May 13, 2015
When mediation fails, arbitrate to close the gap
Mediation is good. It’s a great opportunity to close off litigation.
Too often, mediation results in offers from both sides that are not accepted. We sometimes say that the gap is too big to settle.
A second mediation might or might not close the gap. Arbitration will close the gap. In fact, you can direct the arbitrator to make a decision that falls within the gap. That’s one of the benefits of custom rules, you can get creative.
Is there a risk to arbitrating about the gap? What if only one of the offers is reasonable? That’s fine as it will come out in the arbitration.
A classic failed mediation outcome in employment law is an employer offering too little while the employee asks for too much.
All it takes to drive a deal is an arbitrator to fix a number somewhere in the gap.