Establishes provisions relating to alternative dispute resolution

EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
SECOND REGULAR SESSION
SENATE BILL NO. 1039
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR ROBERTS.
5070S.01I KRISTINA MARTIN, Secretary
AN ACT
To repeal section 435.014, RSMo, and to enact in lieu thereof five new sections relating to
alternative dispute resolution.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 435.014, RSMo, is repealed and five 1
new sections enacted in lieu thereof, to be known as sections 2
435.300, 435.303, 435.306, 435.309, and 435.312, to read as 3
follows:4
435.300. As used in sections 435.300 to 435.312, the 1
following terms mean: 2
(1) "Alternative dispute resolution communication", a 3
statement, whether communicated orally, in writing, or by 4
nonverbal conduct, that is either: 5
(a) Related to the subject matter of the dispute and 6
made during an alternative dispute resolution process; or 7
(b) Made as part of considering, conducting, 8
participating in, initiating, continuing, or reconvening an 9
alternative dispute resolution process. 10
The term "alternative dispute resolution communication" 11
shall not include the notifications or reports made pursuant 12
to subsection 2 of section 435.303 or subsection 8 of 13
section 435.306 or a written agreement as described in 14
section 435.312; 15
SB 1039 2
(2) "Alternative dispute resolution process", 16
mediation, arbitration, or early neutral evaluation used in 17
conjunction with a pending civil action, and any other 18
alternative to trial that has been included in a local court 19
rule applicable to a civil dispute; 20
(3) "Arbitration", a procedure in which a neutral or 21
panel of neutrals hears and decides a dispute between two or 22
more parties; 23
(4) "Conflict of interest", any direct or indirect 24
financial or personal interest in the outcome of a dispute 25
or any existing or prior financial, business, professional, 26
familial, or social relationship with any participant in an 27
alternative dispute resolution process that is likely to 28
affect the impartiality of the neutral or that may 29
reasonably create an appearance of partiality or bias; 30
(5) "Early neutral evaluation", a process in which a 31
neutral provides parties to a dispute with a nonbinding 32
assessment of their dispute; 33
(6) "In camera", a proceeding held in a judge's 34
chambers or in a courtroom from which the public is excluded; 35
(7) "Mandated reporter", an individual who is required 36
to report abuse or neglect pursuant to the provisions of 37
section 192.2405, 192.2475, 198.070, 208.912, 210.115, 38
352.400, 630.162, or 630.165; 39
(8) "Mediation", a process in which a neutral 40
facilitates communications among the parties and assists the 41
parties in their efforts to reach a voluntary agreement 42
regarding the dispute; 43
(9) "Mediator", a neutral who conducts mediation; 44
(10) "Neutral", an individual who, acting 45
independently and not as a representative, agent, or 46
advocate of any of the parties, assists the parties in their 47
SB 1039 3
efforts to reach a resolution of their dispute through an 48
alternative dispute resolution process; 49
(11) "Participant", any person or entity, including 50
any neutral or party, who participates in an alternative 51
dispute resolution process; 52
(12) "Party", an individual or entity named as a party 53
in a pending civil action, or in an agreement to use an 54
alternative dispute resolution process as described in 55
sections 435.309 and 435.312; 56
(13) "Person", an individual; a public or private 57
corporation, business trust, estate, trust, partnership, 58
limited liability company, or insurance company; an 59
association; a joint venture; a governmental unit, 60
subdivision, agency, or instrumentality of the state; or any 61
other legal or commercial entity; 62
(14) "Proceeding", a judicial, administrative, 63
arbitral, or other adjudicative process, including related 64
prehearing and posthearing motions, conferences, hearings, 65
and discovery; 66
(15) "Writing" or "written", a tangible or electronic 67
record of a communication or representation, including 68
handwriting, typewriting, printing, photostating, 69
photography, audio or video recording, and electronic 70
communication; 71
(16) "Written agreement", a writing that: 72
(a) Contains the essential terms of an agreement; and 73
(b) Is signed, executed, or adopted by the parties, by 74
any process described in subdivision (15) of this section, 75
including electronic signatures as permitted by section 76
432.230, with the intent to sign and be bound by the 77
writing, and attached to or logically associated with the 78
writing. 79
SB 1039 4
435.303. 1. A court may refer any individual civil 1
case or category of civil cases to mediation or any other 2
nonbinding alternative dispute resolution process, either by 3
rule or court order. 4
2. Within thirty days of referral by a court to a 5
nonbinding alternative dispute resolution process pursuant 6
to subsection 1 of this section, or such longer time as may 7
be set by the court, or with leave of the court, the parties 8
may: 9
(1) Notify the court that all of the parties have 10
chosen to pursue an alternative dispute resolution process 11
different from the nonbinding alternative dispute resolution 12
process ordered by the court if such choice is evidenced in 13
a written agreement between the parties; 14
(2) Notify the court that all of the parties have 15
agreed to delay such alternative dispute resolution process 16
until a date certain, which date may be subsequently 17
modified by the court, to allow for the exchange of 18
specified information, the identification of representatives 19
with authority, or any other identified action or event 20
related to the ability of the parties to participate 21
effectively in the alternative dispute resolution process; or 22
(3) If any party, after conferring with all other 23
parties, concludes that referral to a nonbinding alternative 24
dispute resolution process has no reasonable chance of 25
helping the parties to better understand or resolve one or 26
more of the procedural or substantive issues in the matter 27
or there is a compelling circumstance for not participating 28
in the alternative dispute resolution process, the party may 29
file a motion for relief from the referral, setting forth 30
the reasons for not participating. Once a motion for relief 31
has been filed, the alternative dispute resolution process 32
SB 1039 5
ordered by the court shall not occur until the court has 33
ruled on the motion. If the court grants the motion, the 34
matter shall not thereafter be referred by the court to an 35
alternative dispute resolution process without compelling 36
circumstances, which shall be set out by the court in any 37
order referring the matter to an alternative dispute 38
resolution process. 39
3. In an action referred to an alternative dispute 40
resolution process, discovery may proceed as in any other 41
action before, during, and after the alternative dispute 42
resolution process is held. The court may stay discovery in 43
whole or in part during the pendency of an alternative 44
dispute resolution process in order to promote savings in 45
time and expense without sacrificing the quality of justice. 46
4. A neutral who is appointed by the court or 47
requested by the parties to serve in an alternative dispute 48
resolution process pursuant to sections 435.300 to 435.312 49
shall avoid any conflict of interest. Even if the neutral 50
believes that no disqualifying conflict exists, the neutral 51
shall: 52
(1) Make a reasonable inquiry to determine whether 53
there are any facts that would cause a reasonable person to 54
believe that the neutral has an actual or potential conflict 55
of interest before agreeing to serve in a matter; 56
(2) Disclose to the parties, as soon as practicable, 57
facts and information relevant to any actual or potential 58
conflicts of interest that are reasonably known to the 59
neutral; and 60
(3) If, after accepting a designation by the parties 61
or the court, the neutral learns of any previously 62
undisclosed information that could reasonably suggest a 63
SB 1039 6
conflict of interest, promptly disclose the information to 64
the parties. 65
5. After the neutral's disclosure of a conflict, the 66
alternative dispute resolution process may proceed if: 67
(1) All parties agree in writing to service by the 68
neutral; or 69
(2) An organization independently administering the 70
alternative dispute resolution process pursuant to the rules 71
of procedure that were adopted by a written agreement of the 72
parties determines under such rules that the neutral may 73
continue to serve. 74
6. Any party who believes a court-appointed neutral 75
has a conflict of interest may request that the neutral 76
recuse himself or herself if a conflict is disclosed or 77
otherwise discovered. If the neutral declines, the party 78
may timely file a motion with the court for disqualification 79
of the neutral. Failure to file a motion waives that 80
objection. On its own motion, the court may also review the 81
choice of a neutral in any alternative dispute resolution 82
process involving a party that is not represented by counsel 83
and require a change of neutral if necessary to protect the 84
rights of the unrepresented party. 85
435.306. 1. Alternative dispute resolution 1
communications shall not be admissible as evidence in any 2
proceeding or subject to discovery, except as otherwise 3
provided in subsections 2, 3, and 7 of this section. 4
Exceptions shall be narrowly construed and only the portion 5
of the communication necessary for the application of the 6
exception to the general rule of nonadmissibility shall be 7
admitted. 8
2. Evidence or information that is otherwise 9
admissible or subject to discovery, including information 10
SB 1039 7
that would be available to the public pursuant to sections 11
610.010 to 610.035, shall not become inadmissible or 12
protected from discovery solely by reason of its disclosure 13
or use in an alternative dispute resolution process. 14
3. A court may admit an alternative dispute resolution 15
communication upon motion of a party, which motion shall not 16
reveal the substance of the communication, and following a 17
hearing, only if the court finds that one or more of the 18
exceptions in this subsection apply and that the 19
communication is otherwise relevant and admissible. The 20
party seeking admission shall ensure that timely notice is 21
given to the neutral and parties that participated in the 22
alternative dispute resolution process in which the 23
alternative dispute resolution communication was made. The 24
hearing shall be conducted in camera if requested by a party 25
or if the court determines on its own motion that an in 26
camera proceeding is necessary to ensure the confidentiality 27
of the communications that are the subject to the hearing. 28
The only exceptions to the general rule of nonadmissibility 29
of alternative dispute resolution communications stated in 30
subsection 1 of this section are as follows: 31
(1) The alternative dispute resolution communication 32
was made in the presence of a mandated reporter and pertains 33
to abuse or neglect that such mandated reporter is required 34
by state law or regulation to report; 35
(2) The alternative dispute resolution communication 36
is a substantial threat or statement of a plan to inflict 37
bodily injury capable of causing death or substantial bodily 38
harm that is reasonably certain to occur; 39
(3) The alternative dispute resolution communication 40
is intentionally used to plan a crime, attempt to commit a 41
SB 1039 8
crime, or to conceal an ongoing crime or ongoing criminal 42
activity; or 43
(4) The alternative dispute resolution communication 44
is necessary to establish or defend against a claim of 45
professional misconduct or malpractice that is filed against 46
or on behalf of a participant based on conduct occurring 47
during the alternative dispute resolution process. 48
4. The admission of evidence in a proceeding under any 49
of the exceptions stated in subsection 3 of this section 50
shall not in itself render the evidence or any other 51
alternative dispute resolution communication discoverable or 52
admissible for any other purpose or proceeding. 53
5. Any participant in an alternative dispute 54
resolution process has standing to intervene in any 55
proceeding to object to the admissibility of an alternative 56
dispute resolution communication made by that participant 57
during or relating to that alternative dispute resolution 58
process. A neutral who participated in an alternative 59
dispute resolution process also has standing to intervene in 60
any proceeding to object to the admissibility of an 61
alternative dispute resolution communication made by the 62
neutral or an agent or employee of a neutral or of an 63
organization through which the neutral provided the 64
alternative dispute resolution services for such process, 65
but the neutral is under no requirement to do so. 66
6. Except as provided in subsection 7 of this section, 67
no neutral, agent or employee of that neutral, or agent or 68
employee of an organization through which the neutral 69
provided alternative dispute resolution services shall be 70
subpoenaed or otherwise compelled to disclose any 71
alternative dispute resolution communication, including any 72
alternative dispute resolution communication that would 73
SB 1039 9
otherwise fall within the exceptions identified in 74
subsection 3 of this section. No neutral who is a licensed 75
attorney, nor an agent or employee of such neutral or of an 76
organization through which the neutral provided alternative 77
dispute resolution services pursuant to sections 435.300 to 78
435.312, shall be required to disclose any alternative 79
dispute resolution communication to which a reporting 80
obligation might otherwise apply under the rules regulating 81
the professional conduct of attorneys. 82
7. A neutral, an agent or employee of that neutral, or 83
an agent or employee of an organization through which the 84
neutral provided the alternative dispute resolution services 85
may be subpoenaed in an action to enforce a written 86
agreement as described in subsection 2 of section 435.309, 87
but only for the limited purpose of testifying that the 88
written agreement was signed by the parties in the presence 89
of the neutral. 90
8. The court may request that the neutral or the 91
parties provide the court with progress reports on 92
alternative dispute resolution processes related to pending 93
civil actions, except such reports shall be limited to a 94
statement that the matter has been resolved in its entirety, 95
partially resolved, or not resolved and whether future dates 96
for an alternative dispute resolution process are 97
scheduled. A neutral may also report to the court that a 98
payment has not been received from one or more parties. A 99
court shall not require the disclosure of alternative 100
dispute resolution communication in any such report. 101
9. The court may order the party or parties seeking 102
admission of an alternative dispute resolution communication 103
to pay the costs and fees of the neutral or other person 104
participating in an alternative dispute resolution process 105
SB 1039 10
who intervenes to contest the disclosure and admission of 106
alternative dispute resolution communication or who responds 107
to a subpoena prohibited by subsection 6 of this section or 108
a subpoena pursuant to subsection 7 of this section. 109
435.309. 1. Unless the parties have entered into a 1
written agreement providing for entry into a binding 2
alternative dispute resolution process, all alternative 3
dispute resolution processes pursuant to sections 435.300 to 4
435.312 shall be nonbinding. 5
2. In order to be binding on the parties, a settlement 6
agreement that is reached in an alternative dispute 7
resolution process shall be in a written agreement. 8
3. Alternative dispute resolution processes included 9
in consumer contracts for goods or services shall be 10
independently administered. 11
435.312. 1. Except as provided in subsection 6 of 1
this section, sections 435.300 to 435.312 shall apply only 2
to those alternative dispute resolution processes referred 3
by rule or court order, or when the parties enter into a 4
written agreement to resolve their dispute through an 5
alternative dispute resolution process expressly providing 6
that sections 435.300 to 435.312 shall apply to such 7
alternative dispute resolution process. 8
2. The parties to a dispute may enter into a written 9
agreement to attempt to resolve their differences through an 10
alternative dispute resolution process and may agree that 11
sections 435.300 to 435.312 will apply to such alternative 12
dispute resolution process before the filing of an action or 13
after the entry of a judgment, as well as during the 14
pendency of an action. If the matter resolves and the 15
parties file a case to present the settlement for approval 16
by the court, the case shall be exempted from any local rule 17
SB 1039 11
that refers a class of cases to any alternative dispute 18
resolution process. 19
3. Nothing in sections 435.300 to 435.312 shall 20
preclude any court from referring any individual matter to a 21
nonbinding alternative dispute resolution process so as to 22
effectuate the timely, fair, and efficient administration of 23
justice, subject only to the provisions of subsection 2 of 24
section 435.303. 25
4. Nothing in sections 435.300 to 435.312 is intended 26
to undermine the right of litigants to a jury trial in the 27
event that a resolution satisfactory to the parties is not 28
achieved through a nonbinding alternative dispute resolution 29
process. 30
5. Nothing in sections 435.300 to 435.312 shall be 31
deemed to require: 32
(1) Any party or party representative who appears at 33
an alternative dispute resolution process in compliance with 34
a court order to settle all or part of any claim; or 35
(2) Any party to attend a mediation with counsel if 36
such party is self-represented. 37
6. If the court has not referred the case to an 38
alternative dispute resolution process pursuant to section 39
435.303 or if the parties do not elect to use sections 40
435.300 to 435.312, the process shall be regarded as 41
settlement negotiations and subject to the rules of 42
confidentiality that generally apply to such negotiations. 43
If the parties to the dispute have agreed in writing to 44
submit their dispute to such alternative dispute resolution 45
process but have not invoked the protections of sections 46
435.300 to 435.312, no person who serves as a neutral in 47
such process, nor any agent or employee of that person or of 48
an organization through which the neutral provided the 49
SB 1039 12
alternative dispute resolution process, shall be subpoenaed 50
or otherwise compelled to disclose any matter revealed in 51
the process of setting up or conducting such alternative 52
dispute resolution process. All settlement agreements shall 53
be in writing as described in sections 435.300 to 435.312. 54
[435.014. 1. If all the parties to a 1
dispute agree in writing to submit their dispute 2
to any forum for arbitration, conciliation or 3
mediation, then no person who serves as 4
arbitrator, conciliator or mediator, nor any 5
agent or employee of that person, shall be 6
subpoenaed or otherwise compelled to disclose 7
any matter disclosed in the process of setting 8
up or conducting the arbitration, conciliation 9
or mediation. 10
2. Arbitration, conciliation and mediation 11
proceedings shall be regarded as settlement 12
negotiations. Any communication relating to the 13
subject matter of such disputes made during the 14
resolution process by any participant, mediator, 15
conciliator, arbitrator or any other person 16
present at the dispute resolution shall be a 17
confidential communication. No admission, 18
representation, statement or other confidential 19
communication made in setting up or conducting 20
such proceedings not otherwise discoverable or 21
obtainable shall be admissible as evidence or 22
subject to discovery.] 23
✓