The Promise and Perils of “Med-Arb”
When disputing parties tire of mediation (because it is too “weak”) or fear arbitration (because it is too “controlling”), they seek an Alternative Dispute Resolution solution that is “just right.” Recently, I’ve heard a number of highly talented negotiators, and one famous law school, endorse med-arb as the best of all ADR worlds. The advantages, however, come with caveats.
Through mediation, parties in conflict negotiate a dispute settlement with the assistance of a neutral mediator. The materials, design, and strength of the deal all belong to the disputants. If they can’t agree, the deal collapses. Each party’s attraction to controlling the settlement terms through negotiation is tempered by the frustration that each lacks power to unilaterally impose a solution. Sometimes mediation doesn’t feel sufficiently “muscular.”
In contrast, arbitration delivers closure because the parties give an impartial arbitrator authority to impose a decision. The arbitrator decides the facts, judges the parties’ legal rights, and dictates the result. Med-arb, as the name indicates, is a hybrid, sometimes proposed as a cure for a failed mediation. Frustrated, tired of spending money, time, and effort in negotiation, parties want closure and may ask the mediator to provide a binding decision. The neutral mediator who has weighed all the accusations and defenses, debated the various proposed solutions, and earned the trust of all parties during the mediation process, seems the perfect candidate to adjudicate the remaining irreconcilable differences between the parties. Med-arb may be the perfect solution; but counsel considering med-arb should think about the following:
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