Med-Arb

Med-Arb, short for mediation-arbitration, is a hybrid alternative dispute resolution process adopting the benefits of both mediation and arbitration. In this process the parties first attempt to collaborate on a settlement through mediation with a mediator. If this initial mediation phase is not successful, or if some, but not all, of the matters at issue are settled, the process and the parties move onto an arbitration process to finally settle the dispute or the remainder of the dispute. The mediator can take on the role of the arbitrator (if he/she is competent to do so) – sometimes referred to as a “med-arbiter” - and issue a binding award, or a different arbitrator can be appointed, though this latter change in personnel seems to make it a mediation process followed by a separate arbitration process.

Med-Arb probably woks better when the mediator becomes the arbitrator, thereby saving time and money by not having to start arbitration from scratch following an unsuccessful mediation. There may be some concerns over sharing confidential information with a mediator who then uses that information “against” a party in the arbitration phase. However this may cut both ways as regards the other party, thereby equalising the risk.

Med-Arb is attractive as it allows the parties control some or all of the outcome in the mediation phase, but also provides for a binding arbitral award if the mediation phase does not settle any or all of the dispute. This is an advantage over arbitration when once commenced, the Parties effectively lose control over the process. Med-Arb is especially effective when under time pressure and or where there is an enduring relationship between the parties to protect e.g. employment situations or design-build-finance-operate- and-transfer construction contracts. While arbitration can sometimes reflect a consensual agreement between the parties (i.e. in a consent award) the mediation element of med-arb allows for some (or all) of a multi-matter dispute to be settled by the parties themselves in negotiation, with non-settled elements arbitrated upon quickly thereafter.