The Development of Mediated Settlement Conferences and ADR Menus:
From "Court-Ordered ADR" to "Settlement Procedures"

By J. Anderson Little (2001)

The year 1989 was a pivotal one for the development of ADR in North Carolina. During that year, bills were introduced in and enacted by the General Assembly which authorized the state-wide expansion of two ADR programs whose pilot phases had just concluded: the child custody mediation program and the court-ordered arbitration program..

By 1989, several conclusions had been reached by the North Carolina Bar Association's (NCBA's) Dispute Resolution (DR) Committee. The first was that these programs were perceived by the litigants as being effective and satisfactory. The second was that these programs (only one of which was the result of the NCBA's ADR efforts) had remarkable success in reducing the time of disposition of civil cases. And finally, that in order for ADR to have an impact, it had to be mandatory. The latter was a milestone for the ADR community in North Carolina, for much of the country continued (continues) to debate whether or not ADR procedures should be court-ordered. The success of these court-ordered programs in North Carolina confirmed that the ADR committee's intuition about this topic was correct. As further development of ADR took place in the '90s, the evidence for that conclusion deepened.

By all accounts in 1989, the NCBA's DR Committee was very successful. There were some of us, however, who were not optimistic about the future. First, the arbitration and child custody programs cost a great deal of money, and already there were predictions of State budgetary shortfalls. In fact in 1991, the state experienced its worst budget crisis since the depression and began to cut back on all services, including those attached to the courts. In 1989, some of us believed that new programs would not pass fiscal muster in the future.

A second reason for pessimism was that there seemed to be no clear direction for further development of ADR. While the arbitration program was "successful", it was not widely popular with lawyers. Those of us in the Middle District were aware of lawyer dissatisfaction with that District's non-binding arbitration program for large cases. Lawyers found themselves twice preparing their cases for trial, because the "success" rate had not been as high in Federal cases as in the smaller cases in NC's district courts. More fundamentally, the arbitration program did not address lawyers' desire, yet inability, to settle cases on their own well in advance of trial.

I make that last statement with some reservation, because lawyers did not express themselves so clearly at the time. Dissatisfaction with the arbitration program was clear. The reasons were not. It was only with the implementation of the Mediated Settlement Conference (MSC) program in 1992 and lawyers' experience with negotiated settlements with that context that they realized the true benefit of this new form of ADR: it provided an opportunity to produce a negotiated settlement. But now I'm getting ahead of my story.

Several events took place from August,1989 to November, 1990 that turned pessimism into exuberance. The first took place in August of 1989 and was the first action of the new DR Committee's Chair, Horace Kornegay. Horace convened a brainstorming meeting of the Committee as a first step toward creating a new agenda for the Committee. That session and subsequent smaller meetings during the next several weeks remarkable for at least three reasons.

The first was the appearance of a lawyer none of us knew, Robert Phillips. Robert was first licensed and practiced in Florida. He recently had moved to NC and opened a practice in the mountain town of Burnsville. Robert's appearance was remarkable for two reasons: the first was that he told us about Florida's mediation program that later became the model for the MSC grogram. The second was the way in which he introduced it to us. In essence, he said that arbitration was a waste of time, that lawyers never chose it over mediation, and that the implementation of mediation in Florida's circuit court was the greatest thing since sliced bread.

I was intrigued, because it was the first time I had heard of anyone using mediation in civil cases (as oppose to family cases). However, Robert's words were not well received by a group who had just spent 4 years and 750,000 developing an arbitration program. It would be many months later before any of us understood the implications of his comments.

Shortly after the August brain-storming meeting of the DR Committee, Horace attempted to synthesize the suggestions made there in a series of small committee meetings. As a result of the those meetings, Horace made two decisions which organized and defined the Committee's efforts for that time and, as it turned out, for many more years to come.

The first decision came from my suggestion to combine several mediation sub-committees into one . During the years '85-'89, when the big project of the full committee was the design and testing of an arbitration program, the number of committees devoted to mediation proliferated. There was a subcommittee on child custody mediation, one on community center mediation, one on farm credit mediation, and one on school mediation. These groups gathered valuable information but none of them produced much that would be applicable to the courts. Combining them into one, so that the energies of all could be focused on one or two projects seemed essential. Horace did that and later asked me to chair the new sub-committee. Thinking it was a dead-end assignment, I was reluctant to do so. Luckily, I finally did.

The second decision Horace made was to establish a multi-door courthouse committee and to name as its chair, Reagan Weaver. Reagan was one of the original ADR Task force members and, along with Ralph Peeples, was one of its reporters. The multi-door courthouse had been a metaphor used in legal circles to describe the infusion of ADR devices into the legal system. Chief Justice Exum often used it in speeches during the 80's, and an artistic rendition of a multi-door courthouse appeared on the cover of the ADR's Task Force's 1985 report.

As a metaphor, the multi-door courthouse was a useful device. However, by the end of the 80's, the multi-door courthouse also denoted a well-defined ADR and case administration program. Such a program was created in Washington, DC. It was the darling of the ABA's ADR Task Force at the time. So, Regan's committee set out to explore the concept and to travel to sites where it existed. Using grant money from the National Institute of Dispute Resolution obtained by Frank Laney, the committee took trips to Washington and Philadelphia during the fall of 1990.

Reagan's committee reported on the programs they studied in the fall of 1990. Each program relied upon a staff of ADR administrators who assigned cases to specific ADR procedures. That method followed wisdom current in the 80's and early 90's that certain types of cases were best suited to specific ADR procedures and that administrators and judges were the appropriate persons to make those determinations. We called it "fitting the forum to the fuss."

The multi-door courthouse approach was initially appealing to the DR Committee. However, it was abandoned later that Fall and never taken up again. The reasons for doing so were several. The first was that the administrative costs of such a program were formidable. With forecasts a dire fiscal year being circulated around the State, proposing such a program seemed untimely. Second, the mediation committee proposed a new program of MSCs in November, 90, involving no State funds and not requiring a new administrative structure. And finally, we were beginning to doubt the current wisdom that one could type cases for assignment to an "appropriate" ADR technique. We were beginning to believe that choosing an ADR technique is a decision that could be made best by the parties and their attorneys.

The new mediation sub-committee began to meet during the fall of 1989. Our goal was to develop objectives and a work plan that would guide our efforts for the coming year or two. We met through the winter and sought the advice of the ABA's ADR Task Force's staff. At the April, 90 meeting of the full committee, I reported the subcommittee's goals. They were: to support the establishment and development of community settlement centers throughout the State, to monitor and make suggestions about the child custody mediation program to its Advisory Committee, and to study whether and how other states were using mediation in civil cases.

To further the last objective, we asked Frank Laney to procure grant money that would pay for travel to four sites we had chosen for study. Those sites were picked with the aid of Larry Ray and his staff at the ABA. None of them included Florida. The trips were to take place in the Fall of '90.

Another important administrative decision was made by our chair, Horace Kornegay, at the urging of the full committee. The Committee noted that the participation of the Bench in the efforts of the DR Committee had diminished during the year 89-90. It was believed that additional judges should be involved in our work in the event we developed new programs worthy of implementation in the courts,. Horace requested the Chief Justice to appoint several judges and Chief Justice Exum agreed to do so. Among them were Jim Long, Senior Resident Superior Court Judge from Stokes and Surry Counties, and Bob Rouse, retired Superior Court Judge and former District Attorney from Pitt County. I mention these two in particular because of the important role they played in bringing mediation to the trial courts of North Carolina.

Finally, during the month of August, 90, several events took place that changed the course of our sub-committee's deliberations. During the Spring and Summer of 90, lawyers in NC received literature promoting civil trial court mediation training offered and taught by David Strawn, former Circuit Court Judge from Orlando Florida. Having learned more about Florida's mediation program during 89-90 from Robert Phillips, I decided to take the training that was offered in August in Asheville. As it turned out, the program was being offered to vacationing Florida lawyers. I was the only NC lawyer to attend for the entire training. Barbara Davis of Asheville, then the director of the Asheville mediation Center, attended for the first day.

I went to the training to learn more about mediation. My original training had been in community center and family mediation. I learned a great deal about conducting mediation in the context of civil litigation, with lawyers present. But more importantly, I learned about the Florida program: how cases were selected, how mediators were assigned, how neutrals were compensated, how the program was funded, and how lawyers reacted to it. These turned out to be the most important lessons of all.

I learned that, although both mediation and arbitration were available in the Florida program, judges routinely ordered the parties to mediation; and the parties and their attorneys never seemed to request other wise. In fact every lawyer at the training told me they always preferred mediation over non-binding arbitration. I also learned that the Florida system required no additional administrative personnel at the local level.

And finally, and most importantly, I learned that the mediators were paid by the parties and not the State. All of the lawyers at the training believed that mediation saved their clients money by producing an early settlement. It finally dawned on me that week in Asheville that the key to new ADR programs in the State of North Carolina was the coupling of a mandatory settlement event with the sharing of costs by the parties. This would be something new to NC and, perhaps, not an easy sell.

Upon returning home, I call Bob Rouse, because he had expressed an interest in the Florida program. I learned that he had decided to attend David's training in Florida later that month and asked him to tell me about his experience when he returned. At the end of August, Bob called me. He was as excited as I about the training, the Florida program, and about how lawyers seemed to love it. In the span of a few days and after numerous phone calls between us, Bob and I made an "executive decision" to scrap the sub-committee's trips around the country and organize a single trip to examine the Florida program in detail. The sub-committee agreed after hearing os our experiences.

The group who went to Florida in October, 90 was not the sub-committee which had worked hard during the preceding year to develop our agenda. Bob and I believed that the Florida model would work well in NC, so this was more than an exploratory trip. We hoped that the group we picked for the trip would become as excited as we and return ready to create it here. We thought they needed to be a group who would command the respect of the Bench and Bar. The group who finally made the trip to Florida in October,90 included Jim Long, Jack Cozort, Harry Martin, Kathy Shuart, Lisa Menefee, Chip Clark, and Robert Phillips.

The trip lasted three days. During that time, we attended mediations, talked to judges and administrators, interviewed countless lawyers and talked among ourselves about what portions of the Florida program might be useful in NC. Robert arranged for us to attend mediations in both Orlando and Tampa. Chip Clark arranged conversations with a number of civil trial lawyers in Orlando. And David Strawn spoke with us and arranged a number of meetings with court officials.

Because lawyers seemed to like the mediation component of the program but not the non-binding arbitration part, we decided to limit our considerations to a court-ordered mediation program (We later called it mediated settlement conferences in order to make it sound more familiar and less threatening to judges and lawyers.). The group seemed to be on fire about the idea, and upon returning to NC, we set up a series of meeting to draft a statute and rules authorizing and implementing a pilot program of mediated settlement conferences in Superior Court in NC. We worked hard for a month and were ready with our recommendations to the full DR Committee at its November, 90 meeting. The full Dispute Resolution Committee seemed as thrilled as we with this new idea. Our next stop was at the office of the Chief Justice. Justice Exum, a strong supporter of ADR and a member of the original ADR Task Force, made two important remarks at the end of our presentation. "Isn't mandatory mediation a contradiction in terms?" he asked. "No", we replied. " Only the parties' attendance is required. No one will be required to make an offer or proposal at the settlement conference." A tougher question followed. "What about having the parties pay for the mediators? We've had a tradition in NC of easy access to the courts. Doesn't this add new costs to the litigants?"

The matter of placing the costs of this program on the shoulders of the parties to litigation was a fundamental feature of the program and the reason why it could be implemented widely and quickly. But many people in the court system were understandably cautious about placing more financial burden on those who used and needed the courts for the redress of their grievances. Although we overcame that hurtle in '90 and '91, there are still those who believe that the State should provide any services it orders the parties to undertake.

Our answer to this was two-fold. Our indication from Florida was that it did not cost more for litigants to pay for mediation services than to proceed toward trial the traditional way. In addition we were building into the pilot program a study that would address that question. We were hopeful that the study would show a reduction in costs even while the parties were paying for mediation services.

The study was conducted during the pilot program. Among the many things concluded was that a reduction in costs could not be demonstrated. In discussing this point later with the principal investigator, Stephens Clarke, we also learned that the litigants did not find the cost of litigation to increase even though they were paying. We don't know why Stephens did not put that in his report. It seems to us to be an important finding, even though it can't be coupled with a finding that costs were reduced overall. By the beginning of the legislative session of 1991, we had successfully garnered the support of the NCBA and the Supreme Court. However, we were introducing an entirely new concept and were not clear what kind of reception we would receive in the General Assembly. The bill was introduced by Sandy Sands in the Senate and shepherded through that body with the help of Dave Horne, the NCBA's lobbyist and Lucius Pullen. Surprising, the bill sailed through the Senate without a single dissenting vote. And more surprisingly, the bill passed the House also without a dissenting vote on June 4, 1991.

Two people stand out in my mind as major contributors to the design of the MSC program, the garnering of support within the Bench and Bar, and the selling of the program to the General Assembly during the period between August, '90 to June,' 91. I have mentioned Bob Rouse already. He loved the courts of our State and wanted to improve them. He was infectious with his enthusiasm for mediated settlement conferences. And he tirelessly worked to make it happen. Unfortunately, we lost him to pancreatic cancer the day before the authorization bill passed the House in June '91.

The other person was Jim Long whose interest in trial court administration is decades old. Judge Long made one of the first presentations to the ADR Task Force in 1983. It was about the use of what he called "judicial arbitration", his name for a procedure lawyers in his district would often employ at his urging to speed the disposition of civil cases. It was a bench trial with specified time limits for the presentation of evidence and summations.

Judge Long later told us that his initial idea about mediation in the civil trial courts was that judges should be trained as mediators so that they could better settle cases that came before them. However, on the Florida trip, Judge Long changed his mind. He became convinced that lawyers needed a mechanism whereby they could negotiate settlements, leaving judges to hear motions and try cases. He also noted that he became convinced that judges often engage in settlement techniques that approach what might be called coercive.

Judge Long's zeal and commitment to the vision of mediated settlements became evident during our drafting sessions. His reputation and credibility through out the State was a great asset to our efforts. Later, during the pilot program, he in many ways led those efforts as chair of the Mediation committee of the Supreme Court's DR Committee formed after the DR Committee of the Bar Association disbanded and became the DR Section.

The Pilot Program was thus authorized in June of 1991. The rules were redrafted and submitted to the Supreme Court in August and were adopted in September of that year. Later that year, eight pilot districts were selected to be in the program with Judge Long's being the first to become operational. Two years later, four additional districts, all with large caseloads, were added to the pilot program. And finally, in 1995, a bill was introduced to authorize the implementation of mediated settlement conferences in Superior Courts throughout NC. The bill passed without a dissenting vote.

The success of the MSC model with mandatory attendance and party pay was evident by more than an easy passage of the state-wide authorization bill. That model became the preferred model in most of the trial forums in the State. First, the industrial Commission and then the Office of Administrative Hearings tested the concept and also got permanent status in 1995. In addition, two of the three federal courts in North Carolina adopted the approach. In the Middle District, that meant dropping the non-binding arbitration program developed some years before for cases above 150,000 in controversy. Lawyers far preferred to negotiate a settlement rather than preparing for and trying a case in non-binding arbitration.

Why did the model gain such popularity? The study conducted by Stephens Clarke showed modest improvements in the time to disposition over cases not ordered to mediation. (Putting the average disposition time in Superior court at 11 months.) He also concluded that there was no "statistically significant" evidence to support the notion that more cases were being settled using the MSC format. (Even though sessions of civil court were being cancelled because of the reduction in caseload in Judge Long's district. In fact Stephens opined in his report that the results were not as beneficial as the supporters had hoped.

To the contrary. The supporters of the program were and still are widely enthusiastic about the advantages of using mediation as the primary settlement tool. We can show reductions in the disposition time; we can claim a reduction in trial loads; we can claim reduced costs of litigation to clients. But, arguably the most important benefit of mediated settlement conferences is in the changes it has wrought in the practice of law in this State.

To understand and appreciate this benefit, one has to understand that there are really two basic forms of ADR. The first is the type that results in a binding decision for the parties. Binding forms of ADR include arbitration, summary jury trials, and judicial arbitration. They are shortened, hopefully cheaper, forms of adjudication; but they are adjudication nevertheless. The parties try their case and get a binding result. These forms of ADR are truly alternatives to trial.

The second basic form of ADR is non-binding. They include the non-binding forms of arbitration, summary jury trials, neutral evaluation, and mediation. They are intended to facilitate the settlement of litigation. Thus these forms of ADR are not alternatives to trial at all. They are alternatives to traditional settlement techniques which are typically conducted by lawyers on behalf of their clients in a series of face to face or on-the-phone conversations.

All but one of those forms accomplishes that purpose by providing an expert's opinion (award) of what would happen to the case if it were tried. And the means to that end are presentations of the case by the parties to a neutral, who in turn renders an advisory opinion. The process of getting an advisory opinion, on which to base further negotiations, is very much a trial process once again. Mediation is the only ADR technique that in designed to aid the direct discussion and negotiation of settlement of civil litigation. The mediator's sole function is to facilitate those negotiations.

Until the MSC program came along, no one had articulated what was wrong with traditional, lawyer conducted settlement processes. What we have discovered is that is something wrong with a system that results in last minute settlements, "at the court house steps." There are three things wrong with the process. First, since traditional settlement occurs in negotiations between lawyers in the absence of their clients, the clients are not present and often have little to do with the settlement of their case. Second, we know that settlement negotiations frequently do not happen until late in a case due to at least three reasons. Lawyers are often busy and pout off negotiations until a trial is staring them in the face. Lawyers tend to put out the fires that are right in front of them. In addition, in an adversary system of jurisprudence in which the court depends upon the parties to initiate a trial, one party or the other often sees an advantage in avoiding settlement negotiations altogether. Often one side's case becomes better with the passage of time. Finally, most people who have had to resort to litigate for the resolution of their dispute are extremely pessimistic about the prospect of negotiating a settlement. For those reasons, settlement negotiations are difficult to arrange in the absence of a mandatory settlement program.

Third, we discovered during the MSC program in NC that lawyers have not been educated in the art and science of negotiations. The most profound impact of the MSC program in NC is that it has both uncovered the need for and has provided a partial remedy for the lack of training in this area. Ask anyone who attended law school before 1990. Few courses in negotiation practice and preparation were taught before that time. Even now, as courses about ADR are proliferating, training in the art of negotiation is not an integral part of the law school curriculum.

Ask any mediator who led MSCs during the pilot program whether attorneys were ready for negotiations when the conference began. Many attorneys had no appreciation of even the simplest elements of preparation, such as the swapping of important medical bills or record. Mediators, who often ask the parties case evaluation questions, have taught attorneys what they need to do to get ready for negotiations. In addition, attorneys are attending mediator training programs even if they don't intend to become certified mediators. They are attending to learn about the process. They come away knowing something about preparing for and conducting negotiations.

Is this a valid goal and important benefit of a court ordered settlement program? Many would, have and still argue that it is not. The only real measure, they say, is court efficiency and the satisfaction of the parties. We believe that a better prepared Bar produces both.

Few problems emerged during the pilot program. Of concern even today, trial court administrators and judicial secretaries frequently complained that mediators were not sending their reports to the court in a timely manner, thus disrupting case management time tables. In many counties, the court uses the mediators report as the key to placing a case on the trial calendar. A second problem existed for a short period of time and appears to have been corrected. Complaints were received suggesting that judges were using a "short list " of experience mediators to appoint a mediator when the parties did not or were unable to agree on the designation of a mediator. Those of us who had studied the Florida program and had heard stories from a similar program in Texas were aghast to hear that some form of "cronyism" had cropped up in our new system here. We had specifically designed the rules to encourage party selection of mediators and to prevent cronyism from appearing. Rule amendments and conferences with participating judges soon eliminated this problem. Most judges now appoint "the nest mediator on the list" of certified mediators when the parties can't agree on which mediator to use. That random rotation actually had the impact of encouraging more party selection.

Party selection of mediators was a component of the Florida program that we felt was vitally important. We believed as a practical matter that MSCs would go better if the matters used a mediator in which they both had faith and confidence. In addition, we discovered, party selection of the mediator is the only quality control mechanism in the program. No one in the court system hires, trains, supervises or disciplines mediators in the MSC program. Those who seek mediator certification are self-selected. Aside from a level of initial training that is required, mediators are not required to get additional training or report to any one about the quality of their work. Of course, gross violations of standards of conduct subject the mediator to discipline by the Dispute Resolution Commission. The real test of the mediator's quality comes from the "market". Do the parties and their parties have confidence in the mediator? If so, they'll hire him/her again. If not, they won't.

There are some who believe that the market approach to ensuring mediation quality is inadequate, particularly when the parties participate in the mediation process by court order. Others complain that there is more use of the "evaluative" approach to mediation in MSCs (where the mediator in effect becomes an evaluator and forces his/her opinions on the parties). Still others complain that mediators aren't evaluative enough, thereby reducing their role to one of messenger, ineffectually carting proposals from one room to another. By and large, complaints about the quality of mediation in the mediation programs in NC have been few. One of the highlights of the Stephens Clarke study was the conclusion that the parties themselves thought the mediators did a good job and were helpful to them in the negotiation process.

By 1995, the MSC programs appeared to be successful to all concerned and plans were made to draft a bill authorizing their use in all Superior courts in the State. The final product was different in several respects from the original pilot program legislation. One sentence was added to make it abundantly clear that the parties did not have to make an offer or proposal of any kind at a settlement conference if they believed it was contrary to their best interest to do so. That change underscored our original belief that the parties should be required only to attend and pay for the services of a mediator. There never has been a requirement that they negotiate "in good faith". That requirement was present in the Florida model and was one we specifically deleted from the MSC program on the belief that it was productive only of satellite litigation. (Florida quickly eliminated it also after the litigation we predicted actually took place in that state.)

A second change took place in the section of the statute that relates to the inadmissibility of negotiations. The Florida program created a privilege for the communications that take place in circuit court mediation. Our drafting group thought this too strong. Instead we made it clear that Rule 408 of the rules of evidence would apply. However several problems developed during the pilot program that sent us back to the drawing boards on this one.

In the first place, a growing number of attorneys were advising their clients not to say anything is settlement conferences on the belief that Rule 408 did not provide the protection it appears to provide in its first sentence ("No statements made or conduct occurring…"). It was their opinion that the sentences that followed and the case law that developed under it, particularly in the Federal Courts, left gaping hole in the protection it appeared to provide.

Secondly, a growing number of mediators were being subpoenaed to court to testify about things said and done during a settlement conference, usually in a proceeding to enforce an oral agreement allegedly reached at the settlement conference or to interpret a written one. The subject of whether or not the mediator could be compelled to testify was not addressed in our original "inadmissibility section".

Thus a new inadmissibility section was drafted providing a new rule of evidence prohibiting the introduction of evidence of statements made or conduct occurring in a mediated settlement conference except under specific, stated circumstances. In addition, an entirely new paragraph was drafted making it clear that mediators would not be compelled to testify. Those sections have been amended even more recently to make agreements reached at a mediated settlement conference unenforceable unless they are reduced to writing.

The final change to the original legislation was the addition of an entirely new provision authorizing the use of settlement procedures other than mediation under certain circumstances. A word of explanation is in order. The program we studied in Florida was a program of mediation and non-binding arbitration. We deleted the arbitration portion of the program because lawyers told us they didn't like it, because of our own experience with non-binding arbitration in the Federal Courts and because it added a layer of complexity to a program about whose acceptance we were uncertain.

However, during the pilot program between 91 and 95, a small number of attorneys told us that mediation seemed inappropriate for some cases and some clients. In our system, there was no choice. You either did mediation or you asked the judge to excuse you from mediation. Most judges were not excusing the parties, having no reasonable criteria for making such a decision. So we perceived some small demand for an alternative to the alternative. How to draft that, however, was a problem.

In December of 1993, I drafted a proposal for the 95 legislation that authorized the statewide implementation of MSCs in superior court authorized the use of "other settlement procedures" where the parties and the judge could agree on them. I called the draft legislation "The Settlement Procedures Act" and presented it to a number of people who had been working on the superior court program for a long time, including those from Mecklenburg County.

Most of my colleagues suggested that the notion was too ambitious and suggested a small one-paragraph amendment which would authorize the use of other settlement procedures under rules of the Supreme Court. That is the approach, which found its way into the final draft for 95. The scheme there is noteworthy and reflective of some basic beliefs about ADR in the court system. The new section says that "if the parties agree", then the court may order some other settlement (ADR) procedure. This embodies the notion that the parties, rather than the court, that are in the best position to determine whether or not some other procedure is needed or desired and, if so, what kind.

This approach is also note worthy in that it places mediation in a default, or preferred, setting among the various ADR procedures. We believe that to be the correct approach because it focuses the efforts of the parties on direct negotiations for their settlement efforts rather than on a trial or hearing. Default or preferred settings in any system are powerful tools, because they set in motion procedures which will take place unless someone goes to considerable effort to change them. It is our belief that if given a true choice in the matter, lawyers would choose mediation over other procedures. There is some evidence to support that belief. First, as practicing lawyers and mediators, we talk with trial attorneys about these matters often. Very few prefer other forms of ADR to the direct negotiations that mediation can provide. More importantly, in those districts that administer their civil caseload through a system of scheduling conferences, lawyers are given a clear choice of ADR options. They routinely choose mediated settlement conferences. Mediated settlement conferences, along with other forms of ADR, fix what has been broken in our legal system: negotiated settlement agreements.

It is ironic to me that the same proposal for a settlement procedures act, which became a paragraph in the '95 legislation, became a full-blown "menu" approach in the county of Mecklenburg. There, lawyers meet in a scheduling conference early in the case and choose which form of ADR they want to use and designate their neutral at the same time. The Western Federal District Court also employs a menu approach.

Shortly after the '95 legislation was enacted, the DR Section of the Bar Association began working on rules to implement the "other settlement procedure" paragraph. A set of rules was eventually debated and drafted and sent to the DRC for review. After more tweaking, they were sent on to the Supreme Court for review and adoption. For some unknown reason, however, staff of the AOC opposed their adoption. Hence they lie on the table at the court waiting for further discussion and action. Oddly enough, AOC eventually agreed to a menu approach in the rules for a pilot program of mediated settlement conferences in family financial cases in District Court. At the urging of the Bar Association and the DRC, the General Assembly enacted a statute during its '97 session authorizing the DRC to draft such a pilot program. The program was modeled on the Superior Court program but included other settlement procedures at the option of the parties. The pilot program was authorized by statute in the '98 short session and began operation in seven judicial districts.

The reviews of the pilot program have been rave ones. Judges and lawyers have expressed strong support and tell stories about how the program has helped the courts, the litigants and the lawyers. Many new districts were added to the program as its success became clear. The DR Section and the DRC have drafted a new statute authorizing the statewide implementation of the program. We hope it will be enacted by the time this book goes to print.

With the inclusion of settlement procedures for family financial cases, all of the trial forums in NC have available some form of ADR or settlement procedures.

A word should be said about the governance of the ADR programs in NC at this time. The problem is that a word will not do. The governing structure is a hodge-podge of advisory boards and commissions that have little to do with each other and are in need of overhaul.

An attempt at such an overhaul has been made recently by a task force appointed by chief Justice Henry Frye in the year 2000 at the urging of the Bar Association. That group eventually recommended that the governance of settlement procedures reside in two groups: the DRC which would continue to certify and provide discipline for mediators in court ordered programs, and a new Dispute Resolution Committee of the newly created Judicial Council. The Judicial Council was created to act as a kind of board of directors for the court system and was one of the recommendations of the Futures Commission.

That committee has just recently been constituted and is trying to figure out how to organize itself and decide what its work will be in the near future. It is intended that it will replace other "governing" bodies such as the child custody advisory committee, the arbitration advisory committee and the Supreme Court's Committee on Dispute Resolution. It is hoped that this body will serve as a forum for ironing out the jurisdictional disputes that have arisen in the past few years and for reaching consensus at a philosophical level about the role and function of ADR in the court system and who should pay for and fund the various settlement procedures programs.

The Dispute Resolution Commission was created in the '95 Superior Court legislation and later expanded in the 98 District Court legislation. It was set up to provide a mechanism for the certification and discipline of mediators. The DRC has a small staff that is funded entirely by annual certification chaired to mediators in the superior and district court programs. The Commission's composition includes judges, lawyers and mediators for the superior and district courts as well as some lay members. From 1983-1993, most of the court based ADR initiatives were conceived of, designed, and drafted within the organizational structure of the NC Bar Association. The NCBA's task force and then committee on dispute resolution was composed of representatives of the practicing Bar, the Bench, court administrators and lay people. With the certification of hundreds of superior court mediators, the NCBA decided to form a dispute resolution section.

The AOC and the Chief Justice decided at that time to provide for an official governing body for all ADR programs. Thus the Supreme Court's Dispute Resolution Committee was formed in 1993 and was chaired by then Associate Justice Henry Frye. However, that committee was never convened after the '95 legislation was enacted. What ADR initiatives occurred from '95-2000 originated from the NCBA's DR section and were processed within the structure of the DRC. That commission then acted as a clearinghouse for the development of ADR during those five years and until the creation of the Judicial Council.

WHAT WE HAVE LEARNED (or should I say believe?)

In the 17 or 18 years that the NCBA has been working ADR processes, certain basic conclusions have been reached which have informed the proposals we make and the program we suggest. They are conclusions and maybe even beliefs, which are not universally shared within or without the court system in NC. They are:

1. In the past fifty years, the court system has been broken in a very fundamental way by an increase in litigation. Informal settlement processes that were adequate many decades ago simply do not work today. Settlement procedures are needed to solve this problem.
2. To be successful, settlement procedures have to be mandatory in the court system.
3. Mediation generally is the preferred settlement procedure, because it promotes direct negotiations of the parties.
4. Parties should be able to choose other settlement procedures.
5. Parties, not court officials, should decide which settlement procedure to use.
6. Public employees are not necessary or even desirable as neutrals in settlement procedures. The parties should be able to choose their own.
7. The parties can pay for settlement services without increasing the cost of litigation.
8. The provision of settlement services should be an obligation of the parties and not a service provided by the taxpayers, much like getting your settlement ticket punched before being allowed in court.