Court-Mandated Mediation: Lessons Learned in New Jersey?

For many years, the New Jersey Court Rules have empowered certain judges to issue Orders of Referral to Mediation.  Administered by the state’s Administrative Office of the Courts, the New Jersey mediation program was way ahead of its time and has prompted tens of thousands of civil mediations.

The program is about to be modified, and indeed a few months ago was threatened with termination.  It is instructive to review how it has worked, where the problems have arisen, and what changes might make it better.

Orders to mediate are authorized by Court Rule 1:40.  By that authority, Superior Court and Municipal Court judges may require parties to attend a mediation session at any time following the filing of a complaint. (1:40-4(a)) Mediators are assigned (1:40-6) from a pool of qualified and trained mediators maintained by the State Administrative Office of the Courts, who have expressed a willingness to serve in any of the various counties of the State.  (1:40-12)  Parties have 14 days from the issuance of the order to select a different mediator from the one assigned by the court.  Mediators must expend one hour of preparation and one hour of the mediation without fee; parties may opt out of the process after that hour.  Thereafter, parties must equally share the costs of the mediation and the fee is set by the mediator and the court.  (1:40-4(b)).

Elaborate provisions ensure the confidentiality and inadmissibility of mediation communications.  (1:40-4(c)-(d)) Training and continuing education requirements for mediators are set forth (1:40-12(b)).

Guidelines have been issued to mediators requiring them to absorb travel expense, office space or other ancillary costs; warning them to advise parties of preparation time in excess of one hour (which in any event may not be charged unless the actual mediation extends past the first hour); and advising them of the court’s availability to issue an Order to Show Cause against a party that refuses to pay the invoice of a Rule 1:40 mediator.

Recently, the courts have voiced concerns about the program.  These include:

  • a low rate of resolution and docket-clearing (around 30%)
  • failure to receive mediator reports within the time limits
  • excessive time spent by court administrators filing paperwork, tracking down delinquent mediators, granting extensions of time and preparing OSCs for relatively small fee amounts
  • other demands on court administration in support of a program that, in a time of resource constraints, is less mission-critical than other court operations

Mediators in the program voice other kinds of concerns:

  • The assignment of mediators by the court constrains the growth of a quality-driven market in the State
  • Both good and poor mediators have the same number of assignments, resulting in many parties and counsel having poor experiences in mediation (“The last mediator I had just wanted to split the baby.”)
  • The two-hour “no-fee” period announces to counsel that the court considers mandatory mediation as, in reality, a condition precedent to continued litigation, and it is therefore widely viewed as such (“Mr. Mediator, please advise when one hour is up and we will be on our way.”)
  • As a consequence, mediation is considered “do-gooder” work for volunteers, retirees and wanna-bes, not requiring professional skills (“So what do you do for a living, Mr. Mediator?”)

Thus a program that, on its face, looks like it would promote mediation and result in a deep pool of highly experienced mediators, while reducing judicial caseloads, actually has resulted in increased administrative burden to the courts; no demonstrable increase in rate of settlement (99% of civil cases in New Jersey settle whether or not they are mediated) and a derisive attitude towards mediation by the litigation bar.

Word is that some changes are in the offing.  New Jersey courts may, in the future, order parties to select a mediator of their own choice, with a default appointed in the event of failure to do so.  On the other hand, hundreds of attorneys recently took a day’s “training” in foreclosure mediation, so the court roster of mediators will continue to be of speckled quality and the very good mediators will float in a diluted pool.  And I know of no discussion to change the “Tell us when an hour is up” phenomenon, and its disheartening consequences on the profession.

Discussions with business court judges in other states suggest a different trend: court-ordered mediation conducted by mediators of the parties’ choice or else drawn from among a very select roster, and paid by the parties at market rates for their professional services.  Mediators who overcharge are dealt like mechanics who overcharge — they don’t get re-hired.  Settlement rates are higher; the process is taken more seriously because the participants are paying for it; mediator reputations are subject to a robust, quality-driven professional market; and the court doesn’t involve itself in anything other than receiving a yes/no report at the end. 

In some states, judges or magistrates not assigned to the case are designated mediators in the matter, in the hope that the case will settle and the docket cleared.  Indeed, Delaware Chancery is charging litigants for this service — and charging them rich, too: a filing fee of $10,000 and a per day mediation fee of $2,500.  And why not?  If you have the best business court in the nation, why not flaunt it?

Mediation has value to litigants, and settled cases have value to our public institutions of justice.  Why not treat it as if it does?

  1. This was interesting and useful. We are dealing with many of the same problems in Los Angeles, where the courts have been slow to upgrade the qualifications for mediators, and to help mediators get paid for their time.

  2. Found the article very interesting. In Dublin, Ireland, Judges are calling for mediation to play an increasing role in proceedings and legislation has now come into force to facilitate this. In our Circuit Court and High Court judges will now be allowed to adjourn proceedings to facilitate the use of ADR and the High Court has been granted discretion to impose costs consequences for litigating parties who refuse or fail to engage in ADR.

  3. Peter,
    I recognize that many of your comments come from a critique by court administrators in New Jersey. However, some of the “facts” are simply erroneous. For example, the 30% success rate is a number that has no substantiation and appears to be based on total filings rather than cases referred to mediation. In addition, New Jersey, unlike many other states, has an early mediation referral, meaning that when cases do resolve in mediation there is significant added savings. Many lawyers and parties find that the court-order to mediation is an opportunity for an exchange that does not otherwise take place and that is highly productive. In fact, in reviewing the current status of mediation in New Jersey, the relevant New Jersey Court’s committee has recommended only slight modifications to the system. Generally, court-ordered mediation has been found to be as effective as voluntary mediation. In addition, as you note, New Jersey lawyers have the opportunity to select their own mediators from the outset. Many of the mediators on the New Jersey panel are also on the New York commercial division panel and on prestigious panels of other organizations. Training requirements should continually be explored and are under consideration now.

    Every system can be improved. There can also be real negative consequences to allowing a system of recommendation or appointment of a narrow group, which includes lack of diversity and no real assurance of particularized skills.

    I look forward to ongoing improvement in New Jersey’s system and to future blogs.

  4. Great article. The New Jersey process seems set up to fail for all the reasons stated. In Texas, we have had a very active mediation practice for over 20 years. Perhaps someone keeps statistics but I would imagine that 1 to 2 million court-annexed cases have been mediated since that time. By statute, judges may require the parties to mediate prior to trial and I would say the majority do. And they remain pleased with the process after many years and with new judges coming on to the bench year after year. Mediation has helped reduce dockets by settling cases earlier. The 80% success rate has been used by mediators since it’s inception. At a minimum, it’s not far from the truth.
    Generally, the judges let the parties choose their own mediator and the mediator sets the fee. If the parties don’t like it, they can choose another mediator. There is no required certification of mediators. The market completely controls. If the mediator doesn’t do a good job, they won’t have a mediation practice for very long. We have, what I believe, are some of the best, most experienced mediators in the world. Perhaps as many as 100 mediators each having mediated thousands of cases with lawyers who use them again and again. And hundreds and hundreds of mediators with significant experience. In short, the process has worked. I highly recommend the Texas system to all. I believe those who have similar systems have similar success stories. Just my 3 cents. Best of luck in New Jersey, Los Angeles and elsewhere.

  5. I have personallly found mediation useless.Abused outlet by the courts and completely un-enforceable. We have been mandated back to mediation three (3) times by Judge Johnson of Live Oak County District court were there is noo back log of cases. We thought we settled at the second mediation and the plaintiffs completely chained the terms of the agreement after receiving funds from us. The mediator fromCorpus was a pompass arrogant individual who continually complained of the hour and his lack of wine. We were scheduled for 1PM we waited until 2:30 as he was still with another party. Apparently that was our fault and he still wanted to leave at 5PM even though he was paid for a half days service up front.
    two and a half years and our rights and requests for a jury trial have been denied.
    This same Judge is proud of the fact and brags to lawyers as a warning that he forced two couples back to mediation for eight years where in they settled by themselves. GO FIGURE
    Totally disgusted. How many times can a judge force or mandate mediation?

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