PRINTER'S NO. 757
No. 684 Session of 2001
INTRODUCED BY LESCOVITZ, CALTAGIRONE, DALEY, LAUGHLIN, McCALL,
ROBERTS, SOLOBAY, YOUNGBLOOD, STEELMAN AND HORSEY,
FEBRUARY 13, 2001
REFERRED TO COMMITTEE ON JUDICIARY, FEBRUARY 13, 2001
AN ACT
1 Amending Title 2 (Administrative Law and Procedure) of the
2 Pennsylvania Consolidated Statutes, authorizing government
3 agencies to use alternative means of dispute resolution to
4 resolve certain issues in controversy.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Title 2 of the Pennsylvania Consolidated Statutes
8 is amended by adding a section to read:
9 § 105.1. Administrative ADR Law.
10 The provisions of Subchapter C of Chapter 5 (relating to
11 administrative alternative dispute resolution) shall be known
12 and may be cited as the Administrative ADR Law.
13 Section 2. Chapter 5 of Title 2 is amended by adding a
14 subchapter to read:
15 SUBCHAPTER C
16 ADMINISTRATIVE ALTERNATIVE DISPUTE RESOLUTION
17 Sec.
18 571. Scope of subchapter.
1 572. Declaration of policy.
2 573. Definitions.
3 574. General authority.
4 575. Neutral persons.
5 576. Confidentiality.
6 577. Authorization of arbitration.
7 578. Arbitrators.
8 579. Authority of arbitrator.
9 580. Arbitration proceedings.
10 581. Arbitration awards.
11 582. Judicial review.
12 583. Support services.
13 § 571. Scope of subchapter.
14 (a) General rule.--Except as provided in subsection (b),
15 this subchapter shall apply to all government agencies.
16 (b) Exceptions.--None of the provisions of this subchapter
17 shall apply to:
18 (1) Proceedings before the Department of Revenue,
19 Auditor General or Board of Finance and Revenue involving the
20 original settlement, assessment or determination or
21 resettlement, reassessment or redetermination, review or
22 refund of taxes, interest or payments made into the State
23 Treasury.
24 (2) Proceedings before the Secretary of the Commonwealth
25 under the act of June 3, 1937 (P.L.1333, No.320), known as
26 the Pennsylvania Election Code.
27 (3) Proceedings before the Department of Transportation
28 involving matters reviewable under 42 Pa.C.S. § 933(a)(1)(ii)
29 (relating to appeals from government agencies).
30 (4) Proceedings before the State System of Higher
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1 Education involving student discipline.
2 § 572. Declaration of policy.
3 The General Assembly hereby finds and declares that:
4 (1) Administrative proceedings are intended to offer
5 prompt, expert and inexpensive means of resolving disputes as
6 an alternative to litigation in the courts of this
7 Commonwealth.
8 (2) Administrative proceedings are becoming increasingly
9 formal, costly and lengthy and result in unnecessary
10 expenditures of time by persons and businesses and in a
11 decreased likelihood of settlement of disputes.
12 (3) Alternative means of dispute resolution are used in
13 the private sector and, in appropriate circumstances, result
14 in decisions that are faster, less contentious and less
15 expensive.
16 (4) Such alternative means can result in more creative,
17 efficient and sensible outcomes especially with respect to
18 administrative decisions impacting on business.
19 (5) Alternative means of dispute resolution may be used
20 in a wide variety of administrative programs.
21 (6) Explicit authorization of the use of alternative
22 means of dispute resolution will eliminate any ambiguity
23 under existing law.
24 (7) The availability of a wide range of alternative
25 dispute resolution procedures, and an increased understanding
26 of the most effective use of such procedures, will enhance
27 the operation of government and better serve both the public
28 and business.
29 § 573. Definitions.
30 The following words and phrases when used in this subchapter
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1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Alternative dispute resolution technique." A procedure that
4 is used instead of an adjudication to resolve issues in
5 controversy, including, but not limited to, settlement
6 negotiations, conciliation, facilitation, mediation, fact-
7 finding, minitrials and arbitration, or any combination thereof.
8 "Award." A decision by an arbitrator resolving the issues in
9 controversy.
10 "Dispute resolution communication." An oral or written
11 communication prepared for the purposes of a dispute resolution
12 proceeding, including a memorandum, notes or work product of a
13 neutral person, parties or nonparty participant, except a
14 written agreement to enter into a dispute resolution proceeding
15 or a final written agreement or arbitration award reached as a
16 result of a dispute resolution proceeding.
17 "Dispute resolution proceeding" or "proceeding." A process
18 in which an alternative means of dispute resolution is used to
19 resolve an issue in controversy in which a neutral person is
20 appointed and specified parties participate.
21 "Issue in controversy." An issue that is material to a
22 decision concerning an administrative program of an agency and
23 as to which there is disagreement between:
24 (1) an agency and a person who would be substantially
25 affected by the decision; or
26 (2) persons who would be substantially affected by the
27 decision.
28 "Neutral person." A person who, with respect to an issue in
29 controversy, functions specifically to aid the parties in
30 resolving the controversy.
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1 "Party." A named party in an administrative proceeding or a
2 person who will be significantly affected by the decision in the
3 administrative proceeding and who participates in the
4 proceeding.
5 "Roster." The list maintained by the Office of General
6 Counsel of persons qualified to provide services as neutral
7 persons.
8 § 574. General authority.
9 (a) General rule.--A government agency may use a dispute
10 resolution proceeding for the resolution of an issue in
11 controversy if all parties agree to such a proceeding.
12 (b) Exceptions.--A government agency may not use a dispute
13 resolution proceeding if the matter:
14 (1) involves a situation where maintaining an
15 established policy is of special importance so that
16 variations among individual decisions are not increased and
17 such a proceeding is not likely to reach consistent results
18 among individual decisions;
19 (2) significantly affects persons or organizations who
20 are not parties to the proceeding;
21 (3) involves a situation where a full public record of
22 the proceeding is important and a dispute resolution
23 proceeding cannot provide such a record; or
24 (4) involves a situation where the agency must maintain
25 continuing jurisdiction over the matter with the authority to
26 alter the disposition of the matter in light of changed
27 circumstances and a dispute resolution proceeding will
28 interfere with this requirement.
29 (c) Promulgation of agency policy.--In consultation with
30 other government agencies as appropriate and with professional
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1 organizations experienced in matters concerning dispute
2 resolution, each government agency shall adopt a policy that
3 addresses the use of alternative dispute resolution techniques.
4 Such professional organizations include, but are not necessarily
5 limited to: the Pennsylvania Bar Association, the American
6 Arbitration Association, the Pennsylvania Council of Mediators
7 and the Society for Professionals in Dispute Resolution. In
8 developing such a policy, each government agency shall examine
9 alternative means of resolving disputes in connection with
10 adjudications, rulemaking proceedings, enforcement actions,
11 issuing and revoking permits or licenses, contract
12 administration, litigation and other actions.
13 (d) Dispute resolution specialists.--The head of each
14 government agency shall designate a dispute resolution
15 specialist for the agency. The specialist shall be responsible
16 for the implementation of the provisions of this subchapter and
17 the agency policy developed under this subchapter.
18 (e) Training.--Each government agency shall provide for
19 training on a regular basis for the dispute resolution
20 specialist of the agency and other employees involved in
21 implementing the policy of the agency. The training shall
22 encompass the theory and practice of negotiation, mediation,
23 arbitration or related techniques. The dispute resolution
24 specialist may periodically recommend employees who would
25 benefit from similar training to the agency head.
26 (f) Procedures for grants and contracts.--Each government
27 agency shall review its standard agreements for contracts,
28 grants and other assistance and shall determine whether to amend
29 any such standard agreement to authorize and encourage use of
30 alternative dispute resolution techniques.
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1 (g) Voluntary use.--Alternative dispute resolution
2 techniques authorized under this subchapter shall be voluntary
3 procedures which may supplement rather than limit other
4 available dispute resolution techniques.
5 § 575. Neutral persons.
6 (a) Qualifications generally.--A neutral person may be a
7 permanent or temporary officer or employee of this Commonwealth
8 or any other person who is acceptable to the parties to a
9 dispute resolution proceeding. A neutral person shall have no
10 official, financial or personal conflict of interest with
11 respect to the issues in controversy, unless such interest is
12 fully disclosed in writing to all parties and all parties agree
13 that the neutral person may serve.
14 (b) Nature of service.--A neutral person who serves as a
15 conciliator, facilitator or mediator shall serve at the will of
16 the parties.
17 (c) Functions of Office of General Counsel.--The Office of
18 General Counsel shall perform the following functions in
19 consultation with appropriate government agencies and
20 professional organizations experienced in matters concerning
21 dispute resolution, including, but not limited to, those
22 specified in section 574(c) (relating to general authority):
23 (1) Establish standards for neutral persons, including
24 experience, training, affiliations, diligence, actual or
25 potential conflicts of interest and other qualifications, to
26 which agencies may refer.
27 (2) Maintain a roster of persons who meet such standards
28 and are otherwise qualified to act as neutral persons, which
29 shall be made available upon request.
30 (3) Enter into contracts for services of neutral persons
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1 that may be used by government agencies on an elective basis
2 in dispute resolution proceedings.
3 (4) Develop procedures that permit government agencies
4 to obtain the services of neutral persons on an expedited
5 basis.
6 (d) Use of agency employees.--A government agency may use
7 the services of one or more employees of other agencies to serve
8 as neutral persons in dispute resolution proceedings. The
9 agencies may enter into an interagency agreement that provides
10 for the reimbursement by the user agency or the parties of the
11 full or partial cost of the services of such an employee.
12 (e) Contracts and compensation.--A government agency may
13 enter into a contract with any neutral person on the roster. The
14 parties in a dispute resolution proceeding shall agree on
15 reasonable compensation for the neutral person.
16 § 576. Confidentiality.
17 (a) General rule.--Except as provided in subsection (b):
18 (1) A dispute resolution communication is privileged.
19 (2) Disclosure of a dispute resolution communication may
20 not be required or compelled through discovery or any other
21 process.
22 (3) A dispute resolution communication shall not be
23 admissible as evidence in any action or proceeding,
24 including, but not limited to, a judicial, administrative or
25 arbitration action or proceeding.
26 (b) Exceptions.--
27 (1) A settlement document may be introduced in an action
28 or proceeding to enforce the settlement agreement expressed
29 in the document, unless the settlement document by its terms
30 states that it is unenforceable or not intended to be legally
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1 binding. For purposes of this section, a settlement document
2 is a written document signed by the parties to the agreement.
3 (2) To the extent that the dispute resolution
4 communication is relevant evidence in a criminal matter, the
5 privilege and limitation set forth in subsection (a) does not
6 apply to:
7 (i) a dispute resolution communication containing a
8 threat that bodily injury may be inflicted on a person;
9 (ii) a dispute resolution communication containing a
10 threat that damage may be inflicted on real or personal
11 property under circumstances constituting a felony; or
12 (iii) conduct during a dispute resolution procedure
13 causing direct bodily injury to a person.
14 § 577. Authorization of arbitration.
15 (a) General rule.--Arbitration may be used as an alternative
16 means of dispute resolution with the consent of all parties.
17 Consent may be obtained either before or after an issue in
18 controversy has arisen. A party may agree to submit only certain
19 issues in controversy to arbitration or to arbitration on the
20 condition that the amount of the award will be within a
21 specified range.
22 (b) Agreement to arbitration must be voluntary.--A
23 government agency may not require any person to consent to
24 arbitration as a condition of entering into a contract or
25 obtaining a benefit.
26 (c) Authority of agency employees.--An officer or employee
27 of a government agency may offer to use arbitration for the
28 resolution of issues in controversy if the officer or employee
29 has authority to enter into a settlement concerning the matter
30 or is otherwise specifically authorized by the agency to consent
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1 to the use of arbitration.
2 § 578. Arbitrators.
3 (a) Selection.--The parties to an arbitration proceeding
4 shall have the right to participate in selection of the
5 arbitrator.
6 (b) Qualifications.--The arbitrator shall be a neutral
7 person who meets the criteria of this subchapter.
8 § 579. Authority of arbitrator.
9 An arbitrator to whom a dispute is referred under this
10 subchapter may:
11 (1) Regulate the course of and conduct hearings.
12 (2) Administer oaths and affirmations.
13 (3) Compel the attendance of witnesses and production of
14 evidence at the hearing, but only to the extent that the
15 agency involved is otherwise authorized by law to do so.
16 (4) Make awards.
17 § 580. Arbitration proceedings.
18 (a) General rule.--The arbitrator shall set a time and place
19 for the hearing on the dispute and shall notify the parties not
20 less than 30 days before the hearing.
21 (b) Record of hearing.--A party who would like a record of
22 the hearing shall:
23 (1) Be responsible for the preparation of the record.
24 (2) Notify the other parties and the arbitrator of the
25 preparation of the record.
26 (3) Furnish copies to all identified parties and the
27 arbitrator.
28 (4) Pay all costs for the record, unless the parties
29 agree otherwise or the arbitrator determines that the costs
30 should be apportioned.
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1 (c) Conduct of arbitration.--The following shall apply to
2 all arbitration proceedings under this subchapter:
3 (1) The parties shall have the right to be heard, to
4 present evidence relevant to the controversy and to cross-
5 examine witnesses appearing at the hearing.
6 (2) The hearing shall be conducted expeditiously and in
7 an informal manner.
8 (3) The arbitrator may receive oral or documentary
9 evidence, except that irrelevant, immaterial, unduly
10 repetitious or privileged evidence may be excluded by the
11 arbitrator.
12 (4) The arbitrator shall interpret and apply relevant
13 statutory and regulatory requirements.
14 (d) Ex parte communications.--
15 (1) A party shall not make or knowingly cause to be made
16 any communication with the arbitrator on the party's behalf
17 without notice unless the parties agree otherwise.
18 (2) If a communication is made in violation of this
19 subsection, the arbitrator shall prepare a memorandum of the
20 communication which shall become a part of the record and
21 shall allow an opportunity for rebuttal.
22 (3) If the arbitrator receives a communication which
23 violates this subsection, the arbitrator may, to the extent
24 consistent with the interests of justice and policies
25 underlying this subchapter, require the offending party to
26 show cause why the claim of such party should not be resolved
27 against such party as the result of the improper conduct.
28 (e) Award.--The arbitrator shall make the award within 30
29 days after the close of the hearing, or the date of the filing
30 of any briefs required by the arbitrator, whichever is later,
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1 unless the parties agree to some other time limit or the agency
2 provides by regulation for some other time limit.
3 § 581. Arbitration awards.
4 (a) General rule.--Unless the government agency provides
5 otherwise by regulation, the award in an arbitration proceeding
6 under this subchapter shall include a brief, informal discussion
7 of the factual and legal basis for the award, but formal
8 findings of fact or conclusions of law shall not be required.
9 (b) Service.--The prevailing party shall file the award with
10 all relevant agencies, along with proof of service on all
11 parties.
12 (c) Finality.--The award in an arbitration proceeding shall
13 become final 30 days after it is served on all parties.
14 (d) Binding nature.--A final award is binding on the parties
15 and may be enforced as an adjudication under this title.
16 (e) Use in other proceedings.--An award entered under this
17 subchapter in an arbitration proceeding may not serve as an
18 estoppel in any other proceeding for any issue that was resolved
19 in the proceeding. Such an award also may not be used as
20 precedent or otherwise be considered in any factually unrelated
21 proceeding, whether conducted under this subchapter, by an
22 agency or in a court, or in any other arbitration proceeding.
23 § 582. Judicial review.
24 (a) General rule.--Notwithstanding any other provisions of
25 this subchapter, a party adversely affected or aggrieved by an
26 award or order made in an arbitration or other dispute
27 resolution proceeding conducted under this subchapter may appeal
28 the award in accordance with Chapter 7 (relating to judicial
29 review).
30 (b) Agency decision on use of subchapter.--A decision by an
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1 agency to use or not use a dispute resolution proceeding under
2 this subchapter shall be a nonappealable order under Chapter 7.
3 § 583. Support services.
4 For the purposes of this subchapter, an agency may use the
5 services or facilities of other Commonwealth agencies with the
6 consent or agreement of the other agency.
7 Section 3. This act shall take effect in 60 days.
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1 SOURCE NOTES
2 2 Pa.C.S. § 571: Patterned after 2 Pa.C.S. § 501.
3 2 Pa.C.S. § 572: Patterned after act of November 15, 1990,
4 P.L. 101-552, § 2 (note to 5 U.S.C.S. § 571).
5 2 Pa.C.S. § 573: Patterned after 5 U.S.C. § 571.
6 2 Pa.C.S. § 574: Subsections (a) and (b) patterned after 5
7 U.S.C. § 572(a) and (b).
8 2 Pa.C.S. § 575: Patterned after 5 U.S.C. § 573.
9 2 Pa.C.S. § 576: Patterned after 5 U.S.C. § 574. The
10 unofficial citations for the statutes cited in subsection (j)
11 are: Act 1957- ____, 65 P.S. § 66.1 et seq.; and Act 1984-159,
12 35 P.S. § 7301 et seq.
13 2 Pa.C.S. § 577: Patterned after 5 U.S.C. § 575.
14 2 Pa.C.S. § 578: Patterned after 5 U.S.C. § 577.
15 2 Pa.C.S. § 579: Patterned after 5 U.S.C. § 578.
16 2 Pa.C.S. § 580: Patterned after 5 U.S.C. § 579.
17 2 Pa.C.S. § 581: Patterned after 5 U.S.C. § 580.
18 2 Pa.C.S. § 582: Patterned after 5 U.S.C. § 581.
19 2 Pa.C.S. § 583: Patterned after 5 U.S.C. § 583.
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