) The mediator shall terminate the session if (A) there is a failure of communication that seriously impedes effective discussion, (B) the mediator believes a party is under the influence of drugs or alcohol, or (C) the mediator believes continued mediation is inappropriate or inadvisable for any reason.

(g) Final Disposition. If the mediation results in the parties' total or partial agreement, it shall be reduced to writing and a copy thereof furnished to each party. The agreement need not be filed with the court, but if formal proceedings have been stayed pending mediation, the mediator shall report to the court whether agreement has been reached. If an agreement is not reached, the matter shall be referred back to court for formal disposition.