Originally from The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration, Fifth Edition

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I.           INTRODUCTION

Those who undertake the dual roles of arbitrator and mediator in the same dispute should understand the differences in the statutes and rules addressing these two processes, the ethical and practical tensions in serving both roles, and what they need to do to ensure the integrity and effectiveness of the process.

In mixed-mode dispute resolution processes, parties use both mediation and arbitration to resolve their disputes. These processes may involve a mediation which, if unsuccessful, is followed by an arbitration (med-arb) or an arbitration followed by a mediation (arb-med). In one arb-med process, the arbitrator’s award is withheld from the parties pending a mediation. Another mixed-mode process involves commencement of an arbitration, followed by a midstream mediation, and then completion of the arbitration (arb-med-arb) if the case does not settle. Sometimes the process may go back and forth between the two modalities depending on the needs of the parties and the nature of the dispute.

In dispute resolution agreements, parties may specify a mixed-mode process in which the same neutral serves the dual role of mediator and arbitrator. (This process will be referred to as a dual-role process.) Parties may make this choice because they believe that use of the same neutral may lead to quicker and less costly resolution. Or they may believe that the prospect of arbitration before the same neutral who conducts the mediation may create incentives for the parties to settle, or that the knowledge gained by the neutral during the mediation may lead to a more efficient and less costly arbitration if the case does not settle.

In deciding whether to serve as mediator and arbitrator in a mixed-mode process, a neutral needs to carefully consider the issues arising from ethical principles and relevant legal rules. This chapter examines those issues in practice and how they are addressed in institutional rules, codes of conduct for mediation and arbitration, statutes, and the common law. The chapter also discusses best practices needed to ensure not only that the processes are effective and fair—in fact and in the perception of the parties—but also that any resulting arbitration award will pass muster by a reviewing court.  The chapter ends with a discussion of the treatment of dual-role processes in foreign countries.

II.           INSTITUTIONAL RULES

Dispute resolution clauses that specify a mixed-mode process may specify that the process will be administered by a dispute resolution institution.  The arbitration rules of the three main institutions—AAA, JAMS and CPR—have rules governing whether arbitrators may serve as both arbitrator and mediator in a mixed-mode process. AAA and JAMS allow an arbitrator to do so with consent of the parties; CPR prohibits the practice.

AAA Commercial Arbitration Rule R-10 addresses mediation that occurs after the arbitration has been initiated but before selection of the arbitrator. It provides that “[u]nless agreed to by all the parties and the mediator, the mediator shall not be appointed as an arbitrator to the case.”  The rule does not address whether, if mediation occurs after the arbitrator has been selected, the arbitrator may serve as the mediator. Nonetheless the rule reflects the principle that parties may consent to a neutral serving in both roles and should be read to allow parties to consent to the appointed arbitrator’s serving as the mediator in an arb-med process.

JAMS Commercial Rule 28(a) addresses mediation at any stage of the arbitration. It provides that the JAMS mediator selected for the matter may not be the arbitrator absent the parties’ consent. Rule 28(b) provides that the process in arb-med for consenting to the arbitrator’s serving as the mediator is that the parties agree in writing to submit the matter to the arbitrator for settlement assistance and agree that, if the matter does not settle, the arbitrator will not be disqualified from sitting as an arbitrator and that the parties shall not raise the arbitrator’s dual role as a basis for vacating or modifying the award.  While Rule 28(b) does not spell out the process in med-arb for requesting the mediator to serve as the arbitrator, the best practice would be for the parties to enter into an agreement with the same provisions.

CPR’s arbitration rules address a neutral’s serving as both mediator and arbitrator in a mixed-mode process, but unlike the AAA’s and JAMS’ rules, CPR’s rules require the mediator to be a person other than the arbitrator. CPR Admin. Rule 21.2; CPR Non-Admin. Rule 19.2.