[Federal Register Volume 61, Number 55 (Wednesday, March 20, 1996)]
[Notices]
[Pages 11433-11434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6704]
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NATIONAL CREDIT UNION ADMINISTRATION
Alternative Dispute Resolution
AGENCY: National Credit Union Administration (NCUA).
ACTION: Policy statement.
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SUMMARY: Consistent with the Administrative Dispute Resolution Act of
1990, the Community Development and Regulatory Improvement Act of 1994,
the recommendations of the National Performance Review, and Executive
Order 12988, NCUA has adopted a Statement of Policy on the use of
alternative dispute resolution (ADR) techniques to resolve appropriate
disputes in a fair, timely, and cost efficient manner.
EFFECTIVE DATE: March 13, 1996.
FOR FURTHER INFORMATION CONTACT: Lisa Henderson, Staff Attorney, Office
of General Counsel, National Credit Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314-3428, telephone (703) 518-6561.
SUPPLEMENTARY INFORMATION:
Background -
The Administrative Dispute Resolution Act of 1990 (ADRA) encouraged
federal agencies to employ consensual methods of dispute resolution as
alternatives to litigation. Congress enacted the ADRA to reduce the
time, cost, inefficiencies, and contentiousness that too often are
associated with litigation and other adversarial dispute resolution
mechanisms. Although the ADRA sunset in October 1995, federal agencies
continue to have authority to use ADR techniques to resolve disputes.
Support and encouragement for the use of ADR in federal agencies
have come from other sources. In September 1993, Vice President Gore
recommended that federal agencies ``increase the use of alternative
means of dispute resolution.'' Report of the National Performance
Review, Recommendation REG06 (Sept. 7, 1993).
A year later, Congress enacted the Riegle Community Development and
Regulatory Improvement Act of 1994. Section 309(e) of the statute
requires that NCUA implement a pilot program for using ADR methods to
resolve: a) claims against insured credit unions for which NCUA has
been appointed conservator or liquidating agent; b) actions taken by
NCUA in its capacity as conservator or liquidating agent; and c) any
other issue for which the NCUA Board determines that ADR would be
appropriate. The statute mandates that the program: a) be fair to all
interested parties; b) resolve disputes expeditiously; and c) be less
costly than traditional means of dispute resolution, including
litigation.-
On February 5, 1996, President Clinton signed Executive Order
12988, addressing civil justice reform. Section 1 of the Executive
Order directs those federal agencies and litigation counsel that
conduct civil litigation on behalf of the United States Government in
federal court to follow certain guidelines designed to promote the just
and efficient resolution of civil claims. The guidelines encourage
litigation counsel to resolve claims through informal discussions,
negotiations, and settlements rather than through formal court
proceedings. They state that it is appropriate for litigation counsel
to use ADR techniques to resolve claims after determining that the use
of a particular technique is warranted for a particular claim and will
materially contribute to the prompt, fair, and efficient resolution of
the claim. Finally, the guidelines state that litigation counsel should
be trained in ADR techniques to facilitate broader and effective use of
ADR. -
In light of the above, the NCUA Board has adopted the following
policy statement.
Statement of Policy on Alternative Dispute Resolution -
Alternative dispute resolution is the resolution of disputes
through informal, voluntary consensual techniques. NCUA is committed to
the use of ADR as a tool to resolve disputes at the earliest stage
possible in an expeditious, cost effective, and mutually acceptable
manner. NCUA adopts this policy to express its full support for ADR and
to set forth a framework for the continuing and expanded use of ADR.
NCUA fully supports the cost-effective use of ADR, including
negotiation, mediation, early neutral evaluation, minitrials, use of
settlement judges, and other hybrid forms of ADR in appropriate
instances. -
NCUA will consider ADR in any dispute in which a negotiated
solution is a potentially acceptable outcome. The individual at NCUA
who has decision-making authority in a particular matter will determine
whether to use ADR in the matter and which method to use. Not every
dispute is suitable for settlement through ADR. NCUA views ADR
processes as supplementary to, not a displacement of, traditional
adjudicative methods of resolving disputes. NCUA will engage in ADR
only after determining that ADR is appropriate in a particular case. -
The factors NCUA will use to determine whether ADR is appropriate
in a particular case are as follows: (1) A creative solution, not
necessarily available in formal adjudication, may provide the most
satisfactory outcome; (2) The case does not involve or require the
setting of precedent; (3) All of the substantially affected parties are
involved in the proceeding; (4) Variation in outcome is not a major
concern; (5) The parties are likely to agree to use ADR; (6) Litigation
likely would be a lengthy and/or expensive process; (7) Cases of this
type frequently settle at some point in the process; and (8) The
potential for impasse is high. -
The particular ADR method selected will depend on the specifics of
the case.
[[Page 11434]]
Mediation, which involves the use of a trained neutral third party to
help disputants negotiate a mutually agreeable settlement, may be
suitable when one or more of the following characteristics are present:
(1) The parties are looking for a substantial level of control over the
resolution of the dispute; (2) The parties have, or expect to have, an
ongoing relationship; (3) Communication between the parties has broken
down to a significant degree; (4) The legal standards for decision are
fairly clear, or neither party has a need to clarify them; or (5) There
are multiple issues to be resolved. -
Early neutral evaluation involves using a neutral factfinder, often
one with substantive expertise, to evaluate the relative merits of the
parties' cases. This process, which can be used early on in a dispute,
usually involves an informal presentation to the neutral of the
highlights of the parties' cases or positions. The neutral provides a
nonbinding evaluation, sometimes in writing, which can give parties a
more objective perspective on the strengths and weaknesses of their
cases, thereby making further negotiations more likely to be
productive. Early neutral evaluation may be an appropriate process when
some or all of the following are characteristics of the dispute: (1)
The dispute involves technical or factual issues that lend themselves
to expert evaluation; (2) The parties disagree significantly about the
value of their case; (3) Top decision-makers of one or more parties
could be better informed about the real strengths and weaknesses of the
case; or (4) The parties are seeking an alternative to extensive
discovery. -
A minitrial is a structured settlement process in which the
disputants agree on a procedure for presenting their cases in highly
abbreviated versions (usually no more than a few hours or a few days)
to the senior officials for each side with the authority to settle the
dispute. This process allows those in senior positions to see first
hand how their case and that of other parties play out, and can serve
as a basis for more fruitful negotiations. Often, a neutral presides
over the hearing, and may subsequently mediate the dispute or help
parties evaluate their cases. The procedures for minitrials are
developed by agreement among the parties. Minitrials can be useful in
cases that have some or all of the following characteristics: (1)
Getting important facts and positions before high-level decision-makers
for the parties is important; (2) The parties are looking for a
substantial level of control over the resolution of the dispute; (3)
Some or all of the issues are of a technical nature; or (4) A trial on
the merits would be very long and/or complex.-
A settlement judge serves essentially as a mediator or neutral
evaluator in cases pending before a tribunal. The settlement judge is
usually a second judge from the same body as the judge who will
ultimately make the decision if the case is not resolved by the
parties. In some cases, a settlement judge may give an informal
advisory opinion. Settlement judges can be useful in cases that have
some or all of the following characteristics: (1) The case is in formal
adjudication; or (2) The parties have not been able to negotiate a
settlement on their own. -
Common to most of the processes discussed above is the use of a
neutral third party. NCUA anticipates that most of the time a neutral
is used to resolve a dispute with an outside party, the neutral will
not be an employee of NCUA. Neutrals are available from other federal
agencies, court systems, and private companies. In all cases, the
particular neutral will be approved by all parties to the dispute. -
The Community Development and Regulatory Improvement Act of 1994
required that NCUA's use of ADR processes: 1) be fair to all interested
parties; 2) resolve disputes expeditiously; and 3) be less costly than
traditional means of dispute resolution, including litigation. In
addition to those objectives, NCUA's goals in using ADR techniques will
be to: (1) Free up personnel and other resources; (2) Create
opportunities for wider ranges of creative solutions and possible
options; (3) Forge better relationships among disputing parties, inside
and outside the agency; (4) Improve communication between and within
parties; (5) Improve the satisfaction level of disputants with both the
process and substantive results of the dispute resolution process; and
(6) Improve the reliability of information on which decisions are
based. -
In furtherance of its commitment to ADR and in response to
Executive Order 12988, NCUA will provide its litigation attorneys with
training in ADR techniques. NCUA also will provide introductory ADR
training to executives, managers, and supervisors so that they
understand what ADR is, its potential benefits, and where to go for
assistance. -
This policy statement is intended only to improve the internal
management of NCUA in resolving disputes. It shall not be construed as
creating any right or benefit, substantive or procedural, enforceable
at law or in equity, by a party against NCUA or its employees. This
policy statement shall not be construed to create any right to judicial
review involving the compliance or noncompliance of NCUA or its
employees with this statement. Nothing in this policy statement shall
be construed to obligate NCUA to offer funds to settle any case, to
accept a particular settlement or resolution of a dispute, to alter its
standards for accepting settlements, to submit to binding arbitration,
or to alter any existing delegation of settlement or litigating
authority.-NCUA will engage in ADR only if it consents to do so. -
NCUA hereby announces that during the period from March 13, 1996,
to August 13, 1997, it will conduct an ADR pilot project based on the
principles and objectives set forth above. Every dispute in which the
agency is engaged during that period will be evaluated to determine its
appropriateness for ADR. At the end of the period, NCUA will evaluate
the project to determine the effectiveness of its ADR program and
whether changes need to be made to improve the program. -
NCUA welcomes and encourages input on the use of ADR and comment on
current and potential uses of ADR from both within and outside the
agency.
-By the National Credit Union Administration Board on March 13,
1996.
Becky Baker,
Secretary of the Board.
[FR Doc. 96-6704 Filed 3-19-96; 8:45 am]
BILLING CODE 7535-01-P
