If your civil lawsuit has been routed into LAR mediation and arbitration, it means the court is sending your case through a short, out-of-courtroom process before giving you a trial date: either a mediator will try to help both sides reach a voluntary settlement, or an arbitrator will hold a compressed hearing and issue a non-binding award. Federal law requires every U.S. district court to establish an alternative dispute resolution program and encourage its use in civil cases, and most state court systems have adopted similar frameworks through local rules.1Office of the Law Revision Counsel. 28 U.S. Code 651 – Authorization of Alternative Dispute Resolution “LAR” itself is not a national statute; it is the label certain court systems use for their local court-annexed ADR program, and almost every version channels cases into one of those same two tracks.
Federal law defines ADR broadly as “any process or procedure, other than an adjudication by a presiding judge, in which a neutral third party participates to assist in the resolution of issues in controversy,” and lists mediation, arbitration, early neutral evaluation, and minitrials among the available forms.1Office of the Law Revision Counsel. 28 U.S. Code 651 – Authorization of Alternative Dispute Resolution The cases most commonly funneled into LAR are relatively straightforward money disputes: car accident injury claims, breach-of-contract fights, property damage, and similar matters. Once the court determines your case qualifies, participation is not optional.
How Mediation Works
In mediation, the neutral does not decide anything. A mediator’s job is to facilitate conversation, help each side see the strengths and weaknesses of their position, and guide the parties toward a voluntary settlement. The session usually begins with everyone in the same room for brief opening remarks, then the mediator separates the parties into private rooms for what are called caucuses. The mediator shuttles between rooms, relaying offers and counteroffers and testing the realism of each side’s position. Good mediators will tell you when your expectations are out of line, and that bluntness is the point.
If both sides reach an agreement, the mediator typically drafts a written settlement that both parties sign before leaving. Once signed, that agreement is a binding contract enforceable by the court. If no agreement is reached, the case simply moves forward toward trial. The mediator has no power to impose an outcome.
How Non-Binding Arbitration Works
Non-binding arbitration looks more like a compressed trial. An arbitrator (or sometimes a small panel) hears evidence and arguments from both sides and then issues a written award specifying who wins and how much. Each side gives a brief opening statement, presents evidence, and may call a limited number of witnesses. The rules of evidence are relaxed compared to a courtroom: arbitrators routinely accept documents, written statements, and other material that a trial judge might exclude. Arbitrators can also administer oaths and issue subpoenas for witnesses and documents under the same rules that apply to federal trials.2Office of the Law Revision Counsel. 28 U.S. Code 656 – Subpoenas
The entire hearing is often limited to an hour or two. That time pressure means you have to prioritize your strongest evidence rather than trying to present everything. The critical word in “non-binding” is non-binding: the award is not immediately enforceable, and either party can reject it and demand a regular trial. But if nobody objects within the deadline set by local rules, the award converts into an enforceable court judgment just as if a judge had entered it.3GovInfo. 28 U.S. Code 657 – Arbitration Award and Judgment
Who Serves as the Neutral
Each court maintains its own roster of approved neutrals and sets its own qualification standards. Federal law allows courts to draw from magistrate judges, private-sector professional mediators and arbitrators, or other individuals trained in ADR.4Office of the Law Revision Counsel. 28 U.S. Code 653 – Neutrals In many court-annexed arbitration programs, arbitrators must be licensed attorneys with a minimum number of years of practice experience, and they take the same oath required of judges and follow the same disqualification rules that prevent conflicts of interest.5Office of the Law Revision Counsel. 28 U.S. Code 655 – Arbitrators
Assignment usually works by random selection from the roster, though many courts let the parties agree on a specific neutral if they have a preference. The assigned neutral enjoys quasi-judicial immunity, so you cannot sue them for how they handled the proceeding.5Office of the Law Revision Counsel. 28 U.S. Code 655 – Arbitrators
How to Prepare
Preparation is where most of the actual work happens. The session itself is short, and walking in without your evidence organized is a fast way to waste it.
Gather every piece of supporting documentation: medical records, repair estimates, invoices, photographs, expert reports, and written witness statements. Label everything clearly as exhibits. If your case involves a damages calculation, build it on paper so you can walk the neutral through it step by step. Vague assertions about “significant damages” accomplish nothing when the arbitrator has an hour and needs a number.
Most court-annexed arbitration programs also require each side to submit a pre-hearing brief or position statement to the arbitrator and to opposing counsel before the hearing date. Deadlines vary by local rule, so check yours early. The brief should lay out the relevant facts, identify the legal issues, and state your damages figure. Treat it as your opening argument in written form.
Confidential Mediation Statements
If your case is on the mediation track, you often have the option of submitting a confidential statement directly to the mediator that the other side never sees. This is where you can be candid about the weaknesses of your own position, your real priorities, and the settlement range you are willing to accept. Some mediators prefer a short phone call instead of a written confidential brief, since a written document always carries some risk of disclosure later. Either way, the ability to communicate privately with the mediator is one of mediation’s most useful features, and holding back from the person best positioned to help you is a common and expensive mistake.
Attendance and Settlement Authority
Every named party and their attorney must attend the session. If an insurance company is involved, a representative with actual authority to approve a settlement for the full claimed amount must also be present. Showing up with someone who “needs to call the home office” to approve anything over a token amount is a well-known stalling tactic, and courts have little patience for it. Some courts will sanction a party whose representative lacks genuine settlement authority. Confirm this before the day of the session, not during it.
What You Say Is Protected — Within Limits
One of the most important features of LAR is that what you say during the process generally cannot be used against you later. Federal law requires each district court to adopt local rules protecting the confidentiality of ADR proceedings.6Office of the Law Revision Counsel. 28 U.S. Code 652 – Jurisdiction On top of that, Federal Rule of Evidence 408 bars the use of settlement offers and statements made during compromise negotiations as evidence to prove liability or the value of a claim.7United States District Court Southern District of New York. Federal Rule of Evidence 408 – Compromise and Offers to Compromise
There are limits. Evidence that existed before the mediation does not become protected just because someone mentioned it during the session. Confidentiality can also be overridden in narrow situations such as proceedings involving threats of bodily harm, child abuse, or elder exploitation. For practical purposes, though, you can speak freely without worrying that a concession you made to the mediator will be read back to a jury. If your case does proceed to a trial de novo after arbitration, the arbitrator cannot be called as a witness and the arbitration award itself is not admissible.
What Happens After the Session
When Mediation Produces a Settlement
If mediation produces a settlement, the signed agreement ends the litigation. The court typically enters the settlement as a consent judgment or dismisses the case with the agreement incorporated by reference. From there, the terms are enforceable like any other court order, and if one side later fails to comply the other can go back to court to enforce the agreement. There is no trial de novo option after a mediated settlement because there is no award to reject. The parties voluntarily agreed.
When Arbitration Produces an Award
After a non-binding arbitration hearing, the arbitrator files the award with the court clerk. The award identifies the prevailing party and sets the damages amount. Under federal rules, if neither party files a written demand for trial de novo within 30 days, the award automatically converts into a final enforceable judgment. That judgment has the same force as one entered after a full trial, with one notable exception: it cannot be appealed to a higher court.3GovInfo. 28 U.S. Code 657 – Arbitration Award and Judgment
Demanding a Trial De Novo
Any party unhappy with the arbitration award can reject it by filing a demand for trial de novo within the deadline, which is 30 days under federal rules. Filing the demand wipes the award off the books entirely, and the case goes back on the court’s trial calendar as if the arbitration never happened.3GovInfo. 28 U.S. Code 657 – Arbitration Award and Judgment Most courts require a filing fee along with the demand. Missing the deadline locks the award in as a final judgment, and there is no extension for good intentions.
Here is where things get risky. Many jurisdictions impose cost-shifting penalties on a party who demands a trial de novo but then fails to improve on the arbitration result. The specifics vary. Some courts require you to reimburse the other side’s costs and expert witness fees; others only penalize demands made in bad faith. Either way, rejecting an arbitration award is not a free roll of the dice. Before filing that demand, compare the award honestly against what you realistically expect to win at trial, factoring in the additional months of litigation and the costs of getting there.
One more wrinkle: filing a trial de novo demand does not automatically reopen the full discovery process. Many courts restrict additional discovery after arbitration to encourage parties to take the arbitration seriously as their primary chance to present evidence. Getting permission for new depositions or document requests typically requires showing good cause. If you were hoping a trial would let you fill gaps in your evidence, you may find the court unwilling to let you do so.
What Happens If You Don’t Participate
Skipping a court-ordered LAR session is one of the worst moves a litigant can make. Courts treat mandatory ADR the same way they treat any other court order. Under Federal Rule of Civil Procedure 16(f), a judge can sanction any party who fails to participate in a court-ordered conference or ADR session. The range of consequences includes monetary penalties, reimbursement of the other side’s preparation costs and attorney fees, striking your pleadings, or entering a default judgment against you.
Showing up is not always enough on its own. Courts expect good-faith participation, which at a minimum means having someone present with real authority to negotiate and settle. A party who attends but refuses to engage, makes no meaningful offer, or sends a representative without settlement authority is effectively not participating. Whether that crosses into sanctionable conduct depends on the jurisdiction, but courts that draw the line tend to draw it harshly.