Trends in mediation and arbitration

Law News was recently invited to attend an AMINZ-hosted discussion at Bankside Chambers, featuring renowned dispute resolution practitioner and teacher, Professor Thomas Stipanowich, who hails from Pepperdine University in California and the Straus Institute for Dispute Resolution.

Professor Stipanowich was “interviewed” on the night by Tony Willis, formerly of Clifford Chance in London and now a top international commercial mediator with a special interest in designing tailored dispute resolution processes. This made for a very entertaining and insightful discussion, peppered with comments from the floor, on issues facing mediators and arbitrators in today’s legal environment, and what we in New Zealand can learn from experiences elsewhere.

Mediation as a “profession” – changing attitudes and a need for regulation?
The first topic up for discussion was whether mediators can yet be considered to be a distinct “profession”. In other words, do mediators have the recognised standards that would constitute them as such, or would they only gain legitimacy as a recognised profession with more regulation in place? Professor Stipanowich’s views tend in the direction that it is a profession: “Increasingly, we have the earmarks of a profession, although I don’t know if we are one already,” he said. “We are developing a broad international sense of standards. More and more training programmes are being set up. ADR and mediation are a sine qua non of a 21st century lawyer.”

On the question of the need for regulation, Professor Stipanowich was cautious. He considers that certain jurisdictions have tipped over into excessive regulation, and gave the example of Austria, where there is a vast array of regulations for entry into the profession and a regulatory structure which has developed “in the total absence of practice”. On the other hand, the US may be accused of being too far in the other direction. “If I have a bias on the question,” said Professor Stipanowich, “then it is towards education.”

There may, however, be a difference between simply educating practitioners in the art of mediation and translating it into a useful tool. Professor Stipanowich noted that some countries may “talk a good game” but not actually have much happening. An example was shared from a recent training programme he was involved with, where two Greek mediators were in attendance as a result of a recent initiative by the Greek government to train 1000 mediators. When Professor Stipanowich asked them how many cases they had mediated, the answer was 15. And no, that was not 15 cases between the two of them – rather, a total of 15 cases had been mediated in Greece since the establishment of the programme.

Compulsory versus voluntary mediation
The discussion then turned to the question of courts ordering mediation (whether phrased as parties being ordered or encouraged to do so), as compared to parties voluntarily agreeing to participate in the process, and whether or not this undermines the likelihood of mediation achieving an outcome.

“There is no question that the role of the courts is essential in driving mediation,” said Professor Stipanowich. “The statistics I’ve seen in the US suggest that it is best not to make it mandatory but that courts can still exercise a good deal of authority in encouraging people in that direction.” Comments from the floor supported his view, and noted that the significant costs ramifications in New Zealand if parties turn down a reasonable offer to mediate act as a real incentive towards resolving matters outside the courts.

Precedents already exist for (effectively) compulsory mediation – for example in the employment sector, and, as discussed in Law News earlier this year, a form of compulsory mediation has recently been introduced in the family law area (see “A straightforward guide to Family Dispute Resolution” in Law News Issue 18, 13 June 2014).

Interrelationships between mediation and arbitration – novel approaches?
It seems that attitudes towards arbitration may also be changing. According to Professor Stipanowich, now that people have more experience of mediation, some are becoming less critical of arbitration. However, others still consider that mediation offers them more “control” and ownership of the process, leading them to reject arbitration in favour of mediation. He discussed the potential for mediators and arbitrators to work more closely together, and suggested that perhaps arbitrators should do more to encourage mediation/settlement, even when the arbitration process is already underway.

Tony Willis raised an example of a process he crafted whereby a mediation and an arbitration were set up in tandem, with a mediator and a panel of arbitrators waiting in the wings. So if the mediation failed then the arbitration was already set to go, making for time- and (potentially) cost-savings in the long run. Professor Stipanowich thinks we are going to see a lot more experimentation like that.

The impartiality of party-appointed arbitrators was also discussed. While arbitrators are supposed to be independent/impartial, some had concerns that, at least some of the time, party-appointed arbitrators may have been predisposed towards the appointing party and this affected the eventual outcome. Despite American Arbitration Association (AAA) rules changing ten years ago to do away with partisan presumptions, “there is still a bit of ‘wink wink, nudge nudge’ going on”, which does not sit well with Professor Stipanowich.

Taking the obligations of impartiality one step further, it was queried whether a mediator should disclose a history of previous mediations involving the same parties/insurers/law firms in advance of a new mediation. Responses differed in this regard – some mediators do not see this as an issue and do not generally disclose such information, while others often do so. Tony Willis considered the issue may come into sharper relief if one party indicates it is only prepared to mediate provided a specified mediator conducts the proceedings.

Professor Thomas Stipanowich is the William H. Webster Chair in Dispute Resolution and Professor of Law at Pepperdine University in California, as well as the Academic Director of the Straus Institute for Dispute Resolution. He was brought to New Zealand by the New Zealand Law Foundation, with support from the University of Auckland and Victoria University of Wellington.

Tony Willis of Brick Court Chambers Barristers in London (and previously of Clifford Chance) is an independent mediator in commercial, business and regulatory matters. Since 1998, he has been engaged full-time as a mediator and negotiator, with a special interest in designing tailored dispute resolution processes. 

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