Mediation and arbitration to solve disputes

For many people, the way they did business and carried out work on a daily basis changed overnight due to the COVID-19 pandemic. For those in the legal profession more specifically, many had to learn how to carry on remotely and virtually.

With the courts having been shut down for a number of weeks (although they are now slowly allowing certain matters to be addressed), many lawyers turned to virtual mediations, and some to virtual arbitrations, in order to move their files along. Let’s face it, we don’t know how long this pandemic will last (especially if there ends up being a second wave), and how long it will take for civil matters to be heard in court.

While mediations and arbitrations are excellent alternatives to the court process, the med-arb process is another option the parties should consider in deciding how to move their matters forward.  

The med-arb process is essentially where the parties retain a mediator-arbitrator (med-arbiter). They first try to negotiate a resolution for their disputes through the mediation process. If the parties are not able to reach a resolution through the mediation process, the parties can then move to the arbitration process (typically, but not always, with the same person who was conducting the mediation).

Here are some advantages and disadvantages to choosing the mediation and arbitration process:

Advantages

Timeliness

Subject to the availability of the parties and the med-arbiter, the matter can be addressed/heard relatively quickly as compared to going through the court system (especially in light of the pandemic and the delays associated with it). As well, if the mediation portion of the process does not result in a resolution of the disputes, there will be a timely and binding decision through the arbitration portion of the process.

Lower costs

The parties and the med-arbiter have the ability to keep the costs down by modifying the steps and the procedures involved in the proceedings. For example, the duration and scope of certain steps in the litigation process can be modified. The mediation portion of the process will provide the parties with the opportunity to narrow down the issues, making it a more efficient process. In addition, by retaining one person to deal with both the mediation and the arbitration process, the parties do not have to start from zero with someone new, if the mediation process fails.

The decision

Generally speaking, and especially for complex matters, the arbitrator’s decision will be released much quicker than decisions rendered by a judge.

Choosing a med-arbiter

The parties can work together in choosing the med-arbiter, whereas the parties cannot choose their judge.

Privacy

Med-Arbs are not open to the public, whereas most court hearings are (unless specifically ordered to be closed to the public).

Disadvantages

Disclosure of information and the perception of bias

Technically, the med-arbiter is not to use confidential information disclosed during the mediation process at the arbitration hearing. Parties may be reluctant to disclose information during the mediation process if they are of the mindset that the med-arbiter’s knowledge of such information may end up impacting the decision. This is especially the case if the med-arbiter makes a suggestion regarding settlement during the mediation process. This lack of disclosure may hinder the ability of the parties to effectively negotiate and resolve the matter. 

The pandemic has been a stressful time for everyone, but it has also forced a lot of people to be more efficient and to adopt new technology in order to be able to carry on with their work. The med-arb process is another option available out there, which should be considered, not only for when we get back to the “new normal”, but while we continue to do things virtually. It should not be overlooked.

David Canton is a business lawyer and trademark agent at Harrison Pensa with a practice focusing on technology, privacy law, technology companies and intellectual property. Connect with David on LinkedIn and Twitter.