Alternative Dispute Resolution in Maryland
Partners at Dragga, Hannon, and Wills in Rockville, Maryland, Heather Collier and Eric Arena have been practicing family law since 2005. Heather represents clients in all aspects of complex family law litigation and negotiation. Eric is a frequent speaker at continuing legal education courses on a variety of family law issues.
In this podcast, both attorneys discuss the many Alternative Dispute Resolution options available to divorcing couples, including mediation, arbitration, and litigation.
Hosted By: Diana Shepherd, Editorial Director, Divorce Magazine
Guest Speaker: Divorce Attorneys Heather Collier and Erik P. Arena
Bio: Family law attorneys Heather Collier and Erik Arena, are both partners at the Dragga, Hannon, and Wills law firm in Rockville Maryland. In 2017, Heather was recognized as a “Super Lawyer” in the area of family law for the fourth consecutive year, and she was also selected to the Super Lawyers’ list of Top 50 Women Attorneys in Maryland. Erik has been named a “Super Lawyer” in family law and a “Best Lawyer” in Maryland family law by Best Lawyers in America.
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Read the Transcript of this Podcast Below.
Divorce mediation and arbitration are two dispute resolution processes that a couple can use to resolve their divorce-related issues. Short of a court intervention, what is the difference between the two?
Mediation is what most people think of when they hear the term alternative dispute resolution. In its most general terms, it's a meeting attended by your ex, or soon-to-be ex spouse, each of your respective attorneys, and a neutral trained mediator or facilitator to explore possible resolutions to your disputed issues. How the mediator or facilitator assists in that meeting can vary. What doesn’t vary is that control over the result always remains with the parties in mediation. By that I mean no resolution is reached in mediation until the parties jointly approve the result.
Arbitration on the other hand is the dispute resolution process that most closely resembles litigation in that the parties see at least partial control of the outcome to the arbitrator. There are two types of arbitration, binding and nonbinding. In either type of arbitration the process is the same, the parties agree to submit a list of disputed issues to a jointly chosen arbitrator. The arbitrator hears testimony, receives evidence, and then makes a decision on the disputed issues in conformance with the governing law on the issues in the jurisdiction of choice.
The difference between the two is that the arbitrator's decision may or may not be binding upon the parties. And by binding I mean the parties pre-agree that the arbitrator's ruling will be legally enforceable against them and that by participating in arbitration, they're waiving their rights to seek a different result in a different form. One final point worth noting is custody issues cannot be arbitrated in Maryland. Custody must be resolved by agreement or court order. Only financial issues are appropriate for arbitration in divorce cases in Maryland.
How often are arbitration and mediation used as dispute resolution methods in your experience?
I've only seen a few cases diverted to arbitration in my 12-year career. Each of them were post divorce enforcement or contract interpretation disputes. All of them elected for binding arbitration and each decision was made either prior to, or just after litigation had been initiated. And by the decision, I mean the decision to elect for arbitration. The hope was that arbitration would produce a just result in a more timely and less expensive manner than in litigation.
Conversely, most of my cases end up in mediation on either the custody or financial issues, or both at some juncture either before or after the suit is initiated. This is due in part to the Maryland courts mandating that efforts be made to resolve each case via Alternative Dispute Resolution before being scheduled for trial. Whether or not those cases result in mediation or as a result of progress made at mediation is an entirely different conversation. In my experience the closer one comes to losing control over the outcome, the more likely one is to compromise.
Can you briefly describe the mediation and arbitration processes from a layman's perspective?
Certainly. The mediation process starts with an agreement to mediate. That agreement will set forth the issues to be mediated, the mediator chosen by the parties, the date, time and duration of each of the mediation sessions, the cost of mediation, by whom they'd be paid and what, if any information or documents will be exchanged between the parties in council before meeting.
The mediation sessions themselves can vary as far as process and procedure. In some cases the parties, their attorneys, and the mediator all remain in the same room for the duration of the session. That is pretty rare as it can be difficult to talk through emotional issues and evaluate proposals and counter-proposals with your spouse and his or her attorney present. More frequently the parties and their attorneys occupy separate rooms with the mediator shuttling from room to room to convey information and proposals.
One thing that does not vary is the confidentiality of the mediation process. In an effort to encourage compromise of pending disputes, our courts mandate that any offers of settlement convey that mediation cannot later be used against you in litigation. This allows you to make reasonable proposals at mediation without fear that your ex, or soon to be ex, will later use your proposal in court to undermine your position on an issue to which you offered a compromise.
The arbitration process, much like mediation, also starts with an agreement, which sets forth the issues to be arbitrated, the identity of the arbitrator, whether or not the arbitration is binding, the cost of the process and how they will be paid, the scope of the arbitrator's authority to provide over discovery issues, pre-arbitration motions, and finally the scope of the arbitrator's ruling to reach binding or nonbinding decisions.
Usually some limited discovery is conducted subject to the oversight of the arbitrator, if not previously collected in a litigation posture. The arbitration hearing itself proceeds like a trial in court, each side calls witnesses, provides testimony, and submits documentary evidence. The arbitrator rules on any objections, concerning the admissibility of testimony and evidence, and then makes a decision on disputed issues in conformance with the governing law on the issues and the jurisdiction of choice.
Does every divorce-related issue have to be resolved during ADR, or can a couple choose to focus only on particular issues?
That is entirely up to the party. They can focus on particular issues at mediation or try to resolve them all in one or several sessions. We frequently mediate custody and child related issues such as child support separate from financial issues like property and alimony, or spousal support. They involve different and sometimes competing priorities and interests. Also it's not uncommon to resolve some, but not all of the disputed issues in mediation leaving the remaining issues for court determination or further exploration in some form of alternative dispute resolution model. Sometimes it's clear from the outset that certain issues cannot be resolved without court intervention.
Once contested divorce litigation has been initiated is there always a trial or is it possible to settle out of court?
It is possible to settle out of court after a suit has been initiated. In fact that is most frequently the result of our cases. Only a small percentage of our cases make it to trial. It's just too costly and oftentimes there isn’t enough to dispute to make litigation worthwhile for both sides, particularly from a cost perspective.
Can a couple mediate some issues and litigate others? Is there any advantage to doing this?
There's no requirement that a couple has to mediate all the issues or litigate all the issues in their particular case. A couple may not have any trouble agreeing on the custody arrangement but the financial issues may be hotly contested or vice versa. Each case is different. You never know what is going to be the hot button issue, it could be the house, the children, or the beanie baby collection.
But oftentimes even in a high conflict case there are at least a few areas where you can reach agreement and resolve an issue or two. The parties can always carve out issues that might be opportune for settlement and take them to mediation, leaving others for litigation. The advantage of mediating at least some of the issues are saving time and money, and the benefit of settlement begetting settlement.
The more issues you can resolve by mediation, the more streamline litigation over the remaining issues become, meaning less time spent on the discovery and litigation process, and a potentially shorter trial. When the scope of the litigation is limited, it tends to cost less than if every issue is in dispute. Resolving even one issue is empowering for the party and is likely to generate momentum for settlement discussions on remaining issues leading to the potential for other issues to resolve, if not all of the issues.
Is there a difference between court-ordered divorce mediation and private divorce mediation?
The main differences between court ordered divorce mediation and private divorce mediation are the way the mediator is selected, the cost and certain time requirements imposed upon court ordered mediation. If the court enters an order directing a case to mediation, the court appoints a mediator from a court maintained list of mediators and ADR practitioners who have taken the required training, meet the criteria set forth under the rules, and have received court approval to take court appointed mediation.
The court order names a specific mediator, a minimum number of hours for mediation and sets the hourly fee that the mediator is allowed to charge for the ordered number of mediation hours. Typically the hourly rate the mediator charges for a court ordered mediation is less than that attorney's normal hourly rate. If both sides agree on a specific mediator from the court approved list that differs from the court selected mediator, the parties can request that the court appoint the agreed upon mediator, however if they do this, they will no longer be able to take advantage of lower court ordered mediation hourly rate, and the chosen mediator will charge their normal hourly rate.
The order also requires that the court ordered mediation session be commenced and completed by a certain date usually by or before the pretrial conference set in the case. Private mediation is much more flexible. You can decide if and when you go to mediation, who you will use as a mediator and how much time to devote to the process. There's no requirement that private mediation be completed by a certain date. Private mediation tends to be more expensive than court ordered mediation because the mediators charge their normal hourly rate for the session rather than being limited by the court ordered hourly rate.
Are there any advantages for using mediation rather than litigation for a high net-worth cases?
There are definite advantages for using mediation rather than litigation for high net-worth cases. Litigation is a rigid process and the remedies available when the court decides a case are limited. Mediation and mediated agreements provide the opportunity for flexibility and developing creative solutions that take into consideration the complex financial and asset structures in play with many high net-worth individuals and their families; including the ability to work with financial and estate planning regime that the family may already have in place, complicated tax consequences, and the longer term impact of the divorce.
If a case is litigated a lot of information ends up in the public record available for all to see. While you can make a request to see or shield a part or all of the court files, the bar is high and it can be difficult to accomplish. Resolving the issues in mediation ensures that almost no information makes it into the public record, a significant advantage for all families and something that may be of critical importance to a high net-worth or high profile individual. Any agreement is shielded from public inspection as a matter of course in our circuit court.
You've just discussed the benefits of using mediation rather than litigation, I'm wondering what are the benefits of divorce litigation?
A commonly asked question, Diana, most people want to know when they will be done with the divorce process. If someone has spent months or in some cases years trying to reach an agreement with a spouse who is not really motivated to participate productively or who constantly delays or puts up roadblocks that puts up settlement, it seems like the divorce will never end. Litigation can help that situation because it puts a timeline and an end date on the process.
The timing of the process is controlled in large part by the court's trial schedule and deadline. That can motivate the resistant party to participate and be realistic about resolving the issues. At the very least you have an end date in sight and a judge to make decisions in the absence of an agreement resulting in closure.
Divorce litigation can also give a voice to the party who is disadvantaged in the relationship due to the party's personality, their relationship dynamics and their history, and provide a forum in which that party will be heard. Mediation may not provide the same opportunity to a person who feels they are significantly disadvantaged in trying to strike a bargain over the issues rising out of that relationship.
Do you advise your clients on how to prepare for contested divorce litigation?
We do advise clients on how to prepare for divorce litigation. If someone is thinking of filing for divorce or if they have learned their spouse may be filing for divorce, the sooner they see us the more we can do to help them prepare for it. In terms of the types of things one can to do be prepared, there are a few basics which would be helpful to anyone regardless of the issues in their case.
Pull together basic information about yourself and your family including important dates and major events in the marriage. Develop a list of all known assets and liabilities including how they are titled and what you think they are worth. Write down a key list of people who might be good witnesses for your case. Copy and preserve important documents like tax returns, bank statements, real estate records, email correspondence or electronic files, and store them in a safe place.
Understand that this is a process not an event. Do what you need to do to mentally steer yourself for the emotional part of the process. That may mean considering therapy or reaching out to core family and friends to tell them you're going to need to lean on them a little more than usual in the near future. There's a strong possibility that at least one or more things will be said or done during the process that will upset or hurt you. A good support system is important to help you through the rough spots.
Does a family court judge rule on all divorce-related issues, or only on those where the divorcing couple are unable to reach an agreement?
The court will rule on all contested issues before it that are set forth in each party's pleadings and are not otherwise withdrawn or settled in agreement between the party. If the parties have reached an agreement on some or all of the issues between them, then that agreement is presented to the court for incorporation into the divorce judgment or court order.