Improving the Arbitration Process Using a CCA Process Facilitator
Many members of the College of Commercial Arbitrators are successful mediators as well as arbitrators. As mediators they can function concurrently as Process Facilitators (“PFs”) during an arbitration to help the parties prepare for an efficient arbitration. As PFs, they are not participating in a Med/Arb process where the same person is both a mediator and an arbitrator. As separately hired mediators, the PFs can talk with parties confidentially, and help the parties use efficient collaborative arbitration processes such as discovery, motions and scheduling. The later can include the efficient scheduling of witness testimony, whether the arbitration hearing is conducted virtually or in person.
Most commercial arbitration cases settle. When they settle makes an enormous difference to the economics of the proceeding. Negative impressions of the cost of arbitrations are often reasons why clients do not agree to arbitration clauses in their pre-dispute contracts. Having a PF empowered as a mediator available at the beginning of and during an arbitration will provide the parties with a resource to remind them to regularly consider whether or when settlement or continued arbitration is in their overall best interests.
Laura Kaster and Jeremy Lack are leaders of the effort of the International Mediation Institute to implement the combined use of the Mixed Modes of mediation and arbitration which the Global Pound Conference determined is the future of dispute avoidance and resolution. As they recently said in the New York Dispute Resolution Lawyer:
“By focusing on issues of process first, the parties can consider less tangible issues early on, such as personalities, cultures, loyalties and emotional reactions as well concrete calculations such as fees, deadlines, the relief sought, and how to best implement a final outcome. No assumptions are made and there is less gamesmanship. The parties have greater scope to think about their procedural needs having been freed of their immediate focus on possible substantive outcomes and such concepts as “winning” or “losing.” Relationships between counsel and/or the parties can be improved by creating a partnership in terms of process design and helping to think collaboratively as a team, before focusing on substantive issues that could otherwise trigger a more competitive or “out-of-group” dynamic without such a prior partnership step. This collective early process focus helps to create and maintain a more amicable and cooperative mindset, even if adjudicative elements will be required.” Kaster, Laura A. and Lack, Jeremy, “Using a Guiding Mediator to Help the Parties Design Bespoke Dispute Resolution Processes,” New York Dispute Resolution Lawyer, 2021 Vol.14. No.1.
The following suggestions involve supplementing forms which are the most widely accepted by industries that endorse arbitration. The proposed CCA model is based on arbitration and mediation rules such as AAA Rule 10 (Construction) and Rule 9 (Commercial). Under AAA Rules, a mediator as PF is permitted to operate even though the parties are also preparing for or conducting an arbitration. JAMS and CPR also have rules allowing for a mediator to be used during an arbitration.
Below are sample clauses permitting the hiring of a PF either in a pre-dispute agreement or in an agreement following the commencement of an arbitration.
Post Dispute Arbitration Clause
If the parties have previously agreed to use arbitration, that agreement can be supplemented with the following:
After the arbitrator(s)’ appointment, the arbitration panel shall suggest that an independent mediator be retained in accordance with the Commercial Mediation Procedures of the American Arbitration Association or such other rules to which the parties may agree. Without the consent of the parties the mediator shall only provide services as a Process Facilitator (“PF”) assisting the parties with discovery and scheduling issues. The agreement to use an agency’s rules does not require the parties also use such agency as a case administrator.
The parties and/or a case administrator shall help the parties choose the PF. The arbitrator(s) shall not be involved in choosing the PF and there shall be no communications between the arbitrator(s) and the PF. Retaining a mediator as an PF enables the parties to communicate confidentially with the PF. However, hiring a mediator as process facilitator does not allow the PF, without further written consent, to conduct any kind of settlement discussion including but not limited to exchanging information about last offers and demands.
If the parties choose to conduct settlement negotiations as part of a mediation process in which the PF is involved, absent the consent of the parties, the mediation process shall not delay the issuance of an arbitration award.
Pre-Dispute Contract Clause
The pre-dispute contract agreement can have a standard mediation clause to which the language below is added. The PF helps the parties decide whether it is their best interest to continue with mediation, litigation, or arbitration. The clause should also improve the probability that more parties would agree to use arbitration even if the case does not settle.
In the event of a dispute, any of the parties or the arbitration panel may suggest the hiring of an independent mediator to be used as a Process Facilitator (“PF”) to assist the parties with discovery and scheduling issues.
The parties and/or a case administrator shall help the parties choose the PF. The arbitrator(s) shall not be involved in choosing the PF and there shall be no communications between the arbitrator(s) and the PF. Retaining a mediator as an PF has the advantage of allowing confidential communications. However, hiring a mediator as process facilitator does not allow the PF, without further written consent, to conduct any kind of settlement discussion including exchanging information about last offers and demands.
Harold Coleman, Jr.
Roy L. DeBarbieri
Paul M. Lurie
Richard H. Silberberg
Thomas J. Stipanowich
*The views expressed are those of the author and do not necessarily reflect the views of CCA or any other organization.