My last two blog posts have discussed “endgame” tactics to break a looming mediation impasse. One such tactic is the “Dutch Auction”; another is commonly known as the “Savoy method”. I offer here a third tactic: combining mediation with “single-offer” or “baseball” arbitration. The latter name is derived from the use of this mechanism for salary arbitration in Major League Baseball.
Let us assume that at the end of a mediation session, the parties find themselves $1 million apart, with neither party willing to make any further concessions. The parties could agree at that point to settle the lawsuit by submitting the case to an arbitrator, to whom each side would submit one figure at which they would settle. Ideally, the plaintiff’s single offer would be no higher than its last demand at mediation, while the defendant’s offer would be no lower than its highest offer at mediation. The parties could have a brief hearing before the arbitrator to justify their numbers, or they could make written submissions. The arbitrator would have no authority to “split the baby” by awarding an amount between the parties’ respective offers. Instead, the arbitrator would select one of the parties’ offers, enter an award in that amount, and that award would (if necessary) be confirmed by the court.
One need only look at salary arbitration in Major League Baseball to see that this process works. Like any dispute resolution format, it has both pros and cons, and I intend to discuss some of them in my next post. Unquestionably, though, baseball arbitration accomplishes the goal of finality, thus allowing the parties to put their disputes behind them.
A recent California case upheld the process of converting conventional mediation into what it called “binding mediation”, but was in reality baseball arbitration, with the mediator serving in both capacities. I recently wrote about that case for the American Bar Association’s Section of Litigation, and I hope you will take the time to read both the case and my short news article about it.
Next time, I will delve further into the advantages and disadvantages of using baseball arbitration as a mediation endgame.
Michael S. Orfinger is a principal mediator at the firm of Upchurch, Watson, White and Max.