Searching for a mutually unsatisfactory but acceptable solution

Of the methods of alternate dispute resolution, i.e., alternate to adjudication by a court, the most ancient is arbitration. Indeed, the noun "arbitration" derives from the Latin "arbitratus," which is the past participle of "arbitrari" ("to be a witness, act as umpire"). Authority: Wiktionary, the free dictionary.

If arbitration is a decision-making process, why might disputing parties not prefer to submit their dispute to a trial judge? In an arbitration the parties can choose who the decision-maker, or makers, will be. They can select as an arbitrator someone who is familiar with the business context of the dispute as well as the substantive law that governs the dispute.

For example, if the dispute is about a claimed construction defect, the parties, who must agree to arbitrate and agree on the arbitrator or panel of arbitrators, are likely to look for an arbitrator who has some savvy about bidding and about reading plans and specifications.

The financial securities business and the insurance industry routinely insert in their business agreements and policies commitment by their customers to arbitration of disputes. The same also goes for employment agreements.

Procedure in arbitration is less formal, and the rules of evidence are applied in a more relaxed fashion than would be the case in a trial court. Arbitration is supposed to be quicker and cheaper than courtroom litigation. The parties also have more control over the schedule, not a small matter if the parties need to call expert witnesses, as would be the case in a professional malpractice action.

However, arbitration has acquired much of the baggage of litigation in a court: motion practice, discovery, depositions, video, PowerPoint presentations and batteries of lawyers.

As a practical matter, the parties have no avenue of appeal from an arbitral award. Parties may in their agreement to arbitrate provide for an appeal by a single arbitrator to a panel of arbitrators, but they cannot by agreement confer review jurisdiction on a court.

Provision for arbitral review of a single arbitrator's award by a panel of arbitrators is rare. To be sure, a disappointed party may move to vacate the arbitrator's award. See G.L.c. 251, ยง12.

Courts, however, consistently take the view that if parties have agreed to arbitrate, courts will not second-guess the arbitrator unless the arbitrator has exceeded his authority - for example, has decided the case on a ground not put to the arbitrator for decision, or the arbitration award is tainted with corruption. The baseline rule is that no matter how wrong or even stupid, the court will not vacate the award.

To that doctrine there is the "public interest exception." A case that dramatically illustrates that exception is Delta Air Lines, Inc. v. Air Line Pilots Association, International, 861 F.2d 665 (1988). A chief pilot was in command of Flight 410 from Boston to Bangor, Maine. A first officer and second officer also were in the cockpit. The crew, which also included four flight attendants, had a scheduled layover in Bangor and was due to fly the plane, as Flight 437, back to Boston the next morning.

That night the chief pilot got drunk; when his two co-pilots knocked on his door at 6:30 a.m., he was still inebriated. The co-pilots escorted their chief to the airport and had to help him up the ramp to their aircraft. Two members of the cabin crew noticed the condition of the chief pilot, as did the last passenger to board the plane. The co-pilots covered for the chief and told the cabin crew that everything was fine.

The flight landed safely in Boston. Two of the cabin attendants blew the whistle, and Delta fired the pilot in command. He claimed arbitration.

The arbitration board, in this case called the System Board, found that the chief pilot had, indeed, committed a dischargeable offense but that Delta did not have just cause to discharge him and should have offered the option of enrolling him in its alcohol rehabilitation program first. Delta appealed.

The court paid tribute to the principle that "the function of the court is very limited when the parties have agreed [to arbitrate]. ... The courts, therefore, have no business weighing the merits of grievance."

That said, there was a public policy issue involved. Delta and nearly all the states had adopted the scarcely remarkable rule that pilots should not fly while intoxicated. There were lives at stake. This was a well-articulated public policy. When an arbitral award offends public policy, the court has a duty to set that award aside and did just that.

For the resolution of international commercial disputes, arbitration has become a favored mechanism. The American Law Institute has recognized that and is in the process of writing a "Restatement of the Law of the U.S. Law of International Commercial Arbitration."

While arbitration has a history and an established role in resolving international commercial disputes, it is mediation that now dominates the alternate dispute resolution scene.

Some 40 years ago, mediation had been in use largely in connection with public disputes, for example as between states having common interests in a lake or labor disputes in which there was a public interest, such as a dispute between communications workers and telephone companies. Private litigants and their lawyers were accustomed to go to court.

The major push for mediation, coming to a negotiated resolution of a dispute with the assistance of a neutral mediator, came from the publication in 1981 by Roger Fisher and William L. Ury of "Getting to Yes, Negotiating Agreement Without Giving In." Fisher and Ury wrote that principled negotiation rests on five propositions:

1) Separate the people from the problem;

2) Focus on interests, not positions;

3) Find options for mutual gain;

4) Use objective criteria;

5) Know your best alternative to negotiated agreement, which the mediation community calls BATNA.

In a recent blog, Joseph Berman, a fellow mediator with The Mediation Group, commented on the role BATNA had played in the negotiated agreement among Iran, the United States and six other world powers. He translated BATNA to: "What happens if we don't settle?" In the case of Iran and its nuclear program, Berman observed that "[a]bsent an agreement to forestall [Iran's nuclear] program, Iran could build a bomb in the near future. There is no way to erase that unfortunate fact."

Another unfortunate fact was that the coalition that had imposed economic sanctions on Iran was fragile. As to Iran, if it did not settle, economic sanctions would continue in force. Thus, there was a search by both sides for a mutually unsatisfactory but acceptable solution.

What stimulated the use of mediation generally was the high cost of litigation, the length of time in reaching trial, as well as the possibility of an appeal, and the uncertainty of the result.

When Eric Green and JAMS, The Mediation Group's Brad and Jane Honoroff and David Matz, and The Boston Law Collaborative's David Hoffman first organized, they were pioneers in holding themselves forth as mediators. Now, acting as a mediator is a career of choice for retired judges and senior lawyers. Negotiation and mediation has become a subject of study at law schools, and a modest number of law school graduates choose acting as a mediator as a first career choice.

For its consumers, the clients, a particular attraction of mediation is that the disputants ultimately control the resolution. They are active participants in the process, and the settlement agreement, if there is one, is a voluntary act.

The ubiquitous use of mediation as a step in dispute resolution has produced some lamentation that it deprives the law of the legal precedents so important to a mature common law system. Professor Stephen N. Subrin of Northeastern University School of Law examined that question in a law review article published in 2002 and observed that the courts were not wanting for cases and that the numbers of appeals was increasing. He did observe, however, that the privatization of dispute resolution does deprive the community of the participation and resultant instruction in the administration of justice that jury trials afford.

Mediation, however, is with us. It has responded to a felt need and the number of mediators has increased, if not exponentially, by a lot.


Rudolph Kass, a retired Appeals Court judge, is a mediator, arbitrator, evaluator and master at The Mediation Group in Brookline. He is a member of Lawyers Weekly's Board of Editors.

Published: Tue, Sep 08, 2015