Justice Goes Private

From neighborhood disputes to corporate lawsuits, people are discovering the merits of private alternatives to the government's overloaded courts.

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Virgilio Razzo, a retired painter, and his wife, Matilda, were kept awake by a barking dog in their neighborhood.

Walter Kocher is the vice-president and general counsel of a corporation that had a multi-million-dollar lawsuit on its hands.

Don and Karyn Souther, a couple with two daughters, were getting a divorce.

A barking dog, a corporate lawsuit, a marriage ending—each of these problems is conventional enough. And if they had come up a few years ago, everyone involved would have assumed that the only place they could go with these problems was to court.

Yet in all three cases, they made a quite different choice: they opted for "alternative dispute resolution," doing in the private sector what most people consider solely within the province of the official, government-operated courts.

Opting out of the system to obtain protection of rights is not an outlandish proposition. Policing was once done almost completely by police, but today there are more private security personnel than there are police officers on government payrolls. Meanwhile, volunteer organizations such as the Guardian Angels and community groups such as Philadelphia's House of Umoja, which was set up to reduce gang warfare and provide guidance for juveniles, are a most welcome part of quite a few urban neighborhoods. In this context, it's no surprise to hear that the Salvation Army is handling probation privately in several Florida counties for some misdemeanants.

What's happening elsewhere in the legal system—opting out—is also happening to the courts themselves. Without fanfare, more and more people are taking their conflicts to private mediation, arbitration, and other alternative methods of dispute resolution. The phenomenon by now even has earned an acronym—ADR.

On a small scale, Americans have been resolving disputes privately for centuries. In Justice Without Law, published in 1983 by Oxford University Press, legal historian Jerold Auerbach traced the pedigree of private ADR all the way back to the Puritans in the 1600s. Throughout the 1800s, an astonishing number of Christian utopian communities were set up around the country, and many shunned established legal institutions. And in the late 1800s and early 1900s, Jewish emigrants from Europe brought along their own tradition of resolving conflicts outside the law. The Dutch in colonial New Amsterdam, the Scandinavians in the Midwest, and the Chinese on the West Coast also employed private ADR as a vehicle of ethnic solidarity. And Auerbach discovered that businessmen without a religious or non-English bone in their bodies had as early as the 1600s established arbitration as a firm fixture along the New York–Philadelphia commercial axis. In 1768, the New York Chamber of Commerce set up the first private tribunal in America for settling business disputes.

Americans today are returning to their ADR roots in ever-greater numbers. After decades of fairly steady but unremarkable growth, the 59-year-old American Arbitration Association saw its annual caseload almost double between 1970 and 1984. Innovations that didn't exist 10 years ago, such as volunteer neighborhood "community boards" and corporate mini-trials, are spreading. Even the American Bar Association, where the pace of reform is often glacial, is getting into the act; the organization is busily conducting workshops and seminars in several areas of the law for attorneys who want to learn about ADR, and its Special Committee on Dispute Resolution now maintains an office in Washington, D.C.

One of the reasons explaining why private ADR looks so good is that traditional litigation these days looks so bad. Going to court has never been a barrel of laughs. "I must say that, as a litigant, I should dread a lawsuit beyond almost anything else short of sickness and death," the respected jurist Learned Hand declared, and that was in 1926. Since then, the judicial system has only gotten worse.

There is little agreement on the cause for it but widespread agreement that the system is overburdened. Civil case filings in the federal courts have grown sixfold since 1940, while the nation's population hasn't even quadrupled in the same period. Business cases that last for years and produce truckloads of documents have become commonplace, and people are no longer shocked to hear of strange cases such as a child suing his parents for "malparenting."

Yet the often-voiced perception that America has become a litigious society, with everyone suing everyone at the drop of a hat, isn't borne out by the facts. An estimated one percent of the American population receives 95 percent of the legal services provided. And there is some evidence that, because the system is so slow and inefficient, people are often reluctant to pursue their grievances or claim their rights via legal action.

Anyone who does take the plunge into the legal system certainly needs a full reservoir of patience. Economist Bruce Benson argues that court congestion serves to "ration" justice: those who are willing and can afford to wait and wait some more might get a trial—if the judge doesn't throw out the case somewhere down the line.

Even the pillars of the system admit that something is wrong. Chief Justice Warren Burger warns: "We have reached the point where our systems of justice—both state and federal—may literally break down before the end of this century." And Derek Bok, the president of Harvard University and former dean of the law school there, writes that the system is "strewn with the disappointed hopes of those who find [it] too complicated to understand, too quixotic to command respect, and too expensive to be of much practical use."

The speeches are bracing and the editorials rousing, but little changes for the better. The crisis seems almost impervious to resolution. But investigation of the scene from Los Angeles to New York reveals that in a growing number of places and an increasing range of circumstances, the private sector is providing a way out through alternative dispute resolution.

Lots of digging for information doesn't turn up any good count of how many individuals and groups across the country are offering ADR. They're springing up so quickly, it's not surprising.

Last year, though, the Washington-based National Institute for Dispute Resolution, an information clearinghouse that opened its own doors only in 1983, published a Dispute Resolution Resource Directory of 100 organizations handling problems that would very likely have headed for the courts—or nowhere at all—a few years ago. The organizations range from Call for Action, a group of radio and television stations offering help with consumer complaints, to Western Network, a private organization in New Mexico that mediates water-management and land-use disputes, and the Children's Hearings Project in Cambridge, Massachusetts, which handles conflicts between adolescents and their parents.

Few of the listed organizations are more than five years old, but there is one very important exception to the rule—the grande dame of private dispute resolution, the American Arbitration Association.

But in its maturity the AAA, funded mainly by fees for services and by dues and contributions from more than 5,000 members, has greatly expanded upon its original purpose. Commercial disputes weren't even a fourth of the nearly 40,000 cases the organization took last year. Today, the AAA also handles interpersonal disputes, labor-management problems, and uninsured-motorist claims. It also puts out eight periodicals, maintains a research institute, trains arbitrators, and tallies upwards of a million votes every year in elections conducted for private organizations. And it's even taking on a few mediation cases lately.

But arbitration—a procedure in which a neutral third party hears both sides, then independently comes up with a binding solution—is still how the AAA usually does things, and it is one of the most common ADR mechanisms. An indication of arbitration's wide acceptance is that 47 states, the District of Columbia, and the federal government all have arbitration statutes, most of which recognize arbitrated resolutions as enforceable contracts that can almost never be appealed in court.

But arbitration and the AAA are by no means the only ADR show in town. Not all disputants want or need a third party with the power of an arbitrator. Larry Ray of the American Bar Association's Special Committee on Dispute Resolution notes that other ADR methods include: direct negotiation, which dispenses with a neutral third party altogether; conciliation, whereby the third party is merely a conveyor of information between disputants; and mediation, in which the mediator's role is essentially to guide the flow of information and make suggestions, while the disputants themselves arrive at a solution (and unlike arbitration, the outcome is usually not considered legally binding).

These distinctions among types of ADR are logical enough. In real life, though, there are now many creative combinations and mutations of them.

Perhaps the least court-like alternative to the courts is to be found in San Francisco. There, in 25 neighborhoods, Community Boards provide an informal apparatus for San Franciscans to solve conflicts with the help of their neighbors. They're a "deceptively simple" operation, as syndicated columnist Neal Peirce has observed. And there is no convenient label with which they can be tagged.

In a recent interview, Community Boards founder Ray Shonholtz listed the sort of differences handled by the Boards: "landlord-tenant disputes, merchant-consumer disputes, neighborhood harassment problems, gay versus Hispanic conflicts, arguments between roommates, neighbors opposed to a high school's off-campus policy." A law professor and still the president of the organization, Shonholtz explained that the Boards act as "third parties who intervene in a conflict before the legal system gets involved."

Since Community Boards got off the ground in 1977, hundreds of volunteers—some doctors and lawyers, others without high-school degrees—have been trained by the Boards organization in basic communication and problem-solving skills. This pool of volunteers, currently numbering about 380, is drawn on for panels that help disputants work out their conflicts. Volunteering for Community Boards isn't a casual commitment: in addition to 26 hours of training, a typical panelist devotes about 125 hours annually to the organization. Community members can avail themselves of the service for free.

Putting a panel together (there are usually three to five members) is something of an art. The members usually come from the same neighborhood as the disputants. Moreover, in a dispute between, say, a Chinese and a Hispanic, the Boards would try hard to recruit at least one Chinese panelist and one Hispanic panelist.

It was to Community Boards that Virgilio and Matilda Razzo, who live in the Visitacion Valley area of San Francisco, took the problem of the barking dog this spring. "We have a hill in back of our house," Mrs. Razzo recently explained, "and we'd heard the dog barking night and day. We couldn't see exactly where it was coming from because of trees blocking the view, but for five years we'd heard the barking."

Finally, after finding out the address where the dog was located, Mrs. Razzo recounted, she sent a letter of complaint to the owner. She received no response. She called the Society for the Prevention of Cruelty to Animals and the police, both also to no avail.

It was then that she called Community Boards. "I'd heard about them," she said. "They'd distributed flyers around the neighborhood saying they were available."

The first step the Boards organization takes after receiving a complaint, according to Shonholtz, is to have a "case developer" visit both sides at home to determine whether a meeting would help. "That's enough by itself," he noted, "to solve about a third of the complaints we handle."

In this instance, the owners of the dog were a couple named John and Maria Arnott. The case developer happened to be Mr. Arnott's sister, and it was she who first told Ms. Arnott about the complaint.

"My sister-in-law said, 'Look, someone's complaining about your dog,'" she later recalled. "We didn't know that our dog was causing a problem, and our attitude was, 'Sure, we'll be happy to talk to them.'"

From time to time, the meeting with a Community Boards panel becomes quite heated. This did not. "They were very good about working it out," said Mrs. Razzo. And Ms. Arnott recalled, "I didn't feel any animosity or tension at the meeting. The panel was trying to figure out how to solve the problem. They asked if there are any other dogs around the neighborhood, and they asked what our schedules are—when we get back from work and when Mr. Razzo is at home—and they suggested some things we should try."

In the end, they put together an agreement signed by Virgilio Razzo and John Arnott. The Arnotts would move the dog house to a lower level and keep the dog where it wouldn't bother the Razzos. Mr. Razzo agreed that he or his wife would call right away if the dog's barking bothered them again. And the Arnotts would check with the Razzos later to make sure that the barking problem was ended.

"The day after the meeting," Mrs. Razzo recounted a few weeks later, "we didn't hear any barking. We haven't needed to call, because the dog barks only once in a great while, and it's just for a few minutes. It's like a miracle."

One of the three panel members was Ben Goodman, a retired utility official and a veteran of Community Boards panels. "We panelists try to set the stage so that both sides will think of each other as humans, not opponents," he explained. "We try to see what they have in common—maybe they both have kids going to the same school, or whatever."

Goodman figures it's important for the panelists "to be at ease and not think of it as 'downtown law.'" And ground rules are spelled out. "The first is that both sides should treat each other with respect. The second is, don't interrupt anyone when they're speaking, because you'll have an opportunity to tell your side. Then, in this case, we said to Mr. Razzo, 'Please tell Mr. Arnott how you felt at night when the dog kept you up.' That kind of thing can help."

Not incidentally, Mrs. Razzo is now an ardent Community Boards booster. "About 80 percent of the cases I've seen end this way," said panelist Goodman with obvious satisfaction. "It can be very wrenching with some of the disputes, but it can be very gratifying. That's why I'm in it."

There was a time when many, if not most, lawyers were repulsed by the idea of private dispute resolution. During an American Bar Association debate in 1919, an overoxygenated Massachusetts lawyer even implied ominous parallels between contractual arbitration and the Bolshevik revolution in the Soviet Union—"where they have taken the lawyers and put them out to work in the fields and factories, where they have closed down the courts."

Some of his successors in the law feel a bit less threatened. They have noticed that there's a growing demand for efficient, inexpensive dispute resolution—and they've also noticed that there are more than a few disputants who are willing and able to pay well for it. Streamlined private dispute resolution is not the kind of thing that attorneys are usually trained for, but many have been learning quickly.

In California, for example, lawyer-entrepreneurs and retired judges are offering "rent-a-judge" services, in which they render legally binding but appealable decisions. The state has a law dating back to 1872 that allows for such services ("general references," as the law calls them), but it's only in the last few years that the practice has flourished, as typical court delays have grown.

Among the more famous California rent-a-judge cases is the divorce of est founder Werner Erhard, which began last year and was still continuing as of June. The law permits general references in any civil (noncriminal) case, and the hired judge doesn't even have to be a lawyer.

California isn't alone: at least 10 other states have some rent-a-judge provisions in their laws. But this is hardly the ceiling on opportunity for entrepreneurial lawyers. Several are setting up full-fledged dispute-resolution businesses, rent-a-judge laws or no. Jonathan Marks of Washington, D.C., is one of those lawyers.

Marks comes to his current endeavor by way of the Harvard Law Review, of which he was president while in law school; the District of Columbia, where he served as a federal prosecutor; and then the high-powered Los Angeles law firm of Munger, Tolles & Rickerhauser. He and a Munger, Tolles colleague, Eric Green, were working eight years ago on a complicated patent case for TRW, a technology conglomerate that was embroiled in a conflict with another company, Telecredit. The case promised to be protracted and expensive.

Exasperated executives on both sides concluded that there must be a better way of handling the problem, so they improvised. They set up a private two-day hearing, with a neutral adviser present, at which lawyers for both sides presented summaries of their cases to executives of both companies. Marks recalls that it wasn't even an hour after all the arguments were ended before the executives from TRW and Telecredit had worked out an agreement. In the process, they jointly saved an estimated million dollars in legal costs.

The concoction was dubbed a "mini-trial." Was it an entirely new idea? Maybe so, maybe not. "It's conceivable that there were mini-trials in the past, but they were never identified as such," says James Henry of the New York-based Center for Public Resources, which promotes and conducts mini-trials.

Marks and his friend Green (today a Boston University law professor) knew a good thing when they saw it. They soon formed a small company called EnDispute to arrange and conduct mini-trials not only in corporate disputes but also in simpler situations such as uninsured-motorist cases. Today, EnDispute has offices in Washington, Los Angeles, Chicago, and Boston, and the mini-trial is only one of its services.

For fees that are calculated at $150 to $250 an hour and usually come to a minimum of about $800, EnDispute will set up and conduct a mini-trial, provide neutral analysis, arrange a voluntary-settlement conference or arbitration, or work out another mode of dispute resolution suitable for the occasion. If need be, they'll conduct a management audit of a company to see how it can reduce the cost of its disputes. Or they'll provide any number of other consultant services.

Others are running the trail blazed by EnDispute, including Dispute Resolution in Hartford, Judicate in Philadelphia, Civicourt in Phoenix, and a handful of small firms, often with a single retired judge, in California. Since the TRW-Telecredit resolution in 1977, mini-trials facilitated by various enterprises have led to the settlement of a multi-million-dollar contract case between Wisconsin Electric and American Can Company; a $10-million liability claim against the Insurance Company of North America; a case brought by Gillette involving theft of trade secrets; and others.

Some of the biggest of the corporate mini-trials have been conducted by the Center for Public Resources, a nonprofit organization with a dues-paying membership. CPR's Judicial Panel—a roster of attorneys and legal scholars who can be hired to preside at mini-trials—includes former attorneys general Elliot Richardson and Griffin Bell, former Yale Law School dean Harry Wellington, and others of their stature. In addition to spreading the idea that the mini-trial is a sensible and useful mechanism, the Center acts, in president James Henry's words, as "a non-profit R&D effort to build the state of the art."

Walter Kocher, vice-president and general counsel of the Borden Corporation, knows from first-hand experience how a CPR mini-trial works. His company settled a $200-million antitrust dispute with Texaco because of one.

Borden had filed a complaint in federal court in May 1980. "The case started out according to normal procedure," Kocher recalled recently in an interview. "Hundreds of thousands of pages were turned over by both sides. After we'd been in the case for more than two years, we were preparing for trial when, in a discussion between attorneys for both sides, it was suggested that we both try to resolve the case with a mini-trial. Both attorneys were members of CPR at the time, so they were familiar with it."

CPR's Henry later wrote that the rules at the Borden-Texaco mini-trial were simple: attorneys for both sides would make presentations to executive vice-presidents of both companies; the presentations would be on neutral ground (a private club in New York); and the attorney for each side would have an hour to make his presentation, plus time for rebuttal.

It worked. The meeting took less than four hours altogether. After "sometimes difficult" discussions between Borden and Texaco executives over the next two months, a solution was hammered out: no money changed hands, but they did negotiate a new gas-supply contract that hadn't even been an issue in the case. It was greeted by both parties "as a win-win settlement," observed Henry.

If private dispute resolution has any emblem of success, it is the win-win settlement. In divorce cases, where the emotional stakes are usually more substantial than in an antitrust dispute or a problem with a barking dog, the possibility of both sides winning can be especially appealing.

That's essentially why Karyn and Don Souther, a Los Angeles–area couple, went to a mediator when they decided to get divorced. "To have two lawyers would have been distasteful to us," Karyn Souther explained. "If you don't have a lot of difficulties already, a lot are created for you with the adversarial relationship in the divorce courts."

The Southers' family therapist recommended that they use the services of mediator Joel Edelman, an attorney and adjunct law professor at the University of Southern California and Loyola University. After Edelman had spoken to both of them on the phone, their first meeting was set up.

"In the first meeting," Mr. Souther recalls, "Joel explained his role. He told us he wasn't there to represent one side or another—he was there to help us decide the things we needed to decide. And he asked us why we wanted to divorce."

The second session was far more difficult. "It was long and drawn out," according to Ms. Souther. "During part of the session, I felt that Joel was favoring my husband, and I brought that up. It was a tough session. In the third session, though, the two of us came to an agreement. Don and I actually worked out part of it while Joel was taking a phone call." The third session was their last.

The agreement that the Southers and Edelman worked out is somewhat unconventional—not the kind of settlement that normally comes out of divorce court. "There were so many trade-offs they made that only they knew the reasons for, and no judge ever would," Edelman said. One of their two daughters is to live with her grandmother in Sacramento, while the other will live part-time with each parent. Ms. Souther is paying Mr. Souther child support, and although he is not providing any money for her to continue her education—as many courts might well have ordered—he is buying out of her share of a jointly owned house.

It's not at all clear how many couples are like the Southers in that mediation can make their divorces easier and less painful. Edelman believes the Southers' divorce went as smoothly as it did because they "were a couple who had a great ability to understand each other and communicate with each other." In his experience, "Mediation works best when the people are basically sane and no one's off the wall—and neither one wants to get the other, emotionally or financially."

Edelman's experience with mediation goes back to 1969 during the Columbia University student strikes. He was on loan from the Rand Corporation (a California "think tank") to the New York Police Department when a police executive learned that Edelman was a graduate of Columbia. "Next thing I knew," Edelman recounted recently, "I was mediating the Columbia student strike and getting hooked on it—as if mediation was one of those rare novels you just can't put down once you've started reading it."

Eight years later, the Los Angeles County Bar Association "drafted" him to set up a Neighborhood Justice Center. The first mediation center in Southern California, it started with "not many standards to speak of except common decency, common sense, and uncommon organizational curiosity," he wrote.

"For me," observed Edelman, "mediation has been life-affirming, all-encompassing, fulfilling, and rewarding. On all levels." These days, he is teaching mediation to law students in Southern California, running small divorce-mediation workshops, and working as a mediator in Santa Monica, frequently with couples like the Southers.

While observers agree that divorce mediation is no cure-all, nor will it work for everyone, it is a growing alternative to often bitter and unsatisfactory court battles over custody and property. No one seems to have tallied how many people are turning to divorce mediation, but there are already several organizations serving the growing market.

An obvious question is whether private dispute resolution is better than the judicial system. Turning up an answer to that is not so easy, though, for several reasons.

First, ADR comes in so many sizes and shapes as to be virtually uncountable. Besides arbitration, mini-trials, for-hire judges, and mediation, there are media-sponsored consumer hot lines, Better Business Bureau complaint resolution, industry-sponsored groups handling complaints for a single industry (such as autos), and numerous others.

Second, private ADR and litigation don't compare on many qualities. As Richard Abel, a law professor at the University of California at Los Angeles, has pointed out, informal ways of processing disputes aren't bureaucratic in the way that the legal system is, and they're not set apart from the larger society like the courts are. He describes ADR as "vague, unwritten, commonsensical, flexible, ad hoc, and particularistic." Those features sound just fine to a lot of people, while others are satisfied and secure with bureaucracy, the rule of law, precedent, and due process.

And while anecdotes about ADR are a dime a dozen—and many of them do ring true—there's very little good hard data about it. That's partly because many of the ADR methods are themselves so new and informal. But it's also because even established and fairly formal institutions like the American Arbitration Association carefully protect the confidentiality of their cases.

This is not to the liking of some observers. A search through the ADR literature turned up, for example, the worries of Berkeley anthropologist Laura Nader. At a conference several years ago, she recounted how AAA officials "weren't about to let us come in" for an external review of the organization's track record. "The reason they gave had to do with confidentiality," Nader relayed dubiously. "They said they had to protect the consumer." Earlier, in a Yale Law Journal article, Nader had suggested that it would be advantageous if public and private mediation and arbitration agencies were required to open their case files for public inspection.

The fact is, of course, that confidentiality can be a real blessing for disputants (no doubt many litigants have yearned for more privacy than the courts usually allow) and something they have a right to preserve. But the same confidentiality means that it can be difficult for consumers—and reporters—to check out the record of an ADR service or compare ADR to the traditional court system.

And yet, some comparisons are possible. For example, there's good reason to think that much of the time, private ADR is cheaper than litigation.

Take arbitration, which is quite similar in structure to what the courts do—so much so that it qualifies for being dubbed a "private court" if anything does. After all, arbitration usually entails an adversarial presentation before a neutral third party; the arbitrator renders a binding (and very judge-like) decision that's enforceable in the "real" courts; and in most arbitrated cases (at least the ones that the AAA handles) both parties have their lawyers with them. Yet, even though arbitration replicates the courts in so many ways, savings can often be realized by going to arbitration.

Herbert Kritzer is a political scientist at the University of Wisconsin, where the prestigious Disputes Processing Research Program has been examining the court system and ADR for eight years. He and Jill Anderson Dean, formerly at the University of Wisconsin and now an attorney in Alaska, compared 755 tort (wrongful act) and contract cases that went through the federal or state courts with 147 similar cases handled by the AAA. Their study is considered the best independent comparison available. They found that on average, legal expenses were higher in AAA cases when the stakes in the case were over $5,000; but when the stakes were less, the AAA was the more economical way to go.

But that's arbitration. Discussion with various people involved suggests that the farther a private ADR moves from the traditional court model, the greater the chance of saving money. The typical mini-trial, for example, is enormously simpler and more informal than the complex litigation that it is intended to replace. While independent data on mini-trials is virtually nonexistent, James Henry of the CPR cites an estimate that a successful mini-trial can result in savings of as much as 90 percent on legal costs.

In recalling the Borden-Texaco mini-trial, Borden counsel Walter Kocher figures that if it hadn't taken place, "you could have expected four to six years of additional litigation. There was so much at stake that neither side would have accepted a negative decision until all the avenues for appeal had been exhausted." And the cost? "Millions of dollars. Let's face it—when you get lawyers and very competent technical people, you pay by the hour, and the hours add up."

It's possible that mini-trials haven't yet reached their full potential. Former Attorney General Griffin Bell, who now practices law in Atlanta and is available for hire through the Center for Public Resources to conduct mini-trials, believes that the day may come when mini-trials or similar ADR mechanisms will be a way to save even more in legal costs, not to mention time and energy. "Where there are thousands of cases against one company, such as in the asbestos litigation and the Dalkon Shield cases, there's got to be some way to marshal all these cases in one place," he observed when interviewed. "It would work well if there were 5,000 cases around the country that could be brought together, but we're not there yet."

For an entirely different kind of dispute, the kind that the Community Boards handle in San Francisco, one can't even begin to compare disputants' costs with what they'd have to invest in litigation. When they go to Community Boards, it doesn't cost them anything. The Boards organization itself doesn't charge them; there's no reason to pay for attorneys, because Boards rules are that an attorney can't participate in a case unless he or she is a disputant; and all the panel members are unpaid volunteers. Virtually the only expenses in the whole Community Boards system—which, so far, has been funded entirely by private contributions—are for a small staff and rent for an administrative office and three storefronts around San Francisco.

Overall, observes Bowdoin College sociologist Craig McEwen, who's sympathetic to ADR, its purported cost advantage isn't proven. But the reliable evidence that's available does suggest that much of the time, ADR is a lot cheaper than litigation.

When it comes to speed in processing disputes, however, the advantage of ADR is much less ambiguous. By and large, the innovative private alternatives are considerably faster than the courts.

When Herbert Kritzer and Jill Anderson Dean compared court cases with AAA cases in five parts of the country, they found that in one area, the AAA was "appreciably faster" for contract cases but not torts; in a second area, the AAA and the court "had similar patterns"; but in three areas, the AAA is "clearly faster." Moreover, Kritzer and Dean noted that the AAA's speed advantage overall might have been even larger if they'd been able to carry out their technical analysis further.

Speed seems to be a hallmark of nearly every private dispute resolution proceeding. Mini-trials, when they're successful, reportedly take days or at most weeks to resolve cases that have sometimes been festering for years and typically would take years more in the courts. The four-hour meeting and two months of negotiations that led to a resolution of the Borden-Texaco conflict was, according to Center for Public Resources spokesperson Anne Glauber, somewhat longer than with the usual mini-trial.

In a divorce like the Southers', there's no way of knowing how long it would have taken if they had gone through the courts, even in a "no-fault divorce" state like California. But in the event, it took only three sessions with Edelman, each lasting only a few hours. He then drew up the divorce papers and sent them to Karyn and Don Souther for their approval. The only delay now is in the court system itself: the Southers are in the middle of a mandatory waiting period before the divorce is made final.

It's not so surprising that a mode of dispute resolution vastly different from the legal system—the Community Boards—is also one of the quickest. Usually, when the organization takes a dispute, both sides and the panel of neighbors gather on a free evening in a Boards storefront or a church basement, set up some folding chairs, talk, and put an agreement in writing before the evening is done. Precious few courts, including those handling the simplest of cases, could boast of doing nearly as well.

There's no question about the fact that alternative dispute resolution offers an appealing way out of a creaky legal system. But it would be a mistake to think that they exist in some vacuum completely independent of the system. They don't.

Almost everywhere, arbitration decisions are legally enforceable—and enforced when necessary—in the courts. The results of mediation, such as in the Southers' divorce, often need the imprimatur of the state to carry any weight. For mini-trials, it's often the same story.

Even the Community Boards group has a close working relationship with local government officials, including the San Francisco police. They "have a good reputation here," Lt. Tim Thorsen, the head of the San Francisco Police Department's Community Service Division, said in an interview. "I've had them to staff meetings, and the Police Department has referred cases to them."

So alternative dispute resolution mechanisms don't function in a stateless society, and the ones that thrive reflect that fact in various ways. But at the same time, they're quietly making news so obvious that it's easy to overlook. It is this: some shrewd, occasionally visionary, usually creative people are coming up with ways to opt out of a tottering legal system that's not doing its job well at all. They're not doing it because they want to erode the government's old monopoly on dispute resolution. They just want to meet people's need to work out conflicts, and several are doing just fine at it. As the Razzos and the Arnotts, the Southers, Walter Kocher, and anyone who's had the misfortune of spending even a week in court would probably attest, that is an impressive accomplishment.

Assistant Editor Paul Gordon is not a lawyer. This article is a project of the Reason Foundation's Investigative Journalism Fund.

You, Too, Can Stay Out of Court

A few years ago, a New York Times editorial called California's "rent a judge" system a "quick, secluded, efficient—and repugnant" alternative to ending up in court. Why repugnant? Because, the paper said, private alternative dispute resolution (ADR) undermines the concept of "an egalitarian society." The only people who would use ADR, the Times suggested, are the super-rich.

But in Ira Gershwin's words, it ain't necessarily so. When it comes to elitism, the legal system is no great shakes, with an estimated one percent of the population getting 95 percent of the legal services. More important, though, private ADR in one form or another is available for nearly every pocketbook. If you're currently embroiled in a conflict of some sort, there may be an ADR just right for you, but you should keep a few guidelines in mind.

First, the more equal you and your adversary are, the better. The chances of working out a problem with an ADR are often higher if the dispute is between a neighbor and a neighbor, a married couple where one partner hasn't been emotionally dominant, two large corporations, or two small businesses.

Both advocates and critics of various ADR methods say so. James Henry of the Center for Public Resources, who has seen several corporate mini-trials first-hand, says that one of the criteria for a good one is "reasonable parity of power between the two parties, such as between two corporations of equal size." And anthropologist Laura Nader, who is skeptical of some ADR, warns that "disputes between people of unequal power are unlikely to be settled fairly by mediation or arbitration unless the force of law is available as a last resort."

This, however, is not a hard-and-fast rule, and there are often ways around it if you're savvy. For example, if you're a lone consumer up against a corporation, you might write a letter to your local TV or newspaper consumer hotline. Making the letter interesting and mentioning any odd twists to the case can help get the media's attention, which can be astonishingly effective in spurring corporate cooperation.

Second, try an ADR only when you're sure that both you and your adversary really want to solve the conflict. If either side has an interest in prolonging a resolution of the dispute, getting revenge, spending large amounts of money on lawyers (which, incidentally, is often tax-deductible for businesses), setting a legal precedent, or defending a personal principle at any cost, that's fine. The courts are most suitable. ADR is for something altogether different.

Third, choose the neutral third party carefully. Los Angeles mediator Joel Edelman, who has handled all sorts of cases, suggests that people looking for a divorce mediator should interview at least two or three candidates (paying for their time) before choosing one. That's true in any case when there's a lot at stake, economically or emotionally. Alternative dispute resolution is a largely unregulated market, which means that there's no bar association or similar creature even purporting to protect you from incompetence or fraud.

And make sure the third party is neutral. If you're a consumer in a brouhaha with either a company or a lawyer, CPA, or other professional, don't forget that industry-sponsored organizations like the Better Business Bureau (BBB) and professional groups like the bar association are funded by one side in the dispute, and that side isn't yours.

Law professor Richard Abel points out that the BBB in particular has "little enforcement power and doesn't offer many meaningful remedies." As for professional organizations such as bar associations and medical associations, he notes, "their complaint processes are lengthy, they're secretive, and after someone has put in all the time and effort to go through the process, they usually impose very mild punishment, if any at all."

Finally, if you need a lawyer, hire a lawyer. Before you agree to any settlement involving something valuable and important to you, check it out with an attorney. Even if you agree with Mormon leader Brigham Young that lawyers are like "a stink in the nostrils," hold your nose and go see a competent one. It could save you a lot of problems later.

What kind of ADR you choose often depends on your problem.

If you have a landlord-tenant problem, housemate hassles, noisy neighbors, or other problems of the sort, and you can't spend a lot of money, "community boards" are your ADR of choice. Fortunately, you don't have to live in San Francisco to use them. At this writing, San Francisco's pioneering Community Boards has spawned similar organizations in six other cities and four American Indian communities in various parts of the country, and six more are in the offing. To find out if there are community boards where you live, contact the San Francisco office at 415/552-1250, or 149 Ninth St., San Francisco, CA 94103. (If there is no community board in your area but you'd like to start one, tell them).

If you and your adversary don't trust or like each other and there's not a big chance that either will need a continuing relationship with the other, you'll probably want a resolution that's legally enforceable and not appealable in court. Arbitration may be for you, so contact the American Arbitration Association. If you're in a big city, it's likely that they're in your phone book. If not, get in touch with their national office (140 West 51st, New York, NY 10020; 212/484-4000) and tell them where you are and what you need. In the last three years, the AAA has been delving into mediation, so you might want to ask about that, as well.

If you and your spouse want a divorce and hope it will be slightly less harrowing than the Hundred Years' War, there are a couple of national organizations that can give you referrals to local mediators. These are the Academy of Family Mediators (P.O. Box 4686, Greenwich, CT 06830; 203/629-8049) and Association of Family and Conciliation Courts (Psychiatry Dept., Oregon Health Sciences University, 3181 S.W. Sam Jackson Park Rd., Portland, OR 97201; 503/220-5651).

If you're in business and getting heartburn because of avoidable conflicts, mini-trials may be your way out. If you want one of the top lawyers in the land and will pay well for his or her services, get in touch with the Center for Public Resources at 860 Fifth Ave., New York, NY 10010; 212/541-9830. If your needs are more modest, try a firm like EnDispute. They're in four cities, but their main office is 1333 H St., NW, Suite 460, Washington, DC 20005; 202/898-0146. Other dispute-resolving firms include Civicourt (505 N. Second, Phoenix, AZ 85004; 602/252-4802); Judicate (1608 Walnut, Suite 1200, Philadelphia, PA 19103; 215/546-6200); and Dispute Resolution, Inc. (179 Allyn, Suite 508, Hartford, CT 06103; 203/724-0861).

Finally, the directory of ADR mechanisms put out by the National Institute for Dispute Resolution (1901 L St., NW, Washington, DC 20036; 202/466-4764) probably has a listing for you if you have a dispute involving something more arcane—say giraffe hygiene, cubist sculpture, or polyandry.

—P. G.