What is ADR?

Alternative Dispute Resolution (ADR) is the general name given to a variety of procedures available to parties in civil cases to resolve their disputes before a formal trial.

The main types of ADR are:

Mediation:

In mediation, a neutral third party helps the parties come to an agreement about how to resolve the case. The mediator has no authority to impose a solution on the parties. Instead, he goes back and forth between sides to help them come to an understanding about how the case could be resolved to their mutual satisfaction. A mediator can be helpful in helping parties evaluate their case realistically, as the mediator can point out which facts or arguments he believes or rejects. When courts order parties to try ADR, they most often order mediation.

Non-mediated settlement:

This process is where the parties negotiate with each other without the help of a third party to come to a mutually satisfactory resolution of the case. This process is not ordered or overseen by a court and, therefore, is a private, rather than public, process. However, the settlement agreement might become a public record if (a) one of the parties is a public entity or (b) the agreement is submitted to the court for approval or enforcement. Private settlement agreements are rarely given to a court for approval unless a state statute requires it. For example, many states require that any settlement involving a minor be submitted to a court for approval to ensure that the minor's interests are protected.

Summary jury trial or mini trial:

These procedures permit parties to present their case to a judge or jury, which issues a non-binding opinion or verdict. The opinion or verdict is then used by the parties as a basis for settlement discussions. It helps the parties see what might happen at a trial or what other people might think about the facts and evidence.

Arbitration:

In arbitration, the parties authorize a neutral third party (or panel) to decide the outcome of their dispute. The process is similar to a trial in the sense that each side presents facts and arguments to the decision maker(s), but it is different because the rules of evidence do not apply and the arbitrator(s) need not adhere exactly to the law.

Why do parties use ADR?

The primary motivations for ADR are to save money and control risk. Preparing for trial is extremely expensive, and parties can save money if they can resolve the case without having to incur the expense of trial preparation. Also, when parties settle cases, they have some control over the outcome of the case in that they can negotiate for terms of the settlement. If a lawsuit goes to trial, the outcome of the case is left entirely in the hands of the judge or jury. Parties cannot control the risk of losing at trial. ADR gives parties a chance to control that risk.

In some cases, privacy or confidentiality may be a factor. Most litigants think of ADR as private, and thus, if they seek secrecy, they may be motivated to try ADR. However, in many cases, confidentiality is not a major concern. Nevertheless, lawyers put confidentiality clauses into settlement agreements as a matter of habit, even if confidentiality was not specifically negotiated. Thus, settlements are usually secret merely by virtue of routine.

It should also be noted that, in the last decade or so, courts have developed rules that require parties to try ADR, usually mediation, before trial. Mandatory ADR has become popular because it helps unclog the court system and because most cases can settle once the parties have undertaken discovery and understand what evidence exists. Most experienced litigation lawyers can fairly assess whether they can win a case and how much the case is worth, although they know that anything could happen at trial, and they would prefer to settle for a fair amount than risk a terrible verdict. But court-ordered conferences raise the issue of whether those conferences should be deemed public hearings, especially when they are run by a court magistrate.

In 1998, Congress passed the Alternative Dispute Resolution Act which orders federal courts to use ADR as a means of unburdening the federal court caseload. Each district court is required to promulgate rules that "require that litigants in all civil cases consider the use of an alternative dispute resolution process at an appropriate stage in the litigation." In most jurisdictions, parties are required to attend a settlement conference at least once prior to trial. The statute also mandates that "each district court shall . . . provide for the confidentiality of the alternative dispute resolution processes and to prohibit disclosure of confidential dispute resolution communications." The statute does not describe how the courts should accommodate First Amendment concerns.

Can ADR be kept secret?

Success in challenging the secrecy of ADR will depend on a few factors:

1. Whether you are seeking access to the ADR proceeding itself or only to documents;

2. What type of ADR proceeding it is;

3. Whether documents were ever filed with, presented to or enforced by a court, and;

4. Whether the litigants are private or public entities.

If you seek access to the ADR proceeding itself, it probably will not be granted. Most courts believe that ADR works only if the parties feel free to say whatever they want without fear of it being reported or used against them later. In fact, there is a rule of evidence in every jurisdiction that prevents parties from using confidential statements made in ADR proceedings from being used as evidence later. This policy was developed to encourage honesty during ADR. Following this belief, courts have ruled that there is no right of access to summary jury trials or settlement proceedings. See U.S. v. Glens Falls Newspapers Inc. (2nd Cir.); In re Asbestos Products Liability Litigation (E.D. Pa., listed below under 3d Cir.); Cincinnati Gas & Elec. Co. v. General Elec. Co. (6th Cir.); In re Cincinnati Enquirer (6th Cir.); CMS Enterprise Group v. Ben & Jerry's Homemade, Inc. (Pennsylvania).

If you seek access only to settlement documents, then you may have a better chance of obtaining access. The primary factors will be whether those documents were ever filed with, presented to or enforced by a court and whether the litigants are private or public entities.

If a settlement agreement was made in private between two private parties and was never submitted to a court for any reason, then the chances of obtaining access are minimal. Under those circumstances, the settlement agreement is not a "court record" because it was never in the court's possession. The court does not have an agreement to provide to the public, and it would have no reason to force a private party to turn over the document in its private possession. See Enprotech Corp. v. Renda (3d Cir.).

If a settlement agreement were submitted to the court for either approval or enforcement, then the agreement would likely be considered to be a "court record" subject to disclosure. See Bank of America Nat'l Trust & Sav. Ass'n v. Hotel Rittenhouse Assocs. (3d Cir.); SEC v. Van Waeyenberghe (5th Cir.); Union Oil Co. of Calif. v. Leavell (7th Cir.); EEOC v. The Erection Co. (9th Cir.); In re Marriage of Johnson (Illinois).

However, settlement agreements are generally not required to be submitted to a court for approval. Usually, court approval is required only in limited circumstances, such as when one of the parties is a minor. See Duggan v. Koenig (Alaska); C.L. v. Edson (Wisconsin); Schnell v. Farmers Insurance Exchange (Wisconsin).

Otherwise, the parties merely file a joint motion to dismiss with the court, explaining that the dispute has been resolved between the parties and court action is no longer necessary.

If a public entity is a party to the agreement, then a court could rule that the document must be disclosed pursuant to the First Amendment or an open records law, in spite of confidentiality provisions. See Society of Professional Journalists v. Briggs (D. Utah -- listed below under 10th Cir.); Anchorage Sch. Dist. v. Anchorage Daily News (Alaska); Copley Press, Inc. v. Superior Court (California); Register Div. of Freedom Newspapers, Inc. v. County of Orange (California); Lesher Communications, Inc. v. Contra Costa County (California); The Tribune Co. v. Hardee (Florida); Helen, Georgia v. White County News (Georgia); State ex rel. Findlay Pub. Co. v. Hancock Cty. Bd. of Comm'rs. (Ohio); State ex rel. Sun Newspapers v. Westlake Board of Education (Ohio); Morning Call, Inc v. Housing Authority of City of Allentown (Pennsylvania).

However, at least one court has found that settlements are protected by exceptions that keep secret records pertaining to litigation. See Tuft v. City of St. Louis (Missouri).

And the U.S. Court of Appeals in New York (2d Cir.) has consistently denied access to settlement agreements merely because it thought the interest in confidentiality outweighed the public's right of access. See U.S. v. Glens Falls Newspapers Inc.; City of Hartford v. Chase; In re Franklin Nat. Bank Securities Litigation.