Expanding the Reach of Alternative Dispute Resolution in Bankruptcy: The Legal and Practical Bases for the Use of Mediation and the Other Forms of ADR

Abstract

Due to the sharp increase of bankruptcy filings, the increased pressure for judges to streamline dockets, and parties’ acute sensitivity to the costs and inefficiencies of litigation, an increasing number of bankruptcy courts now employ or encourage alternative dispute resolution methods. This article examines the reported decisions and select unreported orders in bankruptcy cases where ADR has been employed, the general characteristics of ADR programs currently utilized by bankruptcy courts, and the statutory authority for use of mandatory ADR in bankruptcy cases. Based on the foregoing, this article argues that the Bankruptcy Rules should be amended to regularize the procedures for using ADR and to further its salutary use.