Med-Arb is a dispute resolution process involving both mediation and arbitration functions. Typically, the process starts with the mediation phase, which aims at resolving some or all of the issues in dispute through a mediated negotiation. If not all disputed issues can be settled by mediation, the mediation phase will end and the arbitration phase will begin.
The Med-Arb process must be agreed to by the disputing parties beforehand. The mediator-arbitrator is authorized to decide when the mediation should stop and the arbitration begin, but should only make that transition on clear notice to the parties. The mediator-arbitrator role is often vested in a single person, but the design of the process can allocate those roles to separate individuals were circumstances warrant.
Choosing Med-Arb is appropriate when disputing parties wish to expedite resolution of the matter by the most cost-effective means. This is particularly so when the mediator will also serve as the arbitrator, since the transition from mediation to arbitration can often be done quickly. Delay and added expense are avoided by not having to have a second person – the separate arbitrator – come up to speed with the subject matter of the dispute and the issues.
Med-Arb can be particularly useful in ongoing business relationships such as construction projects where delays can be costly and lengthy, unresolved disputes can create friction and uncertainty. Similarly, employer-employee/labour-management disputes can be resolved quickly, fairly and conclusively with reduced risk of damage to the continuing relationship between the parties.
The prospect of an arbitrator making a final decision following an unsuccessful mediation can provide the impetus for the mediating parties to reconcile their differences in the mediation phase, rather than losing control of the outcome if the dispute were to move into the arbitration phase. Statistically, the majority of Med-Arb processes settle in the mediation phase without the parties ever having to go to arbitration.