Administrative Dispute Resolution Act (1990)

Excerpt from the Administrative Dispute Resolution Act

The Congress finds that—

administrative proceedings have become increasingly formal, costly, and lengthy resulting in unnecessary expenditures of time and in a decreased likelihood of achieving consensual resolution of disputes;
alternative means of dispute resolution have been used in the private sector for many years and, in appropriate circumstances, have yielded decisions that are faster, less expensive, and less contentious;
such alternative means can lead to more creative, efficient, and sensible outcomes;
such alternative means may be used advantageously in a wide variety of administrative programs;
explicit authorization of the use of well-tested dispute resolution techniques will eliminate ambiguity of agency authority under existing law...

In 1989, an estimated 220,000 civil cases were filed in the United States, with the federal government being a party in more than 55,000 of them. The cost of this litigation was almost incalculable. Aside from the money and time expended, the uncertainty and delay caused by pending court decisions as well as the legal work that could otherwise have been done by attorneys was immense. In light of this expense, prior to 1990 the private sector increasingly sought alternative methods of resolving disputes. Some of these alternatives included relying on neutral mediators to solve small disagreements or by arbitration where parties give a neutral evaluator the power to conclude disputes in a more formal way. Private companies had started turning to alternative dispute resolution (ADR) as early as 1925 after Congress passed the Federal Arbitration Act.

But the General Accounting Office had decided not to let decisions on disputes involving monetary claims with federal agencies take place outside the courts without federal statutory authority. Although some government agencies, including the Environmental Protection Agency and the Army Corps of Engineers, had been authorized to use alternative methods such as mediation and minitrials for years, the government had no uniform requirement or guidelines on when to employ ADR techniques.

The Administrative Dispute Resolution Act of 1990 (ADRA) (P.L. 101-552, 104 Stat. 2736) changed this. The ADRA required federal government entities to consider alternative means of resolving conflicts in hopes of realizing some of the same benefits as private companies. The ADRA required that agencies appoint a specific person for training personnel in the use of ADR techniques and assessing all programs with ADR potential. This served the dual purpose of both normalizing ADR within the agencies, as well as establishing specific contexts in which the new tools could be used effectively.

The act provided that voluntary, binding arbitration would be authorized when all parties consented, subject to the safeguards of judicial and agency review. Perhaps most importantly, the act established a framework of confidentiality in ADR proceedings. Since the federal government is subject to the Freedom of Information Act (FOIA), it was important that the ADRA strike the right balance between maintaining an open and transparent process and protecting the parties' confidentiality. In passing the ADRA, Congress mandated that the act expire in October 1995, so that it could review the ADRA's impact before making it a permanent fixture in government agencies.

By 1996 it was apparent that the main flaw of ADRA was the lack of emphasis on confidentiality. When Congress renewed the act in 1996, the ADRA significantly enhanced the confidentiality protections. The new act created a specific FOIA exemption for ADR communications; it also broadened the scope of communications that could not be disclosed by parties to a dispute. The 1996 Act also made the ADRA permanent, tacitly acknowledging the effectiveness of alternative dispute resolution techniques.

ADMINISTRATIVE DISPUTE RESOLUTION ACT (1990)

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