Local Rule LOCAL RULE 9019-2: ALTERNATIVE DISPUTE RESOLUTION (ADR)

LOCAL RULE 9019-2 ALTERNATIVE DISPUTE RESOLUTION (ADR)

(a) Order for Mediated Settlement Conference.

(1) Order By Court. The court may require parties and their representatives to attend a pre-trial mediated settlement conference in any adversary proceeding or contested matter and in such other instances where the court determines that alternative dispute resolution procedures may be helpful to the parties and the court.

(2) Motion to Dispense with Mediated Settlement Conference; Response. Within 14 days after entry of an order requiring attendance at a mediated settlement conference, any party may file a motion to dispense with the conference. Within 14 days after service of the motion, any party may file a response to the motion. Thereafter, the court may rule on the motion without a hearing.

(3) Motion to Authorize Use of Other Settlement Procedures. Within 14 days after entry of an order requiring attendance at a mediated settlement conference, any party may move the court to authorize the use of some other alternative dispute resolution procedure in lieu of a mediated settlement conference conducted under these rules. The motion must be consensual.

(b) Selection of Mediator.

(1) Selection of Mediator by Agreement of Parties. The parties may select a mediator by filing a Designation of Mediator notice form within 21 days after entry of an order requiring attendance at a mediated settlement conference, or within such other time as the court may direct. The notice must state:

• the name, address, and telephone number of the mediator selected;

• the rate of compensation of the mediator; and • that the mediator and the parties have agreed upon the selection and rate of compensation.

(2) Appointment of Mediator by Court. If the parties cannot agree on the selection of a mediator within the time provided in subsection (b)(1), the court may appoint a mediator.

(3) Mediator Information Directory. To assist the parties in the selection of a mediator, the clerk will collect and maintain a central directory of all mediators who wish to mediate cases in this district on the court's website, www.ncmb.uscourts.gov. The directory will indicate whether each person listed is certified as a mediator, and, if so, the certifying body.

(c) The Mediated Settlement Conference.

(1) Where Conference Is to Be Held. Unless all parties and the mediator agree otherwise, a mediated settlement conference must be held in the United States Bankruptcy Courthouse in Greensboro, the United States Bankruptcy Courthouse in Winston-Salem, or another public or community building in this district. The mediator is responsible for reserving a location, making all other arrangements for the conference, and giving timely notice of the conference to all attorneys, unrepresented parties, and other persons and entities required to attend.

(2) When Conference Is to Be Held. The mediator must make a good faith effort to schedule the conference at a time that is convenient to all participants, attorneys, and the mediator. In the absence of agreement, the mediator will select the date for the conference.

(3) Mediated Settlement Conference Will Not Delay Other Matters. Unless the court orders otherwise, a mediated settlement conference will not be cause for the delay of other matters in a case or proceeding, including the completion of discovery, the filing or hearing of motions, or a trial.

(d) Duties of Parties, Representatives, and Attorneys.

(1) Attendance. Unless excused by the court or the mediator with the approval of all parties, the following persons must physically attend an entire mediated settlement conference until an agreement is reduced to writing and signed as provided by subsection (d)(3) or an impasse has been declared:

(A) parties:

(i) all individual parties;

(ii) an officer, employee, or agent of any party that is not a natural person or governmental agency who is not such party's outside counsel and has been authorized to decide on behalf of such party whether and on what terms to settle the subject matter of the mediation; and

(iii) an employee or agent of any party that is a governmental agency who is not such party's outside counsel and has the authority to decide on behalf of such party whether and on what terms to settle the subject matter of the mediation; provided that, if under applicable law, the proposed settlement terms can be approved only by a board, the representative must have authority to negotiate on behalf of the governmental agency and make a recommendation to that board;

(B) insurance company representatives: a representative of each liability insurance carrier, uninsured motorist insurance carrier, and underinsured motorist insurance carrier that may be obligated to pay all or part of any claim that is the subject matter of the mediation. Each representative must be an officer, employee, or agent, other than the carrier's outside counsel, who has the authority to make a decision on behalf of the carrier or has been authorized to negotiate on behalf of the carrier and can promptly communicate during the conference with persons who have decision making authority;

(C) attorneys: at least one attorney of record for each party or other participant whose attorney has appeared in the action.

(2) Notifying Interest Holders. Any party or attorney who has received notice of a lien or other interest asserted in property that may be affected by the mediated settlement conference must notify the claimant of the date, time, and location of the mediated settlement conference and must request that the claimant attend the conference or make a representative available with whom the parties can communicate during the conference.

(3) Finalizing Agreement. Upon reaching an agreement during a conference but before the conference concludes, the mediator must write a draft of the settlement terms. The parties and others with settlement authority and their respective attorneys (if required to be present at the conference) must sign the draft. Upon reaching agreement, either before or during the conference, the parties and others with settlement authority must provide a copy of a formal, executed, written agreement to the mediator within 7 days of the settlement. The mediator must attach a copy of the formal agreement to the Report of Mediator submitted pursuant to subsection (f)(2)(C). Failure of the parties to provide a copy of the formal agreement to the mediator on a timely basis may result in sanctions.

(e) Sanctions and Failure to Attend.

The court may impose an appropriate monetary sanction, whether sua sponte or on written request from another party, if any person required to attend a mediated settlement conference fails to attend without good cause. Sanctions may include but are not limited to the payment of fines, attorney's fees, mediator fees, and expenses and losses of earnings incurred by persons attending the conference.

(f) Authority and Duties of Mediator.

(1) Authority of Mediator.

(A) Control of Conference. The mediator has the authority to control the conference and the procedures to be followed.

(B) Private Consultation. The mediator may meet and consult privately with any participant or attorney during the conference.

(2) Duties of Mediator.

(A) Generally. In addition to scheduling and giving notice of the conference, the mediator must define and describe the following to the participants at the beginning of the conference:

(i) the process of mediation;

(ii) the difference between mediation and other forms of dispute resolution;

(iii) the costs of the mediated settlement conference;

(iv) that the mediated settlement conference is not a trial, the mediator is not a judge, and the parties retain their right to trial (as applicable) if they do not reach a settlement;

(v) the circumstances under which the mediator may meet and communicate privately with any of the parties or with any other person;

(vi) whether and under what conditions communications with the mediator will be held in confidence during the conference;

(vii) that evidence of conduct and settlements is not admissible under applicable rules of evidence;

(viii) the duties and responsibilities of the mediator and the participants; and

(ix) the fact that any agreement reached must be reached by mutual consent.

(B) Disclosure. The mediator has a duty to be impartial and to advise all participants of any circumstances bearing on possible bias, prejudice, or partiality.

(C) Reporting Results of Conference. The mediator must submit a Report of Mediator within 14 days after the conclusion of the conference (if no agreement reached), or upon the receipt of a copy of a formal settlement agreement. The mediator's report must state whether any party, attorney, or insurance representative was absent from the conference without permission. If an agreement was reached, the report must also (i) state how the matter will be concluded or has been resolved (e.g., withdrawal, consent judgment, voluntary dismissal), (ii) identify the persons designated to file any necessary papers to conclude the matter, and (iii) attach a copy of the formal settlement agreement as required by subsection (d)(3).

(3) Failure to Comply with Rule. The court may withhold future appointments and prohibit the selection of any mediator who does not fully comply with the requirements of this rule.

(g) Compensation of Mediator.

(1) By Agreement. When the mediator has been selected by the parties, the parties and the mediator must agree on the mediator's compensation.

(2) By Court Order. When the mediator has been appointed by the court, the mediator will be compensated by the parties at an hourly rate set by the court.

(3) Payment of Compensation by Parties. Unless the parties agree or the court orders otherwise, the parties must pay the costs of the mediated settlement conference in equal shares. For purposes of this subsection, multiple parties will be considered one party when they are represented by the same counsel. Parties obligated to pay a particular share of the costs must pay that share equally unless the court orders otherwise.

(4) Sanctions for Failure to Pay Mediator's Compensation. Unless a party has been excused by these rules or an order of the court, the court may impose sanctions for the party's failure to pay its share of the mediator's compensation at the conclusion of the conference.