‘Switching Hats’: Developing International Practice Guidance for Single-Neutral Med-Arb, Arb-Med, and Arb-Med-Arb

The IMI/CCA/Strauss Institute Mixed Mode Taskforce have just published a series of articles on mixed mode dispute resolution in the New York Dispute Resolution Lawyer. These articles are reprinted with permission. The below article was produced by Working Group 5, and authored by Thomas J. Stipanowich and Mordehai (Moti) Mironi.

Suppose you are the sole arbitrator in a commercial dispute. While hearings are in progress counsel for the parties come to you and explain that circumstances have changed and both parties need a quick and informal resolution of their dispute; they ask you, in whom they have great faith, to assume the role of mediator. Would you agree to “switch hats,” and, if so, under what conditions? How dispute resolution professionals, commercial advocates and counsel, and business parties respond to these questions varies depending on circumstances, personal preferences, culture and legal tradition. While in China and some other countries mixed roles are broadly accepted, in countries like the U.S. lawyers, arbitrators and mediators tend to be skeptical about a neutral changing roles during the course of resolving disputes. Some other countries have statutes regulating or even prohibiting single-neutral “med-arb.”

Given the growing use of “mixed mode” approaches in which both settlement-oriented and adjudicative approaches are employed and the expanding competencies of arbitrators and mediators, it is not surprising that a high percentage of dispute resolution professionals now have some experience playing multiple roles in the course of resolving disputes. Despite these realities, no authoritative, comprehensive, widely accepted guidance regarding med-arb, arb-med, or settlement-oriented activities by arbitrators has yet been developed for international practice. In order to bridge this gap, a working group of the International Task Force on Mixed Mode Dispute Resolution set itself the task of creating new Practice Guidelines for Situations in Which a Mediator Changes Roles to Function as an Arbitrator, or an Arbitrator Performs the Functions of a Mediator (Single–Neutral Med-Arb, ArbMed, and Arb-Med-Arb) or Engages in Settlement-Oriented Activities.1

Concerns Regarding Mixed Roles

Much has been written about the potential problems associated with a neutral changing roles midstream. It is often said that due to the fundamental incompatibility of the roles of arbitrator and mediator, performing both roles in turn may work to the detriment of each—most notably in scenarios where a neutral switches to the role of arbitrator after attempting to mediate. Being aware that their mediator may become a binding decision-maker, parties may be substantially less candid during settlement discussions, and instead concentrate on trying to “spin” the neutral or look for hints about how she might judge their case. If a mediator offers—or is perceived to offe