CUEA CLS 412 LESSON 1ADR GENERALLY

CHARLES BG OUMA Adjunct Faculty CUEA

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Lesson Content

• ADR generally • What is ADR?• Methods of ADR• Structures of ADR• Why ADR?• Arguments for and against ADR• Evaluating ADR• The Place of ADR in the Law-School Curriculum

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Learning Activities

• Getting to know each other • Recording of expectations and aspirations• Agreement on ground rules• Agreement on course structure course

content and delivery methods and timings• Agreement on mode of assessment• Lecture• Active brainstorming and discussion08/04/23 3

Introduction to the course• Lecturer :CHARLES B G OUMA• POSITION: CUEA Adjunct Faculty, JKUAT Adjunct

Faculty, Senior Lecturer KSL • QUALIFICATIONS: LLB,(UON) MLB (WHU/BLS), MDE

(UON)(ongoing)• Advocate of the High Court of Kenya( 20 yrs)• Interests: Commercial and Finance Law, Dispute

Resolution, Constitutional Law• Contact charles.ouma@law-school.de, 0713 937282

sms preferred08/04/23 4

Introduction to the Course

• Course Content Arbitration & ADR ( Negotiation and Mediation)

• Course times Fridays 11 a.m -2 p.m• Number of Lessons 12• Introduction 1 Arbitration 8 Mediation 2 Negotiation 1• Assessment• Sit in CAT (Open Book 1 Hour) 10 : ASS/Class

Participation (one week to submit) 10: Attendance (70% of scheduled classes) 10: Exam 70

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Lesson 1 Objectives• By the end of this lesson you should be able to

1. Define ADR2. Distinguish ADR from other forms of Dispute

Resolution3. Name the different methods, types and structures of

ADR4. Explain the juridical basis of ADR (particularly in

Kenya)5. Evaluate the place of ADR in Dispute Resolution

(particularly in Kenya)6. Explain the place of ADR in the Law School

Curriculum (particularly in Kenya)

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Readings 1. Owen Fiss Against Settlement 93 Yale L. Review 1073 19842. Menkel-Meadow,Carrie Whose dispute is it anyway?3. Sternlight Jean R.4. Ellinghausen Don Jr.5. What you need to know about dispute resolution © 2006

American Bar Association Section of Dispute Resolution http://www.abanet.org/dispute/draftbrochure.pdf

6. Moffitt Michael, Three Things to be Against-Settlement not included 2009 Fordham Law Review . (http://ssrn.com/abstract=1412282

7. Court ADR Library Research article http://courtadr.org/library/effective

8. CPR Order 46 Rules 1-18 9. Carrie Menkel-Meadow. Empirical Studies of ADR: The Baseline

Problem of What ADR is and What It is Compared to (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1485563)

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What is ADR?

• From John Millers article in your reading list at page 1

• ‘Alternative Dispute Resolution (ADR) is an “umbrella term” that refers to various methods used to resolve disputes without resorting to litigation (Nolan-Haley,1992).’

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What is ADR?

• The American Bar Association (ABA, 1999) defines ADR as, “an array of non-binding and binding dispute resolution methods that involve the use of third-party neutrals to aid the parties in contract controversies via a structured settlement process.”

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What is ADR?• Alternative Dispute Resolution (ADR) is a

collection of processes used for the purpose of resolving conflict or disputes informally and confidentially.

• ADR provides alternatives to traditional processes, such as.........; however, it does not displace those traditional processes (http://www.cdc.gov/od/adr/about.htm)

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What is ADR?

• Alternative dispute resolution (ADR) ...... includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. http://en.wikipedia.org/wiki/Alternative_dispute_resolution

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What is ADR?• “The term "alternative dispute resolution“ or "ADR"

is often used to describe a wide variety of dispute resolution mechanisms that are short of, or alternative to, full-scale court processes.

• The term can refer to everything from facilitated settlement negotiations in which disputants are encouraged to negotiate directly with each other prior to some other legal process, to arbitration systems or minitrials that look and feel very much like a courtroom process.”

• USAID ADR Practitioners guide 1998

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The Basic Premise of ADR

• From John Millers article in your reading list at page 1 • ‘The basic premise of ADR is that litigation can and should be

avoided whenever possible. ADR, when applied to public procurement, seeks to resolve disputes equitably and expeditiously by keeping the process in the hands of procurement officials and their legal advisers and away from litigating attorneys, judges and courts’.

• ….the larger issue is the need for contracting officials and their legal advisors to approach rifts in contractual relationships from an ADR perspective that emphasizes mutuality over self-interest and reconciliation over termination

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What is ADR?

• The field of ADR (originally known as “alternative” dispute resolution in the United States) has more recently been called “appropriate” dispute resolution, or just dispute resolution

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Methods of ADR

• First, methods for resolving disputes outside of the official judicial mechanisms.

• Second, informal methods attached to or pendant to official judicial mechanisms.

• There are in addition free-standing and or independent methods, such as mediation programs and ombuds offices within organizations

• source http://en.wikipedia.org/wiki/Alternative_dispute_resolution

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Types of ADR © 2006 American Bar Association

1. Arbitration2. Mediation3. Negotiation4. Case Evaluation5. Early Neutral Evaluation6. Facilitation7. Family Group

Conference8. Mini-Trial

9. Multi-Door Program10. Neutral Fact-Finding11. Ombudsman12. Parenting coordination13. Pro Tem Trial14. Private Judging15. Settlement Conferences16. Special Master17. Summary Jury Trial

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Types of ADR

• The United States Code (5 USC Section 571) defines ADR as consisting of: – conciliation; – facilitation; – mediation; – fact-finding; – mini-trials; – arbitration; – the use of ombudsmen, and – any combination of the above.

• Miller supra at p 2

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The Main Types of ADR

1. Arbitration2. Mediation3. Negotiation

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Some Definitions• Negotiation is a dialogue intended to resolve disputes, to produce an

agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution. http://en.wikipedia.org/wiki/Negotiation

• Mediation is process in which a third party becomes involved in a content dispute between two or more editors in order to try to guide their discussion towards the formation of agreement:

• Arbitration is the hearing and determination of a dispute by an impartial referee agreed to by both parties….. the act of deciding as an arbiter; giving authoritative judgment; "they submitted their disagreement to arbitration“ wordnetweb.princeton.edu/perl/webwn

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Key characteristics of the three types of ADR

• Degree of party control of the proceedings

• NEGOTIATION• MEDIATION• ARBITRATION

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HIGH

MEDIUM

LOW

Structures of ADR

• ADR includes informal tribunals, informal mediative processes, formal tribunals and formal mediative processes

• The major differences between formal and informal processes are :-a. pendency to a court procedure andb. the possession or lack of a formal structure for

the application of the procedure.• Source http://en.wikipedia.org/wiki/Alternative_dispute_resolution

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THE JURIDICAL BASIS OF ADR

• It is consensual• It is jurisdictional. The state permits its

citizens to settle disputes outside of or as an adjunct to the judicial system

• It is a hybrid of the foregoing

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THE JURIDICAL BASIS OF ADR -KENYA

• Law of contract• Constitution Article 159• Civil Procedure Act CPR O 11, 25, 46 et al• Dispute specific legislation limiting excluding

or permitting ADR e.g. s 176 204 CPC S 87 KR Act

• Arbitration Act 2009

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Why ADR?

• (ADR) originally designed to challenge various aspects of formal litigation

• Brittle, • rigid and binary outcomes, • excessive cost and delay,• limited bi-partisan and bi-lateral participation,• emphases on the past and precedent, rather than

future and more creative outcomes and relationships • Per Carrie Menkel-Meadow (2009)

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Why ADR

• ADR Evangelists –Settlement is synonymous with agreement or even deal breaking!

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Why ADR?USAID 1998

• ADR is touted as more efficient and effective than the courts in providing justice, especially in countries in which the judiciary has lost the trust and respect of the citizens.

• Moreover, ADR is seen as a means to increase access to justice for populations that cannot or will not use the court system, to address conflicts in culturally appropriate ways, and to maintain social peace.

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Why ADR?Sternlight (2007)

• In the international context, ADR is said to foster the rule of law in several ways:

• (1) it may increase access to justice by making it easier for people who are poor, illiterate, or geographically dispersed to bring or respond to a claim;

• (2) it may reduce the amount of money and time needed to resolve disputes;

• (3) it may provide an alternative to corrupt or biased court systems;

• (4) it may promote foreign investment opportunities;

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Why ADR? Sternlight (2007)

• (5) it may provide justice to groups, such as women and minorities, whose interests are not well served by the formal legal system;

• (6) it may bring community members together and establish greater social harmony;

• (7) it may bring about political reform; and • (8) it may help community members work

together to better protect their individual rights.

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Why ADR?Moffitt 2009

• Settlements can be autonomy enhancing• Settlements can also be value creating• Settlements can be value promoting• Settlements can lead to docket clearing• Settlements can lead to selective case

filtering• But settlement must not be oversold. The

vision is not always the same as the reality

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Arguments against ADR• The point of departure is always Owen Fiss (1984) .• He has several arguments against settlement

1. Imbalance of power2. Agency costs3. Absence of real consent4. Lack of a foundation for continuing judicial involvement5. Justice rather than peace6. The educational function of public adjudication

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Arguments against ADR

• Litigation romanticists – settlement is synonymous with compromise or even selling out

• Settlement erodes the justice system by decreasing appellate review opportunities Yeazzelle (1995)

• Settlement deprives the public of litigation driven articulation of public norms Luban (1995)

• Settlement favours harmony over justice Nader (1993)

• Process pluralists. Both systems are worthy of praise and celebration Bush (1989)

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Arguments against ADRSternlight (2007)

• A major concern is that the informalization and privatization of ADR is hostile to the rule of Law1. The privatization of dispute resolution is problematic because

the elaboration of law achieved in public trials and published decisions is necessary to protect and enhance individual rights

2. Treating disputes as matters of individual rather than public concern eliminates important public accountability

3. Dispute resolution fails to serve an important educational function when it is privatised

4. Private dispute resolution processes are more easily skewed by power imbalances in society

5. ADR is especially unsuitable for vindicating family disputes

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Arguments against ADRSternlight (2007)

• “The strength and appeal of the rule of law critique should not be underestimated. In the United States, even many of ADR’s staunchest advocates recognize that there are circumstances in which disputes are better resolved publicly, through litigation, rather than through negotiation, mediation, arbitration, or some other private means”

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Advantages of ADR (Mediation)

• The positive aspects of mediation are:

• It helps to identify the true issues of the dispute.

• It resolves some or all of the issues.

• Agreement can be reached on all or part of the issue at dispute.

• It is flexible and informal

• The needs and interests of the parties are met (in part or in full).

• The parties reach an understanding of the true cause of the dispute.

• The parties reach an understanding of each other’s needs and interests.

• It provides the possibility of preserving the relationship

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Advantages of ADR (Arbitration)

• Certainty• Predictability• Neutrality and convenience of forum• Less prone to Corruption • Expert decision makers• Efficient- cost effective, speedy resolution of

disputes, focus on substance of the dispute not technicalities party control of the process

• Effective- finality and ease of enforcement

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Disadvantages of ADR (Arbitration)

• Justice vs finality• Rogue arbitrations• Secrecy• Not cheaper any more, in fact

more expensive than court litigation

• Increasingly judicialized• Unsuitable for the resolution of

certain types of disputes• Encourages regulatory arbitrage

• Disregard for party policy• Inequality of the parties

leads to unequal bargain• Influence of parties on the

party nominated arbitrators

• Reinventing the procedural wheel takes away time tested and proven procedural safeguards

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Perceived Advantages of ADR1. The parties to the dispute define the issues. 2. The process is consensual. 3. The process is controlled. 4. The process is private. 5. The dispute can be resolved expeditiously. 6. The business relationship can be preserved. 7. The results of litigation cannot be predicted. 8. The costs of litigation are avoided. 9. ADR seeks to resolve disputes efficiently and effectively. The

conventional wisdom is that courts are unequal to the challenge

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Acknowledged Problems in ADR

• While it has many advantages, there are important disadvantages which should be noted:

1. Case law and legal precedent are avoided. 2. The process may create a two tier system of justice. 3. The process requires commitment. 4. The process may not work with multiple complex issues. 5. Main issue with ADR: Is the public a stakeholder in every

dispute? Is there a legitimate public interest in HOW and WHERE (and WHEN) disputes are to be resolved

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Some reports on the efficacy of the Judiciary in Kenya

• BY SARAH WAMBUI (Thursday 24th June 2010)

• http://www.capitalfm.co.ke/news/• Kenyanews/Kenya-has-a-million-pending-

court-cases

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Some reports on the efficacy of the Judiciary in Kenya

• ……..study which was conducted by Nairobi University lecturer Beneah Mutsotso on behalf of the Federation of Women Lawyers (FIDA) Kenya chapter shows that there are 998,263 cases that are awaiting conclusion at the High Courts and magistrate courts in Kenya.

• The oldest reported case was filed in 1984 and by the time we were concluding this study it had not yet been resolved. Others are 10 years old and there are hundreds of thousands of court cases especially those dealing with accidents that are still pending,” he said

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Some reports on the efficacy of the Judiciary in Kenya

• Kenya: Court Case Backlog a National Shame• Daily Nation on the Web 9 August 2007

http://allafrica.com/stories/200708090081.html

• The Judiciary has been frequently in the news, and on almost every occasion, this arm of Government has been mentioned negatively

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Some reports on the efficacy of the Judiciary in Kenya

• Surprisingly, most of the criticism leveled at the Judiciary has been from its own officers or from the public, and the conclusion is often the same:1. That it is not delivering justice on time, if at all; 2. That it is largely unschooled;3. That it is corrupt; and 4. That, therefore, it urgently requires some sort of

overhaul.

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Some reports on the efficacy of the Judiciary in Kenya

• As the government of Kenya is fighting to clear its name from allegations of corruption, its efforts are being undermined by renewed claims of graft in the judiciary.

• President Mwai Kibaki's administration had shaken up the judiciary in an attempt to clean up the system. It has not succeeded ( NAIROBI, Apr 16, 2005 (IPS)

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Some reports on the efficacy of the Judiciary in Kenya

• Report followed a fact-finding mission to Kenya in December 2004 by the ICJ on the independence and transparency of the judiciary.

• ‘'We went around collecting views and the evidence we received was overwhelming that corruption was still taking place but in a very secretive manner because the judicial officers are afraid of the radical surgery,'' said George Kanyeihamba, the head of the mission ( NAIROBI, Apr 16, 2005 (IPS)

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Some reports on the efficacy of the Judiciary in Kenya

• With the foregoing, and much more , in mind do you still think that the judiciary in Kenya is equal to the task of resolving the disputes?

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Empirical Research on the Effectiveness of ADR

• Court-Ordered Arbitration in North Carolina: An Evaluation of Its Effects

• Clarke, Stevens H.; Donnelly, Laura F.; Grove, Sara. 1989Abstract:

• This is a comprehensive study of one of the first court-ordered arbitration programs in the country (instituted in 1987). The program operated in three diverse judicial districts (urban, semi-urban and rural) and addressed civil cases involving a damage claim of $15,000 or less. The study found that litigants' satisfaction with outcomes and procedures improved; attorneys were satisfied with program; eligible civil cases were disposed of more quickly than with standard procedures; and the number of civil trials decreased

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Empirical Research on the Effectiveness of ADR

• Just, Speedy, and Inexpensive? An Evaluation of Judicial Case Management Under the Civil Justice Reform Act

• Kakalik, James S.. Judicature, 80(4):184-189, January-February, 1997Abstract:

• This article is a summary of the 4-book research series done by the Institute for Civil Justice (ICJ) on the Civil Justice Reform Act (CJRA) of RAND. The CJRA required each federal court district to develop a plan for civil case management to reduce costs and delay, and 10 districts were chosen as "pilot" programs for evaluation. The case management principles fall into 4 categories: differential case management; early active judicial management; judicial management of discovery; and referral of appropriate cases to non-binding ADR. The study found that the CJRA pilot program had little effect on delays and costs of litigation and that ADR had no major effect on litigation cost or delay, though participants liked the ADR programs and cases referred to ADR were more likely to have a monetary outcome

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Empirical Research on the Effectiveness of ADR

• Trapping the Data: An Assessment of Domestic Relations Mediation in Maine and Ohio Courts

• Wissler, Roselle L.. May 1999Abstract:

• This report looks at domestic relations mediation in thirteen courts in Maine and six courts in Ohio. The data was gathered from participant questionnaires submitted for 789 cases mediated in Maine between February 1996 and March 1997 and from 154 cases mediated in Ohio between February 1997 and March 1998. The data gathered included type of case, mediator demographics, mediation session length and attendance, mediation outcomes, and participant assessment of the process.

• The study found that very little impacted settlement to any extent, but that participant assessments were affected by case and party characteristics, as well as mediator characteristics.

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Empirical Research on the Effectiveness of ADR

• Court-Ordered Civil Case Mediation in North Carolina: An Evaluation of its Effects

• Clarke, Stevens H.; Ellen, Elizabeth D.; McCormick, Kelly. 1995Abstract:

• This is a comprehensive study of a court-ordered mediation pilot program. The program operates in 13 counties, four of which were analyzed intensively for this study. The study looked at participation rates, settlement rates, satisfaction and cost savings to litigants.

• It found that the program achieved its goals of greater efficiency and satisfaction to some extent, but not as much as its proponents may have hoped. It recommends that the court system consider making participation in mediation happen more often and more quickly

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Empirical Research on the Effectiveness of ADR• Metro Court Project Final Report: A Study of the Effects of Ethnicity and

Gender in Mediated and Adjudicated Small Claim Cases• Hermann, Michele; LaFree, Gary; Rack, Christine; West, Mary Beth.

January 1993Abstract:

• This report is a result of a study that examined how women and minorities fared in mediated and adjudicated small claims civil cases in Bernalillo County, NM. It evaluated results in mediation and adjudication using two measures: 1) the objective formula for outcome developed by Vidmar, and 2) subjective measures of satisfaction.

• The study found that minority claimants consistently received less money than non-minorities, while minority respondents consistently paid more. These results were more extreme in mediated cases than in adjudicated cases. Gender did not have an effect on monetary outcomes, except that female respondents paid less in mediated than in adjudicated cases. Minority claimants were more likely than non-minority claimants to express satisfaction with the mediation process. Minority women were the most satisfied with the process, despite the fact that they were more likely to receive less as claimants and pay more as respondents

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Is ADR the forum of Choice?

• In 2002 the European commission sought to know why the use of ADR is not as prevalent as expected given its perceived and possibly proven benefits

• So they posed the following question to the promoters of ADR

• What is your opinion on the general approach to ADR that should be followed by the institutions of the European Union, and what might be the scope of such initiative

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Is ADR the forum of Choice?

• The CPR Institute for Dispute Resolution (www.cpradr.org) a nonprofit educational and research organization submitted the following response to that question,

• ‘The greatest challenge facing proponents of commercial mediation is lack of awareness of its economic benefits, among the community of those who would most directly derive those benefits: the business community’

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Is ADR the forum of Choice?• Numerous studies, well known in Europe, have quantified the

many parameters in which diligent, systematic and skilful application of various ADR processes improve business relationships.

• Among these are lower transaction costs, faster cycle of dispute resolution, avoidance of belligerence, added value in relationships going forward, and maintenance of confidentiality with respect to non-public and strategic aspects of companies’ operations.

• Yet many businesses continue to believe-and are encouraged to believe-that adjudication is the sole and best way to resolve disputes, whether involving vital supply chain partners or involving critical intellectual property

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Relationship ADR & National Court Systems

• The outcome of all ADR proceedings are enforced in national courts unless there is voluntary compliance

• There can be court mandated ADR• There can be need court interventions in aid of

Arbitration• There are disputes that are not suited for ADR• ADR is a compliment of Court dispute resolution not

a substitute of the same

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Whose dispute is it anyway?

• Not every dispute resolution is suitable for resolution in ADR

• The suitability of the forum depends on the degree of escalation of the dispute

• Sometimes there is a legitimate public interest that certain disputes be resolved only in a certain forum and in a certain way.

• Can you think of examples?

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Process Pluralism. Menkel-Medow (2006)Moffitt (2009)• ADR is a compliment to, not a substitute of

litigation• ADR and Litigation have coevolved in ways

that make them dependent on each other• Litigation should not be romanticised, ADR

should not be evangelised• Both processes have something to offer which

can be transported with necessary modifications

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Evaluating Dispute Resolution Mechanisms

• comparisons of various forms of dispute resolution (DR) with each other on a variety of dimensions (fairness, justness, cost and efficiency, party satisfaction and systemic accountability), and evaluations and assessments of the efficacy of various practices and alternative forms of these dispute resolution devices.

• Per Carrie Menkel-Meadow (2009)08/04/23 57

Difficulty of Comparisons or Evaluations

• While in this essay I review some of the recent studies on the uses of ADR, my theme is one of scepticism that we can ever truly measure, with any degree of accuracy, whether one particular process is ever “better” or “worse” than another in a particular case.

• Per Carrie Menkel-Meadow (2009)

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Recurrent Themes in Evaluating ADR

1. The need for clarity in describing processes that vary as much internally as they do across processes;

2. The great difficulty of developing accurate or truly “comparative” treatments or processes of similar disputes;

3. The virtual impossibility of using real experimental models in subjecting the same dispute to several different treatments for comparisons or by co-varying factors of influence (such as case types, gender of disputants, etc.) And;

4. The open boundaries and dynamism of the field itself. Menkel-Meadow (2009)

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Evaluating the place of ADR in Dispute Resolution

• It is usually compared to litigation in national courts • There is a tendency to evangelise it as the panacea for

dispute resolution• The ideal is not always reflected in the practice• All agree that it is not a substitute but a compliment to

existing systems• All agree that it is not suitable for every dispute• All concede the practice is not as good as the ideal• Litigation serves important public purposes that should be

preserved• Settlement has value but the public interest in litigation

may sometimes override that value

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ADR and the Law School Curriculum• In the early 1980s there was an increasing call for

American Law schools to move away from the familiar tilt in law curriculum toward preparing students for legal combat to training their students for gentler arts of reconciliation and accommodation

• The Mcrate report on legal education recommended the inclusion of training in problem solving skills typically associated with ADR

• Courts world over are increasingly turning to ADR to relieve their dockets.

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ADR and the Law School Curriculum• The new constitution of Kenya has entrenched ADR• The CPR have been amended to incorporate ADR

more actively• The Arbitration Acts 1995& 2009 have strengthened

the legal institutionalization of arbitration• Empirical research suggests that more and more

disputes are going to ADR mechanisms• There is a new found love for plurality of processes

and multi-tiered dispute resolution systems• Have Kenyan law schools adequately responded to

the expansion of ADR? Have Kenyan Lawyers ?08/04/23 62

END OF LESSON 1. ANY QUESTIONS?

CHARLES B G OUMA LLB ,MLBADJUNCT FACULTY CUEA

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