THE USE OF MEDIATION TECHNIQUES IN COMMERCIAL
ARBITRATION TO ACHIEVE A FAIR AND EXPEDITIOUS PROCESS
By Lisa Renee Pomerantz, Attorney at Law
and Michele S. Riley, Esq., Arbitrator and Mediator
WORKSHOP OUTLINE
1. The Arbitration Paradox- Arbitration is a process created by contract, but
there are widespread reports of party dissatisfaction with the process as
becoming overly “litigious” and losing its advantage as a method of fair and
expeditious dispute resolution, reportedly due to the use of ever-expanding
discovery and motion practice.
2. What are the possible causes of this paradox?
a. Inability or failure of the parties to specify or limit in advance the
amount or nature of the discovery?
i. Is this feasible?
b. Existence of prisoners’ dilemma (interdependence)?
i. What are the parties’ incentives in requesting discovery and
providing input on process issues?
ii. Are they individually concerned about the fairness or
expeditiousness of the process?
iii. What are the consequences of arbitrator deference to parties
in the context of the preliminary hearing?
c. Failure of the arbitrator to “take control” of the proceedings?
3. Existence of prisoners’ dilemma (interdependence) requires the arbitrator to
“take control” of the proceedings to ensure a fair and expeditious process,
which is to both parties’ benefit.
a. However, if “control” is exercised without seeking party input and
taking the parties’ legitimate needs and interests into account,
fairness and the perception of fairness can be jeopardized.
b. Therefore, the arbitrator should engage the parties in a discussion of
how to accommodate their legitimate needs and interests while
ensuring an expeditious and efficient process.
c. Mediation techniques can be used in facilitating this discussion.
4. Numerous mechanisms available to arbitrator to enhance efficiency and
fairness of process, especially at preliminary hearing which is to discuss
“future conduct of the case, including clarification of the issues and claims
[and] a schedule for the hearings”. (R-20).
a. Clarification and limitation of claims
i. Party statement of claims “are encouraged to provide
descriptions of their claims in sufficient detail to make the
circumstances of the dispute clear to the arbitrator.”(R4(d))
ii. Arbitrator has control over filing of “new or different claim”
(R-6)
b. Arbitrator to order discovery “consistent with the expedited nature of
arbitration”. (R-21(a))
i. Arbitrator may direct production of documents and other
information
ii. The arbitrator may direct identification of witnesses
iii. Arbitrator sets date for exchange of exhibits (R-21b)
c. Arbitrator “has discretion to vary . . . procedure provided that the
parties are treated with equality and that each party has the right to
be heard and is given a fair opportunity to present its case.” (R-30(a))
i. Can direct order of proof (R-30(b))
ii. Can bifurcate proceedings (R-30(b))
iii. Can direct parties to focus on dispositive issues (R-30(b))
iv. Parties can waive oral hearings (R-30(c))
v. Arbitrator can mandate production of evidence “necessary to
an understanding and determination of the dispute.” (R-31(a))
vi. Arbitrator “may exclude evidence deemed . . . cumulative or
irrelevant”. (R-31(b))
vii. Arbitrator may consider evidence in affidavit form. (R32(a)
viii. Arbitrator can mandate “inspection or investigation”.(R-33)
d. Arbitrator discretion to fashion award includes mechanisms to deter
party-caused delay and unreasonable failure to admit or stipulate
i. Arbitrator can issue interim order and require security. (R-34)
ii. Arbitrator can grant “any remedy or relief” that the arbitrator
deems “just and equitable and within the scope of the
agreement.”(R-43(a))
iii. Arbitrator can make “interim, interlocutory or partial rulings,
orders, and awards . . . and may assess and apportion the fees,
expenses, and compensation among the parties . . . as . . .
appropriate.”(R-43(b))
iv. Arbitrator can assess any expenses other than party witness
expenses “against any specified party”. (R-50)
v. Arbitrator can apportion administrative fees
5. Potentially Applicable Mediation Techniques
a. Advance Identification of process issues to be decided by arbitrator
under “fair and efficient” standard soliciting parties’ input
b. Use of “clarifying questions” to understand parties’ positions
c. Use of “paraphrasing” to confirm understanding of parties’ positions
d. Use of “probing questions” to do reality testing of parties’ positions
e. “Reframing” parties’ statements to facilitate communication among
the parties and to refocus on “fairness” and “efficiency”
f. “Brainstorming solutions” to expedite proceedings and focus on issues
truly in dispute
g. “Initiating proposals” for party consideration (especially where
parties unlikely to initiate but likely to agree if proposed by third
party)
h. Recording agreements on issues as reached
6. Distinctions from Mediation Scenario
a. Parties are not final decision-makers
b. Private caucuses not permitted