Court backlogs, judicial retirements spark surge in ADR caseloads

Business has been booming for Judicate West.

"Last year, we had our biggest case year ever," said Rosemarie Chiusano Drohan, Judicate West's executive vice president of business development. "And we are on track to exceed that this year."

The private dispute resolution provider's caseload totals have grown substantially for several practice areas, according to Drohan, who said Judicate West has seen a 60 percent jump in employment disputes over the last three years as well as a 40 percent surge during that same period in elder abuse matters and a 30 percent spike in real estate cases.

Drohan explained that while Judicate West has traditionally seen gradual, incremental gains over its now 30 years of operation, the pandemic fueled an unprecedented surge in demand for the alternative dispute resolution provider's services.

"Growth as far as the industry goes has always been a steady incline -- not in huge leaps and bounds," Drohan said. "Since the pandemic, though, it hasn't been that steady percentage of increase year to year. It's been much higher because of the backlog in the courts."

Joanna Barron, the executive vice president of ADR Services, Inc., said business has also been terrific for her company in recent years, fueled in part by pandemic-related slowdowns in California courts.

"We saw, initially, a drop in cases as soon as there were stay-at-home orders put in place near the start of the crisis," Barron recalled. "Then we saw the trajectory just completely skyrocket in terms of the number of cases and requests we were getting and demand. We actually had our best year in 2020, surprisingly, and then every year since has been our best year."

Barron said ADR Services, Inc. has seen its total case volume increase 20 percent year over year for the last three consecutive years. And like Judicate West's Drohan, Barron said ADR Services' neutrals are handling many more employment disputes today.

"Employment law is really very tricky, and it's ripe for litigation," Barron explained. "Employment-related disputes have definitely been one of our biggest pieces coming through the door, but we've also seen an increase in family law matters and probate. And I think that's probably related to the aging of the population in terms of boomers getting older and having probate and trust and estate issues."

JAMS President Kimberly Taylor said her company has seen significant growth in recent years, not only in California but nationwide.

"Mediation has been a part of the civil justice process in California for a long time, and that is expanding throughout the rest of the country, ... fueled, at least in part, by court closures that happened during the pandemic," Taylor explained. "Those closures pushed some parties -- that maybe weren't using mediation as much prior -- toward that option, and they're now really seeing the benefits of mediation. ... That's led us to expand in several new markets over the last few years. We've now got neutrals in Nashville, North Carolina, and Milwaukee."

JAMS total case volume is up 9.7 percent year over year in California, according to Taylor, who noted that for the company's West Region, which includes Seattle, Las Vegas and California, total case volume is up 12.4 percent.

Like Taylor, Barron and Drohan, Signature Resolution CEO Higuchi said his company has been onboarding more neutrals recently, pointing to a recent surge in retirements by judges across California. Thirteen judges have announced they plan to leave the Los Angeles County Superior Court since Jan. 1, and Sacramento County and San Diego County have each already lost nearly six judicial officers this year.

Higuchi noted, however, that Signature is also now bringing on many former attorneys as neutrals as well.

"I think they may be saying, 'Look, I don't want to do litigation anymore,'" Higuchi explained. "'And there's a real career in dispute resolution and there's growing demand there. Why don't I give that a try?'"

Signature Resolution CEO Dario Higuchi noted that a pandemic-related boost in demand played at least a small part in his company's 2021 opening of a new San Diego office, where the firm now has eight neutrals. Signature also opened a new Oakland office in 2022 and plans to open a new Silicon Valley location this fall, but Higuchi said the expansion his company has enjoyed in recent years is the result of more than just a boost in demand from the COVID-crisis court backlog.

"I don't want to say, 'Look, it's all due to the pandemic and what it's done to the courts.' I think this has just been the natural progression of the industry," Higuchi explained. "More people are used to it. Litigators have gone to tons of mediations. The carriers, corporate America, even their in-house lawyers have been through multiple mediations, so it's become just a big part of the litigation process. ... The big picture issue here is there's more population, more business, more contracts, more disputes, more arbitration clauses, more mediation clauses. Just naturally, our industry is going to increase, and the courts have not followed the pace of that increase in these disputes."

Drohan said Judicate West has also been adding more attorneys.

"I've never been contacted by more attorneys wanting to be neutrals, and I'm seeing that statewide," she explained. "I think some lawyers over the past couple of years of the pandemic have been thinking, 'It's harder to practice law. Do I really want to practice law?' And they're considering career changes."

Dispute resolution conducted over online platforms, such as Zoom, has been a tremendously important part of the surge in business over recent years, according to each of the interviewed dispute resolution providers, who noted neutrals often appreciate the convenience just as much as litigants. More and more of that ADR business is being conducted in person now; however, incremental gains there appear to have been slow, and the vast bulk of dispute resolution is largely still taking place entirely over online platforms or in a hybrid format.

Drohan said she would like to see a continued increase in the amount of in-person dispute resolution Judicate West conducts.

"ADR is a people business, and we love people," she explained. "That live connection -- where you can pat somebody on the back or shake their hand when you settle a case -- there's no substitute for that. Or if somebody is emotional -- maybe crying because of a death, which we see a lot -- and the mediator can touch their shoulder and show they genuinely care, there's just no substitute for that aspect of mediation."