What is Mediation/Arbitration?
Mediation/Arbitration (med-arb) is a combination of mediation and arbitration and, is a short-hand reference to the mediation-arbitration procedure. In med-arb procedure, the parties to a dispute mutually agree to mediate the dispute with an undertaking that, if the issues are not settled through the mediation process, then they will resolve the dispute by arbitration.
Combining mediation and arbitration in sequence can be a fair, efficient and cost-effective process for resolving disputes. A med-arb proceeding may appeal to clients because it offers them more control over the process than they would have in “pure” arbitration, by giving the parties the opportunity to pursue a consensual settlement during the mediation phase, but also promises parties greater finality than they would have in a “pure” mediation, by assuring them a certain end to the dispute, if, not by agreement, then by binding arbitration.
A combined proceeding may enable the parties to narrow their dispute substantially during the mediation phase, often leaving only a few remaining issues to be arbitrated. By agreeing to arbitrate the remaining issues, the parties can preserve the results of their partial agreements and prevent the mediation from failing.