Impact of the Texas ADR Act (Chapter 154 Civil Practice and Remedies Code) On the Role of the Mediator

Impact of the Texas ADR Act (Chapter 154 Civil Practice and Remedies Code) On the Role of the Mediator

by Onyinyechi Muilenburg

The 1987 Texas Alternative Dispute Resolution Procedures Act (“TX ADR”) sets forth the Texas Legislature’s policy of encouraging prompt resolution of litigation through voluntary settlement procedures.  Tex. Civ. Prac. & Rem. Code §154.002; Dispute Resolution Texas Style, 3rd Ed., June 2005.  The TX ADR has a specific emphasis regarding various family law matters.  Tex. Civ. Prac. & Rem. Code §154.002.  Section 154.002 expresses the general policy regarding “peaceable resolution of disputes” is encouraged by “voluntary settlement procedure;” however, the court cannot force the parties to peaceable resolve their dispute or negotiate their differences.  Hansen v. Sullivan, 886 S.W. 2d 467, 469 (Tex. App.—Houston [1st Dist.] 1994); Decker v. Lindsay, 824 S.W. 2d 247, 251 (Tex. App.—Houston [1st Dist.] 1992).  The purpose of the TX ADR being to involve client participation in a prudent, economical, nonbinding, confidential and flexible process which encourages a frank and open discussion and a good faith negotiation.  The process is not a substitute for a trial; and while the parties may be compelled to attend the process they cannot be compelled to settle.

The TX ADR encourages trial and appellate courts to promote the policy of the TX ADR.  Tex. Civ. Proc. & Rem. Code §154.003 “The Texas Legislature has expressly declared the state’s policy of encouraging the peaceable settlement of citizen’s disputes, and has placed on the courts the responsibility for carrying out that policy.”  Adams v. Petrade Int’l, 754 S.W.2d 696, 715 (Tex. App.—Hou. [1st Dist.] 1988, writ denied).  So long as the court retains plenary jurisdiction over a case it can refer it to ADR procedure.  Downey v. Gregory, 757 S.W.2d 524, 525 (Tex. App—Hou. [1st  Dist.] 1988).

Clearly, the Texas Legislation is binding upon Texas State Court’s but not the Federal Courts.  The Federal Courts are governed by 28 U.S.C. §651(b) and 652(a).  Federal Courts in the Southern District of Texas are further governed by Local Rule 16.4.A.  In re Smith, 524 B.R. 689, 702 (Bankr. S.D. Tex. 2015).  At least one judge in the Southern District of Texas “does not belong to the school of ‘mediation romantics’ who believes that mediation best resolves all disputes and leaves all the parties walking away with warm and fuzzy feelings towards one another.”  Id. at 705.  However, even that Judge has recognized that mediation has its place.  Smith, 524 B.R. at 705;  North Bay General Hospital Inc. v. McNaull Adv. No. 08-3422 [Docket No. 203].  However, mediation which is utilized to deprive a party of its day in court or occurs due to counsel’s fear of the courtroom should not occur.  Id.  This thought process seems contrary to that of former Supreme Court Justice Sandra Day O’Connor, who stated “courts of this country should not be the places where resolutions of disputes begin.  They should be the places where disputes end—after alternative methods of resolving disputes have been considered and tried.”  See, Dispute Resolution Texas Style.

Courts may order a matter to alternative dispute resolution on its own motion or a motion of the parties.  Tex. Civ. Prac. & Rem. Code §154.021.  Parties may submit a written proposal to the court suggesting an ADR procedure.  Paul v. Paul, 870 S.W. 2d 349, 350 (Tex. App.—Waco 1994, no writ).   The goal is to seek the appropriate facilitator taking into account the dispute and the parties.  “The characteristics of the case, the preference of the client, the temperament and skills of the attorney, and the inclination of the court should all be taken into consideration in the selection process.”  See, Dispute Resolution Texas Style.

While the court has the authority to order ADR procedures the statute lacks specific enforcement mechanisms or penalties; however, the court can hold a party in contempt for failing to physically appear at the meeting, but cannot compel the party to negotiate in good faith.  Gleason v. Lawson, 850 S.W.2d 714, 717 (Tex. App.—Corpus Christi 1993, no writ).

A party may object to a Court’s referral to an ADR procedure.  Tex. Civ. Prac. & Rem. Code §154.022.  “If a party objects, and there is a reasonable basis for the objection, the Court may not refer the dispute to an ADR procedure.”  Decker v. Lindsay, 824 S.W.2d at 250.

The TX ADR provides for five ADR procedures; however, any variation, combination or modification of the procedures is recognized and the parties and courts are provided the authority to design a process to fit their particular circumstances.  The five are:

a)    Mediation.  Tex. Civ. Prac. & Rem. Code §154.023
b)    Mini-trial.  Tex. Civ. Prac. & Rem. Code §154.024
c)    Moderated settlement conference.  Tex. Civ. Prac. & Rem. Code §154.025
d)    Summary jury trial.  Tex. Civ. Prac. & Rem. Code §154.026
e)    Arbitration.  Tex. Civ. Prac. & Rem. Code §154.027

The TX ADR requires the party being appointed to be the ADR facilitator to be impartial.  Tex. Civ. Prac. & Rem. Code §154.051.  To qualify the impartial third party must have completed a minimum of 40 classroom hours of training in dispute resolution techniques.  Tex. Civ. Prac. & Rem. Code §154.052.

The facilitator “shall encourage and assist the parties in reaching a settlement but cannot compel or coerce the parties into settlement.  Tex. Civ. Prac. & Rem. Code §154.053(a).  Further, the State Bar has adopted Ethical Guidelines for Mediators and other ADR organizations have promulgated ethical guidelines.  The facilitator cannot alter the parties’ agreement or unilaterally interject their own terms into a settlement agreement.  In re McIntosh, 918 S.W.2d 87, 89 (Tex.App.—Amarillo 1996, no writ).  Attorneys who serve as facilitators may not advocate or seek to protect either party, instead they are “guardians of the objective dispute resolution process.”  See, Dispute Resolution Texas Style, 2nd Ed., p. 6.

Information obtained by the facilitator from any party must be held in confidence at all times.  Tex. Civ. Prac. & Rem. Code §154.053(b).  Further all matters including conduct and demeanor occurring during the ADR process is confidential.  Tex. Civ. Prac.  Rem. Code §154.053(c).  “The manner in which participants negotiate should not be disclosed to the trial court.”  In re Acceptance, Inc., 33 S.W. 3d 443, 453 (Tex. App.—Fort Worth 2000).  The records and communication are confidential.  Tex. Civ. Prac. & Rem. Code §154.073(a).  Any notes or records of the ADR procedure are confidential and the parties and facilitators may not be required to testify nor be subject to service of process requiring disclosure of information or data regarding the procedure; however, oral communication and written materials used during the ADR procedure is admissible at trial if it is admissible or discoverable independent of the ADR procedure.  Tex. Civ. Prac. & Rem. Code §154.073(b) and (c).  Discovery of notes or drafts of documents of the facilitator or the parties are barred from discovery.  In re Empire Pipeline Corp., 323 S.W. 3d 308, 314 (Tex. App.—Dallas 2010).

In the event of a conflict of Section 154.073 with other requirements of disclosure (such as the Texas or Federal Rules of Civil Procedure) on an issue involving confidentiality, that conflict may be presented to the court to review the material, in camera, and the court may issue a protective order or determine what communications or materials are subject to disclosure.  Tex. Civ. Prac. & Rem. Code §154.073(e); Avary v. Bank of America, 72 S.W.3d 779, 797 (Tex.App.—Dallas 2002, pet. denied).  Mediation activities do not provide blanket protection for material used in mediation if they are discoverable independent of the procedure.  In re Learjet Inc., 59 S.W.3d 842, 845 (Tex.App.—Texarkana 2001).

The TX ADR allows the facilitator to obtain a reasonable fee which is either set by the court or agreed to by the parties and such fee shall be taxed as costs.  Tex. Civ. Prac. & Rem. Code §154.054; Decker v. Lindsay, 824 S.W.2d at 249; Paul v. Paul, 870 S.W.2d at 350.

Provided the facilitator does not act with wanton and willful disregard to the safety, rights and property of the parties, the facilitator is immune from liability for any act or omission in the scope of his or her duties or functions as facilitators.  Tex. Civ. Prac. & Rem. Code §154.055.

In the event the parties reach an agreement which is reduced to a writing, that agreement is enforceable.  Tex. Civ. Prac. &  Rem. Code §154.071(a).  Such a written settlement agreement is subject to the laws of contract.  E.P. Towne Ctr. Partners v. Chapsticks, Inc., 242 S.W.3d 117, 122 (Tex. App.—El Paso 2007, no pet.); Hur v. City of Mesquite, 893 S.W.2d 227, 234 (Tex.App.—Amarillo 1995, writ denied).  A party reaching a settlement agreement may not repudiate the settlement.  In re Ames, 860 S.W.2d 590, 591 (Tex.App.—Amarillo 1993, no writ).  However, where the agreement contains a contingency which is unfulfilled or there is no finalized agreement, then there is nothing to enforce.  Pickell v. Guaranty Nat’l Life Ins., 917 S.W.2d 439, 441-42 (Tex.App.—Houston [14th Dist.] 1996, no writ); In re McIntosh, 918 S.W.2d 87, 88 (Tex.App.—Amarillo 1996, no writ).  Furthermore, the confidentiality of Section 154.053 (c) does not prevent a party from brining suit for breach of contract to enforce the mediated settlement agreement.  Hur v. City of Mesquite, 893 S.W.2d at 234.  If the dispute over the settlement agreement arises while the court retains jurisdiction, the clam for enforcement should be brought before that court under the original cause number.  Mantas v. Fifth Ct. of Appeals, 925 S.W.2d 656, 658-59 (Tex. 1996).

The TX ADR, together with other alternative dispute resolution procedures enacted and encouraged around the country, may have led to fewer trials.

There is little doubt that trials—i.e. having one’s day in court—have markedly decreased in recent years.  See generally Kimberlee K. Kovach, The Vanishing Trial, 7 Cardozo J. Conflict Resol. 27 (2005). While there are no studies definitively linking the increase in mediation to the decline in trials, it is eminently reasonable to conclude that there is a nexus. See id. (“The use of ADR has also been suggested as a cause for the decrease in trials. In examining the disposition of court cases, ADR, and in particular mediation, has had an impact. While statistics have not demonstrated a direct correlation between mediation and the settlement of additional cases, it is certainly responsible for earlier resolution.”).

Smith, 524 B.R. at 706, n. 11.  In short, the TX ADR should be viewed simply as a useful and frequently effective tool in the toolbox of conflict resolution.

No information in this article is intended to constitute legal advice. For specific legal advice, please contact an attorney.

If you have any questions or would like more information about the impact of the Texas ADR Act on the role of mediator, please contact Michael Durrschmidt at 713.220.9165 or