Med-arb: mediation with a bite and an effective ADR model.

AuthorLandry, Sherry
PositionAlternative dispute resolution

SOARING litigation costs, lengthy delays an the psychological toll on the participants are but a few characteristics of the trial process that make alternative dispute resolution such a desirable option.[1] With the increasing demand for value billing, defense attorneys must broaden their knowledge of ADR methods. While mediation and arbitration are commonly know and used ADR methods, a lesser-known hybrid of the two - called "med-arb" - offers yet an other alternative. A San Francisco lawyer-arbitrator, Sam Kagel, pioneered the med-arb method in the settlement of a nurses' strike in the 1970s.[2]

MEDIATION

Mediation is a structured negotiation process whereby a third-party neutral works closely with the participants to reach a voluntary an consensual settlement of the dispute. Mediator usually conduct two types of meetings with the participants: joint sessions and individual caucuses.

During the joint sessions, the mediator meets with all participants together, gives the parties an opportunity to tell their stories free from interruptions, and allows parties to ask question of the others. During the individual caucuses the mediator meets with the parties separately, probes their underlying interests, and play "devil's advocate" to encourage them to view their positions realistically.

Usually, the mediation process is confidential, either by contract or statute, and statements made or documents produced during the mediation cannot be used in a subsequent legal proceeding. The individual caucuses also are confidential. The mediator cannot disclose any information given by one party during a caucus to the other party without permission.[3]

In contrast to the trial process, mediation offers (1) a less expensive alternative to full-blown adjudication,[4] (2) flexible remedies, (3) a speedy process,[5] (4) an informal setting that allows participants to air their concerns freely,[6] and (5) a solution to which all participants agreed, rather than a solution that has been imposed on them.[7]

If the participants reach an impasse during mediation, they are free to end the process and resort to either another ADR method or trial.[8] Ironically, the freedom to end the session without agreement is not only an advantage but also a disadvantage of mediation. Knowing that the mediator has no "real" power, the participants may not approach mediation seriously or may use the process merely to gain information or leverage for future negotiations.

In years past, mediation in the United States has been used most often in the context of labor negotiations between employers and unions, but in recent years the process has expanded to include a broad range of disputes: domestic relations, property damage, personal injury, and even minor criminal cases.[9] Because mediation is perceived to be a conciliatory, as opposed to adversarial, process, its application is unquestionably valuable when the disputants desire to maintain a positive, ongoing relationship.[10]

ARBITRATION

Arbitration resembles adjudication in that a third-party neutral hears testimony, reviews evidence and renders a binding decision. While often less formal than the trial process, arbitration is more formal than mediation and is likely to be more time consuming and expensive. Typically, the arbitration process is divided into six steps: "initiation, preparation, preheating conferences, hearing, decision making, and award," the "award" being the arbitrator's decision.[11] Arbitrators generally must base their decisions on the law of contract-not on the parties, underlying interests.[12] Judicial review of an arbitrator's decision is narrow in scope, and usually a reversal by a court is "possible only where an arbitrator commits fraud or shows excessive zeal in defining the issues that can be arbitrated."[13]

Like mediation, arbitration has several advantages over the trial process: (1) an opportunity to select in arbitrator with expertise in the area of the subject matter of the dispute, (2) an opportunity to determine what procedural rules and substantive law that will govern the process, (3) a quicker resolution and (4) a confidential, private proceeding.

Arbitration is commonly used in the resolution of business disputes by parties "desiring private, binding decisions by third-party neutrals."[14] It also has been used successfully to resolve community disputes, automobile industry claims and divorce settlements. It is most effective when a negotiated settlement is unlikely and the parties do not desire an ongoing relationship.[15]

MED-ARB METHOD

The med-arb method is a "technique that fuses the 'consensuality' of mediation with the 'finality' of arbitration."[16] Although it assumes a variety of forms, all share a common two-step process. First, a third-party neutral mediates the dispute with the participants in an effort to reach a voluntary agreement. Second, if the participants are at an impasse and unable to resolve the dispute by voluntary agreement, then a third-party neutral renders a binding decision on the unresolved issues.

In the purest form of med-arb, the person who acts as the mediator also acts as the arbitrator and is known as a med-arbiter.[17] There is an interesting and unanswered question, beyond the scope of this article, as to the appropriate standard of professional liability to which a med-arbiter should be held. Should the med-arbiter be subject to the professional standards of a mediator or an arbitrator, who generally has quasi-judicial immunity, or both?[18]

Where traditional mediation is unlikely to be successful, med-arb can be viewed as a superior alternative to either orthodox arbitration or the trial process because the med-arb method "pays strict adherence to the axiom that the best agreement is an agreement which the parties themselves reach." The basic premise being that under the threat of arbitration, the participants will try harder to reach a voluntary agreement. They also may perceive the med-arb method to be "safer" than orthodox arbitration or the trial process...

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