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by Harvey L. Goldhammer and Akram A. Awad

February 2013

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Confidentiality in Mediation October 2011

California's ongoing budget crisis is severely affecting the court system. Courtroom closures up and down the state are particularly problematic given California's mandated "fast track" litigation program, which requires that 75 percent of all unlimited civil lawsuits must be resolved or proceed to trial within one year of their filing; all cases must be disposed of within two years of filing. (See Cal. Rules of Court, Standards of Jud. Admin. 2.2(d) & (f).) Despite this mandate, trial date assignments in some courthouses already exceed the deadline standards. Many judges predict that massive court cuts mean litigants will soon be waiting three to four years before getting to trial. Such delays will, of course, increase the cost of every litigated matter.

Given this growing logjam of civil cases in our court system, attorneys need to try something new. Perhaps the most promising ADR model to come along is a procedure, called "arbitration-mediation," that guarantees complete resolution of a case in a single day.

The process begins in the morning with a half day of binding arbitration before a single neutral. At the conclusion of the morning session, the arbitrator immediately issues a binding decision - and proceeds to seal it so neither the parties nor counsel know the result.

What follows in the afternoon is a half-day mediation conducted by a different neutral. This mediator, like the parties, also does not know the content of the sealed arbitration decision.

If the mediation ends in a settlement, the arbitration decision is destroyed and the parties never learn how it turned out. However, if the mediation does not result in a settlement, the arbitration award is unsealed and disclosed, at which time it becomes final and binding.

There are significant advantages to the arbitration-mediation model. First, it brings prompt finality to the litigation process, either through a binding arbitration award, or else through a mediated settlement.

The procedure also diminishes the overall cost of litigation. The actual cost of presenting a case in a half-day arbitration is significantly lower than a one- to two-week trial. Stipulations between the parties can further streamline and simplify the issues. Medical expert opinions can be presented through medical reports, declarations, and records.

But there are other benefits beyond cost savings. The "arb-med" process encourages a more cooperative, less adversarial framework for resolving cases. The protocol allows conflicting parties (and key claims personnel, such as the adjuster in charge of the file) to see how key witnesses present themselves at the binding arbitration prior to engaging in mediated settlement discussions. This experience better informs the litigants on both sides of the table and is an invaluable aid in the final evaluation of the matter during the afternoon mediation session.

Moreover, a final disposition via this method resolves the case at a much earlier date than the projected three- to four-year wait for trial that litigants may face in the near future.

Although there are no published reports on arbitration-mediation in California, the procedure has shown early promise in Texas. Eric Galton, an attorney-mediator in the Lone Star State who also serves as a visiting mediation instructor at Pepperdine University, reports that in every case where his office utilized the arb-med model, a mediated settlement resulted; these outcomes occurred after the arbitration and without unsealing any of the arbitration awards. Given that experience, there is reason to think this system can be helpful here in California, particularly given the pending logjam at the courthouse.

Talented mediators are creative folks. So are successful litigators. That creativity, coupled with a desire to break through the interminable delays in our state court trial calendars, could spark the fires of change. If litigation attorneys warm to "arb-med," this new and innovative procedure - already proven to be an efficient method for resolving cases - can be deployed to deliver meaningful results to clients who need it.

Attorneys Harvey L. Goldhammer of Goldhammer Mediation Services and Akram A. Awad of Ax3 Mediations are mediators/arbitrators located in Glendale.

Reader Comments

Angela Clemente - March 1, 2013
good read
Chris Blank - March 19, 2013
Great article. Would you be willing to share the engagement agreement you use for providing this service. I'm sure it would be a very valuable tool for litigators, their clients and neutrals.

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