Mediation and Arbitration

A trial is not always the answer - there are other options outside of the courtroom.

Bill Mulvey will never forget his grandfather's digit-less hand. It was a permanent reminder of the dangers and corporate indifference of working in an industrial plant a century ago. The employer's sole responsibility was to pick up the hospital tab for tidying up the amputation. Years later, in 1978, Mulvey, just two years out of law school, took on the case of a retired Portsmouth Naval Shipyard worker who suspected his cancer came from exposure to asbestos. "I always wanted to make a difference," he says, and this case gave him the chance, but it wasn't a pretty process.

Back then, cases followed a predictable pattern – attorneys spent a lot of time building their case, but rarely presented it to a judge or jury. Most cases settled – more than 90 percent – just before the trial began.

For Mulvey's shipyard client it was worse – the dying man endured a six-year legal battle including days of questioning from a team of defense attorneys. "He just wanted to be heard," Mulvey says. Ultimately he was – and more victims filed suits and then the asbestos companies collapsed into bankruptcy, leaving many wondering how the claims would be settled and the leftover resources divided up. "The process was torture for plaintiffs," Mulvey says, "and not a good way to resolve" issues.

At that point, mediating the cases became a necessity and for the next three decades Mulvey helped usher in a formal process aimed at settling rather than trying civil suits. It is generally referred to as Alternative Dispute Resolution (or ADR) but lawyers give it the simple moniker of (New Hampshire Superior Court) Rule 170. It boils down to mediation and arbitration, and it has become so popular that some wonder if it's eroding confidence in and access to the state's court system.

Although the goal of mediation and arbitration is the same, they are very different. Mediation is structured voluntary negotiations and has long been the way cases have been settled. "There is no coercion in the process," says Caroline Hess, a Concord attorney, who exclusively mediates civil cases – primarily employment, personal injury and contract law. "The decision-making is in the hands of the participants."

Arbitration is a mandated process for settling disputes in a private, non-public system – through a third-party arbitrator who acts like a judge. The system tends to benefit the one who designed it. It is often part of those long contracts that consumers sign but rarely read when they are waiting to get on a zip line or sign up for cell phone service. It removes going to court as an option. Some worry that arbitration is forcing consumers to unknowingly sign their rights away. Although arbitration works with trade organizations as a way to keep disputes private, the government also uses it to settle various disputes, from workers' compensation claims to real estate license issues.

Mediation is a good tool, says Bruce Felmly, a Manchester attorney, but it must be tailored for the needs of the parties and situation. Sometimes mediation takes too long because it mandates certain timetables. He points to building contractors, who may need to secure their financial position by

filing a construction lien against a property to ensure payment for services. It depends on, Felmly says, "how quickly you need relief."

Mulvey is leery of generic "form contracts" that establish in advance a process that may be very cumbersome. With mediation, he says, "at most, it causes delay" but with arbitration it can be more troublesome – with different levels of discovery, meetings in far-off locations and expensive points of entry. People, he says, mistakenly "think arbitration is quick and cheap."

The mediation process is pretty simple. There are hundreds of attorneys around the state trained and increasingly skilled at mediation. Some provide volunteer services to resolve simple disputes, more complicated ones – with multiple parties and in excess of $50,000 – go to what is called "market rate mediators."

Attorneys, who are typically focused on representation must shift to a neutral position. Often they are brought into a well-heeled dispute usually to intimidate – not mediate. It's not a disposition classically attributed to lawyers, but all sides credit the institution of Rule 170 for improving the system. Mulvey says it took some time for the training and mindset to take hold, but the market now demands it.

For a fee of $250-$350 per hour an attorney (or more for a retired judge) will work to find a middle ground agreeable to all parties. This doesn't preclude a period of discovery where both sides collect facts to build their case, but the process is less formal and more focused on compromise. There is, Mulvey says, "an external and internal pressure to make it happen."

But some wonder if the message is "settle or else." The legal system is built on compromise. "There has always been an incentive to settle," Hess says. But more so now as courts are facing cutbacks, a backlog of cases and more and more people going to court without an attorney. All of this has left businesses and individuals involved in civil disputes hungry for an alternative that is everything that the public court system isn't – quick, private and relatively cheap.

The problem isn't mediation, says John Tobin, a Concord attorney who runs the state's Legal Assistance Office, but rather the move toward a two-tier system of justice that separates "the haves and the have-nots." It undermines public support for the court during a time when it needs it most.

North Conway attorney Paul Chant, who leads the New Hampshire Association for Justice, a trade group of trial lawyers who want to improve access to court, is quick to praise mediation. "It stretches the band to the point that everyone can reach," he says. The problem, Chant says, is policies that clog or place barriers to the system. He points to one instance where mediation may not be necessary. Some insurance carriers, he says, overuse mediation as a way to delay the case.

But with a dramatic decline in jury trials, Chant's group worries about additional barriers to the court. "The vanishing jury trial" impacts the development of the law, says Mark Rouvalis, a Manchester lawyer. Privately settled cases leave no record to guide people and, he says, "we live in a common law system."

The fight between trial lawyers and advocates of tort reform has been a long, contentious battle and at the heart of it is a constitutional question. And this is a disagreement that will not be mediated anytime soon. NH


Categories: NH Law