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Richard Fullerton provides dispute resolution servicesfor parties to construction, real estate,

homeowner associations, and com-mon interest community disputes.He serves on the arbitrator and

mediator panels of the American ArbitrationAssociation. He can be reached at (303) 229-8668,

adr@richardfullerton.com, or his Web site atwww.richardfullerton.com.

This article, which is adapted from an article entitled“Alternative Dispute Resolution: The Ethics of

Mediation-Arbitration,” published in volume 38 ofThe Colorado Lawyer (May 2009), is reprinted with

permission. Copyright (c) 2009 TheColorado Lawyer and the Colorado

Bar Association. All Rights Reserved.

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MED-ARB AND ITS VARIANTS:

Ethical Issuesfor Partiesand Neutrals

BY RICHARD FULLERTON

MED-ARB AND ITS VARIANTS:

Ethical Issuesfor Partiesand Neutrals

BY RICHARD FULLERTON

A look at the ethical problems

raised by thishybrid dispute

resolution processand its variants.

I n the realm of alternative dispute resolutionmethods, mediation and arbitration are themost popular.1 Despite their popularity, each

process has detractors—mediation for its lack of abinding decision,2 and arbitration for its limitedright of judicial review3 and the lack of party con-trol.4 These perceived shortcomings have causedparties to seek additional dispute resolution optionswith the hope of finding a conclusive, fair alterna-tive that also is efficient.

Bull’s Eye/Getty Images

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One possible alternative to individual processesis a combination of mediation and arbitrationknown as med-arb. Sam Kagel has been credited asthe first to combine the two methods into onewhen settling a controversial nurses’ strike in the1970s.5

The hybrid med-arb differs from using media-tion and arbitration sequentially in that if the medi-ation phase of med-arb is unsuccessful in resolvingthe entire dispute, the mediator becomes the arbi-trator, holds an arbitration hearing and issues abinding award. Med-arb eliminates the need tostart over with a new arbitrator who is wholly unfa-miliar with the dispute. Despite the efficiency ofmed-arb, it has serious limitations that derive fromhaving the same neutral conduct the mediation andthe arbitration. The danger is that the core princi-ples of each process may be compromised.6

This article takes a closer look at med-arb todetermine whether complaints of ethical compro-mise are justified.

DefinitionsDespite the prevalence of mediation and arbi-

tration, few parties or their counsel are familiarwith the ethical foundations. Fewer still under-stand the particulars or the ethics of the med-arbprocess. Before discussing the ethical underpin-nings, however, a review of the definitions of theprocesses as used here may be helpful.

The following definitions are drawn from theColorado Bar Association Web site:7

Mediation is a process whereby:• a neutral and impartial third party (the

mediator) • facilitates communication between nego-

tiating parties which• may enable the parties to reach settle-

ment. Arbitration is a process whereby:

• one or more neutraland impartial expertthird parties

• hear and consider the evi-dence and testimony pro-vided by the disputants and

• issue a binding or non-bindingdecision.

Med-arb is a process whereby: • a neutral and impartial third party • facilitates communication

between negotiating parties and• failing settlement, receives evi-

dence and testimony providedby the parties and

• issues a binding decision.Other definitions of these terms abound, but

most are similar to these.

Ethical Foundations of Mediation andArbitration

Principles supporting mediation and arbitra-tion include collective personal values, which“get their authority from something outside theindividual—a higher being or higher authority(e.g., society)”8—in this case several recognizedassociations representing dispute resolution pro-fessionals.

Mediation Principles

The Model Standards of Conduct for Media-tors9 provide guidance in evaluating the ethicalbasis of mediation. Three of its nine standardsare of interest here: Standard I, Self-determina-tion; Standard II, Impartiality; and Standard V,Confidentiality.

Standard I. Self-determination

Standard I, Paragraph A, provides in relevantpart:

A mediator shall conduct a mediation based onthe principle of party self-determination. Self-determination is the act of coming to a volun-tary, uncoerced decision in which each partymakes free and informed choices as to processand outcome. Parties may exercise self-deter-mination at any stage of a mediation, includingmediator selection, process design, participa-tion in or withdrawal from the process, andoutcomes.Paragraph B further states: “A mediator shall

not undermine party self-determination by anyparty....”

Self-determination recognizes the right of par-ties to make independent decisions, beginning

with voluntary participation inmediation. An adage common

among mediators allows thatalthough parties may be obliged

to attend mediation, they fulfillthat obligation merely by showing

up. Their ensuing participation is vol-untary and they have the freedom to with-

draw at any point. It has been said that “thefreedom to engage in the process but alsoto walk away from it is critical to effectivemediation.”10

Self-determination also allows theparties joint authority in determining

the format, content and conduct ofthe mediation, and particularly the

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terms of any agreement, without undue influenceby the mediator.

As we will see later, med-arb violates the self-determination principle by eliminating the rightto withdraw voluntarily.

The degree of mediator interaction with theparties during mediation depends on the media-tor’s personal style. A transformative stylerestricts a mediator from exerting influence,instead empowering parties to chart their owncourse regardless of outcome. In the more com-mon facilitative mediation, a mediator has thelatitude to clarify party perspectives that couldlead to agreement. An evaluative mediatorexpresses personal opinions on the merits ofparty positions in encouraging settlement.Regardless of style, parties maintain the right toreject any influence of the neutral. However, ifthe neutral is ultimately to be the decider in asubsequent arbitration, mediator–party interac-tion may be undermined.

Standard II. Impartiality.

Paragraph A of Standard II of the MediatorStandards provides: “A mediator shall decline amediation if the mediator cannot conduct it in animpartial manner. Impartiality means freedomfrom favoritism, bias or prejudice.”

Mediation promises a balanced process.Paragraph B instructs mediators to “avoid con-duct that gives the appearance of partiality.”

Mediators often meet separately with eachparty to explore facts and beliefs that could affectthe outcome of mediation, even though ex partecommunication presents an increased risk of biasor the appearance of bias.

Because of the very nature of mediation, how-ever, an “appearance of impartiality” does nothave the same pivotal consequence in mediationthat it has in arbitration. Arbitrators are not sup-posed to have any ex parte communication.However, the private communication from themediation phase of med-arb necessarily is knownby the neutral in the arbitration phase becausethe mediator is also the arbitrator.

Standard V. Confidentiality

Paragraph A of Standard V of the MediatorStandards provides, “A mediator shall maintainthe confidentiality of all information obtained by

the mediator in mediation, unless otherwiseagreed to by the parties or required by applicablelaw.”

Mediators often rely on confidential informa-tion to encourage parties to rethink the perspec-tives they bring to a dispute. Particularly in facili-tative or evaluative mediation, the “task of themediator is to attempt to persuade each party tofocus on its real interests, rather than on what itconceives to be its contractual or legal entitle-ment.”11

This technique can result in greater party sat-isfaction and, consequently, higher rates of agree-ment. In encouraging parties to share confiden-tial information, the mediator pledges confiden-tiality so that the information disclosed will notbe used against them. The critical commitmentsto self-determination, impartiality, and confiden-tiality are so important to mediation practice thatany effort that does not uphold them would notbe considered mediation.

In med-arb, confidentiality of private informa-tion is not shielded from the neutral when actingas arbitrator; even if the other side does not havethe information, the decider in the dispute does.Private information that could be helpful in find-ing a resolution in mediation could be usedagainst a party in the looming arbitration phase.

Arbitrator Standards

The Code of Ethics for Arbitrators in Com-mercial Disputes (Arbitrator Code)12 providesguidance in examining ethical considerations inthe arbitration process. The Arbitrator Code isorganized into ten canons. It was originally pre-pared in 1977 by a joint committee of representa-tives from the American Arbitration Association(AAA) and the American Bar Association. It wasrevised in 2004 by an ABA Task Force and spe-cial committee of the AAA. Both the original1977 code and the 2004 revision were approvedand recommended by both organizations.

Four Canons are pertinent to evaluating med-arb ethics.

Canon III. Appearance of Impropriety

Canon III states: “An arbitrator should avoidimpropriety or the appearance of impropriety incommunicating with parties.” This canon takes

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By having a single neutral conduct both the mediation and arbitration, several core principles guiding the conduct

of arbitrators and mediators may be compromised.

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aim at the “impropriety” created by the arbitratorhaving ex parte communication with a party in-volving the content of a case. Paragraph B pro-vides, with a few exceptions, that “[a]n arbitratoror prospective arbitrator should not discuss aproceeding with any party in the absence of anyother party....” As discussed above, this canonattempts to shield the arbitrator from influencethat could bias the award.

Canon IV. Fair Proceedings

Canon IV states, “An arbitrator should con-duct the proceedings fairly and diligently.” Thiscanon reinforces the due process right of partiesto present evidence, to be represented by coun-sel, and to a timely process. It allows the arbitra-tor to continue the arbitration if one party fails toattend, and generally provides guidance for theconduct of the arbitration pro-cess. For example, it allows thearbitrator to ask questions at thehearing.

Paragraph H of Canon IValso permits the arbitrator tosuggest to the parties that theysettle, but it does not give arbi-trators the right to pressurethem to do so. Arbitrators donot have the same leeway incommunicating with the partiesthat mediators have.

Canon V. Independence

Canon V states, “An arbitrator should makedecisions in a just, independent and deliberatemanner.” It instructs the arbitrator to decide allissues independently and “not permit outsidepressure to affect the decision,” thereby isolatingthe neutral beyond the even-handed exchange ofthe arbitration hearing. The arbitrator also islimited to deciding the issues before him or her,whereas in mediation, the mediator is free tourge the parties to consider ways to “expand thepie” or otherwise resolve the dispute outside theconfines of the controversy.

Canon VI. Trust and Confidence

Canon VI states, “An arbitrator should befaithful to the relationship of trust and confiden-tiality inherent in that office.” This canonaddresses respect for confidentiality, which is animportant aspect of both arbitration and media-tion. However, in mediation, the mediator isallowed—even encouraged—to hear confidentialinformation in private caucus to assist in resolv-ing the dispute. The Arbitrator Code does notallow any ex parte communication.

Thus, this code and the Mediator Standardsare formulated on different and sometimes op-posing principles. The Mediator Standards allowprivate communication between mediator andthe parties, relying on self-determination andconfidentiality to ensure the parties’ right tomake important decisions without influence. TheArbitrator Code, by contrast, protects arbitratorsfrom confidential information by allowing onlyplenary exchanges.

These opposing principles cannot both beobserved in med-arb.

Med-Arb and Ethical ConcernsThe med-arb process has no governing ethical

code of its own. For ethical guidance one mustlook to the Mediator Standards and the Arbi-trator Code.

As a hybrid process, med-arbdoes not have universally ac-cepted procedures. This articleassumes that med-arb includesthe following procedures:1. First the parties agree on aprotocol detailing both themediation and arbitration phas-es. The protocol is incorporatedinto a med-arb agreement. Bysigning this agreement, the par-ties commit to participate ineach process until a mediated

resolution is reached and executed or, if a fullsettlement is not reached, a binding arbitrationaward is issued.

2. The process begins with mediation. If medi-ation results in a complete agreement, themed-arb is terminated without the need forarbitration. Lacking full agreement, the medi-ator closes the mediation and commences thearbitration phase.

3. During the mediation phase, the mediatormay engage in ex parte conversation with eachside, but may not do so during arbitration.

Parties unfamiliar with med-arb may not real-ize that it differs in significant ways from tradi-tional mediation and arbitration. However, assoon as the parties sign the med-arb agreement,changes occur. First, by committing to engage inmed-arb, the parties relinquish the right to vol-untary participation and voluntary withdrawal,both of which are protected by Mediator Stan-dard I (self-determination).

Second, instead of negotiating freely, they mayfeel pressured to accept an offer before an arbi-tration award is imposed.

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Med-arb raisesconcern about theparties’ right to

self-determinationand possible arbi-

trator bias.

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If the parties proceed to arbitration, an ethicalproblem arises because the neutral engaged in exparte communication during mediation. In thisscenario, it is possible—even likely (even thoughsome dispute resolution professionals disagree)—that this communication will influence the neu-tral’s view of the evidence and ultimately thearbitration award. Thus, ex parte communication,although not a danger during the mediationphase, becomes one in the arbitration phase inlight of Arbitrator Code Canon III, which doesnot permit “impropriety or the appearance ofimpropriety in communicating with the parties.”

One commentator has written that informa-tion disclosed during a private caucus in themediation phase “might tempt the neutral intoquestionable conduct during the arbitrationphase. Could a mediator-turned-arbitrator prop-erly conduct questioning during the arbitrationphase of a Med-Arb proceeding directed at infor-mation disclosed during earlier private sessions ofthe mediation?”

Another commentator questioned, “Whywould it be permissible for such information tobe possessed by a Med-Arb arbitrator but not byany other arbitrator or by a court?”13

Some neutrals in med-arb cases claim to beable to disregard confidential informationacquired during the mediation phase and say thatthe risk of such information tainting the arbitra-tion phase is limited. One commentator wrote,“Concerns about the possible contamination ofthe neutral by receiving information or argu-ments in private meetings are overstated. Judgesregularly rule on the admissibility of evidenceand if that evidence is rejected the judge disre-gards the information that has been tendered.”14

In addition, Canon VI of the Arbitrator Code,which cautions arbitrators not to “gain personaladvantage or advantage for others, or to affectadversely the interest of another,” can be used asa shield from accusations of bias.

But the problem remains that med-arb has noprocedural safeguards against the effects of confi-dential information and the practice of allowingsuch communication makes them susceptible tobias. Knowing this, a party could “take advantageof this process” by trying to persuade the media-tor—even by introducing misleading informa-tion—in order to later influence the finalaward.”15 And even worse, that information wouldbe protected by confidentiality and not subject tochallenge in court.

To recap, the self-determination principle isseverely compromised in med-arb by the elimina-tion of voluntary participation and the absence ofa withdrawal option. Also, the impartiality princi-

ple is violated by the ability of theneutral to engage in ex partecommunication. Both concernswould be recognized by users ofmed-arb only with a thoroughunderstanding of the differencesbetween med-arb and the principles ofaccepted mediation and arbitration prac-tice. Except during preparation by counsel or theneutral, users may not notice any procedural dif-ference signaling these changes.

Med-Arb Is a Unique ProcessSupport for med-arb may be based on the fun-

damental misconception that med-arb providesall the benefits of traditional mediation and arbi-tration in a single process.16 The idea that med-arb provides the best of both procedures is simplyinaccurate. Med-arb offers what appears to bemediation, but parties are subjected to uniquepressures in avoiding an imposed decision. If theygo to arbitration, the award they want to rely onfor finality may be tainted by arbitrator bias.Med-arb can be described more accurately as aunique process differing in important ways frommediation and arbitration.

Med-Arb Practice VariationsTo reduce the ethical concerns of the com-

bined practices, practitioners have come up withsome variations in order to offer parties greaterprotection and reduce the potential for bias.Several variations are considered below.

Overlapping Neutrals

One med-arb variation involves using twoneutrals, a mediator and an arbitrator. Instead ofisolating the arbitrator from the mediation, thearbitrator attends joint mediation sessions as anobserver and receives all documents exchangedby the parties during the mediation. The arbitra-tor is only prevented from having access to pri-vate communication between the mediator andeach party.

If an agreement is reached, the arbitrationphase is abandoned. If not, the mediator isexcused and the arbitrator holds an arbitrationhearing to receive evidence.

Overlapping neutrals is efficient because, ifthere is a need to hold the arbitration, the arbi-trator is already familiar with much of the casewhen arbitration starts. It also offers legitimateseparation to avoid arbitrator bias.

But it is more expensive to engage two neu-trals. In addition, the concern remains that theparties are still required to forego voluntary with-drawal from the mediation portion of the

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process. This is no small matter. As MichaelHoellering once wrote: “A large part of thisopenness to mediation and the 85% settlementrate can be attributed to the voluntary nature ofthe process, and a party’s right to end its partici-pation at any time without fear of repercus-sions.”17

Overlapping neutrals place the parties duringmediated joint sessions under the attentive eye ofthe arbitrator. It is difficult to anticipate how thiswill affect the parties’ behavior. Will they seek toattract the favor of the arbitrator or otherwise tryto influence the award? Will they be as candid asthey need to be to make the mediation work?The use of overlapping neutrals, each with sepa-rate interests, has some advantages but at anunknown cost to the mediation.

Plenary Med-Arb

In the plenary med-arb variationthere is a single neutral (following themed-arb procedures assumed in thisarticle) who is not allowed to have any exparte communication with any party.All communication, both oral andwritten, is in joint (plenary) meet-ings. This eliminates concerns ofbias, but it may hinder the effective-ness of the mediation, making itmore challenging for the parties toreach a settlement. Facilitative and evalua-tive mediators feel that the practice of mediationwithout private caucuses is not a legitimateprocess because “candid and honest private com-munications with the mediator are generally con-sidered essential to successful mediation.…”18

Also, as another commentator has noted, “animpairment of private communications and cau-cuses will prejudice the prospects of achievingsettlement to the satisfaction of the parties.”19

Braided Med-Arb

The braided med-arb variation involves a sin-gle neutral. What makes it different is that thearbitration phase can be interrupted for furthermediation efforts so that the parties have addi-tional opportunities to pursue voluntary agree-ment. Proponents see an expanded opportunityfor self-determination as the parties seek agree-ment periodically during the arbitration phase.

However, this variation may violate ParagraphF of Canon IV of the Arbitrator Code, whichspecifically discourages an arbitrator from pres-suring parties to settle or to mediate. ParagraphF states: “Although it is not improper for an arbi-trator to suggest to the parties that they discussthe possibility of settlement or the use of media-

tion, or other dispute resolution processes, anarbitrator should not exert pressure on any partyto settle.”

In the arbitration phase, the neutral gainscomplete authority over the outcome and conse-quently has substantial power in the eyes of theparties. They could construe a settlement pro-posal from the neutral (whether during the medi-ation or the arbitration phase) not as a mere sug-gestion, but as a strong recommendation or aveiled directive. Thus, with braided med-arb,proposals by the neutral may appear coercive andjeopardize the principle of party self-determina-tion.

Although braided med-arb may improve thechances for a cooperative agreement, it places theneutral in a compromised position when encour-aging settlement, especially after confidential

information has been shared.

Med-Arb with Optional Withdrawal

A significant concern with med-arbis the elimination of the parties’ right

to voluntarily withdraw due to the com-mitment to arbitrate. This concern couldbe eliminated by allowing parties to decidewhether to proceed to arbitration at the ter-mination of the mediation phase, rather thanat the beginning. An opt-out provision would

protect voluntary participation.However, optional withdrawal med-arb could

undermine a practical benefit of med-arb—thatis, finality. Withdrawal would force the parties toengage in a new dispute resolution effort tosecure a final outcome. In addition, the option towithdraw may give a party an incentive to manip-ulate the situation by offering finality but with-drawing at the last minute. As a result of this risk,one commentator opined, “If a party believes thatan opt-out clause is required, med-arb shouldprobably be rejected.”20

Furthermore, parties who continue to arbitra-tion still face the concern that a neutral was privyto ex parte communication and therefore could bebiased.

Arb-Med

The reverse of med-arb, “arb-med,” hasgained credibility in a few specialized arenas,although it is not well known or broadly used. Ithas support for both its results and its ethics ineliminating arbitrator bias.21 Arb-med is a processin which:

• a neutral and impartial third partyreceives evidence and testimony providedby disputants in an arbitration, then

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writes an award that is withheld from theparties, after which

• the neutral facilitates communicationbetween the parties in the mediation toenable them to reach an agreement, and

• failing agreement, the arbitration awardis issued and becomes binding on them.

The structure of arb-med allows each party toevaluate its arbitration case after hearing theopponent’s case, when it is easier to recognizestrengths or weakness that could help the partiesfind common ground during mediation. After theclose of the arbitration phase and the writing ofthe award, the neutral is free to hold private cau-cuses with each party during the mediationphase. Because the award hasalready been written, it cannotbe tainted by ex parte communi-cation.

Although this variation elim-inates the ethical problem ofaward contamination, it intro-duces two new concerns. First,parties might feel greater pres-sure to reach agreement duringthe mediation phase of the arb-med process because they areaware of the relative strength oftheir cases and have a bindingaward hanging over the media-tion. Their only alternative toaccepting the arbitration awardwould be to reach a mediatedagreement.22 So it is not sur-prising that arb-med is credited with a greaterrate of voluntary agreement.23

The other concern is that after the arbitrationaward has been written, the neutral cannotchange it, regardless of insight gained during thesubsequent mediation. Were new informationrevealed that would have altered the award, theneutral might be tempted to encourage a mediat-ed agreement so that the award would notbecome known.

Ethical ConsiderationsIn med-arb and some variants, parties may not

be aware of ethical compromises that exist com-pared to traditional mediation and arbitration.For example, conceding their withdrawal rightmay cause them to feel greater pressure to settleand affect the way they interact during media-tion.

Optional withdrawal med-arb circumvents thisconcern, and braided med-arb increases the op-portunity for voluntary agreement, but each

introduces ethical or procedural problems of itsown.

Variations that attempt to eliminate ex partecommunication face similar problems. They mayshield neutrals from confidential information butcreate concerns that cloud their effectiveness.Consequently, although med-arb and its varia-tions may have satisfactory and/or practical out-comes, none offers simultaneous protection ofthe ethical standards for both mediation and arbi-tration.

The Med-Arb Dilemma to Parties

Despite its limitations, some parties prefer thegreater efficiency of med-arb to traditional medi-ation followed by a separate arbitration using a

different neutral. The strongestargument for med-arb is thatparties have the right to con-tract for a less-than-perfectly-ethical process to resolve dis-pute if they choose. Some com-mentators have explained it asfollows: “[W]hen consentingadults make such judgmentswith an informed understand-ing of the advantages and possi-ble disadvantages of the Med-Arb process, they should be freeto contract for the dispute reso-lution process that seems bestto them.”24

Further, there are few legalrestrictions on parties in choos-ing any dispute resolution

method they desire. The Alternative DisputeResolution (ADR) Act, which authorizes districtcourts to promulgate local rules that authorizethe use of “alternative dispute resolution process-es in all civil actions,” broadly defines “alternativedispute resolution processes.” Section 651(a) pro-vides, in relevant part: “Definition: For purposesof this chapter, an alternative dispute resolutionprocess includes any process or procedure, otherthan an adjudication by a presiding judge, inwhich a neutral third party participates to assistin the resolution of issues in controversy.…”20

John W. Cooley, a strong supporter of self-determination in ADR, wrote in the Dispute Res-olution Journal, “ADR profession leaders anddesigners must … emphasize the importance ofpractitioners preserving and guaranteeing to allparties who use ADR services the parties’ rightsto self-determination and informed consent.” Heexplained that “[s]elf-determination is importantbecause it preserves the parties’ right to freelyand jointly choose the neutral (lawyer and non-

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Despite its limita-tions, some partiesprefer the greaterefficiency of med-arb to traditionalmediation followed

by a separatearbitration using adifferent neutral.

Med-Arb Practice Variations

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lawyer) and the ADR process that best suits theirspecific needs.”30

With informed consent, those who freelychoose med-arb for its expediency over principle,assume the risk of demonstrated flaws that mayaffect their specific case.

The Med-Arb Dilemma for Neutrals

Many neutrals do not accept appointment inmed-arb cases, even with the parties’ informedconsent, because of the ethical issues. Others do.An important question is whether those practi-tioners can provide med-arb services in goodconscience. Guidance provided by the MediatorStandards and the Arbitrator Code suggest thatthe answer is arguably yes, if informed consent isobtained from the parties.

Mediator Standard VI, governing the qualityof the process, states in Paragraph 8:

A mediator shall not undertake an additionaldispute resolution role in the same matter

without the consent of the parties. Before pro-viding such service, a mediator shall informthe parties of the implications of the change inprocess and obtain their consent to the change.A mediator who undertakes such role assumesdifferent duties and responsibilities that maybe governed by other standards.31

Canon IV of the Arbitrator Code similarlystates, “An arbitrator should not be present orotherwise participate in settlement discussions oract as a mediator unless requested to do so by allparties.”32

Neutrals who provide med-arb services dostress the necessity of securing informed consentof the parties. For example, Gerald Phillips, aCalifornia neutral, has written, “[T]he parties …can be fully informed of any ethical problems anddecide to waive any objections they may have tothe Med-Arb process. That is why the parties’informed consent to same-neutral Med-Arb is socritical.”33

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Method Procedure Benefits Ethical Concerns Procedural Concerns

Med-Arb Hybrid • 1st mediation, 2nd arbitration• one neutral• ex parte communication allowed

in mediation phase

• efficient • no voluntary withdrawal• risk of arbitrator bias

from access to ex partecommunication

OverlappingNeutrals

• 1st mediation, 2nd arbitration• two neutrals• ex parte communication allowed

in mediation phase• arbitrator hears only shared info

in mediation

• efficient• no risk of

arbitrator bias

• no voluntary withdrawal • arbitrator’s sitting in on mediation can alterinterpersonal dynamics

• more expensive

Plenary Med-Arb • 1st mediation, 2nd arbitration• single neutral• no ex parte communication

allowed in either phase

• efficient• no risk of

arbitrator bias

• no voluntary withdrawal • mediation weakenedwithout confidential info

Braided Med-Arb • 1st mediation, 2nd arbitration• single neutral• ex parte communication allowed

in mediation phase• mediation allowed during breaks

in arbitration phase

• efficient• more opportunity

for voluntaryagreement

• no voluntary withdrawal• risk of arbitrator bias• parties may feel pres-

sure to settle

Med-Arb withOptionalWithdrawal

• 1st mediation, 2nd arbitration• single neutral• ex parte communication allowed

in mediation phase• parties can forgo arbitration by

withdrawing after mediation

• efficient• withdrawal option

allows greater self-determination

• risk of arbitrator bias • no guarantee of finality• possible manipulation by

parties

Arb-Med • 1st arbitration, 2nd mediation• single neutral• ex parte communication allowed

in mediation phase• award disclosed after mediation

if no settlement

• efficient• no risk of

arbitrator bias

• no voluntary withdrawal• parties may feel

pressure to settle in mediation

• arbitrator cannot alteraward based on mediation

However, serving as a neutral in a med-arbmay require working outside a strict interpreta-tion of the Mediator Standards and ArbitratorCode because, as the earlier sections of this arti-cle have shown, they may have been or could becompromised by med-arb at some point. Butthere is one principle that the neutral may notdepart from: the obligation to uphold the parties’essential right to a fair process. Thus, for exam-ple, each neutral must determine the effect ofprivate information acquired during an ex partecommunication and its influence on the award.Finding the appropriate balance would be left tothe discretion of each neutral.

This is a heavy responsibility but one thatsophisticated neutrals are capable of performing.Nevertheless, there is greateruncertainty for the parties andneutrals in med-arb than in tradi-tional arbitration and mediation.That may explain why many neu-trals decline to offer med-arbservices.

To clarify the details of themed-arb process, it is recom-mended that the parties “spellout in detail in a written protocolexactly what process they wish tofollow before the proceedingsbegin.”34

These suggestions recognizeethical pitfalls in med-arb andsteer the participants toward fullknowledge of the inherent risks,the parties’ expectations and the procedures theywould like to follow. However, informed consentdoes not establish an ethical foundation for med-arb. It is only an acknowledgement of, and anassumption of, risk from defects in the process.

Professional Support for Med-ArbSeveral interested organizations have taken a

cautious position on med-arb. For example, theAAA does not recommend same-neutral med-arb“except in unusual circumstances because it couldinhibit the candor which should characterize themediation process and/or it could convey evi-dence, legal points or settlement positions exparte improperly influencing the arbitrator.”However, the AAA says it will administer a caseusing same-neutral med-arb if that is what theparties want. JAMS35 also does not recommendsame-neutral med-arb, but will administer such aprocess if the parties expressly agree to it.36

The International Institute for Conflict Pre-

vention and Resolution (CPR), on the otherhand, promotes having two neutrals. “[T]oensure the integrity of the arbitration process,Med/Arb agreements should provide that thearbitrator shall not be the same person whoserved as mediator in the matter.”37 DeborahKatz of the Expanded Conflict ManagementProcesses Committee of the Dispute ResolutionSection of the ABA has said:

After completing the mediation session, it isnot unusual for the parties to agree to have themediator continue on as the arbitrator as longas the parties do not feel that they have sharedany private or confidential information withthe mediator that might adversely affect thedecision of the mediator/arbitrator.38

No professional disputeorganization has been found thatrecommends the practice ofmed-arb without conditions.CPR rejects same-neutral med-arb, and the ADR Section of theABA seems to have no objectionto it if no confidential informa-tion was shared. Both the AAAand JAMS discourage the pro-cess by publicly withholdingtheir recommendations. Butthey recognize party autonomyto choose the process and bysaying they will administer theprocess if the parties agree inwriting.

Thus, med-arb has little backing from disputeresolution organizations.

ConclusionTraditional mediation and arbitration process-

es, each with its proven history and ethical stan-dards, are well accepted. However, there are ethi-cal issues that arise when these processes arecombined, challenging the integrity of eachprocess in different ways, and creating severalrisks to both parties and neutrals.

Although variations of med-arb may allowgreater ethical protection, none does so com-pletely or without ethical or procedural obstacles.Nevertheless, some parties are willing to engagein med-arb anyway, because it offers greater effi-ciency and finality. An understanding of the com-plications may allow an experienced neutral tooffer med-arb as a useful—if imperfect—disputeresolution alternative. n

D I S P U T E R E S O L U T I O N J O U R N A L 61

No professionaldispute organiza-

tion has beenfound that

recommends the practice ofmed-arb with-out conditions.

(Endnotes are on page 154)

supra n. 14, at ¶ 88.19 UNCITRAL Secretariat, Note,

Settlement of Commercial Disputes:Revision of the UNCITRAL Arbitra-tion Rules (Dec. 6 2006) ¶ 24, UNDoc.A/ CN.9/WGII/WP.145/Add.1.

20 Report of WGII on the work of its47th session (Sept. 10-14, 2007) ¶ 30, UN Doc A/CN.9/641.

21 See art. 4.2 of the 1999 and 2010IBA Rules.

22 See art. 6.2 of the 1999 IBA Rules(requiring statement of independencebefore expert’s appointment) and art. 6.2of the 2010 IBA Rules (requiring de-scription of qualifications and statementof independence before expert’s ap-pointment).

23 Report of WGII on the work of its51st session (Sept. 14-18, 2009) ¶ 94,UN Doc A/CN.9/684.

24 Compare id, ¶ 91 with Report ofWGII on the work of its 47th session,supra n. 20, at ¶ 110.

25 Report of WGII on the work of its48th session (Feb. 4-8, 2008) ¶ 20, UNDoc A/CN.9/646).

26 Report of WGII on the work of its45th session, supra n. 10, at ¶ 57.

27 Report of WGII on the work of its46th session (5-9 Feb. 5-9, 2007) ¶ 63,UN Doc A/CN.9/619.

28 UNCITRAL Secretariat, Note,supra n. 19, at ¶ 41.

29 Report of WGII on the work of its45th session, supra n. 10, at ¶ 67 (“in

practice, arbitral proceedings had beenadversely affected by mala fide or tacticalresignations by arbitrators”); id. at ¶ 71(noting that loss of the right to reap-point an arbitrator “could only be basedon the faulty behavior of a party to thearbitration”).

30 Id. at ¶ 76.31 See, e.g., Baker & Davis, supra n.

12, at 107.32 See, e.g., Glamis Gold v United

States (Procedural Order No 2, 31 May2005; NAFTA Chapter 11 proceeding)¶ 12(c) (tribunal ‘may decline to [bifur-cate jurisdictional issues] when doing sois unlikely to bring about increased effi-ciency’), available at http://ita.law.uvic.ca/documents/16Order2_000.pdf.

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1 David Lipsky & Ronald Seeber,“The Appropriate Resolution of Cor-porate Dispute: A Report on the Grow-ing Use of ADR by U.S. Corporations,”available at www.marquette.edu/disput-eres/downloads/patterns.pdf.

2 Claude Thompson, “Med-Arb: AFresh Look” (Nov. 12, 2008), availableat www.claudethomson.com/docs/Med-Arb_A_Fresh_Look.pdf.

3 The ADR Committee of the Colo-rado Bar Association (CBA), Manual onAlternative Dispute Resolution, availableat www.cobar.org/index.cfm/ID/211/subID/1244/Manual-on-Alternative-Dispute-Resolution.

4 Steven Menack, “Mediation/Arbi-tration: The Hybrid ADR Theory,”N.J.L.J. (Aug. 14, 1995), available atwww.divorcelawandmediation.com/images/mediationarticle2.pdf.

5 Megan Elizabeth Telford, “Med-Arb: A Viable Dispute Resolution Alter-native,” available at irc.queensu.ca/gallery/1/cis-med-arb-a-viable-dispute-resolution-alternative.pdf.

Med-arb achieved broad acceptancein the 1980s, particularly in public sec-tor labor conflicts where the mediationphase offered the possibility of resolvingthe dispute through a cooperative ex-change, which, if unsuccessful, is fol-lowed by arbitration as the ultimatehammer to bring about resolution whilepreventing labor disruptions.

6 See Gerald Phillips, “Same-NeutralMed-Arb: What Does the Future Hold?”60(2) Disp. Resol. J. 26 (May/July 2005)(stating: “Some arbitrators and media-tors believe that mixing mediation andarbitration is heretical and even unethi-cal....”).

7 Colorado Bar Association, “Alter-native Dispute Resolution Process De-

finitions,” available at www.cobar.org/adrdirectory/description.cfm.

8 Frank J. Navran, “Defining Values,Morals, and Ethics,” available at www.navran.com/article-values-morals-ethics.shtml.

9 Model Standards of Conduct forMediators (Aug. 2005), available at www.abanet.org/dispute/news/ModelStandardsofConductforMediatorsfinal05.pdf.

10 Michael Hoellering, “Mediation &Arbitration: A Growing Interaction,”52(2) Disp. Resol. J. 23-25 (Spring 1997).Michael Hoellering was the corporatecounsel of the American ArbitrationAssociation for many years.

11 Alan Redfern & Martin Hunter,Law and Practice of International Com-mercial Arbitration (Sweet & Maxwell1999).

12 Code of Ethics for Arbitrators inCommercial Disputes (Feb. 9, 2004),available at www.abanet.org/dispute/commercial_disputes.pdf.

13 Thomas J. Brewer & Lawrence R.Mills, “Med-Arb: Combining Mediation& Arbitration,” 54(4) Disp. Resol. J. 32-39 (Nov. 1999).

14 Thomson, supra n. 2.15 Id.16 Examples can be found in profes-

sional journals. “[The] med/arb processprovides the disputants with the bestthat mediation and arbitration have tooffer. It furnishes them with a cleanincentive to resolve the disputed issuespromptly, affordably, amicably and totheir mutual satisfaction through media-tion, by holding open the prospect of anadverse, nonappealable determinationby the arbitrator if a mediated settle-ment is not reached.” Menack, supra n. 4

17 Hoellering, supra n. 10.18 Brewer & Mills, supra n. 13

19 Thompson, supra n. 2.20 Id.21 Arnold Zack, “The Quest for Fi-

nality in Airline Disputes: A Case forArb-Med,” 58(4) Disp. Resol. J. 34-38(Nov. 2003/Jan. 2004).

22 William H. Ross & Donald E.Conlon, “Hybrid Forms of Third-PartyDispute Resolution: Theoretical Im-plications of Combining Mediation andArbitration,” 25 Acad. of Mgmt. Rev.416-27 (2000) ( it “may cause disputantsto actively consider the possibility of los-ing … because a ruling already has beenrendered.…”). As another author noted,“the deal sealer is the power of the enve-lope.” Rita Drummond, “A Case forArb-Med: Why Consider It and How toDraft an Arb-Med Clause,” available atpapers.ssrn.com/sol3/papers.cfm?abstract_id= 951194, 12/2/2008.

23 Brewer & Mills, supra n. 13.24 28 U.S.C. § 651.25 John W. Cooley, “Shifting Para-

digms: The Unauthorized Practice ofLaw or the Authorized Practice ofADR,” 55(3) Disp. Resol. J. 72-79 (Aug./Oct. 2000).

30 Model Standards, supra n. 9.31 Code of Ethics, supra n. 12.32 Phillips, supra n. 6.33 Brewer & Mills, supra n. 13.34 See www.jamsadr.com.35 Phillips, supra n. 6.36 International Institute for Conflict

Prevention & Resolution, “An ADRPrimer” (Dec. 2, 2008), available atwww.cpradr.org/ClausesRules/ADRPrimer/tabid/340/Default.aspx.

37 ABA Section of Dispute Resolu-tion, “Expanded Conflict ManagementProcesses,” available at www.abanet.org/dch/committee.cfm?com=DR088888.

Med-Arb and its Variants: Ethical Issues for Parties and Neutrals(Continued from page 61)

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