Many businesses and individuals are taking advantage of a streamlined process that combines mediation and arbitration. The process starts out as a Mediation and if issues cannot be resolved, the Mediator switches hats and becomes the Arbitrator. This is effective if the parties can agree to some but not all of the issues in dispute.

Advantages:

Finality - Standard mediation does not guarantee a resolution; it is possible that parties will still have to settle specific issues with litigation or arbitration. Med-arb offers the assurance of a timely and binding decision, whether it is reached mutually or through arbitration.

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Efficiency - Med-arb has a much smaller time frame, which means it tends to cost less than separate mediation and arbitration processes. Many are finding that it is more cost and time effective.

Momentum - Rather than moving from a mediator to a separate arbitrator, med-arb offers momentum. You continue working and can leverage the progress you have made rather than starting all over, re-stating your cases, etc. 

 

Change of tone - Knowing that the mediator could be the one making the ultimate decision can dramatically change the tone of mediation. It can make both parties more agreeable and respectful of each other and help avoid extraneous outbursts and extreme positions.

Narrows the scope - Parties narrow the scope of the issue(s) during mediation; if they are “stuck” on one specific issue, they do not have to start over. They can have the arbitrator decide on this one issue. It saves time, money, and energy.

Disadvantages:

Reluctance to disclose - Parties may be reluctant to “show their hands” or disclose information in mediation that may affect them later in arbitration. This reluctance in disclosure can stile the process.

Confidentiality - If the mediator meets with each party separately, as in a caucus, the information discussed is confidential. When the arbitration phase arrives, the neutral will be privy to this information, and this knowledge may impact his/her decision.

  In summary, speed and efficacy are often cited as the most common reasons that businesses pursue med-arb and most are usually successful in reaching a resolution before arbitration. Med-arb as a combined process provides a safety net of sorts, and fortunately, the net is not always needed.