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Med-Arb: From the Mediator Perspective

My Slaw colleague Ian Mackenzie suggested that we each explore the topic of med-arb – I would take the perspective of mediation and Ian the perspective of arbitration. I thought that would be a great way to spur more discussion about this “hot” topic.

When I taught “Introduction to Dispute Resolution” to first year students at UBC Law School a few years ago we spent some time collaboratively constructing the “DR Continuum”. I’m sure most of you are familiar with the linear chart showing dispute resolution processes along a line from “avoidance” on the far left to “war” on the far right. Negotiation and mediation were typically shown around the middle while arbitration and litigation were closer to the right end of the spectrum. That continuum was helpful at the time but it is no longer capable of encompassing all of the new forms of conflict resolution processes, and combinations of processes (“hybrids”), being invented to meet changing needs and conflict environments.

One of the most popular hybrids these days is “med-arb”, a mediation process followed by an arbitration (binding adjudication) process. For the purposes of this discussion I will assume that the same person plays both roles. Med-arb originated in the collective bargaining context because it was seen to combine the flexibility of mediation with the guarantee of a final and binding decision. It has since spread to other civil and family disputes. Parenting coordination, for example, is a modified med-arb model.

Before launching into a high level analysis of the pros and cons of med-arb from the perspective of mediation, it is important to note that there is no black and white – the advantages and disadvantages depend on the situation including the goals, values and expertise of the parties and the neutral. As Baril and Dickey pointed out:

What one party may see as a strength of the med-arb process (the power and leverage of the med-arbiter during mediation) may be viewed by another as a flaw (power that too often results in pressure tactics and “coercion” of a mediated settlement).

Benefits / advantages of med-arb include:

  • Flexibility
  • Can be less costly and more efficient than arbitration or litigation
  • Can save time and money over separate sequential phases
  • Can help to preserve ongoing relationships
  • Provides a final resolution to a dispute
  • The prospect of a binding arbitral decision may encourage settlement

Risks/disadvantages of med-arb include:

  • Risks to confidentiality:
    • A party may divulge information to the mediator in a private caucus that they do not want shared with the other parties.
    • There is a danger that the med-arbiter may consider and weigh this information in the arbitration phase.
    • Can a med-arbiter keep a secret from herself?  Even if she can, what about the parties’ perceptions of the neutral’s fairness?
    • There is a natural justice risk that an eventual award may be set aside if the losing party could show that the med-arbiter based her decision on confidential (undisclosed) information.
  • Risks of coercion: when the power to decide the dispute is invested in a person acting as a mediator, that person has power to pressure the parties into settlement. Evaluation by the mediator will be highly ‘suggestive’ of how he/she will decide the legal and factual issues in the arbitration phase. Parties may choose not to raise their concerns at that point in order to avoid alienating the decision-maker. How does this affect the parties’ self-determination?
  • Risk of perception of bias: particularly if the med-arbiter makes a “settlement suggestion” in the mediation phase.
  • Need for dual expertise: it is very important for the med-arbiter to be trained and skilled in both mediation and arbitration.
  • Risk of posturing: when the neutral has decision-making power the parties attempt immediately to win the favour of the neutral. They may also be much less likely to be forthcoming about their true interests, goals, intentions and potentially harmful information.
  • Risks of party confusion around the timing and nature of the med-arbiter’s change of role.
  • Change of focus: similarly, if the med-arbiter provides evaluations during the mediation phase the parties will likely engage in advocacy geared toward receiving a good legal evaluation instead of good problem solving.

On this last point, my colleague Wayne Plenert, experienced lawyer and mediator, shared a relevant story from a roleplay session as part of his LLM program at Osgoode. There were 6 role play groups, each conducting a med-arb of a dispute between two businesses. In all but one group, the med-arbiter implemented a model in which either party could, at any time, declare that it was an arbitration and obtain a decision. These med-arbiters all made detailed notes and used cross-examination techniques to clarify facts. While settlements were reached, the results were very narrow in scope. In the final group, the only difference was that a party could not elect to begin arbitration until the mediation discussions had reached a stalemate. In this group the lawyers pushed their chairs back, the business people leaned forward and a really creative business outcome was negotiated including a profit sharing arrangement to pay for the devastation caused by the problems.

From this story I learned that the looming prospect of arbitration can affect the behaviour of the med-arbiter, the behaviour of the parties, the behaviour of advisers and lawyers, and the creativity of the result in subtle and not so subtle ways.

Again, what one party views as the biggest strength of med-arb may be viewed by another as its biggest concern. The way in which the participants react to the changing role of the med-arbiter can lead to healthy outcomes or to less satisfactory outcomes including confusion, distrust and a sense of unfairness and even betrayal.

What may sound like a simple and cost-effective tool is actually very complex from a behavioural and ethical perspective. That said, the parties control the choice of process and as long as they are fully informed about the positives and negatives (and these are carefully documented in writing beforehand) it remains an important option for them. It may be a more risky option when self-represented parties are involved, particularly in family law.

Bottom line: There is a danger that the power associated with the arbitration phase will swallow up the unique benefits of the mediation phase. The resulting hybrid process may be what the parties desire but perhaps it shouldn’t be called “mediation”. “Settlement conference” anyone??

Special thanks to Wayne Plenert and to Carol Hickman Q.C. for sharing her paper “Ethical Issues Concerning Med-Arb in Family Matters” prepared for her LLM program at Osgoode.

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Comments

  1. This is a useful discussion of an important topic. Med/arb is not all that new – it was very much on the table when the Uniform Arbitration Act was developed in 1989-90. The only section in that Act that was not settled, i.e. the Uniform Act gave alternative provisions, was on med/arb. (see section 35 at page 106) The question was the default provision: the parties may agree that a mediator may do arbitration, or the parties may not agree to that. However, the provision was subject to change by the parties, so the statutory rule was only a suggestion, or the rule if the parties did not elect otherwise.

    Ontario’s choice was to make the default provision a ban. Ontario’s Commercial Mediation Act, 2010 (to implement the UNCITRAL Model Law on International Commercial Conciliation) made the same choice.

    Alberta’s Arbitration Act went the other way (also in s. 35).

    The main argument I hear from the profession in favour of med/arb is that the threat of arbitration makes the parties focus more intently on making a deal themselves during mediation, so the arbitrator won’t do it for them.

    The main argument I hear against med/arb is that when the mediation is done, the mediator knows who he/she thinks should win, and it may prejudice the more independent adjudication process of arbitration.

    I certainly agree that the process should be explained to potential parties before they sign up for it.

  2. Very useful analysis of the practice of med arb. As John Gregory mentioned, it is not at all new. Traditional communities in West Africa and in Aboriginal communities in Australia have used it for centuries in dispute settlement. The parties are told beforehand the advantages of mediating and know very well that in case there is no common agreement, the kingsman or chief will arbitrate.

    Lawyers and academics have criticised these practices in their absence of “access to justice”. the reasons for med- arb in those communities is that they are completely outside the institutional legal system. Perhaps one should ask the question whether such traditional justice systems should be institutionalised. India I believe has initiated something of the sort to legalise traditional justice.

    It is also very interresting to explore all new hybrid concepts in dispute resolution.

  3. I share the views of John and Charlotte. From my experience and dual role as Arbitrator and Accredited Mediator, I think a clear explanation of the med/arb process to parties and their advisers is fundamental. Great care must be taken by the med-abrbiter to facilitate the process (during mediation stage) , leaving the parties to take charge.

    There is a potential danger that if the med-arbiter is perceived by the parties or their advisers of being too assertive or assuming the role of arbitrator during the mediation stage, there is likely to be a greater tendency to assume that such confidential information obtained during caucus in mediation may influence his award, if the matter proceeds to the arbitration stage. therefore, it is imperative to cautiously and mindfully be aware of the dual roles involved in med/arb. Tailoring the appropriate skills as the process progresses and/or demands is essential. In mediation, a laid-back approach, allows the parties to drive the process to settlement, if they and is key to maintaining neutrality and independence. On the contrary, arbitration requires a more assertive role on the arbitrator. The ability to use both skills at appropriate stages, without compromising neutrality and independence is of vital importance.

    The opportunities med-arb offers are great.If parties are desirous of working out a deal in what may be a difficult circumstances, having an opportunity to put the dispute behind via a negotiated settlement that is binding must be welcome.

  4. This is fabulous article. The comparison between med-arb and settlement conferences is particularly apt. Like a med-arbiter, a judge who tries to talk parties into settling during a pre-trial conference brings power and authority into mediation, and compromises the parties’ self-determination. This is especially (but not exclusively) true if the judge will have the authority to make a binding decision in the matter, as in med-arb.

    I have an article coming out in the Journal of Dispute Resolution arguing against judicial settlement-conferencing in child custody and access cases. I think pure mediation by a non-judge is much better option, given the special features of these cases. A big part of my argument is the very reason identified by Kari’s post: “power associated with the arbitration phase will swallow up the unique benefits of the mediation phase.”