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ADR: Unlimited Possibilities

Robert M. Smith, Esq.


You can combine ADR processes -- for example, mediation and arbitration. The process and result are limited only by the imagination of the disputants and the neutral.

Combinations are a safecracker's dream. They may be equally useful in ADR to open the settlement door.

In earlier editions of this newsletter, I have written about different types of ADR. ("ADR" stands for alternative dispute resolution-- alternatives to the civil justice system.)

The subjects have included mediation, arbitration, the minitrial-- a few of the types of ADR. But one thing I haven't discussed is the possibility of combining different types of ADR.

Different ADR processes can be-- and often are-- tried in succession in the hope that when one is unsuccessful, another may be successful.

One advantage to a multi-step process is that it keeps the parties in a settlement mode. If one settlement process is unsuccessful, another automatically begins.


One, Two

A common technique is to begin with a non-binding settlement process-- like mediation or minitrial-- and, if that is unsuccessful, follow it with a binding, adjudicatory process like arbitration or private judging.

This assures the parties that a resolution to their dispute will be achieved, either through mutual agreement or through an enforced decision.

Another common technique is to begin settlement facilitation and adjudicatory phases with a first step requiring face-to-face negotiations. "Med-arb" describes the process by which a dispute is first submitted to mediation, and, if the mediation efforts fail, the dispute is submitted to binding arbitration.

Just As Solid

One advantage to this is that any agreements reached in the mediation may be included within the final arbitration award. These mediated agreements will be enforceable as an ordinary arbitration award.

A controversial aspect of med-arb is whether the mediator will also act as the arbitrator. This is left up to the wishes of the parties and the mediator; it is, obviously, agreed on in advance.

One side argues that if the parties know that the mediator will act as an arbitrator, this gives the mediator more leverage in the mediation process.

The other side argues that this arrangement compromises the integrity of the mediation process and may also reflect on the arbitrator's neutrality.

Another technique to avoid any potential problems with the mediator's also acting as arbitrator is to appoint the arbitrator at the beginning of the mediation phase. This technique is known as "co-med-arb."

The arbitrator sits in on the initial joint mediation session, but withdraws during the private caucus phase.

Parties may provide for med-arb (or any other hybrid or multistep ADR process) in a pre-dispute contract clause. They may also agree to submit an existing dispute to med-arb.

Mediation First

Parties that have an existing arbitration agreement may decide that they would like to try mediation before arbitrating. In this situation, they may modify-- formally or informally-- their existing agreement to provide for the mediation.

The med-arb agreement should discuss who has the authority to declare that the mediation phase is at an impasse and that the arbitration phase will begin.

It may be dangerous to leave the decision as to when the mediation has failed to the parties. This may allow one party to force the proceedings prematurely into arbitration when there is still a chance of a mediated settlement.

On the other hand, the principle that mediation must be voluntary to be successful may dictate that the mediator consider declaring the process at an impasse and suggesting that the parties begin the arbitration phase.


The arbitration phase may differ from a single-step arbitration hearing in that some of the facts may have already been uncovered in the mediation phase and need not be presented again.

Any facts that the parties agree on and that are uncovered during the mediation phase should be the basis for stipulations between the parties before the arbitration phase.

Variations on hybrid or multi-step processes are bounded only by the parties' (and the neutral's) imaginations.

*This article is taken from a chapter of Mr. Smith's book Alternative Dispute Resolution for Financial Institutions (West Group, updated annually, 1200 pp.)