By Dr. Justin Wood
Over the last few decades there have been many new forms of alternative dispute resolution (ADR) established and VERY appropriate. Most notably; mediation which has a binding agreement made by the parties in which the mediator, a third party neutral, facilitates and helps walk the disputants through their disagreement to let them find a viable, agreeable solution. No less important; arbitration allows many customizable hearings but allows the parties to work toward a solution but if that fails then the arbitrator makes a final award that can be filed and upheld in court.
Binding mediation has come to light by parties such as: Bowers v. Raymond J. Lucia, 12 C.D.O.S. 5876. They wanted to mediate their dispute but if that failed, the mediator would make a final binding and enforceable decision. Even though the California courts upheld this form of ADR, it is unethical, impractical, dangerous and I believe will be struck as illegal.
The first role of a mediator is to be impartial and this CANNOT happen if the mediator knows they have the final decision making power. Any quality mediator knows the best decision comes from the parties at the table. When you put the mediator in the role of a judge, you make them partial. If you insult, defame, become rude, or just tell a really good story the mediator is driven toward one side over the other. This unethical flaw should be the nail that ends this practice.
An arbitrator has rules and guidelines to prevent unethical practices, mediators do not. An arbitrator shall not have ex-parte communications (a discussion with one side alone) to allow both parties to hear and know there is not coercion, deal making, bribes or other manipulation. This also gives the other party the ability to object to anything they do not agree with or believe is inflammatory.
Mediators should have training and yearly continuing education in the area of mediation. This training is directed toward: how to listen, how to be impartial, how to allow parties to vent, etc. There is NO training provided to mediators on how to avoid ex-parte communications, make clear judicially accepted awards, write critically with legal forte, or understanding legal word usage like “Shall”, “Will, or “May”. These imperative issues can reverse the entire decision or even make it invalid.
Though I am not giving legal advice; this practice of binding mediation, if not explained fully and understood by all parties, breaks the creation of a contract. All contracts must have an Offer, Consideration and Acceptance just to be considered valid. If any party did not understand, or after the ruling claim to not have understood, the true nature of the agreement or the mediator acts as if the parties will make the final decision could invalidate the entire award. Thus; the actions, body language, temperament, and training of a mediator is unlike an arbitrator.
Arbitration has a practice called Med-Arb which if done properly with two separate neutrals is effective and ethical. This process can also be achieved with using a waiver but my true recommendation would be to find a trustworthy arbitrator who is well versed in expedited arbitration.
Expedited or Express Arbitration
These forms of arbitration can allow for the parties to have a final, binding, court acceptable award while still negotiating or even having a mediator present to find a resolution. It can be agreed that if the parties find an agreeable resolution to the dispute, the arbitrator must make their agreement the award. Expedited and express arbitration are held quickly, normally 10-15 days, and have pre-set limits on number of witnesses, length of testimony, maximum number of documents, and types of motions allowed to keep the process on the fast track.
Binding mediation is a practice that has roots in a positive ADR process but the continued practice is anything but positive. Mediation and arbitration need and must be kept separate for the ADR processes to work as intended. Muddying the water with cross pollinating different efficient forms of ADR is like allowing a traffic court judge to make a ruling on a RICO case. Could they; Yes, should they; No.
References & Resources