Mediation can end in an impasse, a prospect that some parties may want to avoid. Arbitration doesn’t allow parties to be involved in deciding the outcome, as mediation does. Med-Arb combines the benefits of both processes into a hybrid mediation-arbitration approach.
The mediator first tries to help the parties find a solution that works for both involved. If there is no agreement, the mediator takes on the role of arbitrator and makes a decision (usually/preferably binding). There is a second option to engage a separate individual as the arbitrator, which may be somewhat more costly but has the advantage of separating the mediator and arbitrator functions. A Med-Arb professional can make interim decisions within the Med-Arb process in order to advance the mediation effort, and/or conclude with a final decision that incorporates the entirety of the dispute. At all times there should be a clear demarcation between the mediation and arbitration processes.
The arbitration phase in a Med/Arb is often less expensive and faster than a regular arbitration, because the arbitrator is already familiar with the case, having previously acted as the mediator.
A properly designed and implemented med-arb process can lead to a fair, cost-efficient and speedy resolution of disputes.