ADR and Mediation

Your Guide to Alternative Dispute Resolution (ADR)

Methods for settling disputes without going to court

What is alternative dispute resolution?

Alternative dispute resolution (commonly called ADR) refers to various methods used to resolve legal disputes outside of a formal court proceeding.

Generally, these methods are less time consuming and are more cost effective than litigating in court, making them attractive to a variety of individuals and entities involved in legal disputes.

Methods include:

  • Mediation
  • Arbitration
  • Collaborative Law
  • Pre-trial Settlement Conference

The two most common methods of ADR used in Illinois are Mediation and Arbitration.

What is mediation?

Mediation is a confidential process in which an impartial third party called a mediator acts to facilitate the communication and negotiation between parties in order to bring about a resolution to their dispute. Mediation is an informal, non-adversarial, and non-binding process aimed at helping the parties reach a mutually acceptable agreement on all or part of their dispute.

Decision making rests with the parties, not with the mediator. The mediator will not render or impose on the parties an opinion or decision, nor will he or she make a finding of fault or liability. Rather, the mediator will help guide the issues of the dispute and will help the parties explore settlement alternatives, help define mutual interests, and reassess their goals.

Illinois has adopted the Uniform Mediation Act which can be found at 710 ILCS 35/1 et seq.

Who are the mediators?

A mediator is a neutral third party who is selected by the disputing parties. The mediator may be an attorney, retired judge, or other individual with specific experience or training in a particular professional field. Some court systems have mediators who are certified in a particular type of law.

How do I choose a mediator?

In selecting a mediator, consideration should be given to the mediator's reputation, experience, training, areas of expertise or concentration and certifications. A mediator should also be impartial and free of any bias.

Why choose mediation over court litigation?

Mediation is a problem solving technique that allows parties to work together in a confidential manner to form their own mutually acceptable resolution to their dispute. Sometimes for reasons of expense or the need to preserve a business or personal relationship between the parties, it may be important to resolve a dispute in a non-adversarial manner or more expeditiously than is permitted by court calendars. Furthermore, mediation may be required for some disputes under certain circumstances. For example, disputes stemming from a contract that contains a mandatory mediation clause typically require the disputing parties to first engage in mediation before they can seek any other dispute resolution method such as arbitration or litigation in court. Additionally, a court will typically order mediation in a custody proceeding, for instance, to assist the parties in developing an agreeable parenting plan.

The mediation process is typically comprised of one or more sessions attended by the disputing parties and the mediator. Because these sessions are confidential and non-binding, the parties can still proceed to arbitration or litigation with their full rights if the dispute is not resolved during mediation. Attendance by a parties' attorney is permitted, but is not mandatory and can be waived.

What is arbitration?

Arbitration is a process in which an arbitrator or arbitration panel considers the facts and arguments presented by the parties to a dispute submitted for arbitration and renders an enforceable decision in favor of one party and against the other. The purpose of arbitration is to obtain a final disposition of the issue(s) in dispute by the parties in a manner which is designed to be easier, quicker, and less expensive than by litigation in court. Even though arbitration is less formal than a court trial, there are still procedures that must be followed. The decision resulting from arbitration is usually binding and the right to appeal the decision of the arbitrator or panel of arbitrators is typically very limited.

Illinois has adopted the Uniform Arbitration Act which can be found at 710 ILCS 5/1 et seq.

Who are the arbitrators?

Arbitrators are often lawyers, but can be any individual who is deemed by the parties to be capable of understanding the terminology, practices, and customs and usages of trade involved in the dispute being arbitrated. In many cases, arbitrators are required to meet specific criteria and must undergo special training in order to be certified to act as an arbitrator. Unless specified in a contract or written agreement, you and your attorney usually will have input as to the selection of the arbitrator.

How do I choose an arbitrator?

In selecting an arbitrator, consideration should be given to the arbitrator's reputation, experience, training, areas of expertise or concentration, and any certifications the arbitrator may hold. An arbitrator should also be impartial and free of any bias.

Why choose arbitration over court litigation?

While arbitration is similar to litigation in court in many respects, there are still important distinctions between the two. There is no judge or jury in arbitration, for example, and the arbitration hearing is conducted privately and is less formal than a trial, which allows the presentation to be streamlined. Thus, the procedure can be simpler, faster, and less expensive than courtroom litigation. Additionally, arbitration may provide the parties with greater confidentiality. The final decision of the arbitrator or panel of arbitrators may or may not preclude you from further litigation.

Do I still need a lawyer?

Mediators and arbitrators do not provide legal advice and do not act as a lawyer for any party. A party to any method of ADR should consider retaining the services of a lawyer in order to obtain the necessary legal advice to understand the full nature, scope, and potential consequences of the dispute in which they are involved.

A lawyer can also assist a party to a dispute in choosing the most appropriate ADR method. Lawyers often understand the procedure and preparation necessary to mediate or arbitrate a dispute, and thus you may benefit by obtaining legal counsel to help guide and represent you through any ADR process.

Other forms of ADR

Collaborative Law (also known as Collaborative Practice)

Collaborative law is a process used primarily in family law matters and in cases when the parties' relationship must continue after the legal dispute has been resolved. The process involves a series of joint meetings between both parties and their respective collaborative attorneys. The process often includes other professionals also trained in the Collaborative Practice model and in mediation, such as mental health and financial professionals. It is a voluntary process in which the parties are fully informed about the law but use their own standards of reasonableness and self-determination to reach resolution thereby eliminating the need for the court to make the decisions. All of the professionals serve as advisors under Limited Scope Representation Agreement1 not to engage in litigation, if the parties decide they wish to litigate. Similar to mediation sessions, the goal of the joint party/professional sessions is to bring about a written agreement between the parties that resolves some or all of the various issues needing to be addressed. To commence the Collaborative Practice process, the parties and all of the professionals involved sign what is known as a "Collaborative Participation Agreement." This document spells out the roles, duties, and goals for the parties, the professionals and the process. By signing the Participation Agreement, each of the participants makes a pledge to full disclosure, fair dealing, and remaining future-focused on workable outcomes. When a final, agreeable resolution is reached, it is reduced to a written settlement agreement by the collaborative attorneys. Thereafter, the parties and the attorneys go to court one time to have the settlement approved by a judge.

Private Judge

This is a process by which parties to a dispute agree to have their case heard privately by an individual who both parties have selected to act as a private judge. A private judge is an individual who is respected for his/her impartiality, intellect, and understanding of the subject matter involved in the dispute. As a neutral third party, the private judge acts to facilitate a mutually acceptable resolution between the parties. The decision of the private judge may be binding depending on the agreement of the parties.

Pre-trial Settlement Conference

The pre-trial settlement conference is a technique used by judges for the purpose of exploring and encouraging the settlement of lawsuits before they reach trial. Parties and their attorneys are typically summoned to a pre-trial settlement conference by a judge, who will then act as a neutral third party to assist the parties to better understand, appreciate, and evaluate the strengths and weaknesses of each party's case in an effort to facilitate a mutually-acceptable settlement.

For more information on ADR:

Persons interested in learning more about ADR in Illinois can obtain information:

  • County and local bar associations. You can find these associations in a local telephone directory.
  • Your attorney. If you are represented by an attorney, he or she may be able to recommend ADR resources.
  • Circuit Courts. Most circuit courts have a list of certified child custody mediators and also maintain lists of individuals certified in dispute resolution for civil disputes.

1 For more information refer to ISBA Consumer Legal Guide Publication "A New Way to Get Legal Help: Limited Scope Representation

Prepared by the Illinois State Bar Association's Alternative Dispute Resolution Section (2017)

Zurich American Insurance Co. v. Personnel Staffing Group, LLC

Zurich American Insurance Co. v. Personnel Staffing Group, LLC
Illinois Appellate Court
Civil Court
Arbitration
Citation
Case Number: 
2018 IL App (1st) 172281
Decision Date: 
Tuesday, May 15, 2018
District: 
1st Dist.
Division/County: 
Cook Co., 2d Div,
Holding: 
Affirmed.
Justice: 
NEVILLE

Insurer filed demand for arbitration of its dispute with its insured. Insurer then filed complaint against its insured and 2 other defendants, alleging that insured fraudulently transferred funds to the other defendants to avoid paying an anticipated arbitration award; and insured filed in court a counterclaim that matched claims it raised in arbitration. Insurer's complaint concerns collection of arbitration award, and court properly held that parties did not agree to arbitrate issues as to collection of arbitration awards. Thus, court correctly refused to stay proceedings on fraudulent transfer claims pending arbitration. (HYMAN and MASON, concurring.)

Warciak v. Subway Restaurants, Inc.

Federal 7th Circuit Court
Warciak v. Subway Restaurants, Inc.
Civil Court
Arbitration
Citation
Case Number: 
No. 17-1956
Decision Date: 
January 25, 2018
Federal District: 
N.D. Ill., E. Div.
Holding: 
Reversed and remanded

Dist. Ct. erred in granting defendant’s motion to compel arbitration of plaintiff’s claim that defendant had wrongfully sent spam text message to plaintiff’s cell-phone, where said motion was based on arbitration clause contained in cell-phone agreement between T-Mobile and plaintiff’s mother. Generally, court cannot compel party to arbitrate dispute unless said party has agreed to do so, and while Dist. Ct. applied federal law to grant motion to compel arbitration, it should have applied state promissory estoppel principles to decide whether non-party to contract should be bound by terms of another person’s contract. Moreover, under Illinois law, defendant could not rely on estoppel principles to enforce T-Mobile’s arbitration clause against plaintiff, because defendant cannot show any detrimental reliance on statements or conduct of plaintiff.

Hyatt Franchising, L.L.C. v. Shen Zhen New World I, LLC

Federal 7th Circuit Court
Hyatt Franchising, L.L.C. v. Shen Zhen New World I, LLC
Civil Court
Arbitration
Citation
Case Number: 
No. 17-2071
Decision Date: 
November 28, 2017
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. did not err in granting plaintiff’s request to enforce $9 million arbitration award in favor of plaintiff, where plaintiff had alleged that defendants breached contract to renovate hotel and to operate said hotel using plaintiff’s business methods and trademarks. While defendants argued that arbitrator improperly refused their request to depose attorney regarding circumstances of negotiations leading up to signing of contract, Ct. found no violation under 9 USC section 10(a)(3) for alleged “refusal to hear evidence,” since said statute pertained only to conduct occurring during hearing and not during discovery. Moreover, attorney’s advice during negotiations was not relevant to parties’ contract dispute, especially where contract had integration clause that foreclosed resorting to negotiation history as interpretation tool. Also, Ct. rejected defendants’ argument that award conflicted with federal and state franchise law, where: (1) defendants’ purported “legal errors” did not qualify as ground to refuse enforcement of arbitration award; and (2) none of defendants’ arguments concerned violation of rights of third-parties.

Hayes v. Victory Centre of River Woods, LLC

Hayes v. Victory Centre of River Woods, LLC
Illinois Appellate Court
Civil Court
Arbitration
Citation
Case Number: 
2017 IL App (1st) 162207
Decision Date: 
Thursday, November 9, 2017
District: 
1st Dist.
Division/County: 
Cook Co., 5th Div.
Holding: 
Reversed and remanded with directions.
Justice: 
HALL

Court erred in denying Defendant's motion to stay wrongful death claim pending arbitration of survival and family expense claims raised in Plaintiff's complaint. All 3 of Plaintiff's claims turn on allegations of Defendant's negligence. Issues are sufficiently interrelated in that whether Defendant was negligent in its care of decedent is definitive in the arbitrable claims and the wrongful death claim in circuit court. Allowing arbitration to proceed first may eliminate the need for court proceedings. (REYES and GORDON, concurring.)

Public Act 100-212

Topic: 
Illinois Administrative Procedure Act

(Barickman, R-Bloomington; Andersson, R-Geneva) ensures that the appeals by citizens in administrative review actions are not thrown out of court for a scrivener's error that is called a "misnomer."

(1) It requires that final administrative orders list all of the parties of record together with their last known address of record. The final order must also include whether there are any agency rules requiring a motion for reconsideration as a part of obtaining a reviewable final administrative decision and, if so, the citation to the rule.

(2) It prohibits an action for administrative review to be dismissed for lack of jurisdiction based on the misnomer of any agency that is properly served with summons issued in the action within the applicable time limits. It also prohibits dismissal for failure to perfectly name an agent if a timely action of administrative review has been filed that identifies the final administrative decision under review and makes a good faith effort to properly name the administrative agency.

(3) It allows a court to correct misnomers for an erroneous identification of the administrative agency that was made in good faith.

Effective August 18, 2017.

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Davis v. Fenton

Federal 7th Circuit Court
Davis v. Fenton
Civil Court
Arbitration
Citation
Case Number: 
Nos. 16-2121 & 16-2165 Cons.
Decision Date: 
May 26, 2017
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed

Dist. Ct. had jurisdiction to confirm arbitrator’s $82,528.10 award in favor of plaintiff in plaintiff’s action alleging that defendant committed legal malpractice while representing plaintiff in underlying mortgage foreclosure action. Instant malpractice action was stayed by Dist. Ct. pending arbitration pursuant to agreement by parties to submit to arbitration any dispute arising out of defendant’s representation of plaintiff. Thus, Dist. Ct. had jurisdiction to act on plaintiff’s subsequent request to confirm arbitration award because Dist. Ct. had stayed, as opposed to dismissed plaintiff’s original lawsuit. Fact that defendant had filed state court action seeking to vacate arbitrator’s award prior to plaintiff coming back to Dist. Ct. to confirm said award did not require different result.

Webb v. Frawley

Federal 7th Circuit Court
Webb v. Frawley
Civil Court
Arbitration
Citation
Case Number: 
No. 16-3336
Decision Date: 
May 24, 2017
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed and reversed in part

Dist. Ct. did not err in granting defendant’s motion to compel arbitration in one plaintiff’s lawsuit alleging that defendant-co-worker defrauded him and interfered with his employment with parties’ employer-securities and investment banking firm, where said employment contract contained clause calling for arbitration before FINRA with respect to “matters relating to your employment.” Record showed that said plaintiff was person associated with FINRA, due to said plaintiff’s employment with parties’ employer, even though plaintiff was not employed by said employer at time instant lawsuit had been filed. However, Dist. Ct. erred in granting same motion to compel arbitration with respect to second plaintiff, who had not signed relevant employment contract containing instant arbitration clause.

House Bill 3288

Topic: 
Abused and Neglected Child Reporting Act

(Cassidy, D-Chicago) removes a list of specified persons who are currently required to immediately report suspected cases of child abuse or neglect to DCFS.  Instead, it provides that any person, agency, organization, or entity that knows or in good faith suspects a child may be an abused child or a neglected child shall immediately report or cause a report to be made to the Department. Scheduled for hearing in House Human Services March 8.

 

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People v. Daily

People v. Daily
Illinois Appellate Court
Criminal Court
Aggravated DUI
Citation
Case Number: 
2016 IL App (4th) 150588
Decision Date: 
Friday, December 16, 2016
District: 
4th Dist.
Division/County: 
Coles Co.
Holding: 
Affirmed in part and vacated in part; remanded with directions.
Justice: 
TURNER

(Modified upon denial of rehearing 2/21/17.) Defendant pled guilty to aggravated DUI and unlawful possession of a converted motor vehicle. Court sentenced him to concurrent terms of 24 years for DUI and 14 years for unlawful possession of a converted motor vehicle. Habitual criminal statute mandates Class X sentencing for repeat offenders who meet its requirements; statute has no language exempting convictions under Vehicle Code. Defendant was subject to Class X sentencing under Section 5-4.5-95(b) of Unified Code, and thus his 24-year sentence fell within appropriate sentencing range. Defendant is entitled to 94 days of sentencing credit, and also should be awarded $5-per-day credit against his eligible fines. Certain fines vacated as they were improperly imposed by circuit clerk. (KNECHT and STEIGMANN, concurring.)