Mediation arbitration or Med-Arb is becoming an increasingly popular dispute resolution mechanism in which disputing parties and a third-party neutral attempt to reach a voluntary agreement through mediation, and then move to Arbitration by the same third party if they are unsuccessful. This can be done on a point-by-point (one issue at a time) basis.
Therefore, the parties, may, for example tackle a particular issue and hopefully after their respective submissions, come to an agreement on that particular issue. If there is no consensus, the mediator then becomes an arbitrator and makes the final decision on that particular point.
The primary goal of mediation is to assist the conflicting parties in negotiating their own dispute and in working towards a mutually satisfactory settlement. The third-party mediator acts as a facilitator with no authority to make decisions on any of the issues that arise during the mediation. In Arbitration, on the other hand, the arbitrator is expected to render a final and binding decision based on the evidence presented and the parties’ respective submissions.
The good thing about Med-Arb is that the parties are still very much involved in putting forward their positions. If consensus cannot be reached, the Arbitrator then makes that decision on that point in dispute. In the end… there will be an Award and no court.