The Florida Bar

Florida Bar Journal

Neutral-Driven Dispute Resolution — The Missing Piece of ADR

Alternative Dispute Resolution Section
Image of NDR Coaster

Illustration by Barbara Kelley

The face of alternative dispute resolution (ADR) has been changing over the last few years with the addition of online dispute resolution and other innovations for use by litigators. One little-known but hugely valuable innovation is neutral-driven dispute resolution (NDR), which is a potential solution for limited stakes cases and other matters where traditional litigation is ill suited for the disputants. This article explains how NDR works, the types of disputes for which it is well suited, those for which it is not, and practical implementation issues.

The Origin of and Rationale for NDR

NDR is exactly what its name implies, an alternative dispute resolution process that is driven by the neutral decision-maker(s) or mediator instead of opposing lawyers. NDR empowers a mutually selected, independent neutral judge, expert, or panel to 1) conduct a robust, yet stakes-sensitive investigation into what happened, 2) gather and evaluate the facts, 3) determine what law controls a dispute, and 4) either reach a decision or facilitate a mediation. The scope of work and power of the neutral is solely determined by the parties.

The term “NDR” was coined by author Rob Christopher from his experience as a litigation attorney in California,[1] and born from the need for a principled, cost-effective dispute resolution method when the amount in controversy, business relationships, or special circumstances do not support the actual and hidden costs associated with litigation and its collateral consequences. For example, when preserving the relationship between the parties is key, NDR may provide a prompt but fair resolution without the psychological and financial tolls of depositions and onerous discovery requirements. Where parties value truth-seeking, relationships, and an expedited resolution, NDR works well. Disputants may prefer a principled process and outcome that is far less expensive but allows them to seek vindication and avoid what may be viewed as extorted compromises and burdensome litigation costs. NDR can be used for a wide range of disputes among people who want a timely, thoughtful, cost-effective, and final solution to their dispute. Many disputes are too small to warrant the long path of traditional litigation.

NDR is premised on the notion that our civil justice system lacks a gap-filler — the ability to “right-size” the process to meet the problem. Our court system and the attendant rules of civil procedure offer a one-size-fits-most modality. Some disputes are too big to ignore but too small to litigate extensively. Accordingly, a few mediators have been known to quip, “you all have something to argue about, but not for very long.” NDR is well served for the niche of disputes too large to ignore but not large enough to warrant the costs and burdens of our civil justice system.

The NDR process is consensual. Although, conceptually, the parties could choose a panel, typically there is one neutral — not necessarily an attorney — but typically a lawyer-neutral with some subject matter expertise. Like arbitration, there typically is no appeal, but the process can readily accommodate one if the parties so choose.[2] The costs are determined in advance and in most cases are shared and fixed. The neutral is paid a negotiated sum at the start. The process may take many forms as needed to meet the needs and constraints of the parties. The arguments in favor of NDR are several:

1) NDR slashes and limits time and costs to rational levels by focusing all investigation and analysis on non-adversarial truth-seeking instead of procedural technicalities, discovery disputes, motion practice, and gamesmanship. (NDR participants can expect saving between 60-80% of anticipated legal fees and other costs over traditional litigation.)

2) NDR makes the workload predictable and controllable, enabling candidate neutrals (and potentially even legal advisors) to competitively quote fixed or capped fees and costs in advance at stakes-sensitive levels — something virtually impossible in an adversarial process.

3) NDR investigations and analyses are robust because the neutral(s) are empowered to obtain whatever information they want in the manner they want it from parties who have agreed to cooperate fully and promptly. To that end, the neutral(s) must have traditional judicial discretion to punish any failure to cooperate with adverse inferences or findings.

4) NDR is fair because process rules and neutral(s) are independent and mutually selected, fully vetted for conflicts of interest, integrity, and expertise.

5) The inequities arising from power and wealth disparities that may influence a litigated dispute are greatly reduced.

6) NDR is private and can be kept as confidential as the parties may agree.

7) The NDR process has great flexibility, including options for the number of neutrals, facilitated negotiation (mediation) before decision, a binding and court-enforceable decision or advisory neutral evaluation, and expedited (appellant-paid) review by additional neutrals to assure against plainly wrong or biased outcomes.

8) NDR satisfies parties’ critical psychological needs to be heard, to feel enfranchised during the process, to have legal counsel advising them, and to feel fairly treated with dignity. NDR offers access to justice.

The NDR Process Is Flexible

While NDR’s reliance on proactive, investigating neutrals enables extraordinary savings to the parties and sets it apart from other forms of ADR, perhaps equally compelling is the decision-making process. In the authors’ preferred version of NDR, the neutral makes preliminary findings of fact and law and the tentative decision is distributed to the parties for comment. The decision is not “one and done.” The parties may submit whatever additional facts, law, or analysis they believe are worthy of the neutral’s re-consideration. The NDR neutral may issue a revised proposed decision. In this way the process is iterative. There may be multiple opportunities for the parties and counsel to comment before the neutral reaches a final decision. Unlike a traditional arbitration award, the NDR process leads to a final result only after review and reconsideration of the facts and law along the way. Accordingly, the parties should feel as though their positions, even if rejected, have been fairly considered. The NDR process invites a contemplative result.

NDR is a helpful innovative concept for litigators, as NDR aligns lawyer and client financial interests in stakes where traditional litigation may prove too slow or costly. NDR is best seen as a complementary tool to litigators’ current practices because they can manage or refer out cases that otherwise make no economic sense (to them or their clients) and concentrate on cases that warrant zealous advocacy and full-blown civil litigation. In this way, the general public will come to see lawyers as helpful shepherds, offering different paths to resolution of a dispute. This should promote greater client trust and loyalty for high-stakes situations that compel zealous adversarial representation.

Triggering NDR and Applicable Rules

The parties may contractually stipulate to an NDR process as they would to mediation or arbitration. Here is sample language:

DISPUTE RESOLUTION. The parties agree to submit any dispute arising out of or relating to this Agreement to ____________ as an independent neutral service provider for binding neutral-driven, non-adversarial resolution (NDR) according to its then-current rules.[3]

NDR provisions could be inserted in a variety of commercial contracts and forms. NDR works for construction companies (where margins are already thin, and time is of the essence due to risk of delays), Realtors (where claimed failures to disclose material facts vex brokers, sellers, and buyers alike), start-up companies and their investors (where legal fees spent on disputes waste precious capital), commercial buyers and sellers (where valuable relationships can be saved), independent service contractors (where small disputes kill profits and ruin reputations), family partnerships and small trust estates (where feuding families spend the corpus on legal fees and holiday dinners change forever), cross-border transactions (where foreign business partners loathe the hostility and costly gamesmanship of American justice), insurers and insured (where speedy resolution is important and where the carrier wishes to avoid published opinions), and property distribution in divorce.

As with arbitration and mediation, NDR may be ill-suited to some situations and disputes. Here are some examples:

1) When the parties can voluntarily share enough information to settle, whether with or without the help of lawyers, on a principled basis before initiating litigation.

2) When stakes are so high that adversarial process is worth its many actual and hidden costs.

3) When an indispensable third party or a nonparty witness will not cooperate.

4) When immediate equitable relief, like a temporary restraining order or preliminary injunction, is needed.

5) When one side simply won’t agree to it for whatever reason(s) — especially likely in tort and other claims between or among strangers without any prior relationship, and any relationship where one side is inherently suspicious (or counseled to be suspicious) of anything the other side might suggest.

6) When considerations of public policy prevent otherwise willing parties from effectively agreeing to it.

NDR and Private Judging

NDR is similar to “voluntary trial resolution” in F.S. §44.104, commonly referred to as a private judging statute. Although seldom used, §44.104(1) expressly provides that two or more opposing parties involved in a civil dispute may agree in writing to submit the controversy to voluntary binding arbitration or voluntary trial resolution (VTR) in lieu of litigation, prior to or after a lawsuit has been filed, provided no constitutional issue is involved.[4] However, rather than supplant a circuit judge with a retained private judge as contemplated by §44.104, NDR significantly reduces costs and hastens access to justice by eliminating much of the procedural formality attendant to a civil action, including hyper-technical motion practice and burdensome discovery. While the rules of procedure and evidence presumptively apply to statutory VTR, it appears that the parties may be able to stipulate to a less formal process akin to NDR and still enforce a final award under the statute.

In this way, statutory VTR, which contemplates that lawyers largely perform their traditional roles, could achieve what NDR does: Charge the neutral with the hands-on investigation, questioning of witnesses, and fact-finding to reduce time and expense.

Barriers to Implementation

Potential barriers to implementation are several: NDR is not widely known nor taught in law school. Second, the psychology of dispute resolution inhibits adoption of NDR in some situations because people think they are right and want to prove it through litigation (until legal bills and delays compel settlement in more than 95% of filed civil cases). The general public is influenced by television, film, and entertainment, which views trials as entertaining content. Indeed, trials are high theatre, while the work of a mutually agreed neutral is unremarkable, quiet, and lacking in drama or material for headlines or pundits.

Additionally, most parties to a dispute end up in litigation so infrequently that it is seen as a “one-off” matter. In other words, apart from attorneys, only frequent purchasers of legal services are likely sensitive to and interested in pursuing alternatives to traditional litigation.

There are no published decisions arising from a failed or challenged NDR process. NDR has existed in various related forms for decades, but not typically in a broadly prescriptive fashion for limited stakes cases. For example, variations have existed under the banners of “ombudsmen,” “neutral fact-finders,” and “dispute resolution boards.”[5]

Some lawyers may view NDR as a threat to their livelihood. Mediation was viewed the same way decades ago. Lawyers, like most professionals, may resist change where they lose some degree of control or perceived control over a case and where their skills as litigators are put on hold. Finally, recommending an unfamiliar method to a client may seem to be risky behavior in the event the NDR process yields an unwelcome result. A judge and/or jury should theoretically reach roughly the same result as an NDR neutral, but lawyers don’t know about NDR yet, occupying the same innovative space as mediation 40 years ago. Mediation met with some of the same objections decades ago but is now considered the norm. All of these reasons suggest adoption will be slow, despite the merit and cost-savings to the parties.

Where Can One Find NDR or Something Akin to It?

Current providers and analogous models for NDR-type resolution include the following: 1) Dispute resolution boards (DRBs) used in large construction industry projects for mostly nonbinding recommendations;[6] 2) collaborative lawyering common to domestic relations in which both spouses retain the same attorney-mediator and other neutral experts to investigate and recommend fair terms of their dissolution and division of assets;[7] 3) industry-based or statutory-based processes designed to expedite the resolution of smaller disputes without need of adversarial process;[8] and 4) independent service providers who specialize in offering binding NDR or NDR mediation by one name or another.[9]

Conclusion: NDR Is a Valuable New Tool

NDR, or neutral-driven non-adversarial dispute resolution, is not a complete panacea, but it is a cure for the inefficiencies, costs, and emotional burdens visited upon disputants engaged in ordinary litigation where the stakes are limited. If the amount in controversy is something less than $500,000, should the parties invest $100,000 or more in fees and costs in motion practice, discovery, and more to reach trial? The economics and the optics in a one-size-fits-some legal system are bad. Because it caps costs and renders a prompt and fair result, NDR not only has the potential to deliver economically rational justice, but it also may improve the public’s perception of the legal process and the role of lawyers. The public also stands to benefit by reducing the number of cases actively litigated in the court system. The hidden cost of unresolved disputes that languish in an over-crowded court system is staggering. NDR incorporates the speed and cost-savings attendant to mediation and the desired finality of arbitration.

[1] Robert Christopher, Just Right — How Neutral-Driven Resolution Can Close the Gap in American Civil Justice (Fair Mission Press 2022).

[2] Id. at 97-98. Typically, when appellate review is permitted, the cost of a second neutral or review panel is born by the appellant regardless of the outcome of the appeal. Id.

[3] Id. at 127. Variants can include many additional terms, e.g., Id. at 128.

[4] See generally, Richard Brodsky, Private Judging in Florida: Useful in Business Cases?, 90 Fla. Bar. J. 51 (Apr. 2016).

[5] Id. at 158 and accompanying endnotes.

[6] The Dispute Resolution Board Foundation, www.drb.org.

[7] See International Academy of Collaborative Professionals, www.collaborativepractice.com.

[8] Better Business Bureau, www.bbb.org; California Department of Consumer Affairs, www.dca.ca.gov.

[9] Just Resolve, www.justresolve.com (affiliated with the authors); Advantage Arbitration and Mediation Services, www.advantageadr.com; Anywhere Arbitration, www.anywherearbitration.com.

Robert Christopher is a member of the State Bar of California, general counsel and co-owner of Christopher Ranch, LLC, and is an AV-peer rated trial attorney. He is the founder and CEO of Just Resolve LLC, which facilitates non-adversarial dispute resolutions like NDR.

 

 

 

 

David W. Henry of Orlando is a former litigator and the owner of Henry Mediation, P.A., serving as a mediator and neutral for a variety of civil matters. He serves on the Florida Supreme Court Committee on ADR Rules and Policy, and publishes Mediation Minute, a monthly blog related to mediation rules, advocacy, and ethics.

This column is submitted on behalf of the Alternative Dispute Resolution Section, Christy L. Foley, chair, and Ana Cristina Maldonado, editor.