ADR Bounces Back Changed, but Strong, in Face of Pandemic

Since the onset of the COVID-19 pandemic in March of this year, America’s courthouses have been shuttered to varying degrees. Some courts are open for some limited types of business, but many remain closed to jury trials and other proceedings that require packing large numbers of people into small courtrooms that in many instances are not equipped with state-of-the-art HVAC systems.

But dispute resolution in America has not come to a standstill. Instead, companies that provide alternative dispute resolution, or “ADR,” services – namely, arbitration and mediation – are back to pre-COVID case levels. Along the way, one thing has changed dramatically: the vast majority of ADR proceedings are now being conducted virtually, with some or all of the parties, attorneys, witnesses and neutrals appearing via Zoom, Webex or other similar platforms.

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In the “Before Times,” a typical weekday would find the offices of Atlanta’s Henning Mediation and Arbitration Services teeming with lawyers and clients working with Henning neutrals to mediate and arbitrate cases. In the afternoons, the aroma of freshly baked cookies, or hot popcorn, would permeate the office, perhaps intended to coax each party to his or her own “happy place” and thereby closer to a conciliatory mindset.

Like many other businesses, Henning closed its office when the pandemic struck in March, and the caseload dropped. The office reopened on June 1. While Henning’s caseload has gradually returned to pre-COVID levels, the atmosphere is entirely different now. According to Henning’s president, Dave Henning, the organization is averaging fewer than one proceeding per day conducted in-person in the office. The rest of the matters have moved online – to virtual proceedings conducted either entirely remotely, or as a hybrid with some participants in the office and others participating remotely. “I’m okay with that,” Dave Henning says. He’s not pushing for more in-person proceedings, noting that the virtual proceedings help to protect Henning’s staff as well as case participants. The virtual setting also allows Henning to accommodate larger matters, including a recent two-week arbitration with 25 participants that was conducted virtually. “Where would we have put all of those people?” Dave Henning wonders aloud in thinking about how such a large proceeding could have been conducted in-office.

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Kim Taylor is Senior Vice President and Chief Legal and Operating Officer for JAMS, which provides ADR services in 29 offices worldwide. JAMS, too, saw an initial decline in its caseload after the onset of the pandemic, but since May, the organization has seen what Taylor calls a “dramatic rebound” in its caseload, even as most of its physical offices remain closed. Today, more than 70% of JAMS proceedings are being conducted virtually.

Taylor predicts that the utilization of ADR will continue to grow. Even when courts reopen, they will be bogged down by severe case backlogs and budget cuts, and parties will turn to ADR for what Taylor calls their “pent-up need for resolution of cases.” Some JAMS mediators predict that, ironically, mediations will pick up when courts fully reopen, since the specter of a looming trial date is what often drives parties into mediation. And, Taylor notes, the pandemic will spawn new types of cases – bankruptcies, business interruptions, insurance and employment – that may be well suited to alternative dispute resolution.

Both Henning and Taylor agree that, despite any initial skepticism, ADR proceedings conducted either entirely virtually, or as hybrid live/virtual proceedings, are here to stay. “It’s been amazing to watch,” says Taylor. “People are resistant to change but very adaptable at the same time. When we have to, we do.” She predicts that, even post-COVID, as many as 30% of JAMS cases will be conducted online, due to travel-cost savings and a growing consensus among participants that “the virtual environment is just as effective as being in person.”

Says Dave Henning, “I don’t think I’ll ever see an out-of-state adjuster in our office again.”

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