Mediations and other forms of ADR
Mediation is obviously not the only form of Alternative Dispute Resolution (ADR) outside traditional courts. We need only think of arbitration, binding third-party decisions, collaborative negotiation, ... for example.
’Hybrid’ forms of these alternative dispute resolution techniques can also offer interesting perspectives for parties seeking to resolve disputes outside the court system.
Many combinations are possible and, again, creativity and party autonomy are important assets. Some examples are:
- MED-ARB: sometimes parties wish to frame the mediation more strictly: if no complete solution can be found at the mediation table, an arbitrator will adjudicate any issues that remain at the expiry of a defined period.
- ARB-MED-ARB: appointed arbitrators can also propose to the parties that before issuing an arbitral award, they first seek a solution through mediation; this may, sometimes, already be foreseen in the ADR clause within a contract.
- LEGAL TABLE: the mediator may, at a certain point in the mediation, sit together with counsel for the parties, if desired, to allow them to present and weigh legal arguments against each other, or to facilitate the elaboration of legal solutions, e.g. at the time of drafting the mediation agreement.
In binding third-party decision-making, the parties agree that a third party (who is not a judge or arbitrator) will decide in their place on a particular legal or factual aspect of their legal relationship and accept that this decision is binding on them. The decision made by the binding third-party decider has the same force for the parties as an agreement between them. In principle, the parties can only challenge the decision in case of manifest unreasonableness, conflict with public policy or any fraud committed during its preparation.
The matters left to the discretion of a binding third-party decider are very diverse in practice. For example, in the event of a dispute about a pre-purchase clause in the context of a shareholders' agreement, a binding third-party decider may be asked to determine how the clause should be interpreted; or exactly how much the rental damage at the end of a commercial lease amounts to; or whether or not certain actions of a distributor can be characterised as an urgent reason for terminating the distribution agreement.
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