In 2000’s first quarter, the authors of this article served on a panel of three mediators to mediate a software development contract dispute worth several million dollars.  None of the mediators previously had participated on such a panel. Though initially uncertain as to the process and usefulness of a three-mediator panel, we came to believe that the advantages of this type of mediation led to the resolution of a seemingly impossible dispute.

Like many contracts, this agreement contained an alternative dispute resolution clause in which any dispute would be referred to mediation under the mediation procedures of the CPR Institute for Dispute Resolution, which publishes Alternatives. Unlike most ADR clauses, however, this agreement specified the use of three mediators – each side chose one mediator, and the two party-appointed mediators chose a third mediator.

How did this unusual ADR provision arise?  The counsel indicated that in a draft of the contract, one of the parties had suggested an arbitration clause using three arbitrators. The other party had a negative arbitration experience and would not agree to arbitration, but would agree to mediation, so the parties compromised with an ADR clause that specified three mediators.