Mediation-arbitration (‘med-arb’) has become an increasingly popular dispute resolution mechanism for people whose disputes are ongoing and are difficult to resolve.
This is a good process choice for parties who want a private process that is tailored to meet their needs. In med-arb, the mediator-arbitrator will first meet with the parties (usually without their lawyers present) to screen them for appropriateness for the process, and to understand the issues, their complexity, and how far apart the parties are from settling.
She will then meet with the parties in a focused, problem-solving mediation meeting, with the goal of settling some or all of the issues in dispute. There may be one or several mediation sessions, and the lawyers may attend none, some or all of the mediations.
The mediation is often highly successful and satisfying for both parties, who have often been through years of conflict, often in the courts, and who have often paid tens of thousands of dollars in legal and other fees. It is often surprising how ready and motivated people will be to settle after going through this much anguish, stress, time and money.
Usually, the parties reach a whole or partial settlement which is then sent back to their lawyers for legal advice and review. Sometimes a follow up meeting is required to finalize aspects of the settlement and sometimes the lawyers are required to attend that meeting.
In the event that the mediation does not result in an agreement, the parties will then begin a separate and distinct arbitration process. The goal of this part of the process is not to reach a settlement, but to ensure that each party has an opportunity to make his or her case to the arbitrator and respond to the other person’s case.
If the case does not settle in mediation, the mediator-arbitrator will then set up a conference call with the lawyers to map out how the arbitration will progress, how long it will take, how the evidence will be presented and what the estimated cost will be. The arbitrator will require a fee deposit at this point.
The arbitration hearing usually will take place some weeks later, so that both sides have sufficient time to prepare their cases. It will often involve presenting the evidence of witnesses under oath, and cross examination by lawyers. However, many arbitrations are able to proceed by way of written evidence and limited cross-examination, in order to keep costs down. It is almost always essential to have lawyers present for this part of the process.
After all the evidence has been provided, and each party has had reasonable opportunity to respond to the other’s evidence and question the other party, the parties and their lawyers will make their arguments to the arbitrator. The arbitrator will take detailed notes of the entire hearing, and may have a court reporter present as well if the parties agree to have one.
After the hearing is finished, the arbitrator will take the time she needs to review all the evidence, consider the arguments and write an award. The length of time that it takes the arbitrator to issue the award will depend on the complexity of the case. An arbitration Award is final and binding on both parties. Rights of appeal will be set out in the Arbitration Agreement.
Mediation-arbitration is a good process, but it is not for everyone. If the mediation is not successful in helping the parties reach an agreement, they will be required to participate in the arbitration whether they wish to continue with the process or not. It is therefore important that both parties have confidence in the integrity and affordability of the process before they begin. It is important that both parties wish to fully participate in the arbitration process, and that their lawyers also remain fully engaged in the process. Arbitration can be expensive because it can take many more days than either party expected. And it can result in a decision that makes one or both parties unhappy.
Before deciding to propose mediation-arbitration, it is wise therefore seek legal advice on the costs and benefits of this evolving process.
