Med-Arb: The Adjudication Perspective

“The promise of arbitration is choice, and in order to fulfill that promise, choice must be deliberatively and effectively exercised,” Thomas J. Stipanowich, in Arbitration: the New Litigation.

“I am a firm adherent to the school of thought that denies acceptability of a person who has mediated subsequently filling the role of arbitrator, notwithstanding statutory recognition of this possibility.” Sir Laurence Street, “The Language of Alternative Dispute Resolution” [I992] ADRLJ 144.

Kari Boyle and I are writing columns this month about mediation at adjudication, commonly known as med-arb: she from the mediation perspective and I from the adjudication perspective. Kari has highlighted many of the risks in having one person both mediate and adjudicate a dispute. I will focus on some of the ethical concerns in being both the mediator and the adjudicator and some of the best practices in limiting these risks. In this article I will refer to the mediator/adjudicator as the “neutral”.

Med-arb has been a part of the dispute-resolution toolkit for labour arbitrators for a long time. (For a good overview of med-arb in labour arbitration, see this paper by Megan Elizabeth Telford.) A crucial difference in the use of med-arb in labour arbitration from its use in Tribunal settings is that in labour arbitration the parties generally agree on the arbitrator. In a Tribunal setting, the parties have no control over who will adjudicate their dispute.

Med-arb is a combination of mediation and adjudication that is different than the sum of its parts. Mediation is a voluntary process based on the initial, and ongoing, consent of the parties. Adjudication is not a voluntary process – it is either a statutory right (for human rights applications, for example) or a contractual right (in collective agreements, for example). In conventional med-arb, the parties must initially consent to the process, but once they have consented they are committed until the end – either a settlement or adjudication by the same neutral. For example, subsection 48(14) of the Ontario Labour Relations Act states: “An arbitrator … may mediate the differences between the parties at any stage in the proceedings with the consent of the parties. If mediation is not successful, the arbitrator … retains the power to determine the difference by arbitration.” In Marchese v. Marchese, 2007 ONCA 34 (CanLII) the Ontario Court of Appeal examined an agreement to med-arb in the family law context and had this to say:

[4] We do not agree with the submission that there is any ambiguity in the words “mediation/arbitration” or that those words mean “mediation or arbitration.” Mediation/arbitration is a well recognized legal term of art referring to a hybrid dispute resolution process in which the named individual acts first as a mediator and, failing agreement, then proceeds to conduct an arbitration. We note that it was appellant’s solicitor who suggested this process, naming a well known practitioner who regularly conducts mediation/arbitrations and who has written papers on the topic explaining precisely what that process entails. The motion judge did not err in rejecting the contention that there was no agreement to arbitrate.

…

[6] In our view, a mediation/arbitration agreement may be reconciled with the Arbitration Act, s. 35 which prevents an arbitrator from “conducting any part of the arbitration as a mediation.” If s. 35 applies (a point we need not decide) it can be waived and the agreement to engage in “mediation/arbitration” in this case amounted to a waiver.

There are med-arb processes that require the parties to consent to the adjudication after the completion of the mediation process. The British Columbia Administrative Tribunals Act states that if a tribunal member assists in a dispute resolution process, he or she can make pre-hearing orders in respect of the application “but must not hear the merits of the application unless all parties consent”. A dispute resolution process is defined in that Act as a “confidential and without prejudice process established by the tribunal to facilitate the settlement of one or more issues in dispute”.
The B.C. Human Rights Tribunal calls med-arb a “settlement meeting” (Rule 21) that can include interest-based mediation; early evaluation or rights-based mediation; and/or structured negotiations. If the adjudicator conducts the settlement meeting and the complaint is not resolved, that adjudicator will not hear the complaint without the written consent of the parties.

In a Tribunal setting, how does med-arb usually arise? In many cases, conventional mediation services are available early on in the application or complaint process. Parties who arrive at the adjudication hearing have either been unsuccessful in mediating or have declined mediation when it was initially offered. By the time they get to adjudication, the parties often have a better understanding of the dispute and the weaknesses of their case. Sometimes a dispute is only “ripe for settlement“ on the hearing room steps. Generally, settlement is to be encouraged over litigation. An adept administrative justice process will therefore facilitate settlement whenever and wherever the parties are ready to consider it.

A med-arb process is an efficient process because the neutral is available and the adjudication can proceed immediately if no settlement is reached. The reason for not using a different neutral for the mediation is, in part, because of efficiency and resource concerns. It is not efficient, or a wise use of Tribunal resources, to have a mediator on stand-by just “in case“ the parties decide to mediate. A related concern is the necessity of rescheduling a hearing if the mediation is unsuccessful. Rescheduling results in lost hearing days and delays in hearing the case. (This is not the case for high-volume tribunals, where there is a sufficient volume of cases to justify having a mediator on call. For example, the Landlord Tenant Board in Ontario has a mediator available on hearing days.)

Another concern about allowing parties to withdraw consent after the mediation has commenced is the risk of “adjudicator-shopping“. There is a concern that a party might agree to mediate with the assigned adjudicator as a means of disqualifying him or her from adjudicating the dispute. Or, a party could use a mediation process to assess the adjudicator and determine whether or not he or she might be sympathetic to their position.

Kari Boyle has discussed the potential pressure of med-arb to force a settlement on the parties – a conflict with the value of self-determination of the parties. I will focus on concerns about the impartiality of the neutral when he or she takes on the adjudication role. This arises in three contexts: the offering of mediation, the conduct of the mediation and in the decision-making by an adjudicator after mediation.

The timing of an offer of med-arb is critical in maintaining adjudicator impartiality. There may be a perception by the parties that the adjudicator is suggesting settlement discussions because he or she has decided that the case for one party is weak.

In the conduct of the mediation, caucusing or private meetings with each side can create perception problems. When adjudicating, it is a significant breach of natural justice to meet with the parties separately. However, mediating in plenary is often not effective in reaching settlements. In addition, since the neutral conducting the mediation will decide the case if the parties cannot reach a settlement, he or she must be careful in providing any evaluation of the case in mediation that might indicate a closed mind.

During a mediation, the neutral will likely hear confidential information that may be prejudicial to either side. The adjudicator is required to put that information out of his or her mind when evaluating the evidence of the subsequent hearing and when deciding the dispute. Some people are sceptical that anyone is capable of truly separating out that information. However, it is not uncommon in our justice system for juries to be instructed to ignore evidence ruled to be inadmissible and judges often hear evidence that they may then have to ignore because of privileges and other rules of evidence.

Good Practices

There are a few things that neutrals and Tribunals offering med-arb can do to reduce concerns about impartiality and protect the parties’ right to self-determination:

1. Ensure that you have documented the informed consent of the parties. This can be achieved through a number of mechanisms: a guide or practice note that explains the process (the BC Human Rights Tribunal has a useful pamphlet); a script that each adjudicator can rely on to explain the process to the parties; and a med-arb agreement (for an example, see the Human Rights Tribunal of Ontario Med-Arb agreement).
2. Adjudicators should have mediation training and should also receive some training on ethical considerations in med-arb.
3. Adjudicators should be mindful of when they offer med-arb and how it is offered. I and other adjudicators that I know will offer med-arb at the beginning of most hearings and tell the parties that it is the general practice to offer it in all proceedings (message: this is a routine suggestion and not because I have formed an opinion on this case). I also tell them that the offer of med-arb continues throughout the hearing and they can raise it with me at any time. This is not to say that offering med-arb after the hearing has commenced is always inappropriate. However, an adjudicator should be mindful of the possible perception of the parties and time the suggestion so it does not suggest that the adjudicator has come to any conclusions on the case.
4. Adjudicators need to be careful when providing evaluation of the case to the parties during mediation. The parties will generally expect some evaluation in the mediation. However, it is important when providing that evaluation that the neutral is not categorical and does not leave the impression that he or she has already decided the outcome of the case.
5. There should be a clear separation between mediation and adjudication. A physical separation helps; using different rooms can assist the parties in separating the two processes. It is also important to take a short break after a failed mediation and reconvene in the hearing room with an opening statement by the adjudicator. That opening statement could re-emphasize that what occurred in mediation will not be considered by the adjudicator.
6. The adjudicator needs to be vigilant, especially with self-represented parties, to ensure that no information from the mediation session is mentioned in the hearing.
7. Adjudicators need to be scrupulous when writing the decision not to include any information obtained through the mediation process.

ADR processes need to be flexible and accommodate both the needs of the parties and be suitable for the dispute. Med-arb is often a pragmatic choice. It is not either mediation or adjudication but is more accurately described, in the words of Richard Fullerton, “as a unique process differing in important ways from mediation and arbitration”. Med-arb is simply another tool for dispute resolution and one that needs to be handled with care.