Stay up to date on everything mediation!

Subscribe to our free newsletter,
"This Week in Mediation"

Sign Up Now

Already subscribed No subscription today
<xTITLE>“Double Hatting” under Med-Arb: A Comparative Analysis</xTITLE>

“Double Hatting” under Med-Arb: A Comparative Analysis

by Gizem Alper
October 2021 Gizem Alper

Over the past few years, the concept of blending mediation with arbitration has attracted attention in the international arbitration community. Med-Arb is a hybrid dispute resolution mechanism; generally, parties first agree to mediate the dispute, or they resort to mediation after the arbitration proceedings have commenced; if the mediation ends in impasse, the dispute proceeds to arbitration or, as the case be, arbitration resumes. Moreover, if the dispute is resolved, generally, a consent award may be rendered. The said consent award becomes enforceable under the New York Convention.  

As with other alternative dispute resolution mechanisms, Med-Arb has its advantages; these are mainly, efficiency, confidentiality, neutrality, and enforceability. However, there are potential pitfalls. A pitfall requiring immediate attention is “double hatting”: Could or should the same person act in the capacity of a mediator and thereafter, an arbitrator in the same dispute?

Different jurisdictions and international institutions have addressed this matter somewhat differently. SIAC is perhaps the leading international arbitration institution to have implemented practical Med- Arb procedures. SIAC and SIMC have joined forces in 2014 and outlined a procedure for Med- Arb. “Double hatting” is not addressed directly in the protocol; however, parties have been discouraged from appointing the same person as a mediator and arbitrator in the same dispute: It has been noted that the same person will not be appointed both as an arbitrator and mediator, unless, of course, the parties to the dispute agree otherwise. A parallel approach has been adopted by ISTAC of Turkey; the 2019 Med-Arb Rules do not allow for “double hatting”, unless, otherwise explicitly agreed in writing by the parties to the dispute.

Meanwhile, in Hong Kong, “double hatting” has been addressed under the Hong Kong Arbitration Ordinance. As per the Arbitration Ordinance, when a person is a mediator and arbitrator in the same dispute, any information revealed in caucus during mediation will be disclosed to all parties,  if the dispute cannot be settled during mediation and, the parties proceed to or resume arbitration. Although this provision ensures ethical practices, it undermines the benefits of the mediation process. One of the key elements of mediation is that it allows parties to disclose confidential information, knowing that it will be kept confidential during caucus sessions. Caucus sessions sometimes enable mediators to break impasse and always provide a “safe space” for the parties to voice their concerns. 

CIETAC has also acknowledged the ethical dilemma that may be posed by “double hatting”. As such, under CIETAC proceedings, CIETAC may “supplant the arbitral tribunal to ‘assist the parties to conciliate the dispute’”, provided that consent is sought from the parties. 

As a global player in the arbitration world, ICC’s revised rules allow for the incorporation of mediation into arbitration proceedings. The 2021 ICC Arbitration Rules do not directly address Med-Arb; however, the parties are to be “encouraged” to settle disputes through amicable dispute resolution methods, including mediation. Since the matter has been regulated under “case management techniques”, it can be presumed that the arbitrator and mediator may be the same person wearing “double hats”. In this respect, the rules do not provide any explicit guidance on ethical considerations.

The highlight of ICDR arbitration proceedings is concurrent mediation. The 2021 ICDR International Dispute Resolution Procedures, provide for concurrent mediation, unless, of course, the parties opt out. Although, “double hatting” is not common in practice, the ICDR procedures do not provide any explicit provisions for “double hatting”, neither do the ethical guidelines of the American Bar Association  (ABA) for arbitrators and mediators. Nevertheless, the model rules of ABA are helpful as it lays out ethical standards and it is up to the mediator or arbitrator to decide whether “double hatting” hinders these ethical standards in each dispute.

An interesting approach has been discussed in Australia. The ACICA rules of 2021 do not have elaborate provisions for Med- Arb; however, the Draft Consultation Rules allowed the parties to “veto” the arbitrator, if the -now-arbitrator had been a-former-mediator in a caucus session or information had otherwise been revealed in confidence during the mediation process. 

IMI’s Mixed Mode Task Force formed an international working group (Working Group V) addressing challenges to Med-Arb. The working group has emphasized that flexibility, enhancement of procedural efficiency and economy are the main benefits of “double hatting”. However, the working group acknowledges the challenges that Med-Arb presents; it is drafting international guidelines to address some of the challenges of “double hatting”. The draft international guidelines require, inter alia, informed consent and a written agreement reflecting the clear understanding of the parties. If a private caucus has been used during mediation, the parties are presented with several options, including, inter alia,: i) acknowledgment of the parties that the arbitrator will solely rely on evidence disclosed during arbitration proceedings; ii) consent of parties acknowledging that the information disclosed during caucus may affect the decision of the arbitrator; iii) disclosure of material confidential information to all parties, if the dispute proceeds to arbitration and; iv) signed agreement of the parties allowing mediators to recuse themselves. 

“Double hatting” is a slippery slope requiring some sort of international guidelines and regulations. The difficulty in drafting an international standard is cultural differences; mediation practices differ across the globe. Nevertheless, given the ethical considerations, it is a necessity for ensuring justice and fairness. Also, training of mediators is of utmost importance. This includes education enabling mediators to navigate the ethical considerations imposed by “double hatting” and establishing practical norms through education because mediators play and will continue to play a key role in shaping practical standards.

Biography


Gizem Alper has earned a PhD from Istanbul University and has masters degrees from Leiden University (the Netherlands) and Pace University (New York). She is an attorney in New York and Istanbul, with experience in cross border commercial matters, arbitration and mediation. She runs the CISG Database at the Institute of International Commercial Law at Elisabeth Haub School of Law (Pace University). She is also a mediator with the Volunteer Layers for the Arts (VLA) in New York. She is a member of LCIA, BVI Arbitration Group and secretary for Commercial Law and Uniform State Laws at the City Bar of New York.



Email Author
Additional articles by Gizem Alper