ARC Articles



"Puff The Magic Dragon" Binding Mediation

by: Professor A. Marco Turk, Esq.
©2010 The Daily Journal Corporation




I can still hear Peter, Paul and Mary singing the song "Puff, the Magic Dragon" as it went to the top of the record charts in 1963 .It proved to be the inside favorite about a fun-loving dragon from a special place called "Honah Lee," who taught children in a magical world about self-esteem. A line in the song says, "A dragon lives forever, but not so girls and boys." That analogy can be made to historical arbitration versus meditation. It seems that the former, as the bedrock of alternative dispute resolution to the court system, continues to make its presence known as the easy choice for those with their hearts still in the camp of adversarial outcomes. They have been given that assist by a process referred to as "binding mediation."

In an effort to deal with the user problems that occur in both arbitration and mediation, a hybrid approach has been taken to combine the two into what one writer has referred to as "mediated arbitration." However, this is nothing more than mediation first and then arbitration practiced by the same neutral, i.e., what we know as "med-arb." Try mediation first, and if at first we don't succeed then move on to arbitration with the same neutral in the saddle making the final decision through an award that binds the parties.

While binding mediation has been proposed as a way for disputing parties to achieve the best of both possible ADR worlds and finally come to a resolution that is expeditious, inexpensive, provides for self-determination, preserves existing party relationships, and ensures the finality of arbitration in the event of a failure to agree, all is not well in River City.

It seems that the basis for this hybrid approach has its genesis in the misunderstanding of the true nature of mediation. Instead of looking at mediation in its purest sense as a process that is controlled by the mediator only in connection with the procedural aspects; an event that belongs to the parties themselves in terms of their interaction and ultimate agreement if any, proponents of the hybrid approach view the mediator as one who is "empowered to make the final decision" and who has the authority to make a "ruling" in the event that the parties fail to agree upon a resolution.

Adding to the problem is the reliance on opportunities for discovery that are available through the court system and the arbitration process to ensure a "fair exchange of information" as a "necessary part of any fair, binding proceeding." When was the last time that a proponent of the purity of the mediation process turned to discovery as one of the contents in a mediator's toolbox, or sought to achieve a "binding proceeding?"

But it gets worse. In the binding mediation process the neutral is "both mediator and arbitrator" who has the authority to "issue subpoenas," as would an arbitrator. And, the positions, credibility and reasonableness of the parties "will be judged by the mediator" in "rendering" the "final decision" concerning issues that the parties themselves could not resolve. The power of the mediator as ultimate decision-maker is enhanced by the authority to consider information already in hand or obtained outside the process, as well as by the final offers of the parties, and may even extend to utilizing "legal principles and the facts" or giving "greater weight to the equities" of what is at stake.

Although it has been claimed that while binding mediation may be "nearly perfect," there are many problems, not the least of which is its questionable enforceability. This is exacerbated by the lack of case authority dealing with the problem and the fact that the parties could end up in a contest that is decided as if the process were in fact arbitration. One would think this was not the original intent of the parties when they adopted a process that contained the word mediation.

It is interesting to note that proponents of binding mediation employ an oxymoron in promoting its use as a time, fee and cost saver for the parties in dispute, but "still winding up with a process and outcome over which they have substantial control." One promoting dispute resolution organization in the construction industry has even gone so far as to assert its belief that "Binding Mediation is the fastest, simplest, least expensive and most efficient single ADR process that offers a final and binding resolution to a dispute."

In California, there appears to be one case that has dealt with this issue. In Lindsay v. Lewandowski (2006) 139 CA4th 1618, 1623-1625, 43CR3d 846,849-850, the 4th District Court of Appeal held that the material but non-legal term "binding mediation" was vague and therefore the stipulation for settlement was unenforceable. According to "The Rutter Group ADR California Practice Guide" (3:12.6; 3-5,3-6), the better approach would be to provide for "binding arbitration if mediation fails," rather than using the term "binding mediation." Rutter also recommends that the provisions governing binding arbitration contain rules: Specifying which facts heard by the mediator may be used in connection with the "binding portion of the procedure;" requiring that the "mediator-turned-arbitrator" comply with all the mandated rules that would apply to an arbitrator; mandating compliance by the mediator with court connected mediation standards of conduct, especially concerning informed consent; requiring that parties be informed by the mediator when the process moves from mediation to arbitration; and, ensuring that the parties may select a different neutral for the arbitration portion when a negotiation impasse arises.

The Lindsay court noted that the only other case on the issue (Frain v. Frain [1995] 213 Mich.App. 509, 511-512) indicates that in cases where the mediator is authorized to render a binding decision, the process in effect turns into arbitration. The Lindsay concurring opinion by Presiding Justice David G. Sills notes that binding mediation as a term actually misleads and deceives because it can be interpreted as "[I]f a settlement is not reached, then, puff, the mediation becomes an arbitration." He cautioned that "arbitration" implies a decision that may not please all parties while "mediation" necessarily encompasses a mutually satisfactory resolution.

It seems that arbitration lives forever, but not so mediation. "Puff, the Magic Dragon."



A. Marco Turk is professor and director of the Negotiation, Conflict Resolution, and Peacebuilding Program at Cal State University Dominguez Hills, a mediator for the California Court of Appeal (2nd District), and a member of ARC. His column appears here on the first and third Fridays. He can be reached at amt4adr@gmail.com.






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