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Most Bankruptcy Courts Offer Mediation
"The beauty of mediation is that it can give those involved in a
bankruptcy case a good feeling about the legal system," Bankruptcy Judge
Barry Russell (C.D. Cal.) said. "If you can help resolve your own
dispute, you feel much better about the process and are much more likely
to live up to the promises you make."
Mediation, defined as facilitated negotiation, is offered by more than
two-thirds of the nation's 90 federal bankruptcy courts. (An informal
Federal Judicial Center survey places the number at 62, but notes that
additional bankruptcy courts offer other forms of alternative dispute
resolution other than mediation.)
Those courts vary as to how they authorize and organize the mediation
process, and there exists great variation in how frequently it is used.
But the availability of mediation for creditors and debtors has drawn
praise from judges and court staff alike.
"It is a valued process," said Chief Bankruptcy Judge Judith Wizmur (D.
N.J.), whose court has offered mediation for over 10 years. "Use of
mediation has not been particularly high, but it has proved to be very
helpful in some cases."
Her court's website encourages parties to use its mediation program "as a
cost-effective means to settle disputes that may arise."
This site, at www.njb.uscourts.gov/mediation, also notes that,
"Mediation is intended to afford litigants a less expensive and more
expeditious alternative to traditional litigation. The mediator's role
is to assist the parties in reaching a negotiated settlement by
conducting meetings, defining issues, defusing emotion, and suggesting
possible ways to resolve the dispute."
The U.S. Bankruptcy Court for the Western District of Pennsylvania's
website suggests that "almost all disputes are good candidates . . . .
Mediation can be used in a wide variety of contested matters or
In the Central District of California, 3,759 matters have been assigned
to mediation since Russell helped design and make the process available
in 1995. About 64 percent of those matters were settled.
"We have about 200 mediators, lawyers and non-lawyers, who have agreed
to help resolve cases. The first day of their services is free, and
rarely does a mediation go beyond that first day," Russell said.
Compensation for mediators varies among the courts, as do other aspects
of their mediation programs, authorized by local rule, general order, or
"Some bankruptcy courts began formally offering mediation in the 1980s,
but the concept of negotiation, including facilitated negotiation, has
always been present in expedited dispute resolution and plan formulation
in bankruptcy courts," said Robert Niemic, a senior research associate
with the Federal Judicial Center and expert on mediation in bankruptcy.
One of the newer programs is offered by the U.S. Bankruptcy Court for
the District of Arizona, which began its Alternative Dispute Resolution
(ADR) program in 2004. That court has had nine cases assigned to
mediation in the past three years, and Bankruptcy Clerk of Court Terry
Miller reports that "the reaction has been very positive within our
"The court worked very closely and very early on with the local
bankruptcy bar to create a successful program," Miller said. "A local
ADR committee was created, and its membership consisted of judges, local
attorneys, and clerk's staff."
Likewise, Bankruptcy Clerk of Court Michael Dowling of the U.S.
Bankruptcy Court for the District of Hawaii reports that nine matters
have drawn mediation assignments in the past three years, with six of
"Our judges promote mediation at the initial scheduling conference.
Attorneys who are regular bankruptcy practitioners are aware of the
program and generally are supportive," Dowling said. "Some have
volunteered as mediators for an initial four hours at no charge for
Mediation most often is voluntary — all parties to a dispute must agree
to the mediation assignment and, in some courts, on the mediator. But
most bankruptcy courts with mediation also have a provision for its
mandatory imposition in certain disputes. In Russell's court, a local
rule allows mandatory use of mediation.
"Mediation is a settlement process, and sometimes a judge can understand
that, due to strategic reasons, the parties are unwilling to come
forward and have the dispute mediated. Mandatory mediation does not
occur too often, but it is available to the judge," Russell said.