IN THE PROFESSION
is the same person, unless someone (including the mediator who
can opt out) objects during the process, in which case an alternative
arbitrator has already been selected in advance. With the parties’
prior written consent and established rules for the arbitration
process, the parties can obtain an efficient and economical result.
Is This A New Approach?
While it is not a new concept, it has not been commonly used
in the U.S. However, Med-Arb is seeing growth internationally
in Canada, Turkey, China, Hong Kong, Singapore, India, and
Brazil, particularly in industries where arbitration has been
widely adopted, like in commercial disputes, construction, labor,
and trade disputes. The ADR Institute of Canada, for example,
recently announced that it was pioneering the “world’s first” Med-
Arb framework, with new rules, practitioner designations, and
templates for Med-Arb.
Likewise, Istanbul’s Centre for Arbitration launched a similar
program in late 2019 and it is seeing commercial disputes resolved
in just eight weeks, as opposed to the 541-day average it takes to
have a case resolved by the courts. With the growing time and cost
pressures facing litigation and commercial arbitration in the U.S.,
Med-Arb may offer a faster, more cost effective, private forum for
the resolution of disputes.
What Type of Cases Are Best Suited for Med-Arb?
More commonly used in family law cases, Med-Arb has seen an
up-tick in business disputes. In the business realm, commercial,
construction, condominium, shareholder, joint venture, labor,
securities, and supply chain disputes are well suited for Med-Arb.
These types of cases generally have significant issues or money
at stake and may have contractual arbitration clauses, but where
it makes sense to use a hybrid process that gives the parties the
chance to sort out their differences.
Sometimes valuable commercial relationships are more important
than the stakes involved in the dispute and most relationships
do not survive litigation. Med-Arb can be useful in cases where
there is an ongoing relationship, such as a labor dispute, supplier
dispute, or fixed relationships between the parties. Each situation is
different, and Med-Arb does not work for every case, but it can be
useful where time and litigation costs matter.
What is the Downside?
Some practitioners have expressed concern over how to protect the
integrity of the arbitration where confidential information has been
shared during the mediation phase. The fear is that where the same
person is serving as both the mediator and arbitrator, he/she may
gain information in private caucuses during mediation that they
otherwise would not have been privy to in the arbitration, which
could sway their decision. While this can be resolved by using a
separate arbitrator or using an Arb-Med framework, proponents of
Med-Arb say the benefits outweigh the risks.
Med-Arb is not for every case, but it can be a successful approach
for clients looking for a common-sense resolution to a dispute.
With clear rules and prior written consent, it can be particularly
useful where cost or speed is important.
In an age where litigation and even commercial arbitrations have
expanded in time and costs across the globe, innovative lawyers
are looking for the best process to achieve a successful outcome
for their clients. Whether that is mediation, arbitration, Med-Arb,
Arb-Med or another variation of ADR, the client need for a swift
and affordable means of ending legal disputes is driving change in
the approach to conflict resolution.
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