Jerome F. Rock

When parties agree to participate in the Med-Arb process, they combine the Mediation and Arbitration processes into a hybrid process for the purpose of compromising, settling or resolving disputed claims:

• first by use of a voluntary Mediation/Facilitation format to resolve as many issues as possible

• but if all matters are not resolved by agreement, the parties will proceed promptly into an Arbitration format to deal with those unresolved issues.

The final result of Med-Arb is a binding decision which includes the voluntary agreements achieved during the mediation/facilitation phase and the  decisions made by the Neutral as Arbitrator during the Arbitration phase.

There are substantial differences in the ethical and professional relationships between the Neutral and the parties in a Mediation engagement, and the same parties in an Arbitration engagement.

 

In a Mediation engagement, the parties are encouraged to be open and candid, often sharing confidential information or settlement positions, recognizing that mutual agreement of the parties is required in order to resolve the matter as a formal settlement. Depending on the use of joint or separate caucus sessions with the parties, the Mediator may have discussions with one side that are intentionally not shared with the other. The parties can continue in Mediation as long as they are productive, or either party may unilaterally withdraw or cease discussions at any time and return to their litigation schedule. The Model Standards of Conduct for Mediators recognizes the voluntary nature of Mediation and the necessity of self-determination by each party during all aspects or phases of the process, including satisfaction with the continued neutrality of the Mediator. By definition, Mediation is voluntary and a settlement must be agreed upon by the parties without coercion.

At the other end of the spectrum, Arbitration is compulsory (after the parties agree to arbitrate), the outcome is determined by a third party, and the resulting award is legally binding. During the course of a typical Arbitration engagement, there is a strict code of conduct restricting any ex parte communications between the Arbitrator and any party. This restriction is a matter of due process, assuring each party that they are aware of all information or evidence conveyed to the Arbitrator, and have an opportunity to cross examine or challenge the information during the Arbitration phase. This restriction is also in place to reinforce the impartiality of the  Arbitrator. In Arbitration there are also a number of important, procedural choices that have become accepted as standard components of Commercial Arbitration proceedings, such as choosing the rules to be followed, the amount, or limits on discovery and the form of the award. These are all typical issues that would be addressed if the matter started as an Arbitration case, but often get lost if the matter begins in a Mediation framework, and then transitions into the Arbitration phase.

It is therefore a challenge to combine the Mediation process and the Arbitration process into a single proceeding, while preserving the integrity and expected procedural benefits of each separate process. This challenge is met by making disclosures, requesting consents and offering each party the opportunity to opt-out, or opt-in at key Decision Points.

There are a number of choices or alternatives that are set forth throughout Jerome Rock's standard Med-Arb Agreement, and the parties are requested to review and initial each of these separate elections as they advance through the process. Some of the choices or alternatives should be addressed at the beginning, which form initial basic commitments of the parties to the binding nature of the Arbitration phase of the Med-Arb process. There are other choices that should only be made during the transition from the Mediation phase to the Arbitration phase of the Med-Arb process, as these are the choices that recognize the importance of the concept of self-determination, while providing a structure to finalize the Arbitration phase that produce the binding Award.