Enforcement of Contract Clauses Providing for Mediation Chapter 34
Kathleen M. Scanlon, who wrote this article as an “ADR Counsel In Box,” a series of Alternatives centerfold pullout supplements, is a former CPR senior vice president who is special counsel to New York’s Heller Ehrman White & McAuliffe. She wrote the “Drafter’s Deskbook: Dispute Resolution Clauses,” published by the CPR Institute, which covers issues in this article.
Adam Spiewak is a former CPR student intern. He is an associate in the Los Angeles office of Quinn Emanuel Urquhart Oliver & Hedges.
Nonbinding ADR processes occupy a key role in resolving disputes. Increasingly, pre-dispute contract clauses are being inserted to provide for the use of some form of nonbinding ADR process prior to commencing arbitration or litigation. The rationale for including such clauses is that they will increase the likelihood of an early consensual resolution once a dispute has arisen. CPR’s model abbreviated multistep ADR clause provides for three sequential stages:
Negotiation Phase: “The Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives.”
Mediation Phase: “If the dispute has not been settled by negotiation within  days, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure. Unless otherwise agreed, the parties will select a mediator from the CPR Panel of Distinguished Neutrals.”
Arbitration or Litigation Phase: “[Any dispute that remains unresolved  days after appointment of a mediator shall be settled by arbitration in accordance with the CPR Rules for Non-Administered Arbitration, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.] [If the dispute has not been resolved by nonbinding means as provided herein within  days of the initiation of such procedure, either party may initiate litigation [upon 00 days written notice to the other party.]]”