July 1999

Alternate Dispute Resolution Comes of Age in Washington

by Washington Supreme Court Justice Philip Talmadge

Over the course of my career in the Washington State Legislature and on the Washington Supreme Court, I have had the opportunity to participate in the development of Washington's law on alternate dispute resolution (ADR). The future of ADR, both mediation and arbitration, inside and outside the traditional court system, is bright in no small part because our courts are increasingly focused on criminal matters and certain identified civil case priorities, such as child dependency/termination of parental rights. Simply stated, ADR is crucial to the present ability of Washington's judiciary to handle its civil caseload. It is difficult to imagine how our courts would function without mandatory civil arbitration of smaller cases, ADR in the family law context, or private ADR for civil disputes. ADR is expeditious and in many instances employs simplified evidentiary and discovery rules to facilitate dispute resolution. (These rules might well be employed in our traditional civil justice system more often.)

In the near future, ADR will be even more important to Washington's judiciary. ADR will soon be used for additional matters such as minor criminal cases, and nearly all family law cases. Out of the reality of too few judges, too many criminal cases, speedy trial mandates, and other imperatives, I predict our traditional civil justice system in the near term will largely be handled in ADR. What does this mean for Washington law and Washington's citizens?

Plainly, Washington has a rich tradition of support for ADR upon which to build. As early as 1891, our law permitted trials by referees.1 Our Arbitration Act, now chapter 7.04 RCW, was first enacted in 1943. In 1979, the Legislature enacted mandatory arbitration of smaller civil actions in superior court.2 In 1984, as part of the Court Improvement Act, the Legislature created alternative dispute resolution centers (chapter 7.75 RCW). Funding for those centers was later created by allowing counties to keep a portion of civil filing fees to support the centers and expanded trials by referees.3 In 1991, the Legislature provided for mediation confidentiality.4 In addition to enactment of procedures to support ADR, the Legislature provided for application of ADR to a wide variety of specific disputes in numerous statutory enactments over the last decade and a half.5 

Complementing legislative support for ADR, Washington's court system has adopted court rules and decided cases providing support for ADR. Indeed, in a 1994 OAC (Office of the Administrator of the Courts) survey, 81 percent of Washington's judges agreed with the proposition, "judges should establish mediation/arbitration dispute resolution options." The Supreme Court has adopted court rules to implement mandatory civil arbitration and mandatory mediation of medical negligence cases.6 Washington courts have, in fact, repeatedly upheld arbitration awards and declined to permit judicial review of arbitration decisions except under very narrow circumstances.7 

Finally, ADR has substantial support in our private Bar and in the private sector. The Washington State Bar Association has a very active ADR section. We have seen explosive growth of ADR by firms, panels and individual attorneys in recent years. If I read recent Bar News ads correctly, many of the lawyers with whom I formerly litigated have transformed themselves into mediators/arbitrators.

Thus, Washington has a rich tradition of ADR support, and ADR is an ever-increasing part of our civil system of dispute resolution. Given this significant growth in ADR, however, a variety of unaddressed challenges have emerged, requiring the attention of the Legislature, the courts, the Bar, and the public. In particular, two key questions loom large at present:

1. Have we adequately described the public policy of ADR in Washington?
2. Is ADR sufficiently fair for all participants?

With respect to the first question, a cursory statutory review reveals no comprehensive definition of the terms mediation, arbitration or ADR in the Revised Code of Washington. Absence of a definition presents practical problems. Do different ethical standards apply? Who may do the work?

As to the qualifications for mediators and arbitrators under Washington law, in some instances (in particular mandatory civil arbitration) state law specifies qualifications for arbitrators. Can anybody, however, be a mediator or arbitrator in other settings in Washington? Should we allow only attorneys under Washington law to be mediators and arbitrators? What training is necessary for them?

Associated with these questions is the issue of ethical standards for mediators and arbitrators. Plainly, where lawyers or other licensed professionals are involved in arbitration, they must subscribe to appropriate ethical professional standards, insofar as they exist, involving the proceeding. But if the mediator or arbitrator is not a licensed professional, who assures the public that appropriate ethical standards are applied in the resolution of disputes? Moreover, should mediators and arbitrators enjoy an immunity from suits similar to that enjoyed by judicial officers when deciding cases?

For example, suppose a mediator mediates a dispute between parties to a satisfactory conclusion on all but one issue. Thereafter, the parties ask that mediator to resolve the final dispute as an arbitrator. Can the mediator, privy to the positions of both parties in settlement, ethically resolve a dispute as an impartial decisionmaker? What facts may the mediator/arbitrator ethically use to decide the case?

At present, there is no general standard in Washington law as to ADR process rules. In particular, should there be basic rules of the procedure for mediation and arbitration apart from those that apply in contexts like mandatory civil arbitration? Should the records and the thought processes of participants, mediators and arbitrators in ADR be confidential? While confidentiality is a valuable attribute of ADR for some, I am concerned that the continuing development of common law, based on stare decisis, will wither away with the increase in essentially nonappealable ADR results. As ADR is conducted, with the only result typically being either an award of damages or no award, without analysis, who will write the McPherson v. Buick cases of the future? Will our common law cease developing? Also, to what extent does the public have a right to know about the resolution of disputes?

Finally, the relationship of ADR to our traditional civil justice system is poorly articulated in Washington law. Judges are foreclosed, for example, from requiring the parties to mediate child support disputes.⁸ Perhaps state law should more carefully delineate when judges themselves may mediate/arbitrate or may directly order ADR. Indeed, perhaps judges should more often invoke ADR in the criminal context.⁹ Chief Justice Guy has asked Justice Barbara Madsen to study this possibility.

With respect to fairness, a number of questions arise. Particularly in the consumer context, large institutions such as banks, health-care insurers, home-construction firms, telecommunications firms, brokerage houses, and auto dealer-ships have placed mandatory arbitration provisions in their agreements with consumers. Are these mandatory mediation/arbitration provisions in consumer contracts sufficiently fair to consumers?¹⁰ Due process standards have been advocated by a number of organizations in the consumer context. In particular, the American Arbitration Association has developed a consumer due process protocol that may serve as a model for how due process standards should apply in the consumer context.

Additionally, the cost of ADR must be addressed. The cost of private ADR can very often be substantial, running to several hundred dollars per hour. Is it fair to have a two-tier system of civil justice in which those people who have the resources can seek out and pay for private ADR while all the rest of the people must wait, and wait, and wait, for a trial date in our traditional civil justice system? Should we consider a specific public support or subsidy for low-income people to access private ADR? A subsidy could be funded by allowing judges to mediate or arbitrate at a higher civil filing fee than we traditionally charge for civil cases, and then using the funds to support ADR for low-income persons. Plainly, we must avoid an unfair two-tier system of justice in which the wealthy access ADR while low-income people are forced to use the traditional court structure for dispute resolution.

In conclusion, ADR is part of the future of Washington's court system, particularly our civil justice system. Its very success in recent years, however, requires us to carefully consider the challenges ADR creates and to take appropriate steps in the Legislature, the courts and the Bar to address those challenges and to ensure our state policy on ADR is clear and fair to all citizens of Washington.