ELEVENTH CIRCUIT HOLDS MEDIATION IS NOT ARBITRATION
The Eleventh Circuit has held that for the purposes of the Federal Arbitration Act (“FAA”), mediation is not arbitration. Specifically, the court held that a party cannot use § 3 of the FAA to enforce a contract clause requiring an aggrieved party, prior to filing a lawsuit, to institute mediation or non-binding arbitration. The court noted that while the FAA does not define “arbitration”, classic arbitration is characterized by submitting a dispute to a third party for a binding decision. Furthermore, the court said, the “FAA clearly presumes that arbitration will result in an ‘award’ declaring the rights and duties of the parties.” Thus, a dispute resolution procedure that does not result in an award is not arbitration “within the scope of the FAA.”
While some in the ADR circuit may believe this decision represents a clear understanding of the differences between arbitration and mediation, others may feel the court unnecessarily denigrated the mediation process by implying that it is little more than a speed bump on the way to the courthouse. Advanced Bodycare Solutions, LLC v. Thione International, Inc., No. 07-12309 (11th Cir. Apr. 21, 2008).
This post written by Lynn Hawkins.
