State Courts, Lean Budgets And ADR

February 23, 2012

       “State courts across the United States are bracing for another year of austerity as a new budget cycle threatens once again to limit funding for the courts.” So writes Sheri Qualters in the National Law Journal, as reprinted this week in the New Jersey Law Journal online edition (subscription required). Her story goes on to detail the problems faced by state courts nationwide, which depend on anemic state tax revenues for their funding. She further details the steps being taken by state courts to trim budgets and curtail services in an effort to balance the books.

       New Jersey is no exception to this trend. In response to ever-increasing caseloads and budgetary constraints, the state\’s Administrative Office of the Courts recently issued a report in support of proposed legislation to increase filing fees and permanently dedicate the new revenue to improving the courts; specifically, the creation of an e-filing system and the funding of Legal Services of New Jersey.

       Nowhere in the article cited above or the NJ AOC report is there mention of the role alternative dispute resolution can play in reducing the burdens on a state court system. In fact, the New Jersey judiciary is currently reevaluating the state\’s mandatory mediation program based on concerns that it diverts too many resources away from the administration of a growing civil case load. Many in the New Jersey ADR community fear that the current court mandated mediation program will be scrapped for “budgetary reasons.” Both sides on this issue are missing the forest for the trees.

       The railroad barons of the 19th century lost their preeminence because they thought they were in the railroad business when they were really in the transportation business. Apparently, those running state court systems today believe they are in the litigation business, when they should be in the dispute resolution business. There is a well established and competent (albeit private) community of ADR providers now operating in parallel with the state courts. That community stands ready willing and able to work in tandem with the court system to resolve disputes at virtually no additional cost to the taxpayers.

       Previous efforts to integrate private ADR providers with the state courts (including the current New Jersey program) have encountered two major obstacles. First, the courts are reluctant (and some would say Constitutionally unable) to mandate any substitute for a trial in state court, particularly anything the litigants must pay for in addition to statutory filing fees. Second, the courts have been unable to assure the competence and quality of ADR providers in court annexed programs. However, neither of these obstacles is insurmountable.

       This is where the ADR community needs to focus its attention. There is no question that ADR processes can dispose of most disputes more efficiently than litigation in state court. The legal community has had a generation of exposure to ADR, and is prepared to accept its use under the right circumstances. Creative minds can find a way to overcome the obstacles to a state court – private ADR system, thereby solving the current budgetary problem, yielding better outcomes and protecting the taxpayers.

       Much more discussion and debate on how to overcome these obstacles must follow. For today, I can only suggest that we not write or accept further analyses of the “state court budget problem” that do not include a major role for ADR. Private ADR providers are to the state court systems what the interstate highways are to the railroads. Door to door delivery of all shipping containers by railroad is prohibitively inefficient and expensive. Let\’s stop making that mistake.

[Image: Unloading a shipping container with household contents, June 19, 2010, by Geo Swan]