Alternative Dispute Resolution

Key Innovators

Shannon Salter, Colin Rule, and Chittu Nagarajan

Alternative Dispute Resolution (ADR) is a catch-all phrase for resolving legal disputes outside of court. Today, ADR is widely recognized by civil courts as a good idea, because parties that settle are usually more satisfied with the outcome and more likely to comply with it. Plus, when a case settles, it’s less work for the court and less expense for the client.

Modern ADR is also fertile ground for innovation, especially when it comes to technology-enabled forms of ADR and online dispute resolution.

1800 BCE–1888 CE
Origins of ADR

Informal dispute resolution has been around for as long as there have been legal disputes. I found a timeline that suggests mediation and arbitration were already known in the Middle East around 1800 BCE, and may have been first codified in the Rhodian sea laws sometime around 700 BCE.

I’m not sure I agree that Solomon threatening to cut a baby in half should count as ADR, though.

In the American colonies, laws regarding arbitration were adopted by Massachusetts in 1632, by Pennsylvania in 1705, and in 1768 the New York Chamber of Commerce appointed the first American tribunal for resolving commercial disputes. In 1878 (no longer the colonial period), Maryland adopted voluntary, binding arbitration of labor disputes, and similar laws were passed in other states in the years that followed. Some, like New York and Massachusetts in 1886, also established permanent arbitration boards.

Of course, this was all a precursor to the American Arbitration Act of 1888.

Labor & Arbitration

The original American Arbitration Act was passed after a string of railway worker strikes, including the Great Railroad Strike of 1877, and the rise of the labor movement. As with the Federal Arbitration Act (FAA), which came in 1925, it was primarily concerned with labor and commercial arbitration. The gist of the FAA is basically just that arbitration provisions in contracts are enforceable.

I’m oversimplifying because it’s beside the point. The point is that until the 1980s, formal ADR was mostly about labor and commercial arbitration. ADR in the sense of regular litigants trying to settle their dispute with some help (facilitative ADR) was still, by and large, informal.

Modern ADR

The modern ADR movement got going in the late 1970s, and an important event seems to have been the National Conference on the Causes of Popular Dissatisfaction with the Administration of Justice (the Pound Conference), which was held in Minneapolis in 1975. The conference was named for a speech of the same name given by Roscoe Pound in 1906. (It is tempting to go off on a tangent about this speech, but instead I’ll urge you to read more about it in this paper by University of Minnesota Law School professor Robert Stein. It’s worth it.)

While momentum was building within the legal profession, it was also building outside the legal profession. Social workers and community activists were also pushing for more options for resolving conflicts. Many had experience in community mediation programs, some created to divert cases away from courts, while others were created by activists in the civil rights movements of the 1960s. According to the Community Mediation Center’s history page, “There were perhaps 10 [community mediation] programs in 1975; there were 170+ program by 1985; approximately 300 by 1995.”

Within the legal profession lots of new organizations were founded with ADR as their focus. For a partial summary, see the history page on the Academy of Professional Family Mediators website. Family law was especially well represented, presumably because ADR is especially effective in family matters like divorce and child custody.

So from disparate causes, momentum towards more alternative ways to resolve disputes—legal and non-legal—was building. By the 1990s and 2000s, many courts were integrating ADR into their civil dockets, as well.

ADR Goes Online

Traditionally, ADR usually happens in person, if not in the same room. With the internet, the parties no longer have to be in the same room. And when combined with other innovations, like cloud computingexpert systems, and machine learning, dispute resolution can be partly or fully automated.

Online dispute resolution had been around since the early 2000s, but it fully arrived with the birth of Modria in 2011. Modria grew out of eBay’s efforts to resolve conflicts between buyers and sellers who were not always in the same state or country, and who might have a dispute over a fairly low-value transaction, making litigation impractical. eBay hired Colin Rule and Chittu Nagarajan, both early champions of online dispute resolution advocate, and they later went on to found Modria, which expanded beyond eBay disputes, attracted over $12 million in venture funding and was sold to Tyler Technologies, a government contractor, in 2017.

While Modria was a private company, the Civil Resolution Tribunal is a public online dispute resolution tool launched in 2016 in British Columbia, Canada. The CRT is required for disputes that fall within its jurisdiction, although disputants can appeal with permission. It has been a highly effective success story for online dispute resolution.

Published on January 6th, 2022. Last updated on January 11th, 2022, by Sam Glover.