Further reading

Blackaby, Partasides & Hunter Redfern, Hunter on International Arbitration, 2009, OUP.

Collins, Briggs, Dickson, Harris et al. Dicey, Morris and Collins: The Conflict of Laws, 15th edn, 2012, Sweet & Maxwell.

Hill and Chong, International Commercial Disputes, 2010, Hart Publishing.

Lew, Mistelis & Kröll, Comparative International Commercial Arbitration, 2003, Kluwer. Merkin, Arbitration Law, 2004, Informa.

Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, Lexis Nexis (3rd ed. Expected 2014).

Sanders, Quo Vadis Arbitration? Sixty Years of Arbitration Practice, A Comparative Study, 1999, Kluwer. Sarcevic, Essays on International Commercial Arbitration, 1989, Graham & Trotman

Chapter 20

Mediation (Conciliation): An Alternative Form

of Dispute Resolution

Chapter Contents

610 | MEDIATION (CONCILIATION): AN ALTERNATIVE FORM OF DISPUTE RESOLUTION

Introduction

There are, besides arbitration, other types of alternative dispute resolution (ADR)1 that are binding on the parties, such as expert determination and ombudsman schemes. In expert determination, a third party, an expert chosen by the parties, is used to consider the particular matter raised by the parties.The decision of the expert is normally binding. Expert determination clauses are often found in construction contracts2 and information technology contracts. Cost-effective and quick, the use of ombudsmen is another popular alternative frequently used worldwide for complaints by individuals against particular sectors, such as insurance3 and banking. In contrast, a non-binding type of ADR4 that has caused a stir on the domestic and international commercial scene is mediation, or conciliation, as a mode of dispute resolution.5

Use of a third (neutral) party to aid the contracting parties to iron out their differences and arrive at an amicable solution is the distinctive feature of mediation. Although the terms ‘mediation’ and ‘conciliation’ are used interchangeably here, there is some suggestion that in mediation the third party plays an evaluative role (i.e., by expressing his opinion), whereas in conciliation the role is a facilitative one (i.e., the third party does not advise parties of his own opinion).6 This distinction is by no means well settled, neither is it widely accepted. For instance, an American writer7 describes the processes thus:

While differing somewhat in language and detail, most modern defi nitions of mediation contain two common elements: (1) third party facilitation of dispute settlement, and (2) lack of third party power to determine the resolution of the dispute. In other words, the principle of self-determination is paramount. The disputants, not the third party intervener, maintain the exclusive power to decide on a resolution of their dispute . . . [at p 508].

The process of ‘conciliation’ has yet to achieve a stable meaning, and is often used interchangeably with mediation. In earlier usage, conciliation usually referred to a process that emphasised facilitation of communications among disputants without third party

1 Also sometimes known as appropriate dispute resolution.

2For instance, in Channel Tunnel Group v Balfour Beatty Ltd [1993] AC 334, the contract included an expert determination clause. Clause 67(1) of the contract provided:

If any dispute or difference shall arise between the Employer and the Contractor during the progress of the Works . . . such dispute or difference shall at the instance of either the Employer or the Contractor in the first place be referred in writing to and be settled by a Panel of three persons (acting as independent experts but not as arbitrators) who shall . . . state their decision in writing . . . to the Employer and Contractor.

The expert determination clause was perceived by the House of Lords as ‘nearly an immediately effective agreement to arbitrate, albeit not quite’ (p 353). The expert determination clause was part of a two-stage procedure the parties had agreed for resolving disputes. The first port of call was a panel of experts. If either of the parties was dissatisfied with the decision of the experts they could, on notice, refer the dispute to arbitration. The court held they had the power pursuant to its inherent jurisdiction to grant a stay of an action brought before it in breach of an agreed method of resolving disputes by some other method. They agreed they should grant a stay in the present case. See Lord Mustill at p 353.

3 See www.theiob.org.uk. Ombudsman schemes are commonly used in other jurisdictions.

4Frank Sander, Roger Fisher and William Ury are widely acknowledged as the founders of ADR. However, see Menkel-Meadow, ‘Mothers and fathers of invention: the intellectual founders of ADR’ (2000) 16 Ohio State Journal on Dispute Resolution 1.

5Other well-known types of ADR are early neutral evaluation (ENE), and mini-trial (executive tribunal) and Med-arb. In ENE, the parties present their cases in an adversarial manner, which is evaluated by a neutral third party, and the parties negotiate on the basis of this evaluation. Mini-trial is conducted with a panel comprising a third party and a senior executive from each side

recommendations, as contrasted with mediation, which allowed for more activist third party intervention. Ironically, this understanding (mainly in the labor fi eld) appears to have been reversed in international dispute resolution, where a conciliator is regarded as a third party who makes a non-binding recommendation to resolve a dispute. In any event, in most contexts today, conciliation and mediation are considered synonymous, and both may involve activist intervention by the third party [at p 513].

The Centre for Effective Dispute Resolution (CEDR),8 a major provider of commercial mediation in England, adopts the term ‘mediation’ to refer to both evaluative and facilitative mediation,9 even though it promotes facilitative mediation.10

Since the mediation process does not share the trappings of the judicial or arbitral process (e.g., handing down of awards or judgments, the adjudicative role of the arbitrator or judge), it is not acrimonious in nature. It helps focus the parties’ minds on the nature of the differences, to try to see if they can come to some agreeable arrangement, thus preserving their business relationship. This positive aspect of mediation has contributed to its enthusiastic reception by businessmen, academics and practitioners alike. As The Rt Hon Lord Goff of Chieveley colourfully observed:

... cost and delay have been identifi ed as two of the principal enemies of justice in the modern world; and, since time is money, it is really cost that we are talking about. But, in addition, formal arbitration has become to some extent affl icted by arthritis, the disease which, as time passes by, seems to attack nearly all institutions as it does nearly all human beings. ADR [alternative dispute resolution, that is, conciliation and mediation] is seen as the one means of escaping from the infl exible processes towards which substantial arbitrations seem to gravitate. ADR, if effective, mayproducenotonlyalessexpensivebut,also,alesstraumaticresolutionofdisputes –especially important where the parties may wish to continue to do business together in the future.11

Mediation, however, has its fair share of criticisms. For instance, it has been said that prejudice, power imbalance and bigotry are rife in mediation and that most mediations go against the grain of rule of law.12 It is also said that mediator neutrality is a myth and that the sex13 and ethnic backgrounds of the mediator and of the participants affect the outcomes.14 Although it may be the case that exhibition of raw emotion and the making of inflammatory statements by the parties in the course of mediation (e.g., during their opening statements, or when the parties have been brought together by the mediator for further discussion and problem solving) may not conform to the familiar trappings of legal discourse, in most cases, parties are aware of and informed by the framework of available legal solutions. In most cases involving commercial disputes, parties are

8Based in London, the CEDR has played an important role in raising the profile of commercial mediation in commercial disputes in England. More details on this organisation are available at www.cedr.com.

9 There is some debate about the relative merits of facilitative mediation and evaluative mediation. See, for example, Love, ‘The top 10 reasons why mediators should not evaluate’ (1997) 24 Florida State University LR 937.

10It promotes facilitative mediation in the courses it offers. See Richbell, The CEDR Mediator Handbook: Effective Resolution of Commercial Disputes, 2004, CEDR; Mackie et al, The ADR Practice Guide: Commercial Dispute Resolution, 2007, Tottel.

11Tackaberry (ed), International Commercial Arbitration for Today and Tomorrow, 1991, Euro Conferences, p 41.

12Delgado et al, ‘Fairness and formality: minimizing the risk of prejudice in alternative dispute resolution’ (1985) Wisconsin LR 1359.

13For a feminist perspective on mediation, see Evans, ‘Women and mediation: toward a formulation of an interdisciplinary empirical model to determine equity in dispute resolution’ (2001) 17 Ohio State Journal on Dispute Resolution 145; McCabe, ‘A forum for women’s voices: mediation through a feminist jurisprudential lens’ (2001) 21 Northern Illinois University LR 459; see also Grillo, ‘The mediation alternative: process dangers for women’ (1991) 100 Yale LJ 1545, who observes that mediation is not a feminist alternative.

14Hermann et al,The Metrocourt Project Final Report, 1993, University of New Mexico Center for the Study and Resolution of Disputes.