A brief ADR primer for resolving disputes out of court

NpS (Pennsylvania)
Posts: 4,216

Posted:

Here is a brief primer for anyone who is thinking about Alternative Dispute Resolution (ADR).

ADR provides alternatives to resolving disputes through the courts. ADR is often cheaper, quicker, and less formal. Under all ADR forms, there is a neutral individual who sets the rules of engagement and guides the proceedings. The different formats produce different outcomes.

1. Arbitration - If you want a neutral's opinion on who is right and who is wrong, arbitration is the way to go. The arbitrator's opinion can be binding (the decision is final) or non-binding (one party can still take the issue to court for a final decision if he doesn't like the arbitrator's decision).

2. Mediation - If you want a neutral's opinion on how the two sides can reach a mutual settlement REGARDLESS of who was right or wrong, mediation is the way to go. The mediator's opinion is always non-binding. (She is not deciding your dispute. Her focus is on getting a mutually acceptable deal put together.)

3. Med-Arb - This is a hybrid form where the neutral mediates first, and if settlement is not reached, then arbitrates.

The questions on which format to use and whether an arbitrator's decision will be binding or non-binding are decided in advance. One reason for this is that people tend to disclose information differently to a neutral mediator and to a neutral arbitrator. In an arbitration, you will want to keep some information close to the vest because you want the arbitrator to decide in your favor. In a mediation, keeping your guard up is less likely to be a concern to you.

If you choose a neutral who was a former judge, you often wind up with an arbitration even if you seek a mediation. Most of them are so used to handing down decisions from the bench, that they really can't get out of that mode. So picking the right format and the right neutral will determine if you are going to get the kind of opinion that you seek.

Sikubali jukumu. Read all posts at your own risk.

EmmaH1
Posts: 674

Posted:

Thank you Nps,

That was very, very informative I'm sure it will be useful info for many. Good tips and points, just wondering have you used any of these court alternatives yourself in the past concerning HOA matters?

thanks again,
Emma

BobD4 (up north)
Posts: 1,002

Posted:

The flexibility of mediation is that with enough good faith by disputants, it can be quick, fairly quiet and driven by the disputants themselves. Many sets of disputants want it free or realize (far too late) that they should have tried to trigger it. Expect confidentiality only from the mediator/no "mediation police".

Arbitration may be triggered and proceed -if jurisdictionals allow - ex parte/with one participant and result in an outcome which courts are often loathe to overturn, particularly where arbitration was originally contracted between the now-disputants.

It is no accident that if and after face to face starting mediation, there is a progressive turning disputants away from directly facing each other as more formal adjudications next ensue . . . ie disputants' loss of control & big costs arriving . . .

TimB4 (Tennessee)
Posts: 21,059

Posted:

From Cornell University law school:

Alternative Dispute Resolution

Uniform Arbitration Act page, provided by Cornell University. It lists and provides links to individual State laws on the issue (most but not all of the links on that page work).

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By EmmaH1 on 12/06/2014 6:55 AM
have you used any of these court alternatives yourself in the past concerning HOA matters?

1. Vendor relations - We offered ADR to 2 prior MCs. In both cases, they were doing their own thing and not following specific provisions that we had built into our contract with them. The practical reality was that we were only one of 30-75 accounts. As the MCs grew, they wanted to move away from customization toward standardization. Both of them dragged their heels on our ADR offers. This helped our board reach a decision to terminate the relationships earlier than we might have otherwise. The fact that we had a clear process that we were willing to follow, even if it never occurred, was extremely helpful and avoided a lot of extraneous chatter among board members.

2. Neighbor-to-neighbor disputes - In every neighborhood where I have lived, there has been bad blood somewhere. Sometimes the dispute becomes so absurd that it makes living there uncomfortable for others in the immediate vicinity. On a couple of occasions, we offered sit downs with a neutral. In one case, one of the parties refused to come and sent his daughter instead. After the session, he refused to commit to anything she had agreed to do. So not having all the directly affected people actually present didn't work. In the other case, getting the two HOs in the same room with a neutral helped the two of them to rekindle a friendship that had gone sour many years ago. They ultimately decided that they didn't want to fight with each other any more. Surrounding neighbors were appreciative.

3. HO to HOA disputes - Haven't had the opportunity, but we would offer it in some cases. If a person is willing to have faith in a process regardless of the outcome, we would try it. If a person is unwilling to accept an unfavorable outcome regardless of how fair you try to make the process, we wouldn't bother. Some people want to have a true exchange of thoughts and others want to keep banging the same drum until everyone around them is deaf. In an HOA, you get to know who is who.

Sikubali jukumu. Read all posts at your own risk.

EmmaH1
Posts: 674

Posted:

Quote:

Posted By NpS on 12/06/2014 11:45 PM

Posted By EmmaH1 on 12/06/2014 6:55 AM
have you used any of these court alternatives yourself in the past concerning HOA matters?

1 3. HO to HOA disputes - Haven't had the opportunity, but we would offer it in some cases. If a person is willing to have faith in a process regardless of the outcome, we would try it. If a person is unwilling to accept an unfavorable outcome regardless of how fair you try to make the process, we wouldn't bother. Some people want to have a true exchange of thoughts and others want to keep banging the same drum until everyone around them is deaf. In an HOA, you get to know who is who.

Nps,

What you seem to be saying is that in your opinion, would probably not be the best or most realistic solution for a HO to HOA or HOA to HO dispute, right? Because both parties probably have their feet dug firmly in the ground and you think it probably wouldn't work?

Also, I agree with your last three sentences (above) as long as you were referring to both homeowners and BODs. Especially when you say "some people want to keep banging the same drum...........", that is so true of both BOD's and homeowners depending on the situation. People need open minds and the ability to accept constructive criticism (we probably all need work in that area). Some time people get away with doing things wrong for a long period of time and when someone notices they refuse to admit it, change, apologize if necessary and make things better. (I think apologies would go a long way to keep peace in some communities. Instead of refusing to admit wrongdoing.

Emma)

EmmaH1
Posts: 674

Posted:

Quote:

Posted By EmmaH1 on 12/07/2014 7:28 AM

Posted By NpS on 12/06/2014 11:45 PM

Posted By EmmaH1 on 12/06/2014 6:55 AM
have you used any of these court alternatives yourself in the past concerning HOA matters?

1 3. HO to HOA disputes - Haven't had the opportunity, but we would offer it in some cases. If a person is willing to have faith in a process regardless of the outcome, we would try it. If a person is unwilling to accept an unfavorable outcome regardless of how fair you try to make the process, we wouldn't bother. Some people want to have a true exchange of thoughts and others want to keep banging the same drum until everyone around them is deaf. In an HOA, you get to know who is who.

Nps,

What you seem to be saying is that in your opinion, would probably not be the best or most realistic solution for a HO to HOA or HOA to HO dispute, right? Because both parties probably have their feet dug firmly in the ground and you think it probably wouldn't work?

Also, I agree with your last three sentences (above) as long as you were referring to both homeowners and BODs. Especially when you say "some people want to keep banging the same drum...........", that is so true of both BOD's and homeowners depending on the situation. People need open minds and the ability to accept constructive criticism (we probably all need work in that area). Some time people get away with doing things wrong for a long period of time and when someone notices they refuse to admit it, change, apologize if necessary and make things better. (I think apologies would go a long way to keep peace in some communities. Instead of refusing to admit wrongdoing.

Emma)

Maybe sometimes people don't apologize because they are afraid it would be an admission of guilt.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By EmmaH1 on 12/07/2014 8:43 AM

Posted By EmmaH1 on 12/07/2014 7:28 AM

Posted By NpS on 12/06/2014 11:45 PM

Posted By EmmaH1 on 12/06/2014 6:55 AM
have you used any of these court alternatives yourself in the past concerning HOA matters?

1 3. HO to HOA disputes - Haven't had the opportunity, but we would offer it in some cases. If a person is willing to have faith in a process regardless of the outcome, we would try it. If a person is unwilling to accept an unfavorable outcome regardless of how fair you try to make the process, we wouldn't bother. Some people want to have a true exchange of thoughts and others want to keep banging the same drum until everyone around them is deaf. In an HOA, you get to know who is who.

Nps,

What you seem to be saying is that in your opinion, would probably not be the best or most realistic solution for a HO to HOA or HOA to HO dispute, right? Because both parties probably have their feet dug firmly in the ground and you think it probably wouldn't work?

Also, I agree with your last three sentences (above) as long as you were referring to both homeowners and BODs. Especially when you say "some people want to keep banging the same drum...........", that is so true of both BOD's and homeowners depending on the situation. People need open minds and the ability to accept constructive criticism (we probably all need work in that area). Some time people get away with doing things wrong for a long period of time and when someone notices they refuse to admit it, change, apologize if necessary and make things better. (I think apologies would go a long way to keep peace in some communities. Instead of refusing to admit wrongdoing. Maybe sometimes people don't apologize because they are afraid it would be an admission of guilt.

Emma

Once again, you attempt to overlay your "evil empire"/"disfunctional board" spin onto a post that I intended as a resource for HOA leaders who may become newly exposed to ADR. I started this thread because some postings on this forum seemed to misunderstand the distinction between the different forms of ADR. The lines I drew were essentially between arbitration, mediation, and a hybrid called med-arb. IMO, ADR of all types can be effective in just about any setting.

I distinguished between HOA-Vendor, HO-HO, and HO-HOA disputes in response to your question about my personal experience. I thought that other HOA leaders might find value if I made this differentiation because it is often difficult to bring on a new idea and apply it across the board all at once.

ADR is a movement that has been evolving over the last half century. It will continue to expand its reach. Some HOAs will implement well. Others will implement poorly. I hope that others will add to this thread as they have more exposure and experience with ADR.

Mediation and arbitration clauses are finding their way into more and more vendor contracts. IMO, HOA leaders should familiarize themselves with what these clauses actually say - They are not all the same. In many states, the courts have become so congested, that every other case that fits a certain criteria is being channeled into mandatory non-binding mediation. Some states have established a State clearinghouse for HOA-HO complaints - and created a procedure for monitoring and making mediation accessible in HO-HOA disputes. Generally speaking, mediations through these State clearinghouse are not mandatory, but the statistics are tracked so that the State legislature can gain a better understanding of how such disputes are handled. In both the court and the clearinghouse settings, the cost of mediation is typically split 50-50. So if a HOA-HO dispute was to be mediated, the HO would pay 1/2 of the mediation cost and the HOA would pay the other 1/2.

Re your "digging in" comment, I do not believe that "digging one's heels in" puts the kabosh on ADR. Many people come to an ADR session with a locked down position statement and leave with an agreement (mediation) or ruling (arbitration) that is far apart from their original "dug in" position. A capable neutral understands the distinctions between posturing and settling/resolving disputes.

I suppose a further explanation of my personal perspective on HOA-HO disputes is in order:

1. I believe that if anyone is being disrespected BECAUSE OF his race, religion, disability, gender, language skills, birthplace, etc. then ADR is a very appropriate means to bring the individuals face to face, whether those individuals are BOD members, HOA employees, HOs, or residents.

2. Every set of HOA organizing docs that I have seen included the right for any HO to demand a special meeting. All the HO has to do is get the right number of signatures on a petition, and the HOA must hold that special meeting within a specified time and must notify and invite every HO. If a HO is not willing to go to the effort of collecting signatures, then I question why the BOD should exert time, energy, and money to create an alternate format when the one that already exists isn't being used.

3. More than 95% of all HO complaints I see here are supposedly based on some grand principle, but when you boil it all down, the HO doesn't want to spend his own money and resources but instead wants the HOA to spend everyone else's money and resources. Or the HO can't get something done that she wants done, so she finds some purported justification for claiming that the HOA must do it the way she sees fit. Too many times these complainers pound their chests about their rights with total disregard for the financial impact and diversion of resources for everyone else. IMO, this thinking is terribly short-sighted. A primary responsibility of any BOD is to preserve and protect the financial well-being of the community as a whole. That role deserves the respect it is due. And if it isn't being done well enough for your standards, get in there and do it better.

Sikubali jukumu. Read all posts at your own risk.

TimB4 (Tennessee)
Posts: 21,059

Posted:

One of the key differences between legal proceedings and ADR (alternative dispute resolution) is what can be heard.

The court will often limit, using rules of law, what can or can not be entered into evidence.

ADR, to my understanding, typically has no such rules and the mediator can hear and consider anything and everything brought forward. Therefore, ADR may not always be the best option to choose if the actual issue can be muddied by other things you may or may not consider relevant.

See:

center for conflict resolution which has some excellent resources.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By TimB4 on 12/08/2014 12:57 PM
One of the key differences between legal proceedings and ADR (alternative dispute resolution) is what can be heard.

The court will often limit, using rules of law, what can or can not be entered into evidence.

ADR, to my understanding, typically has no such rules and the mediator can hear and consider anything and everything brought forward. Therefore, ADR may not always be the best option to choose if the actual issue can be muddied by other things you may or may not consider relevant.

See:

center for conflict resolution which has some excellent resources.

In a courtroom, there are both Rules of Procedure and Rules of Evidence. Lawyers rely on both to get stuff in and to keep stuff out.

You are correct Tim when you say that a mediator can consider anything and everything brought forward. But remember, a mediator is not rendering a decision on the case like a judge would. A mediator is negotiating with both sides trying to get them to reach a mutually agreeable settlement. Many mediators are not lawyers. Many have experience in a particular field and can help the two sides find a solution that is acceptable without turning to an independent decision-maker (a judge or an arbitrator). The mediator's role is not to apply the law - the mediator's role is to get a deal put together.

On the other hand, an arbitration is more like a courtroom proceeding in that the arbitrator will be issuing an opinion. In an arbitration, the arbitrator (sometimes with the input of the parties) can define the rules of procedure and rules of evidence that are different than the standard rules you would find in a courtroom. If you have any questions or concerns, these rules should be hashed out before the arbitration takes place. The objective of using short-form rules is to streamline the process to reduce time and cost.

When you lump arbitration and mediation together under the heading ADR, you lose these important distinctions.

Sikubali jukumu. Read all posts at your own risk.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By NpS on 12/08/2014 1:37 PM

When you lump arbitration and mediation together under the heading ADR, you lose these important distinctions.

Understood. Something to keep in mind for the future.

EmmaH1
Posts: 674

Posted:

Nps,
Your post was very informative to me, even if it was meant for members that are already HOA leaders. As I said I hope to hold a position soon and help make choices for the betterment of my entire neighborhood. In the meantime I appreciate all the time you took to explain to me, your opinion and why you feel the way you do.
Emma

HowardC2 (North Carolina)
Posts: 80

Posted:

Quote:

Posted By EmmaH1 on 12/08/2014 2:00 PM
Nps,
Your post was very informative to me, even if it was meant for members that are already HOA leaders. As I said I hope to hold a position soon and help make choices for the betterment of my entire neighborhood. In the meantime I appreciate all the time you took to explain to me, your opinion and why you feel the way you do.
Emma

+1 on the above.
I wanted badly to run for an open position on our bod in our recent election but the timing was such that I am not "a member in good standing".
Maybe next year.

EmmaH1
Posts: 674

Posted:

Howard,

I believe in Karma.

The people that are doing what they did to you will get what they deserve, eventually. (unfortunately sometimes it takes a while.)

Emma

NpS (Pennsylvania)
Posts: 4,216

Posted:

IMO Tim, you have the presence and real world experience to make a good mediator. All you would need is a bit of training.

Sikubali jukumu. Read all posts at your own risk.