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4th Key-Professionalism: Encourage Mediation and Arbitration Integration

by Mark Appel, Wolf von Kumberg

June 2020

Editorial Note:

Mediate.com has published a series of peer reviewed articles and videos under the collective title Seven Keys to Unlock Mediation’s Golden Age. The objective of the Seven Keys is to encourage discussion among all stakeholders on navigating mediation’s best future. Here is the Table of Contents.

The Seven Keys are: Leadership, Data, Education, Profession, Technology, Government and Usage, each with supportive articles and videos, contributed by some 40 leading authors around the world.

The Seven Keys articles recognize mediation’s extraordinary versatility: a) resolving disputes, b) deal making, c) managing interpersonal disputes in families and communities, e) designing systems for schools and the workplace, f) peace-making between groups, g) and national public policy decision-making. Each key is a jigsaw piece that forms a vibrant, exciting vision of how the field can dramatically improve and prosper.

Mediate.com strongly supports convening the field’s stakeholders to further grow mediation. This is the goal of our upcoming online conference: Mediation 20/20: Navigating Mediation’s Best Future on September 30-October 2, 2020. #7KeysMediate

Seven Keys to the Future

4th Key-Professionalism: Encourage Mediation and Arbitration Integration

There are few givens in dispute resolution, but here are some: 

  1. The preferred result in any dispute is a negotiated settlement.
  2. A skilled mediator between disputing parties adds real value to settlement talks.
  3. Nothing energises dispute negotiation like a deadline - such as a firm hearing date.
  4. Mediation and arbitration can work perfectly as an integrated dispute resolution process.

Dismantling Silos

A common disputant refrain is: “don’t talk to me about process, talk to me about solutions”. When Wolf was counsel at Northrop Grumman, its ADR Policy required finding expeditious, cost effective means of resolving disputes. As he explained it at the time: “We knew that maintaining control over the outcome was preferable to asking an adjudicator to make a determination. Through experience we learned that mediated settlements were virtually always better than uncertain awards and helped maintain relationships and eased enforcement. Yet, we also recognised in our Policy that arbitration was sometimes the unavoidable means of dispute resolution and that a stepped approach blending mediation with arbitration was needed.” In contrast, during Mark’s time at the American Arbitration Association, he recalls a Construction Industry executive self-identifying, perhaps only half in jest, as “a victim” at a meeting of arbitration industry professionals.

Many dispute resolution professionals, particularly those who have been around for many years, persist in seeing the arbitration and mediation processes as mutually exclusive. The challenge is therefore, how best to bring about an appreciation for the integrated use of mediation and arbitration, whether sequenced, concurrent or otherwise as best fits the circumstances of the case.

Integration Imperative One - Informed Users

Progressive users have put in place written ADR Policies that clearly reflect best dispute resolution practice. Doing so helps to ensure that all employees understand what is to be negotiated into agreements, but also what the pathways are to finding a resolution once a dispute arises.  The outcome for these organisations is more predictable, cost efficient and satisfactory outcomes than for those that simply leave their disputes to the lawyers and risk confinement in the silo. Predictably it is those progressive organisations that have been at the forefront of pushing private dispute resolution to be more efficient, more user and solution focused.  More efforts of that sort by the user constituency are necessary to bring about much needed change in rules and attitudes, particularly of the legal profession, to enable mediation and arbitration each to be better together. Supply follows demand. If users insist on contract clauses and policies that enable the flexible use of arbitration and mediation, service providers will step up to meet the challenge.
 


Interview with Mark Appel and Wolf von Klumberg


Integration Imperative Two - Institutional Leadership

In our legal training we learned that rules of procedure, not unlike legislation, reflect societal norms and expectations.  Certainly, this has been the case with procedural rules for arbitration and litigation. But sometimes institutions need to lead, not just follow.  Like the slow-moving policy makers challenged in the bestselling book “Nudge”, arbitration and ADR Institutions need to adapt their procedural rules so that disputants are encouraged to do things to help themselves.  Like talk to each other or, better yet, agree to engage the services of a mediator.  Too often, dispute resolution provider organisations perpetuate arbitration and mediation silos, encouraging a choice of one or the other.  Better that those same organisations’ rules and practices create seamless access to an arbitrator or mediator as necessary and appropriate during the dispute resolution process. In a few institutions’ rules you will now find incarnations of duality, such as the ability to attempt med/arb/med, or at least to permit mediation and arbitration to run simultaneously. There is also an increasing awareness in some common law jurisdictions that parties who give their express consent to engage in a med/arb/med process, should be permitted to do so (Ontario, Canada is one such jurisdiction).

Integration Imperative Three – Dispute Resolvers

It is particularly unfortunate that most arbitrators and mediators themselves are not leading the charge for effective integration of arbitration and mediation processes.  At the very least, efforts should be made in the training provided to both groups that provide them with the basic knowledge of each other’s process and how it functions. Fortunately, some neutrals are looking at dispute resolution holistically and taking a “guided choice” mixed mode approach[3]. This requires them to understand that the objective of every dispute is to find an outcome with the greatest cost/benefit to the parties. They may propose dispute avoidance mechanisms, such as dispute boards, dispute management processes such as structured negotiation or mediation and, finally, adjudication, arbitration or litigation. Each dispute is approached on a “horses for courses” basis, utilising appropriate dispute resolvers as necessary for an effective outcome.

Integration Imperative Four – The Justice System

In many countries, it has been the Civil Justice system and the Judiciary that have led the way in changing legal cultures and breaking down established norms, to bring a holistic approach to the resolution of disputes, with a court trial as the final forum, if required. We have already seen the steps being taken in Ontario. England & Wales as well have been at the forefront in reforming the judicial system to recognise a mixed mode approach, where, following the Civil Justice Report in November 2018, a Judicial ADR Liaison Committee was formed. Wolf is a member of that Committee and it is intended to provide a dedicated forum for the discussion and exchange of information about the role of ADR in providing access to justice and more effective means of resolving disputes. This can lead to more effective implementation of mixed mode dispute resolution. Leading arbitration and ADR provider institutions could take a similar approach.

Investor State Dispute Settlement (ISDS)

Both mediation and traditional arbitration have an important role in ISDS. Mediation allows investors and States to resolve their disputes in a consensual manner. Mediation’s advantages include speed, cost, retaining control over the outcome and preserving relationships and also allowing States and investors to create solutions which address both economic and political realities. Crucially, Foreign Direct Investment is key to the economies of many States, and a stable investment environment requires effective and timely dispute resolution. A policy of combining mediation with arbitration will enhance the achievement of investment goals for both investors and States.

The Yin and Yang of Dispute Resolution

So much is being done already to break down the barriers and silos hindering the use of ADR in more effective ways. Much can, however, be done to build on this and to make mixed mode attitudes, expertise and methodology universal.

Integration is the future.

ENDNOTES

Endnotes 1 and 2, author bios, are below.

[3] See, for example: Thomas J. Stipanowich and Véronique Fraser article in the Fordham Law Journal (2017) on the International Task Force on Mixed Mode Dispute Resolution: Exploring the interplay between mediation, evaluation and arbitration in commercial cases. To access, click here. For information on the Mixed Mode Task Force of the IMI, click here. For an overview of Guided Choice by Paul M. Lurie, click here.


Mark Appel has nearly 40 years of global arbitration and mediation experience, having served in both executive and senior executive positions at the American Arbitration Association (AAA) and International Centre for Dispute Resolution (ICDR), leaving ICDR/AAA as Senior Vice President, EMEA in December of 2015. While serving as a AAA Executive, Mark personally administered or was responsible for the administration of thousands of commercial arbitrations and mediations. Mark has over 30 years of experience in training arbitrators and mediators on four continents on behalf of various arbitral institutions, government ministries, Courts and NGOs. Mark is a former director, and is now an Honorary Director of the International Mediation Institute (IMI) and has served as Chair of the IMI Investor-State Mediation Task Force. Mark is a member of ArbDB Chambers.


Wolf von Kumberg brings over 30 years of international legal and business experience to the practise of ADR. He served as Legal Director and Assistant General Counsel of Northrop Grumman Corporation and Litton Industries Inc. Wolf is a certified CEDR mediator and a Fellow and former Chair of the Management Board of the Chartered Institute of Arbitrators. He has mediated numerous commercial disputes and has been involved in many domestic and international arbitrations. He is a member of the mediation panels of CEDR, KLRCA and the AAA/ICDR and of the arbitration panels at AAA/ICDR, KLRCA, LCIA and the DIFC. He is a former Chair of the International Mediation Institute, founding panellist of the Aerospace/Security panel of the AAA and has assisted in the development of Investor-State Mediation Guidelines for the Energy Charter Treaty Secretariat. Wolf is a member of ArbDB Chambers.

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