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Neutral Corner: Indiana’s ADR Rules adopted 25 years ago

October 5, 2016

Neutral Corner: John Van WinkleTwenty-five years ago, the Indiana Supreme Court adopted Rules for Alternative Dispute Resolution. Signed on Nov. 7, 1991, the rules focused primarily on mediation. The ADR Rules became formally effective on Jan. 1, 1992, and trial judges across the state began to immediately refer civil cases to private mediators. Mediation has developed into an integral and critical component of the civil litigation system in Indiana.

Original rule

Although mediation became the main thrust of the ADR Rules, mediation as now known was not the central feature of the rules originally proposed.

The origin of the rules can be traced to an article in the February 1985 issue of Res Gestae entitled “Alternative Dispute Resolution – Has its Time Come?”

The president of the Indiana State Bar Association in 1985 requested that the Young Lawyer’s Section investigate the feasibility of ADR in Indiana. In October of 1986, the committee presented an overview of its initial research to the ISBA. In April of 1987, the ISBA ADR Committee’s report to the ISBA House of Delegates indicated that a proposed rule had been formulated based on court-annexed procedures established in Michigan. The proposed rules focused on non-binding arbitration for civil cases and provided for sanctions for attorney fees and costs for parties who rejected the arbitration panel’s evaluation and did not obtain more favorable results at trial. In December of 1989, a first draft of the proposed rules was presented to the Indiana Supreme Court for consideration.

On Aug. 30, 1990, then-Chief Justice Randall Shepard wrote to the chair of the ISBA ADR committee and stated, “The Supreme Court has approved in principle adoption of rules authorizing expanded use of accelerated dispute resolution in Indiana” and further requested that the ISBA prepare a final rule for the court’s consideration.

This letter, demonstrating the court’s receptiveness toward ADR, intensified the interest of the general bar, and the ISBA expanded the committee to include representatives of the Indiana Trial Lawyers Association and what is now the Defense Trial Counsel of Indiana.

An article in the Jan. 30-Feb. 12, 1991, issue of Indiana Lawyer entitled “ISBA group shares ideas, concerns about ADR,” highlighted the objections of the expanded committee to the non-binding arbitration focus of the rules, and particularly the provisions for attorney fees and sanctions.

As a result of these and other objections, the ISBA ADR Committee redrafted the proposed rules, removing the mandatory non-binding arbitration provisions and shifted the central thrust of the final proposed rules to mediation.

The final draft of the proposed rules with mediation as its focus was submitted to the Indiana Supreme Court Committee on Rules of Practice and Procedure on Feb. 28, 1991. Following a public hearing on July 15, 1991, the Rules Committee made the final changes and the proposed rule was submitted to the Supreme Court for adoption.

Michigan moves to mediation

Had the Indiana Supreme Court adopted the originally proposed rule focusing on mandatory neutral case evaluation, it would have joined Michigan as one of only two states to mandate the non-binding arbitration process.

How has the evaluation process evolved and functioned in Michigan for the past 25 years? Tracy Allen, a leading national mediator in southeast Michigan, reports that mediation has replaced the non-binding evaluative process as the core of ADR in Michigan. Allen indicates that her experience with the evaluative panels as a neutral and her experience as a commercial mediator is consistent with and echoes the conclusions of a 2011 survey and report to the Michigan Supreme Court. The report, “The Effectiveness of Case Evaluation and Mediation in Michigan Circuit Court,” was conducted by Courtland Consulting of East Lansing, Michigan, and was based on court statistics, surveys and focus groups with Michigan judges and lawyers.

The report found that while case evaluation is still widely used in Michigan, some courts are moving away from case evaluation toward a greater use of mediation. The report also examined cases that were mediated. The report concluded:

“The case evaluation award amount was accepted in 22% of the cases examined in this study … Where mediation was held, nearly half (47%) were settled ‘at the table.’ Ultimately 72% of cases that went to mediation were disposed of through a settlement or consent judgment and without later using case evaluation or going to trial.” (pg. 5 of Courtland Report).

The report also found that mediation was faster than case evaluation for disposing of cases and that mediation was found to generally reduce costs for both courts and litigants. The consulting group concluded the report with recommendations to the Michigan Supreme Court, including the following:

“Given the evidence that mediation is generally more effective and preferred over case evaluation, Michigan circuit courts should be encouraged to make mediation available and not require case evaluation … .”

It appears clearly that the 1991 Indiana State Bar Association committee and the Indiana Supreme Court got it right.•

John R. Van Winkle, of Van Winkle Baten Dispute Resolution, is a former chair of the American Bar Association’s Section of Dispute Resolution and author of West’s Indiana Rules of Dispute Resolution Annotated. The opinions expressed are those of the author.

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