Reporter’s Notes—2022 Amendment: Rule 16.3(b)(3) is amended, pursuant to the Supreme Court’s directive under Administrative Order 49, ¶ 13, that the Civil Rules Advisory Committee “consider whether a permanent change to the rules relating to participation in remote mediation is advisable.” Prior to these amendments, Rule 16.3(b)(3) required parties and counsel to attend a mediation unless they stipulate otherwise or the court, for good cause, excuses participation or authorizes telephone participation. AO 49, ¶ 13, however, suspended that rule. Paragraph 13 provides that “the judicial emergency” addressed by AO 49 “constitutes ‘good cause’ authorizing remote participation in mediation, by video or telephone, without a stipulation or further court order.” The present amendments retain the basic structure of Rule 16.3(b) that in-person attendance is the default position, with an option for remote mediation if the parties so stipulate or the court, in its discretion, so orders or excuses a party. In the amendment the court’s discretion is substituted for “good cause” as the standard by which the court may determine whether to order remote mediation or excuse a party from it. For example, in a financial disparity between parties, where the disadvantaged party is out of state, absence may not be sufficient to meet a good cause standard, but it may be a fact that could convince a judge to use his/her discretion regarding remote mediation if it made sense to the court to do so, in striking a balance between the benefits of remote and in-person mediation in the circumstances of a particular case. For examples of the use of “in its discretion” see V.R.C.P. 3(a), 4(j), 23(f) (as it relates to the Supreme Court), 39(b), 55(c) and (d). The “in its discretion” language is also well litigated. This process would make it a bit easier to have remote mediation where the parties do not agree. To clarify best practice, the present amendments specify that the default requirement of the rule is for “in person” attendance by parties and counsel, and that the alternative, whether by stipulation or court order, is remote attendance by either video or telephone. It should also be noted that the stipulation provided by Rule 16.3 occurs in connection with the pleading process. The parties may informally agree to remote mediation at any time.
Reporter’s Notes—2016 Amendment: Rule 16.3, originally promulgated in 1999, is abrogated and replaced by the present rule, which is intended to conform to present practice. The new rule combines provisions of the former rule with a simpler organization similar in form to recently promulgated V.R.F.P. 18 and recently recommended V.R.P.P. 16.1. Thus, the title of the new rule and references throughout are “Mediation,” rather than “Alternative Dispute Resolution,” reflecting that preliminary evaluation (former Rule 16.3(d)) and forms of ADR other than mediation are no longer required or governed by the rule. New Rule 16.3(a) essentially carries forward in simplified form the substance of former Rule 16.3(a). New Rule 16.3(b) incorporates in simplified form many of the provisions of former Rule 16.3(c), omitting detailed provisions for selection of the neutral, scheduling, and the contents and timing of the neutral’s report. Paragraph (b)(3) provides that a party may be excused from personal attendance at a mediation by stipulation or court order and that nonparties who have a material interest or others such as experts or spouses whose presence is essential may be invited to attend by agreement. New Rule 16.3(c) is derived from former Rule 16.3(e), eliminating provisions for income guidelines for state payment of part of the neutral’s fees and administrative orders listing preliminary evaluators and other neutrals available for referral. New Rule 16.3(d)-(f) carry forward with little modification the provisions of former Rule 16.3(f)-(h).
Reporter’s Notes—2012 Amendment: Rule 16.3(g) is amended to conform the rule to the Uniform Mediation Act (UMA), 12 V.S.A., ch. 194, §§ 5711- 5723, adopted by Act 126 of 2005 (Adj. Sess.), § 1. For the drafters’ comments, see 7A Uniform Laws Annotated (Part III) 91 (Master Edition, 2006), http://www.law.upenn.edu/bll/archives/ulc/mediat/2003finaldraft.htm. The amendment deletes the references to confidentiality and to inadmissibility under V.R.E. 408 in favor of a single reference to the Act, which covers both. A currently proposed amendment to V.R.E. 408 would incorporate references to the UMA and the present amendment of V.R.C.P. 16.3(g). Section 5715(a) of the UMA creates a privilege against discovery or admission in evidence of a “mediation communication”; the privilege is embraced in the saving of statutory privileges in V.R.E. 501(a). The privilege may be exercised by a party to refuse to make or to prevent any disclosure, by a mediator to refuse to make any disclosure and to prevent anyone else from disclosing a communication by the mediator, and by a nonparty participant to refuse to make, or to prevent disclosure of, a communication by the nonparty. 12 V.S.A. § 5717(b). Section 5715(c) provides that otherwise discoverable or admissible evidence or information is not rendered inadmissible solely because disclosed or used in a mediation. Other exceptions to the privilege are set out in 12 V.S.A. § 5717, significantly narrowing the exceptions to inadmissibility in V.R.E. 408. The separate reference to confidentiality in Rule 16.3(g) is deleted as superfluous, because § 5720 of the Act provides that mediation communications are confidential (that is, are not to be disclosed outside of a proceeding) “to the extent agreed to by the parties or provided by law.” The initial clause referring to exceptions “hereinafter provided” is deleted, because those exceptions are also deleted. Under § 5717(a)(1), the privilege does not apply to a communication included in a written agreement signed by all the parties; thus, the second sentence of the rule, stating that it is inapplicable to certain agreements “approved by all the parties,” is deleted as both under and over inclusive. The final sentence of the rule, which was intended to facilitate study of what was initially adopted as an experimental rule, is deleted as unnecessary. V.R.C.P. 81(d) recognizes the inherent power of the court to make temporary provision for experimental procedures by administrative order. “Mediation communication” is broadly defined in § 5713(3) as an oral, written or electronically recorded, verbal or nonverbal statement made or occurring during a mediation “or for purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.” The Act defines “mediation” in § 5713(2) as “a process in which a mediator facilitates communication and negotiation between parties to assist them in reaching a voluntary agreement regarding their dispute.” The term should be understood as including early neutral evaluation and other nonadjudicative forms of dispute resolution provided for in V.R.C.P. 16.3(c)(2) where the ability of parties to speak freely is paramount. Cf. Comment to Uniform Mediation Act, § 2(1). Thus, the exclusion of “binding arbitration” is retained in the rule. Under § 5714, the Act applies, with certain exceptions, to a mediation required by statute, rule, or under a reference by a court or other tribunal. The privilege may be asserted in a “proceeding” defined by § 5713(8) as “a judicial, administrative, arbitral, or other adjudicative process, including related prehearing and posthearing motions, conferences, and discovery; or a legislative hearing or similar process.” Rule 16.3(c)(6) (mediator’s report) and Rule 16.3(e)(5) (impartiality and conflicts of interest) are not amended, although they concern matters covered in 12 V.S.A. § 5718. Both sections of the rule are essentially consistent with the statute. Any differences are dictated by the fact that the rule applies to court-connected mediation in litigation that has already begun and operates within the limits of court procedure and structure.
Reporter’s Notes—2005 Amendment: Rule 16.3(a)(3)(A) is amended by eliminating an obsolete reference to Rule 73, abrogated in September 2002 with the promulgation of the Vermont Rules of Small Claims Procedure, and by substituting a reference to the Vermont Rules for Environmental Court Proceedings for a reference to Rule 76, which is being abrogated by simultaneous amendment.
Reporter’s Notes—2003 Amendment: Rule 16.3 is adopted permanently to apply in all counties of the state in order to provide a uniform procedure for the use of court-connected alternative dispute resolution (ADR) in the superior court. The rule was originally promulgated effective December 31, 1999, as an experimental rule applicable in Bennington, Rutland, and Franklin counties. The experiment in those counties as later extended by the Court to December 31, 2002, was monitored by the Advisory Committee on Rules of Civil Procedure through an empirical study conducted by the Woodbury College Dispute Resolution Center. The results of the study and the widespread positive reaction to the rule expressed by members of the bench and bar now lead to its permanent, statewide adoption with only minor alteration of its provisions. Administrative Order No. 39, adopted to implement certain provisions of the experimental rule, is amended simultaneously to provide for its statewide application. The use of ADR in civil actions had become familiar to the Vermont bench and bar prior to the promulgation of Experimental Rule 16.3 thanks to the adoption of Local Rule 12 of the United States District Court for the District of Vermont and the development of local ADR procedures for the superior court in more than half the counties. The rule in both its experimental and permanent forms draws on those provisions as well as on the experience of other jurisdictions in order to standardize the practice for all counties. Where the rule provides that an action is to be taken by the “court,” the action is to be taken by the presiding judge or a judge acting for that judge, pursuant to Rule 83(1) and 4 V.S.A. § 112(b). Rule 16.3(a) describes the actions to which the rule is applicable and makes clear that in those actions ADR is required, subject to certain specific exceptions. Under Rule 16.3(a)(1), the rule applies to every civil action except small claims actions under the Vermont Rules of Small Claims Procedure and those actions in which the parties can certify and demonstrate, by filing a neutral’s report, that they have previously engaged in ADR. The effect of subparagraph (A) is that small claims actions will continue to be subject to expedited mediation procedures established in the counties until the Supreme Court adopts a general rule governing small claims mediation in all counties. The exclusion in subparagraph (B) for actions in which ADR has already been attempted is intended to create an incentive for prelitigation ADR efforts and to avoid duplicative proceedings for parties who have undertaken such efforts in good faith. A certificate not filed in good faith would be subject to sanction under Rule 16.3(h) or Rule 11. Rule 16.3(a)(2) provides that the ADR procedures of the rule must be followed in three types of cases. Under Rule 16.3(a)(2)(A), any action in which the parties jointly request ADR in their pleadings or at a subsequent point in the proceedings will be subject to the provisions of the rule. In actions involving tort or real property claims (other than foreclosures or evictions), Rule 16.3(a)(2)(B) makes the application of the rule automatic. These are the types of actions that most frequently go to trial. By virtue of Rule 16.3(a)(2)(C), in all other civil actions except those specifically listed in Rule 16.3(a)(3), the court is to screen the pleadings to determine whether ADR should be required. This function may be exercised by the presiding judge or delegated to the clerk. The primary question to be considered is whether the action is one likely to settle or to be resolved without contested proceedings, or whether there are genuine issues that could be clarified or resolved by an appropriate form of ADR. If a party objects to engaging in ADR pursuant to subparagraph (B) or (C), the party may move to be excused for cause under Rule 16.3(f). Rule 16.3(a)(3) specifies three types of actions in which the court will require ADR only on a finding that to do so would serve the interests of both the parties and the court in reaching an appropriate resolution of the dispute. Appeals and post-conviction proceedings, though civil in form, have different purposes than the ordinary civil action. Foreclosure and eviction actions are summary matters that are ordinarily routine and do not warrant ADR. On occasion, however, a proceeding listed in paragraph (3) may really be about conflicts between the parties’ underlying interests that are not reflected in the legal form of the action but could be resolved fairly and efficiently through mediation or another ADR process. In such a rare case, the court has discretion to order an appropriate form of ADR, which, under Rule 16.3(f), may be adapted to suit the circumstances of the action. Rule 16.3(b) makes clear that any action in which ADR under the rule is not required goes forward under the other provisions of the civil rules, in which the first step ordinarily is placement on the hearing calendar pursuant to V.R.C.P. 40(a)(1). This provision applies whether the action is excluded under Rule 16.3(a)(1) or not required to enter ADR under Rule 16.3(a)(2)(C) or (3). If the action is one in which participation in ADR has been excused for cause by the court under Rule 16.3(f), the action proceeds as provided in the court’s order. Rule 16.3(c) provides the basic procedure. All parties to a civil action in which ADR is required under Rule 16.3(a) must either file a stipulation providing for ADR by a specific method and go forward under subdivision (c) or engage in preliminary evaluation under Rule 16.3(d). Rule 16.3(c)(1) provides different filing times for the stipulation, depending on the provision of subdivision (a) under which ADR is required. In tort or property actions, where ADR is automatic, subparagraph (c)(1)(A) requires the stipulation to be filed either at the time that local practice requires the filing of an initial general pretrial stipulation or, if there is no such requirement, within 30 days after the filing of the last required pleading. In actions where, pursuant to Rule 16.3(a)(2)(C), the need for ADR is to be determined by the judge or clerk on the pleadings, subparagraph (c)(1)(B) provides that the clerk must promptly notify the parties of the result of that determination. If the determination is that ADR is required, the parties must file a stipulation within 30 days after the clerk mails the notification. Since an agreement for ADR under Rule 16.3(a)(2)(B) or an order for ADR under paragraph (a)(3) may be filed at any time, Rule 16.3(c)(1)(C) provides that in such a case the 30-day period for filing the stipulation runs from the filing of the agreement or order. Under both subparagraph (B) and subparagraph (C), if a general pretrial stipulation is required by local practice, the time period set by the rule for the ADR stipulation controls. Both stipulations must be filed together within the 30 days. Under Rule 16.3(c)(2)(A), the stipulation may provide for mediation, early neutral evaluation, binding arbitration, or another agreed-upon ADR method that uses the services of a neutral, such as nonbinding arbitration or a minitrial. The parties may agree to use more than one method sequentially or for different phases of the action. The specified methods embrace three very different forms of ADR: In mediation, the neutral’s task is to help the parties recognize their interests and arrive at a resolution of their dispute based on those interests. Early neutral evaluation may include mediation, but its primary purpose is to provide the parties with an evaluation of their positions as a basis for a realistic settlement of the dispute. Binding arbitration is an informal adjudicative proceeding in which the arbitrator renders a decision after hearing the evidence and arguments of the parties. Whatever method is employed, it must be carried out in conformity with the other provisions of Rules 16.3(c) and (e)-(h). Pursuant to Rule 16.3(c)(2)(B), the stipulation must either designate a named individual who will serve as the neutral or must contain an agreement to select a neutral from the clerk’s referral list as provided in Rule 16.3(c)(3). The terms on which the neutral is to serve are specified in Rule 16.3(e). A neutral selected by the parties initially or from the clerk’s list need not be an attorney. Rule 16.3(c)(2)(C) provides that the stipulation must also contain any agreement concerning payment of the neutral that the parties might enter in order to vary the equal division set forth in Rule 16.3(e)(1) or for another purpose. Under Rule 16.3(c)(2)(D), the stipulation must set forth a schedule for the process or an agreement to accept the assistance of the neutral in setting the schedule. That schedule must be consistent with Rule 16.3(c)(4). Rule 16.3(c)(3) allows the parties to file their ADR stipulation without having agreed on a neutral. Upon receipt of such a stipulation, the clerk is to send the parties the referral list of neutrals maintained as provided in Rule 16.3(e)(4). The parties then have seven days to select a neutral from the list or to agree on another neutral. If they do not select a neutral within that period, the stipulation is no longer in effect, and they must engage in preliminary evaluation in accordance with subdivision (d). Rule 16.3(c)(4) allows the parties substantial control of the schedule for any ADR method agreed to under subdivision (c). The provision permits the parties to choose whether to have the ADR session early in the discovery process or at a later point. This flexibility allows the parties to balance the cost saving from limiting discovery against the benefit of more information as the basis for an effective ADR process. If the parties need more than eight months to be ready for ADR, either party may move the court for an extension of that time limit, but to prevent last minute delays the parties must indicate their readiness for ADR or file a motion for an extension at least 30 days before the scheduled ADR session. The schedule may provide for the submission of appropriate case statements summarizing the facts, issues, and positions of the parties and identifying the parties, counsel, and others who will attend the session. Rule 16.3(c)(5) requires participation by the parties and their lawyers in mediation or preliminary or neutral evaluation, or any other process where the parties’ underlying interests are to be addressed. (Participation by a party is not required in binding arbitration, because that is an adjudicative process in which positions rather than interests are at stake.) When a party is an entity or when a liability insurer sues or defends, an employee with settlement and stipulation authority must attend. The purpose of these requirements is to assure that the parties themselves understand the nature of the proceedings and the settlement or other resolution possibilities that may exist. The presiding judge may excuse a party or lawyer from all participation or may permit participation by speaker phone for good cause, which should be limited to illness or other inability to travel or, in the case of an individual, financial hardship. If the parties and the neutral agree, a person, such as statutory workers’ compensation lienholder, whose interests are materially affected by the proceeding may be invited to participate. Rule 16.3(c)(6) requires the neutral to report a summary of an ADR (other than binding arbitration) process and its results to the court in writing within 15 days after the session. Binding arbitration is excluded, because the procedure for submission to the court is covered by the arbitration agreement and statute. Further procedural steps in the action will depend upon the nature of the results achieved in ADR. If a settlement leading to final disposition is reached, judgment will be entered accordingly. If the action is partially settled, or not settled at all, Rule 16.3(c)(7) provides that it will go forward either as the parties may agree or, if there is no agreement, as the court may order. Thus, gains made in the ADR process, such as disposing of or narrowing issues or agreeing on a trial schedule, will not be wasted. Rule 16.3(d) is a default provision. If the parties cannot stipulate to ADR as provided in subdivision (c), they must engage in a preliminary evaluation session that offers opportunities for a mediated settlement, case evaluation, or case management. Under paragraph (1), the clerk is to schedule the session automatically if the parties do not file a stipulation for ADR within the time required under subdivision (c). While the parties may agree on any individual to serve as evaluator, ordinarily the evaluator will be drawn from the panel that the Supreme Court has established in Rule 1 of Administrative Order No. 39, adopted pursuant to Rule 16.3(e)(3). If the evaluator is drawn from the panel, the evaluator will be a lawyer. See Rule 16.3(e)(3); Rule 1(b)(1) of Administrative Order No. 39. The procedure for selection from the panel is based on that followed in the federal court under Local Rule 12(f). Rule 16.3(d)(2) provides the procedure for preliminary evaluation. The rule incorporates the provisions of paragraphs (c)(5) and (6) concerning participation and reporting. The evaluator may, through informal mediation, encourage the parties to settle at once or to agree to full-scale mediation or arbitration. If a settlement is reached, the action is disposed of on that basis. If the parties agree to further ADR, they file a stipulation and proceed as provided in Rule 16.3(c)(1)(C). If neither of these courses is followed, the evaluator should assist the parties to evaluate their positions and to reach an agreement that, pursuant to Rule 16.3(c)(7), will narrow the issues and define the procedure for trial. The provisions of Rule 16.3(e) apply to neutrals serving in accordance with either subdivision (c) or subdivision (d). Rule 16.3(e)(1)(A) makes clear that a neutral selected by agreement under Rule 16.3(c) is to be paid at a rate that the neutral and the parties negotiate based on the neutral’s usual charges. The rate for a preliminary evaluator is that provided in Administrative Order No. 39, adopted pursuant to Rule 16.3(e)(3). Under Rule 16.3(e)(1)(B), unless one or more of the parties is entitled to proceed in forma pauperis as provided in Rule 16.3(e)(2) and Administrative Order No. 39, fees and expenses will be divided equally or as the parties may otherwise agree or the court may otherwise order. The neutral is to be paid when the report is filed regardless of the outcome of the proceeding. If ADR does not result in settlement (or an arbitration award), the court has discretion to allow sums paid to the neutral as taxable costs to the party who eventually prevails in any contested proceeding. To assure that the cost of ADR is not unduly burdensome on individuals of limited means, Rule 16.3(e)(2)(A) provides that the Supreme Court will establish a sliding scale system of reduced fee payments for those meeting certain income guidelines. The Court has implemented this provision in Rule 3 of Administrative Order No. 39. A party entitled to proceed at reduced cost under that system pays only the amount specified. Parties not eligible under the guidelines pay the share of the neutral’s fee and expenses that they would in any event be required to pay by virtue of paragraph (1). Under Administrative Order No. 39, the Court Administrator will pay the amount by which the neutral’s fees and expenses exceed the payments made by the parties. Pursuant to Rule 16.3(e)(4) and Administrative Order No. 39, a neutral listed on a county referral list is expected to accept a certain number of referrals in proceedings under Rule 16.3(c) at a reduced fee. If the neutral has been compensated or reimbursed by the state, provisions of Rule 16.3(e)(2)(B), drawn from V.R.C.P. 3.1(c), allow the state to recoup its payments from a settlement or as costs if the indigent party prevails in litigation. Rule 16.3(e)(3) provides that the Supreme Court will establish one or more panels of preliminary evaluators who have agreed to provide services under Rule 16.3(d) at a fixed fee. The Court has implemented this provision in Rule 1 of Administrative Order No. 39. The fixed fee requirement for panel service is a quid pro quo for the training that the Court will provide for panel members and also reflects the fact that panel service may lead to compensated work as a neutral for panel members. The rule requires that all members of a panel must be attorneys, because the role of preliminary evaluator may require a litigator’s assessment of the parties and the value of the case. Under Rule 16.3(e)(4), the Supreme Court is to provide by administrative order for the establishment in each county of referral lists of neutrals available to conduct ADR proceedings undertaken in accordance with subdivision (c). The Court has implemented this provision in Rule 2 of Administrative Order No. 39. The rule formalizes the present local procedure in a number of counties. Panel members need not be attorneys. The only condition for inclusion on the list is an agreement to take cases involving indigents on terms established in the administrative order. This provision is necessary to assure that neutrals are available in such cases. Rule 16.3(e)(5) requires self-disqualification by a neutral who believes that he or she cannot act impartially. The neutral must also make an initial and a continuing disclosure of any matter that would affect impartiality or give an appearance of partiality or bias. A party may disqualify a previously agreed-upon neutral if a conflict later arises, but a preliminary evaluator from the panel may be disqualified only by the presiding judge for cause. In applying that standard, the judge should be guided by the standards of Canon 3E of the Code of Judicial Conduct. If a neutral in a proceeding under a stipulation pursuant to Rule 16.3(c) self-disqualifies or is disqualified by a party, the parties must promptly select another neutral or the case will be scheduled for preliminary evaluation under subdivision (d). When a preliminary evaluator is disqualified, the clerk will chose a successor and, if too much time has elapsed, may reschedule the evaluation session. Under Rule 16.3(f), the court may excuse a party or the parties from participation in all or part of the process for good cause, which might include a showing that the suit was frivolous, or that only a single dispositive issue of law is involved, or other showing of serious harm to the interests of a party or the public interest. In applying this provision, courts should be especially sensitive to power imbalance situations. Subdivision (f) also allows the court to modify the terms of the rule to suit a particular situation—for example, when the parties agree on ADR at a later stage in the action or the court orders ADR under Rule 16.3(a)(3). The court’s order under Rule 16.3(f) will specify the future course of the proceeding, whether it is to return to the trial calendar or continue on a modified form under the rule. Rule 16.3(g) is similar to Federal Local Rule 12(k). It provides that all communications in ADR proceedings other than binding arbitration are confidential and makes such communications inadmissible under Vermont Rule of Evidence 408. (Confidentiality in arbitration is to be determined in accordance with the terms of the arbitration agreement.) The purpose of the confidentiality requirement is to encourage ADR participants to speak candidly in order to facilitate the conduct of processes such as preliminary evaluation and mediation. The requirement of confidentiality is binding on all parties by virtue either of their express ADR agreement under Rule 16.3(c) or their implied agreement to engage in preliminary evaluation under Rule 16.3(d). Rule 16.3(h) provides sanctions for nonappearance at an ADR session under the rule for parties, lawyers, and others such as employees of corporate parties or insurance carriers required to appear pursuant to Rule 16.3(c)(5). Sanctions are also provided for refusal to comply with requirements such as those for filing, or with orders made under the rule. The rule makes clear that the offending individual must pay expenses and fees incurred as a result of the conduct unless unusual circumstances warrant a different decision. The court also has discretion to impose a variety of other appropriate sanctions. In view of the difficulty of articulating and enforcing appropriate standards, there are no sanctions for the failure of a person who attends an ADR session to participate appropriately in the session. Rule 16.3(h) is intended to supplement, rather than supersede, Rule 11.
Reporter’s Notes—2002 Amendment: Rule 16.3(a)(1) is amended to reflect the abrogation of the District Court Civil Rules and the resulting applicability of the Vermont Rules of Civil Procedure to District Court civil actions. See Reporter’s Notes to simultaneous amendment of Rule 1.
Reporter’s Notes: Rule 16.3 is an experimental rule adopted to facilitate the development of a uniform procedure for the use of court- connected alternative dispute resolution (ADR) in the superior court. The rule was originally promulgated on September 11, 1998, to become effective on January 1, 1999. Because of delays in developing the administrative order necessary for implementation, the effective date of the rule was extended until April 1, 1999, and then was indefinitely postponed pending adoption of the administrative order. See Court Administrator’s memorandum of December 10, 1998; Order of February 5, 1999. The rule as originally promulgated is now withdrawn. The present rule, reflecting a number of changes resulting from review by the Office of the Court Administrator, the Civil Rules Advisory Committee, and the Vermont Bar Association’s Alternative Dispute Resolution Committee, is promulgated in its place. Simultaneously, the Court is adopting Administrative Order No. 39 to implement certain provisions of the rule. The experiment will be conducted in Bennington, Franklin, and Rutland counties for a period of two years from December 31, 1999, through December 30, 2001. The Advisory Committee on Civil Rules is directed to monitor the experiment and to report to the Court by September 1, 2001, on the operation of the rule, with recommendations as to whether its operation should be continued or expanded. The use of ADR in civil actions has become familiar to the Vermont bench and bar thanks to the adoption of Local Rule 12 of the United States District Court for the District of Vermont and the development of local ADR procedures for the superior court in more than half the counties. The present rule draws on those provisions as well as on the experience of other jurisdictions in order to standardize the practice for all counties. Where the rule provides that an action is to be taken by the “court,” the action is to be taken by the presiding judge or a judge acting for that judge, pursuant to Rule 83(1) and 4 V.S.A. § 112(b). Rule 16.3(a) describes the actions to which the rule is applicable and makes clear that in those actions ADR is required, subject to certain specific exceptions. Under Rule 16.3(a)(1), the rule applies to every civil action except small claims actions and those actions in which the parties can certify and demonstrate, by filing a neutral’s report, that they have previously engaged in ADR. The effect of subparagraph (A) is that small claims actions will continue to be subject to expedited mediation procedures established in the counties until the Supreme Court adopts a general rule governing small claims mediation in all counties. The exclusion in subparagraph (B) for actions in which ADR has already been attempted is intended to create an incentive for prelitigation ADR efforts and to avoid duplicative proceedings for parties who have undertaken such efforts in good faith. A certificate not filed in good faith would be subject to sanction under Rule 16.3(h) or Rule 11. Rule 16.3(a)(2) provides that the ADR procedures of the rule must be followed in three types of cases. Under Rule 16.3(a)(2)(A), any action in which the parties jointly request ADR in their pleadings or at a subsequent point in the proceedings will be subject to the provisions of the rule. In actions involving tort or real property claims (other than foreclosures or evictions), Rule 16.3(a)(2)(B) makes the application of the rule automatic. These are the types of actions that most frequently go to trial. By virtue of Rule 16.3(a)(2)(C), in all other civil actions except those specifically listed in Rule 16.3(a)(3), the court is to screen the pleadings to determine whether ADR should be required. This function may be exercised by the presiding judge or delegated to the clerk. The primary question to be considered is whether the action is one likely to settle or to be resolved without contested proceedings, or whether there are genuine issues that could be clarified or resolved by an appropriate form of ADR. If a party objects to engaging in ADR pursuant to subparagraph (B) or (C), the party may move to be excused for cause under Rule 16.3(f). Rule 16.3(a)(3) specifies three types of actions in which the court will require ADR only on a finding that to do so would serve the interests of both the parties and the court in reaching an appropriate resolution of the dispute. Appeals and post-conviction proceedings, though civil in form, have different purposes than the ordinary civil action. Foreclosure and eviction actions are summary matters that are ordinarily routine and do not warrant ADR. On occasion, however, a proceeding listed in paragraph (3) may really be about conflicts between the parties’ underlying interests that are not reflected in the legal form of the action but could be resolved fairly and efficiently through mediation or another ADR process. In such a rare case, the court has discretion to order an appropriate form of ADR, which, under Rule 16.3(f), may be adapted to suit the circumstances of the action. Rule 16.3(b) makes clear that any action in which ADR under the rule is not required goes forward under the other provisions of the civil rules, in which the first step ordinarily is placement on the hearing calendar pursuant to V.R.C.P. 40(a)(1). This provision applies whether the action is excluded under Rule 16.3(a)(1) or not required to enter ADR under Rule 16.3(a)(2)(C) or (3). If the action is one in which participation in ADR has been excused for cause by the court under Rule 16.3(f), the action proceeds as provided in the court’s order. Rule 16.3(c) provides the basic procedure. All parties to a civil action in which ADR is required under Rule 16.3(a) must either file a stipulation providing for ADR by a specific method and go forward under subdivision (c) or engage in preliminary evaluation under Rule 16.3(d). Rule 16.3(c)(1) provides different filing times for the stipulation, depending on the provision of subdivision (a) under which ADR is required. In tort or property actions, where ADR is automatic, subparagraph (c)(1)(A) requires the stipulation to be filed either at the time that local practice requires the filing of an initial general pretrial stipulation or, if there is no such requirement, within 30 days after the filing of the last required pleading. In actions where, pursuant to Rule 16.3(a)(2)(C), the need for ADR is to be determined by the judge or clerk on the pleadings, subparagraph (c)(1)(B) provides that the clerk must promptly notify the parties of the result of that determination. If the determination is that ADR is required, the parties must file a stipulation within 30 days after the clerk mails the notification. Since an agreement for ADR under Rule 16.3(a)(2)(B) or an order for ADR under paragraph (a)(3) may be filed at any time, Rule 16.3(c)(1)(C) provides that in such a case the 30-day period for filing the stipulation runs from the filing of the agreement or order. Under both subparagraph (B) and subparagraph (C), if a general pretrial stipulation is required by local practice, the time period set by the rule for the ADR stipulation controls. Both stipulations must be filed together within the 30 days. Under Rule 16.3(c)(2)(A), the stipulation may provide for mediation, early neutral evaluation, binding arbitration, or another agreed-upon ADR method that uses the services of a neutral, such as nonbinding arbitration or a minitrial. The parties may agree to use more than one method sequentially or for different phases of the action. The specified methods embrace three very different forms of ADR: In mediation, the neutral’s task is to help the parties recognize their interests and arrive at a resolution of their dispute based on those interests. Early neutral evaluation may include mediation, but its primary purpose is to provide the parties with an evaluation of their positions as a basis for a realistic settlement of the dispute. Binding arbitration is an informal adjudicative proceeding in which the arbitrator renders a decision after hearing the evidence and arguments of the parties. Whatever method is employed, it must be carried out in conformity with the other provisions of Rules 16.3(c) and (e)-(h). Pursuant to Rule 16.3(c)(2)(B), the stipulation must either designate a named individual who will serve as the neutral or must contain an agreement to select a neutral from the clerk’s referral list as provided in Rule 16.3(c)(3). The terms on which the neutral is to serve are specified in Rule 16.3(e). A neutral selected by the parties initially or from the clerk’s list need not be an attorney. Rule 16.3(c)(2)(C) provides that the stipulation must also contain any agreement concerning payment of the neutral that the parties might enter in order to vary the equal division set forth in Rule 16.3(e)(1) or for another purpose. Under Rule 16.3(c)(2)(D), the stipulation must set forth a schedule for the process or an agreement to accept the assistance of the neutral in setting the schedule. That schedule must be consistent with Rule 16.3(c)(4). Rule 16.3(c)(3) allows the parties to file their ADR stipulation without having agreed on a neutral. Upon receipt of such a stipulation, the clerk is to send the parties the referral list of neutrals maintained as provided in Rule 16.3(e)(4). The parties then have seven days to select a neutral from the list or to agree on another neutral. If they do not select a neutral within that period, the stipulation is no longer in effect, and they must engage in preliminary evaluation in accordance with subdivision (d). Rule 16.3(c)(4) allows the parties substantial control of the schedule for any ADR method agreed to under subdivision (c). The provision permits the parties to choose whether to have the ADR session early in the discovery process or at a later point. This flexibility allows the parties to balance the cost saving from limiting discovery against the benefit of more information as the basis for an effective ADR process. If the parties need more than eight months to be ready for ADR, either party may move the court for an extension of that time limit, but to prevent last minute delays the parties must indicate their readiness for ADR or file a motion for an extension at least 30 days before the scheduled ADR session. The schedule may provide for the submission of appropriate case statements summarizing the facts, issues, and positions of the parties and identifying the parties, counsel, and others who will attend the session. Rule 16.3(c)(5) requires participation by the parties and their lawyers in mediation or preliminary or neutral evaluation, or any other process where the parties’ underlying interests are to be addressed. (Participation by a party is not required in binding arbitration, because that is an adjudicative process in which positions rather than interests are at stake.) When a party is an entity or when a liability insurer sues or defends, an employee with settlement and stipulation authority must attend. The purpose of these requirements is to assure that the parties themselves understand the nature of the proceedings and the settlement or other resolution possibilities that may exist. The presiding judge may excuse a party or lawyer from all participation or may permit participation by speaker phone for good cause, which should be limited to illness or other inability to travel or, in the case of an individual, financial hardship. If the parties and the neutral agree, a person, such as statutory workers’ compensation lienholder, whose interests are materially affected by the proceeding may be invited to participate. Rule 16.3(c)(6) requires the neutral to report a summary of an ADR (other than binding arbitration) process and its results to the court in writing within 15 days after the session. Binding arbitration is excluded, because the procedure for submission to the court is covered by the arbitration agreement and statute. Further procedural steps in the action will depend upon the nature of the results achieved in ADR. If a settlement leading to final disposition is reached, judgment will be entered accordingly. If the action is partially settled, or not settled at all, Rule 16.3(c)(7) provides that it will go forward either as the parties may agree or, if there is no agreement, as the court may order. Thus, gains made in the ADR process, such as disposing of or narrowing issues or agreeing on a trial schedule, will not be wasted. Rule 16.3(d) is a default provision. If the parties cannot stipulate to ADR as provided in subdivision (c), they must engage in a preliminary evaluation session that offers opportunities for a mediated settlement, case evaluation, or case management. Under paragraph (1), the clerk is to schedule the session automatically if the parties do not file a stipulation for ADR within the time required under subdivision (c). While the parties may agree on any individual to serve as evaluator, ordinarily the evaluator will be drawn from the panel that the Supreme Court has established in Rule 1 of Administrative Order No. 39, adopted pursuant to Rule 16.3(e)(3). If the evaluator is drawn from the panel, the evaluator will be a lawyer. See Rule 16.3(e)(3); Rule 1(b)(1) of Administrative Order No. 39. The procedure for selection from the panel is based on that followed in the federal court under Local Rule 12(f). Rule 16.3(d)(2) provides the procedure for preliminary evaluation. The rule incorporates the provisions of paragraphs (c)(5) and (6) concerning participation and reporting. The evaluator may, through informal mediation, encourage the parties to settle at once or to agree to full-scale mediation or arbitration. If a settlement is reached, the action is disposed of on that basis. If the parties agree to further ADR, they file a stipulation and proceed as provided in Rule 16.3(c)(1)(C). If neither of these courses is followed, the evaluator should assist the parties to evaluate their positions and to reach an agreement that, pursuant to Rule 16.3(c)(7), will narrow the issues and define the procedure for trial. The provisions of Rule 16.3(e) apply to neutrals serving in accordance with either subdivision (c) or subdivision (d). Rule 16.3(e)(1)(A) makes clear that a neutral selected by agreement under Rule 16.3(c) is to be paid at a rate that the neutral and the parties negotiate based on the neutral’s usual charges. The rate for a preliminary evaluator is that provided in Administrative Order No. 39, adopted pursuant to Rule 16.3(e)(3). Under Rule 16.3(e)(1)(B), unless one or more of the parties is entitled to proceed in forma pauperis as provided in Rule 16.3(e)(2) and Administrative Order No. 39, fees and expenses will be divided equally or as the parties may otherwise agree or the court may otherwise order. The neutral is to be paid when the report is filed regardless of the outcome of the proceeding. If ADR does not result in settlement (or an arbitration award), the court has discretion to allow sums paid to the neutral as taxable costs to the party who eventually prevails in any contested proceeding. To assure that the cost of ADR is not unduly burdensome on individuals of limited means, Rule 16.3(e)(2)(A) provides that the Supreme Court will establish a sliding scale system of reduced fee payments for those meeting certain income guidelines. The Court has implemented this provision in Rule 3 of Administrative Order No. 39. A party entitled to proceed at reduced cost under that system pays only the amount specified. Parties not eligible under the guidelines pay the share of the neutral’s fee and expenses that they would in any event be required to pay by virtue of paragraph (1). Under Administrative Order No. 39, the Court Administrator will pay the amount by which the neutral’s fees and expenses exceed the payments made by the parties. Pursuant to Rule 16.3(e)(4) and Administrative Order No. 39, a neutral listed on a county referral list is expected to accept a certain number of referrals in proceedings under Rule 16.3(c) at a reduced fee. If the neutral has been compensated or reimbursed by the state, provisions of Rule 16.3(e)(2)(B), drawn from V.R.C.P. 3.1(c), allow the state to recoup its payments from a settlement or as costs if the indigent party prevails in litigation. Rule 16.3(e)(3) provides that the Supreme Court will establish one or more panels of preliminary evaluators who have agreed to provide services under Rule 16.3(d) at a fixed fee. The Court has implemented this provision in Rule 1 of Administrative Order No. 39. The fixed fee requirement for panel service is a quid pro quo for the training that the Court will provide for panel members and also reflects the fact that panel service may lead to compensated work as a neutral for panel members. The rule requires that all members of a panel must be attorneys, because the role of preliminary evaluator may require a litigator’s assessment of the parties and the value of the case. Under Rule 16.3(e)(4), the Supreme Court is to provide by administrative order for the establishment in each county of referral lists of neutrals available to conduct ADR proceedings undertaken in accordance with subdivision (c). The Court has implemented this provision in Rule 2 of Administrative Order No. 39. The rule formalizes the present local procedure in a number of counties. Panel members need not be attorneys. The only condition for inclusion on the list is an agreement to take cases involving indigents on terms established in the administrative order. This provision is necessary to assure that neutrals are available in such cases. Rule 16.3(e)(5) requires self-disqualification by a neutral who believes that he or she cannot act impartially. The neutral must also make an initial and a continuing disclosure of any matter that would affect impartiality or give an appearance of partiality or bias. A party may disqualify a previously agreed-upon neutral if a conflict later arises, but a preliminary evaluator from the panel may be disqualified only by the presiding judge for cause. In applying that standard, the judge should be guided by the standards of Canon 3E of the Code of Judicial Conduct. If a neutral in a proceeding under a stipulation pursuant to Rule 16.3(c) self-disqualifies or is disqualified by a party, the parties must promptly select another neutral or the case will be scheduled for preliminary evaluation under subdivision (d). When a preliminary evaluator is disqualified, the clerk will chose a successor and, if too much time has elapsed, may reschedule the evaluation session. Under Rule 16.3(f), the court may excuse a party or the parties from participation in all or part of the process for good cause, which might include a showing that the suit was frivolous, or that only a single dispositive issue of law is involved, or other showing of serious harm to the interests of a party or the public interest. In applying this provision, courts should be especially sensitive to power imbalance situations. Subdivision (f) also allows the court to modify the terms of the rule to suit a particular situation—for example, when the parties agree on ADR at a later stage in the action or the court orders ADR under Rule 16.3(a)(3). The court’s order under Rule 16.3(f) will specify the future course of the proceeding, whether it is to return to the trial calendar or continue on a modified form under the rule. Rule 16.3(g) is similar to Federal Local Rule 12(k). It provides that all communications in ADR proceedings other than binding arbitration are confidential and makes such communications inadmissible under Vermont Rule of Evidence 408. (Confidentiality in arbitration is to be determined in accordance with the terms of the arbitration agreement.) The purpose of the confidentiality requirement is to encourage ADR participants to speak candidly in order to facilitate the conduct of processes such as preliminary evaluation and mediation. The requirement of confidentiality is binding on all parties by virtue either of their express ADR agreement under Rule 16.3(c) or their implied agreement to engage in preliminary evaluation under Rule 16.3(d). Rule 16.3(h) provides sanctions for nonappearance at an ADR session under the rule for parties, lawyers, and others such as employees of corporate parties or insurance carriers required to appear pursuant to Rule 16.3(c)(5). Sanctions are also provided for refusal to comply with requirements such as those for filing, or with orders made under the rule. The rule makes clear that the offending individual must pay expenses and fees incurred as a result of the conduct unless unusual circumstances warrant a different decision. The court also has discretion to impose a variety of other appropriate sanctions. In view of the difficulty of articulating and enforcing appropriate standards, there are no sanctions for the failure of a person who attends an ADR session to participate appropriately in the session. Rule 16.3(h) is intended to supplement, rather than supersede, Rule 11.