Med/Arb

As its very name indicates, Med/Arb employs mediation first; then arbitration.

First, the parties submit their dispute to mediation before a mutually acceptable mediator. If an issue remains unresolved after mediation (or a number of issues), then the mediator acts as an arbitrator to resolve outstanding issues on a binding basis through an award. Generally, the award contains both mediated/settled issues, as well as, of course, the issues that had to be submitted to binding arbitration.

It isn’t all that frequent to find Med/Arb clauses in commercial contracts. However, multi-tier dispute settlement strategies are gaining corporate favor.

Inherent to Med/Arb is the fact that the mediator is also the arbitrator if need be. Although this person’s independence from the parties may be objectively established, it is not so easy to guarantee his/her impartiality as an arbitrator having previously mediated between the parties. Additionally, some jurisdictions expressly prohibit mediators from acting as arbitrators in the same matter.