🔒CT law firms embrace booming alternative dispute resolution market

As Connecticut’s court system strains under mounting caseloads, a parallel private justice system is flourishing, with law firms across the state jockeying for a share of the rapidly expanding alternative dispute resolution market. The numbers tell a compelling story: The American Arbitration Association — a nonprofit that administers mediation and arbitration cases nationwide — handled more than 13,425 business-to-business disputes in 2024, with parties claiming more than $21 billion at stake. Meantime, cases resolved through the association reached a conclusion in a median of 11.6 months — less than half the 31.6-month median for civil cases in U.S. District Court. Those kinds of delays through the traditional court system have real economic consequences. A study by consulting firm Micronomics estimated that litigation-related slowdowns cost the U.S. economy between $10.9 billion and $13.6 billion from 2011 to 2015 — more than $180 million per month. That efficiency gap has sparked what some observers call a sea change in how legal disputes, particularly business conflicts, get resolved in Connecticut and nationwide.

“The most significant trend that I’ve seen over the last half-dozen years is the increase in pre-litigation mediation,” said Robert L. Holzberg, a retired Connecticut Superior Court judge who chairs the alternative dispute resolution practice at Pullman & Comley. “It makes sense to resolve cases quickly. Let’s not have a public bloodletting, so to speak.” Holzberg, who served 23 years on the bench before retiring in 2012, has witnessed the transformation firsthand. Shortly after he retired, he launched Pullman & Comley’s alternative dispute resolution, or ADR practice group, which has since mediated or arbitrated more than 3,600 cases. Other firms have followed suit. In September, Brown, Paindiris & Scott (BPS) launched a mediation center headquartered in its Essex office, led by three retired Connecticut judges with decades of combined judicial experience.

ADR landscape

Alternative dispute resolution encompasses two different processes with distinct characteristics. Mediation involves a neutral third party — often a retired judge or experienced attorney — who helps disputing parties reach a voluntary settlement. The mediator shuttles between parties in separate rooms, testing arguments and probing for common ground, but cannot impose a resolution. Both parties must agree to any settlement. Arbitration functions more like a private trial. Parties present evidence and arguments to an arbitrator or panel of arbitrators who render a binding decision, subject to very limited appeal rights. Unlike mediation, arbitration produces a winner and loser, though the process remains faster and more confidential than traditional litigation.

New players

The BPS Mediation Center is led by retired Supreme Court Justices Peter T. Zarella and C. Ian McLachlan, along with retired Superior Court Judge A. Susan Peck.

Joining BPS is a homecoming for Zarella, who was a partner at the firm from 1978 until 1996, when he was appointed as a Superior Court judge. After opening a new office in Essex in March, BPS had extra space, said Nicholas Paindiris, the firm’s managing partner and co-founder. “We had all these excess rooms for lawyers, so we could easily accommodate a mediation for as many as four or five different parties,” Paindiris said. But the decision went deeper than available conference space. The 25-attorney firm recognized that Connecticut’s court backlog that accumulated during the COVID-19 pandemic created an opportunity. “The trial dockets are so slammed,” said Kathryn Bissonnette, a BPS partner who focuses on family law. “Within the last two years, they just started clearing up the dockets.” That backlog extends even to mediators, said Stephen Sobin, another BPS partner who handles complex medical malpractice and personal injury cases. “There are a lot of mediators that are booked three, six, even more months out, especially when you’re trying to get someone who’s able to handle a complex medical malpractice action or a personal injury action,” Sobin said.

ADR for businesses

There are several factors driving businesses toward alternative dispute resolution, experts say, including efficiency, privacy, specialized expertise and cost.

Ryan McKeen, who has two decades of experience handling personal injury cases and currently runs McKeen Law, said the staggering backlog of cases in Hartford Superior Court illustrates why many parties are seeking faster options. “There are 55,000 pending cases in Hartford Superior Court,” McKeen said. “You have like 12 judges. The sheer volume of cases makes it hard to get an efficient judicial process.” Beyond speed, ADR also appeals for its discretion, particularly in an era when social media and online scrutiny can quickly damage reputations. “ADR offers privacy in addition to efficiency,” McKeen said. “For companies, they may not want their names dragged through the mud. They may not want public filings and media inquiries and things like that. So, they opt for handling the dispute privately.” That confidentiality can be especially valuable for high-profile individuals or companies with trade secrets and proprietary information at stake. Bissonnette, the BPS partner, noted that high-asset divorces increasingly move to private mediation to avoid public disclosure of financial details. ADR also allows parties to choose decision-makers with relevant expertise. Instead of a randomly assigned judge who may lack familiarity with an industry’s nuances, parties can select arbitrators who understand healthcare disputes, construction contracts, intellectual property or other specialized areas. “I’m a lawyer. If I had to come up to speed on a business dispute case, if I were a judge, I’d have to learn a lot of things,” McKeen said. “If it were a (personal injury) case, I can understand the issues much, much more quickly, and also the pain points that the parties may have, and also the barriers to resolution.” Cost is another consideration. Holzberg estimated that a complex business dispute litigated through trial could cost “hundreds of thousands, if not millions of dollars,” whereas mediation might involve meetings over one to four days at a cost of $50,000 to $80,000. However, ADR isn’t without drawbacks. Critics note that arbitration decisions are typically final, with few avenues for appeal even if errors occur. Some also argue that mandatory arbitration clauses in business and employment contracts may disadvantage smaller parties who have less bargaining power. And, because the process is confidential, it can limit public access and the development of legal precedent. “The backbone of our judicial system is public access, and certainly the public has a right to know what’s going on,” said Holzberg of Pullman & Comley. “That said, there are cases where the parties agree to confidentiality because of the sensitive details involved.” Still, not every dispute belongs outside the courtroom. Some cases hinge on factual disputes that require a jury, the need to set precedent, or a party’s desire for public vindication. “You’re always going to have people who are not going to be mediation-minded or settlement-minded,” Bissonnette said. “Some people need their day in court.”

Intersection with public courts

Cases can arrive at mediation or arbitration through several paths. Many business contracts now include mandatory arbitration clauses that parties sign before any dispute arises. Alternatively, cases already in litigation can be sent to mediation by agreement of the parties or, in limited circumstances, by court order. Connecticut mandates arbitration for personal injury cases valued under $50,000, though parties can reject the arbitrator’s decision and proceed to trial, according to Sobin, the BPS partner. More commonly, parties voluntarily agree to mediation after substantial discovery reveals the likely trial outcome or mounting legal fees exceed the amount in dispute. “Sometimes a lawsuit just has to be filed to get the other side’s attention, or to initiate the process, or for technical reasons — maybe a statute of limitations problem,” Holzberg said. “But even if a lawsuit has been filed, the question is: Do the parties get involved in protracted litigation, or do they say, ‘Let’s take a timeout and try to resolve this expeditiously and economically?’”

Lucrative practice area

For law firms, ADR represents an attractive business opportunity beyond its benefits to clients. Retired judges can command $5,000 per party for a day-long mediation — $10,000 total for a typical two-party dispute. Complex arbitrations can generate $100,000 or more in fees, McKeen said. Importantly, ADR work creates no conflicts of interest that would prevent firms from representing other clients. “These are incredibly cash-positive practice areas that also don’t create conflict for these firms,” McKeen said. “If you’re representing Hartford Hospital, you can’t sue Hartford Hospital. But when you’re doing mediation, you don’t have those kinds of concerns.” Lawyers seem to view the demand increase for ADR as largely positive, driven by business strategy and benefits to clients. “Businessmen are in the business of solving problems, not creating them,” Holzberg said. “So, there’s a built-in recognition that it makes sense to try to solve the problems before they explode.”