Med/Arb is one of the most powerful – yet most misunderstood – processes in legal dispute resolution.
At its simplest, Med/Arb is a hybrid process. The neutral facilitates the parties’ attempt to resolve their dispute through mediation, by utilizing his tools of subject-matter expertise, legal education, perspective-taking and expectation-management. If they are unable to reach a full settlement, the unresolved issues are then decided by the neutral in binding arbitration. In many cases, the same neutral serves first as mediator and then, if necessary, as arbitrator. In some cases, parties choose one neutral for the mediation phase, and then another neutral for the arbitration phase.
The appeal of Med/Arb is obvious. It offers the flexibility and creativity of facilitated mediation by an expert, combined with the finality and enforceability of arbitration – just the same as in court. It allows parties to negotiate, problem-solve and retain control over the outcome – but with the assurance that the case will not remain unresolved if negotiations fail.
There is a live debate about the same neutral serving as both mediator and arbitrator.
On one hand, when using the same neutral for both phases, there is a risk that the prospect of arbitration may weaken mediation. Parties may become less candid. They may be reluctant to admit weaknesses, discuss settlement limits or speak freely in caucus. For this reason, some parties may prefer contracting one neutral for the mediation phase and another neutral for the arbitration phase. Others use the same neutral, but just restrict or eliminate private caucuses to protect the integrity of the arbitration phase.
On the other hand, using the same neutral for both phases can improve the quality of negotiation. The mediation phase gives the parties an opportunity to resolve the dispute consensually, privately and creatively – but methodically managed by a legal expert who is very familiar with the area of law and the many methods to reach a balanced settlement. The arbitration phase ensures that any unresolved issues, if any, will be decided in a binding and timely way. That combination reduces cost, preserves energy and prevents the dispute from drifting through endless procedural steps. Moreover, parties often negotiate differently when they know that unresolved issues will not simply remain unresolved. The presence of a binding end point can reduce posturing. It can encourage more realistic risk assessment. It can help counsel and clients focus on what truly matters. In some cases, parties behave more reasonably because they know that the neutral may ultimately decide the case. That reality creates a constructive attitude in the mediation phase.
A case is most suitable for Med/Arb when four conditions are present. First, the parties need both a settlement opportunity and binding finality. Second, the parties are capable of giving informed consent after understanding the risks and benefits. Third, the neutral is genuinely competent to perform both the mediation and arbitration roles. Fourth, the process is clearly designed, carefully documented and ethically managed. Where those conditions exist, Med/Arb can be an excellent option. It can reduce delay, control cost, focus negotiation and produce a final result within a predictable framework.
Just because a case is suitable for Med/Arb, does not mean that every Mediator/Arbitrator is suitable. Not every good mediator should arbitrate. Not every good arbitrator should mediate. Mediation requires patience, emotional intelligence, creativity, process management and the ability to help parties generate their own solutions. Arbitration requires procedural discipline, legal analysis, evidentiary judgment and the ability to render a fair and enforceable decision. Med/Arb requires both skill sets.
A case is suitable for Med/Arb where the proposed neutral has the experience, judgment and temperament to move between roles without confusing them. The neutral must be able to facilitate settlement discussions without prejudging the case, and later adjudicate the unresolved issues without relying on improper information. That is a demanding standard. It is also essential.
If you have any questions or wish to schedule an intake meeting, please contact Susanna Akpan susanna@benmor.com
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