It is a pleasure to participate in the Office of Management and Budget's second annual ADR award ceremony. The programs that OMB is recognizing today are leaders in the field and models for the government. Their innovative programs help resolve disputes at the earliest possible stage, by the least expensive, most expeditious methods. They use ADR to fulfill the President's vision that the government should be citizen-centered, not bureaucracy-centered; should give people a greater role in solving their own problems; and should provide individuals with more flexible options to resolve disputes outside rigid proceedings.
I am speaking to you today on behalf of the Attorney General, who is the Presidentially appointed leader of the government's ADR effort. That effort is based upon two important statutes. When Congress passed the Administrative Dispute Resolution Act, it wrote 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." The legislation, signed into law in 1990 by President George Bush, called for the use of ADR to "enhance the operation of the Government and better serve the public."
Since that time, ADR in the government has grown dramatically. More and more courts and administrative boards have recognized its value and are requiring it. In 1998, Congress passed the Alternative Dispute Resolution Act, which directed every district court in the country to devise and implement an ADR program, and to require that litigants in all civil cases consider the use of ADR. Many Boards of Contract Appeals are promoting the use of ADR as well, and we are recognizing a leader of this effort as one of the award winners this morning.
ADR is growing not just because it is being mandated, but also because it works. People both inside and outside the government have found it has substantial advantages over more traditional adversarial processes. ADR is often quicker and cheaper than administrative adjudication and federal litigation. Perhaps even more importantly, people find ADR gives them greater control over how they resolve their disputes, more opportunities to be creative, increased feelings of satisfaction, and improved relationships with each other.
I speak to you today based on my own personal experience with ADR, both before and after I joined the government. I spent much of my career in Atlanta as a trial lawyer in private practice dealing with commercial and personnel injury matters. Much of my work consisted of advising my clients how to avoid disputes and how to resolve those disputes that could not be avoided. My clients were like many of you here today -- they wanted their matters resolved quickly, effectively, and with a minimum amount of adversity. We found mediation and arbitration could be helpful tools in achieving these goals.
Before becoming Associate Attorney General, I was privileged to served as the AAG of the Civil Division, the largest legal division in the Justice Department. We used ADR in hundreds of cases every year, including medical malpractice matters, health care and consumer fraud enforcement, and workplace discrimination litigation.
As the Associate Attorney General, I now am responsible for supervising the five civil litigation components of the Department. For us, increasing the use of ADR is a very attractive proposition. The Justice Department is the most prolific litigator in the federal courts. We represent the United States and its agencies in roughly 100,000 civil cases each year, which is about one third of the entire docket of the federal courts. Those of you who practice in the administrative arena face similarly large caseloads. The government does not serve its citizens well if it takes all of these cases to trial. That would be inefficient use of both government and private resources.
Like all litigants, the federal government settles far more cases than we try and we always have. At the Justice Department, for every civil case we take to trial, we resolve about one hundred others before they go to trial. To be sure, we are ready to take any and every case to trial. However all cases involve risk that must be realistically assessed, and in most cases, settlement on a reasonable basis serves the interest of both parties. Alternative Dispute Resolution helps us achieve that result.
To evaluate the effectiveness of our ADR program, we conducted a nationwide study of our use of these processes. We surveyed our Assistant United States Attorneys after they used ADR, examining almost one thousand cases over a four-year period. We found that ADR achieved settlements about two-thirds of the time it was used. Even in those cases when a settlement did not occur, about half the time our lawyers reported ADR was beneficial for other reasons, such as improving the relations between the parties.
We then asked our lawyers to compare what happened through the use of ADR to what would have happened if they had proceeded on their own with unassisted negotiation or trial. Our trial lawyers believe the process saves significant amounts of both time and money. They estimated that, in the average case, ADR saved about six months of litigation time. They reported that ADR resulted in savings of about $10,000 per case in litigation costs. Finally, they stated that the settlements achieved through ADR were better tailored to meet the parties' needs and helped preserve the relationships between the people involved in the dispute.
There are innumerable examples of cases, large and small in which mediation has worked. One of the biggest case where we used ADR is the Microsoft antitrust lawsuit. We litigated this case through a trial, an appeal, and a remand back to the trial court, where we began preparing for yet another trial. During this period, we had a dozen lawyers working on the case full time, and another dozen who worked on it part time. Microsoft was represented by as many lawyers or more, as were state offices of various attorneys general. After three and a half years of litigation, the case was still going forward to another trial.
At that point, the parties engaged a professional mediator, who had decades of experience in settling cases, to assist the parties in the negotiations. After two weeks of non-stop mediation, we reached an agreement with Microsoft to resolve the case. The parties report that the mediator was invaluable in helping them obtain the settlement.
We find ADR effective in smaller cases as well. I worked on medical malpractice cases both in the private sector and in the government, and one particular case at the Justice Department reflects how the use of ADR can result in a resolution of a dispute suited to the parties needs.. A man died during an operation at a government hospital, and the family sued the United States for damages. As in many such case, these were significant differences between the two sides on the merits of the claim. A court would have been able to award only money. However, the family members were not motivated solely, or even primarily, by money. During mediation, the parties arrived at a unique settlement. The government purchased a tree and a brass plaque to honor the man who had died. The tree was planted on the hospital grounds as a memorial in a ceremony attended by the family, the lawyer for the government, and the hospital director. The monetary portion of the claim was then settled for a relatively modest amount consistent with the litigation risks assessed by the government attorneys.
The plaintiffs were very pleased with the settlement that they and the government had created together. More than just money, they were seeking closure from the situation, as well as an acknowledgment from the hospital of the loss of their father. Parties find creative solutions like this much more frequently in mediations than in trials.
ADR is particularly important in the government contracting area, where many of you work. Government contracts are a significant portion of the federal budget and of the entire national economy as well. ADR affects the disposition of more and more of this money every year. ADR is official government policy in contract disputes, as the Federal Acquisition Regulation states that "Agencies are encouraged to use alternative dispute resolution procedures to the maximum extent practicable."
One of the most important reasons ADR has thrived in the government contracting field is that these matters involve continuing relationships. The government regularly does business with the same companies, and both sides benefit when they resolve disputes in a way that preserves good working associations. While litigation tends to destroy relationships, ADR allows the parties to work together in fashioning their own solution to a dispute. The cooperation that begins in ADR often sets a model for future productive dealings between the parties.
While we think of ADR as a relatively recent development in the government, it is worth noting that the values it represents have been a part of our country for generations. As Abraham Lincoln said more than a hundred years ago: "Discourage litigation. Persuade your neighbors to compromise, whenever you can. Point out to them how the nominal winner is often a real loser in fees, expenses, and waste of time."
True to this maxim, the United States seeks to settle disputes with its citizens whenever possible and ADR helps us do that. For that reason, I am very pleased to be here and I congratulate today's award winners for their role in fulfilling this vision.