09.14.06 – In a recent California Court of Appeal opinion in Fininen v. Barlow, 142 Cal. App. 4th 185 (Cal. Ct. App. 2006), where a mediator settled an earlier case involving Defendant, a residential remodeler.  Other parties subsequently sued Defendant, and agreed to binding arbitration with the mediator in the prior suit.  The trial court denied the petitioned. Affirmed.  While CCP section 1286.2 (a) (6) provides that the court may vacate an award if it finds the arbitrator did not disclose known reasons for disqualification, the record was clear that disclosure was made.  Defendant recognized the arbitrator as the same person who served as the mediator in the prior matter, and the arbitrator made it clear that he would not proceed without everyone's consent.

Even if everyone consents, however, the more interesting question is whether it is prudent to arbitrate with the same person who previously served as mediator in the same or a related matter.  Effective mediation depends on candid and confidential communication between the parties and mediator, which is less likely to occur with the specter of a subsequent arbitration if the case does not settle.

Even in cases like this one, where the mediation is conducted before the parties know they will be in a subsequent arbitration, the same person serving as mediator and then arbitrator is fraught with peril.  The arbitrator's role as a decision maker imposing a binding decision on the parties is inconsistent and antithetical to the trusting and neutral role of a mediator, where parties are free to share confidences in their efforts to settle the case.  Parties may develop false expectations of the mediator-turned-arbitrator, which may be why the Defendant tried to resist the arbitration award in this case.  While permissible, the minimal cost-efficiency of having the same person serve as mediator and then arbitrator is outweighed, in my opinion, by the potential for a frustrating experience that neither advances the interests of mediation or arbitration.

Article posted with permission from Steven H. Kruis, Esq. www.agreement.com