What is Med-Arb?
When parties agree to attend med-arb instead of court, they will first attend mediation to attempt to reach an agreement. If mediation is unsuccessful, the parties will then move on to arbitration. The mediator might become the arbitrator, or the parties may attend arbitration with another arbitrator.
Mediation is more likely to be successful when the parties have agreed to the med-arb process because each party faces a risk that the arbitrator will order something less favourable to them than the other party is offering.
Med-arb is a wise choice when parties want to try to work together but they also want to ensure a prompt resolution without the need for an expensive trial.
Med-arb can be particularly cost-effective when the parties agree to hire one person to serve as the mediator and arbitrator. For example, if the parties agree to the final offer selection method, the parties will both exchange their final offers in mediation and the arbitrator will simply choose the most reasonable offer. The most reasonable offer would then become binding as the arbitrator’s “award.”
Advantages Over Mediation
The primary goal of a mediator is for the parties to reach an agreement. The mediator will attempt to push the parties towards a reasonable compromise, but the mediator will not advocate for either party. If one party is a bully or very stubborn and the other party is submissive and more lenient, the bully is often more likely to achieve a favorable outcome. People often feel pressured to resolve disputes in mediation and this isn’t possible when neither party will budge.
However, in med-arb, it’s not as easy for bullies to get their way. If mediation is unsuccessful, the arbitrator will side with the more reasonable party.
Potential Downsides
Mediation is typically a safe and confidential place, whether nothing said or admitted can be used against the other person. This ability to be completely open often assists the parties in coming together. Even when attending med-arb with a single mediator-arbitrator, the parties can agree that everything said in mediation will be confidential and the mediator-arbitrator must disavow themselves of everything said if the mediation moves to arbitration. However, the parties will generally be more guarded when they know that their mediator could ultimately make a binding decision about their case. They may be less inclined to share confidential information that could result in the arbitrator forming a negative option about them and taking the other party’s side.
At The Law Portal, we always recommend alternative dispute resolution methods instead of court. Parties can force each other to attempt mediation but parties cannot be forced to agree to attend arbitration or med-arb. Mediation is often successful, even in the most challenging cases. If the parties’ positions are diametrically opposed and there is a high level of conflict between them, skipping mediation and going straight to arbitration might be more preferable.
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