It is time to redirect Dispute Resolution Program Act funds away from Counties who have Court Annexed ADR programs that give free mediations in unlimited jurisdiction cases, rather than charging the parties on a sliding scale basis. The Legislative intent as outlined in the statute provides funds for programs that support community based programs that resolve specific community disputes. Programs are suffering because funds are being diverted to court annexed programs that are serving the economically prosperous, who receive dispute resolution services free of charge while paying handsomely for all other aspects of their litigation.
In 1986, the California legislature enacted a statute to fund a Dispute Resolution Program (‘DRPA’) Business and Professions Code section 465 In enacting this statute the Legislature stated that the purpose of the program is to seek alternatives to costly legal process, by funding community-based dispute resolution programs reflective of the diversity of the communities to be served, funded partly by public funding and partly by users of these services on a sliding scale basis, but without cost to indigents. The Legislature recognized that the types of disputes that would warrant DRPA funds are “disputes between neighbors, some domestic disputes, consumer-merchant disputes, and other kinds of disputes in which the parties have continuing relationships.”
So how do these funds that are aimed at community-based dispute resolution programs, end up in the hands of Court-annexed ADR programs which are used to pay administrative personnel and to give away free mediations to parties who can afford to pay? Are these funds being misused contrary to the legislature’s stated purpose?
The DRPA statute provides that from $3 to $8 per court filing is placed in the DRPA fund account. The Department of Consumer Affairs dispenses the monies to each county. There are 37 counties in California who receive DRPA funds. Los Angles County is one of the 26 counties who have chosen to take $8, which is the maximum amount from each court filing fee. Los Angeles County for the year 2006-2007, has budgeted $2,713,000 from DRPA revenue. Who gets this money that is suppose to be used for community based dispute resolution programs? Los Angeles County (administered through the LA County Community and Senior Services) in its Request For Proposal states that the county program and goals are for three types of programs: 1) Community Programs that primarily assist in resolving disputes that have not entered the court system, 2) Court –Connected programs to assist disputes that already have been filed and 3) Youth programs to assist in resolving disputes in which at least one of the disputants is under the age of eighteen.
Los Angeles County gives Los Angeles Superior Court $574,126 per year, the largest recipient of funds. The remainder of the funds are split up between 13 Community based and Youth Programs.
However, in awarding monies to Los Angeles Superior Court, Los Angeles County ignores the legislative intent by giving the ‘main priority’ to Court-connected unlimited jurisdiction civil claims (over $25,000) by providing free services indiscriminately to all comers provided they are already in the litigation system. The Los Angeles court connected program specifically discriminates against Small Claims and low value ‘limited jurisdiction’ cases (under $25,000 cases), by giving them the least priority and fails altogether to provide services ‘on a sliding scale basis’. By diverting funds to already well-funded unlimited jurisdiction cases, the County circumvents the statutory purpose by failing adequately to provide funding to programs for Small Claims and limited jurisdiction cases that involve disputes “between neighbors, domestic disputes and consumer-merchant disputes,’ as specified by legislative intent. Some funds are given to non profit organizations to handle the Small Claims cases, but the small claims court cases cannot be effectively resolved this way without court involvement.
With the $574,126 per year Los Angeles Superior Court pays administrative personnel to hand out unlimited jurisdiction cases to mediators. Theses pro bono mediators receive no part of the funds, not even to reimburse them for their expenses, such as parking, copying or postage. Of the 37 counties only one other county requires that the well heeled parties not pay, Contra Costa, which requires 2 hours of pro bono time. The remaining counties receiving DRPA funds provide unlimited jurisdiction mediations on a sliding scale or market rate basis, with it free to indigents. The bottom line is that the two counties that are using DRPA funds for free court-annexed unlimited jurisdiction mediations are misusing these funds. Funds for community based and youth programs are reduced or denied when the available funds are awarded to court-annexed programs, such as unlimited cases where the parties can afford to pay The DRPA funds are being diverted to Court-annexed unlimited jurisdiction programs serving the economically prosperous, who pay handsomely for all other aspects of their litigation.
The DRPA statutes need to be amended so funds are directed to the sources and the type of cases envisioned by the Legislature. Business and Professions Code section 467.2 outlining the county’s eligibility requirements for funding should be revised to state that court annexed dispute resolution programs will be eligible for funds if the court annexed program, in unlimited jurisdiction cases, charges parties on a sliding scale fee-paying basis, according to income and financial, and without cost to indigents.
Some of the judiciary agrees that those who are well heeled litigants should not benefit from public funds that are used for ADR. Recently, California First Appellate District Justice Ignazio Ruvolo published an article in California Litigation, Vol 20, 2007, entitled ‘Time to Re-Examine the State of Civil Litigation in California.’ In the article Justice Ruvolo writes, ‘Since ADR has truly become part of the legal system’s culture, perhaps then the courts could safely leave ADR largely to the private sector…. Case management, as it relates to ADR, might focus on locating those cases in the civil justice system that are suited for non-traditional resolution but which lack the financial resources to employ ADR. These are the cases that should be the beneficiaries of court-sponsored ADR.’ Some State agencies argue that if this amendment is passed it will make Los Angeles Superior Court or any other court that adopted CCP section 1775 et. seq. to be in violation. CCP section 1775.5 and 1775.8 allows the court to order a case into mediation where the amount in controversy is under $50,000, that the compensation of the court-appointed mediator will be $150 per mediation (funded by the Court) and if the mediation is per stipulation then the parties will split the $150 to be paid to the mediator. Since the funding to pay mediators is no longer available, all cases under $50,000 get a pro bono mediation and pursuant to statute the court cannot charge the parties for mediation. This argument does not apply to cases over $50,000 because the court does not order the parties to mediation, even though it may seem like it, but the court notes that the parties have agreed and stipulated to mediation.
CCP section 1775 et. seq. needs to be amended or repealed altogether. The statute was enacted as a pilot mediation program that was slated to be repealed in 1998, but the repealer was repealed. The statute is out of date, in that the dichotomy of $50,000 is not in line with the $25,000 current monetary cut off between limited and unlimited jurisdiction cases. Further, the funding that was to support this pilot program to pay mediators is nonexistent. If the statute remains, the CCP section 1775.5 should give the court authority to order mediation in limited jurisdiction cases, under $25,000, and have available a pro bono mediation panel. ADR is no longer a pilot program. It is time to re-examine Court-annexed ADR programs and make changes. In court annexed ADR, parties that are well-heeled are using free monies that could be directed to programs that lack the financial resources to employ ADR. It is time to stop the misdirection of DRPA funds and make parties in court connected unlimited jurisdiction cases, who can afford it, pay for mediation.
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