Online Mediation and Arbitration

Arbitration is a private process where disputing parties agree that one or several individuals can make a decision about the dispute after receiving evidence and hearing arguments. Arbitration is different from mediation because the neutral arbitrator has the authority to make a decision about the dispute. The arbitration process is similar to a trial in that the parties make opening statements and present evidence to the arbitrator.

Compared to traditional trials, arbitration can usually be completed more quickly and is less formal. For example, often the parties do not have to follow state or federal rules of evidence and, in some cases, the arbitrator is not required to apply the governing law. After the hearing, the arbitrator issues an award. Some awards simply announce the decision (a bare bones” award), and others give reasons (a “reasoned award). 

The arbitration process may be either binding or non-binding. When arbitration is binding, the decision is final, can be enforced by a court, and can only be appealed on very narrow grounds. When arbitration is non-binding, the arbitrator’s award is advisory and can be final only if accepted by the parties. In court-annexed arbitration, one or more arbitrators, usually lawyers, issue a non-binding judgment on the merits after an expedited, adversarial hearing.

The arbitrator’s decision addresses only the disputed legal issues and applies legal standards. Either party may reject the non-binding ruling and proceed to trial; sometimes, cost sanctions may be imposed in the event the appellant does not improve his/her position in court. This process may be mandatory or voluntary. Examples: USA—used in federal and state courts, mainly in small and moderate- sized tort and contract cases, where the costs of litigation are often much greater

In Arb-Med, the neutral first acts as arbitrator, writing up an award and placing it in a sealed envelope. The neutral then proceeds to a mediation stage, and if the case is settled in mediation, the envelope is never opened.

Case evaluation (“Michigan mediation”) provides litigants in trial ready cases with a written, non-binding assessment of the case’s value. The assessment is made by a panel of three attorneys after a short hearing. If the panel’s assessment is accepted by all parties, the case is settled for that amount. If any party rejects the panel’s assessment, the case proceeds to trial. This arbitration-like process has been referred to as “Michigan mediation” because it was created by the Michigan state courts and subsequently used by the federal district courts in Michigan as well.°1 324. See, e.g., WI). Mich. Civ. R. 16.5. 134

Conciliation is a type of mediation whereby the parties to a dispute use a neutral third party (a conciliator), who meets with the parties separately in an attempt to resolve their differences. Conciliation differs from arbitration in that the conciliation process, in and of itself, has no legal standing, and the conciliator usually has no authority to seek evidence or call witnesses, usually writes no decision, and makes no award.

Conciliation differs from mediation in that the main goal is to conciliate, most of the time by seeking concessions. In mediation, the mediator tries to guide the discussion in a way that optimizes parties’ needs, takes feelings into account and reframes representations. In conciliation the parties seldom, if ever, actually face each other across the table in the presence of the conciliator, instead a conciliator meets with the parties separately (“caucusing”). Such form of conciliation (mediation) that relies on exclusively on caucusing is called “shuttle diplomacy”.

Early neutral evaluation is a process that may take place soon after a case has been filed in court. The case is referred to an expert, usually an attorney, who is asked to provide a balanced and unbiased evaluation of the dispute. The parties either submit written comments or meet in person with the expert. The expert identifies each side’s strengths and weaknesses and provides an evaluation of the likely outcome of a trial. This evaluation can assist the parties in assessing their case and may propel them towards a settlement.

Fact-finding: A process by which a third party renders binding or advisory opinions regarding facts relevant to a dispute. The third party neutral may be an expert on technical or legal questions may be representatives designated by the parties to work together, or may be appointed by the court.

Judge-Hosted Settlement Conference: In this court-based ADR process, the settlement judge (or magistrate) presides over a meeting of the parties in an effort to help them reach a settlement. Judges have played a variety of roles in such conferences, articulating opinions about the merits of the case, facilitating the trading of settlement offers, and sometimes acting as a mediator.

Examples: USA—This is the most common form of ADR used in US federal and state courts; Japan-judge as neutral may implement three ADR procedures (Jardine 1996).

Med-Arb., or Mediation-Arbitration: An example of multi-step ADR, parties agree to mediate their dispute with the understanding that any issues not settled by mediation will be resolved by arbitration, using the same individual to act as both mediator and arbitrator. The parties may, however, be unwilling to speak candidly during the mediation when they know the neutral may ultimately become a decision maker. They might believe that the arbitrator will not be able to set aside unfavorable information learned during the previous mediation. Additional related methods have evolved to address this problem:

In Co-Med-Arb, different individuals serve as neutrals in the arbitration and mediation sessions, although they both may participate in the parties’ initial exchange of information.