Does ADR really save money? The jury's still out

by Deborah R. Hensler

This article reviews the evidence for claims that alternative dispute resolution can reduce the public costs of civil case disposition and lower litigants' legal bills. The evidence is mixed. In most jurisdictions that adopted court-administered arbitration, too few cases are diverted from trial to balance the public costs of implementing an arbitration program. Moreover, court-administered arbitration programs have had mixed success in reducing litigants' costs for legal fees and expenses. The author suggests two lessons with application beyond the court-administered arbitration context: (1) inserting any new procedure in the litigation process is likely to produce unanticipated outcomes, and (2) litigants' and attorneys' disputing behavior are influenced by non-economic as well as economic factors. Thus in the long run, whether public or private ADR programs achieve cost savings will probably depend in large measure on how much they change patterns of disputing and lawyering.

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Originally published in: The National Law Journal, 1994, pp. 1-3.

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