Med-Arb and other hybrid processes have been received with reluctance in the United States and UK, mainly because of ethical concerns of the arbitrator. Outside of common law countries, however, the legal culture has been more welcoming to the involvement of an adjudicator — whether a judge or an arbitrator — in settlement discussions. This range of views was the topic of a panel discussion at the UIA’s recent World Mediation Forum in Lisbon, Portugal.
Joe Behan of Dublin, Ireland, reframed the topic as the role that mediation plays in arbitration practice. ICC Arbitration Rules Appendix iv(h)(ii) allows the arbitral tribunal to facilitate settlement, with the proviso that such efforts not derogate the enforceability of the award. CIArb Practice Guideline 7 provides for the parties to waive challenges on the basis of settlement efforts, as do the rules of the HKIAC and SIAC. JAMS has a “mediator in reserve” policy in international arbitrations. CPR categorically forbids arbitrators from acting as mediators. Some courts have held agreements for med-arb, and awards deriving from med-arb, to be enforceable, even where statutes prohibit it, if the parties have intentionally and knowingly waived such objections.
Mark Appel of ICDR emphasized the need for flexibility in applying dispute resolution processes to particular needs of the matter and the clients – a message consistent with AAA’s longtime insistence that the client’s needs, not the purported professional expectations or standards of the neutral, should drive ADR. He also described AAA’s Prudential Whole Life process from the late 1990s in which 70,000 claims were subjected to a grid analysis, followed by mediation and arbitration if needed.
Giorgio Grasso of Rome, Italy, provided an overview of benefits and risks of various hybrid processes. He cited the Italian experience of consumer claims in the communications industry, which is a multi-step process implicating med/arb at the end.
Wang Cheng Jie of the China Center for Promotion of International Trade (CCPIT) described the intricate Chinese system in which both arbitrators and judges are empowered to engaged in settlement efforts. He grounded the intellectual basis for system on Confucius’ adage that “harmony is a virtue.” He cited a success rate of about 70% in 12,000 cases involving 50 countries and regions since establishment of the CCPIT Mediation Centers in 1987. Wang also explained that cases that approach a CCPIT Mediation Center but are not resolved can go to CIETAC and an Arbitration Commission that is distinct from the mediator. (CCPIT Mediation Procedure Art. 28). By contrast, cases approaching CIETAC in the first instance are subject to mediation efforts by the arbitration tribunal itself, though consent of the parties is required. He reported that 30% of CIETAC-filed cases are resolved by mediation.
Once again one is reminded that, however fierce the debates may take please in the United States, “there is a world elsewhere.”
Thank you for placing American resistance to med-arb in a wider context. I agree with AAA that the needs of the parties should trump overly mechanistic professional rules. Having been a full-time mediator and arbitrator for over 20 years, I consider myself quite adept at helping counsel develop hybrid process steps within traditional ADR formats. For example, in both mediations that are stalled, and arbitrations that are proceeding well, I might ask counsel and their clients if they think it would be helpful to tee up a discrete factual or legal question for an expeditious resolution, so that thereafter the parties can take a fresh look at settlement possibilities. Sophisticated corporate counsel appreciate outside-the-box thinking that is grounded in experience and common sense.