[Editor's notes]

At the end of the last century, commercial mediation began to develop in the US, and now the commercial mediation service in the US has occupied a leading position in the world. The topic of this column "Stone from Other Mountains: Trends of International Commercial Mediation" focuses on introducing the development of commercial mediation in the US, including the development history of commercial mediation, representative ADR institutions, expert mediators, and professional expositions made by Professor Stephen B. Goldberg of Northwestern University Law School on commercial mediation procedures, so as to gain an insight into the whole process of international commercial mediation taking root in the US, and understand the different operation modes of commercial mediation. Professionals who are concerned about commercial mediation are welcome to contribute actively.

I. System Construction

The development of American mediation originated in the second half of the 20th century, when the number of civil and commercial disputes surged. In view of the traditional judicial system, American legislation, judicial departments and all walks of life began to explore new ways to resolve disputes, and mediation, a convenient and efficient way to resolve disputes, came into being. The development of American mediation system has gone through a change from unwritten to written, from a separate law setting mediation procedure to special legislation of mediation system, and from unconsciousness to consciousness.

From 1970s to the beginning of 21st century, American mediation system experienced three distinct stages of development. The first stage is the pilot stage of legislation. Many communities set up and developed mediation centers, and small claims courts began to adopt mediation. The second stage takes place in the next decade, which is the rapid implementation period of mediation. And the courts and the society have actively carried out a large number of mediation projects, showing obvious diversity. For example, the Judicial Arbitration and Mediation Service(JAMS), established in 1979, has now become the largest mediation company in the US, resolving 13,000 to 14,000 disputes annually. Finally, from the judicial point of view, the mediation profession has entered the management stage. The Civil Justice Reform Act of 1990 explicitly authorized some pilot courts in the federal area to conduct court-attached ADR experiments, so as to promote the rapid development of ADR in courts. The ADR Act of 1998 authorized the federal district courts to formulate specific rules, stipulating that each federal district court should have at least one ADR procedure, which quickly promoted ADR widely and effectively. In 2002, the American Bar Association and the National Conference of Commissioners on Uniform State Laws passed the Uniform Mediation Act.

The development of American mediation system follows the principle of "experiment before management". The grass-roots level is the field of production experience, and practice is the source of creative theory. Therefore, the US attaches great importance to primary courts and grass-roots communities, closely integrates mediation practice with them, and promotes the development of mediation system from bottom to top. Thus, the process of institutionalization of mediation in the US could be summarized as follows: legislation first, dispute settlement agencies follow up, mediator guidance, and parties’ independent decision.

II. Professional Organizations

Judicial Arbitration and Mediation Services, Inc.(JAMS), the largest ADR organization in the world, is a non-profit organization proposed and founded by Justice Warren Knight in 1979. After 40 years of development, JAMS has gradually become one of the global leaders in dispute resolution legal services.

JAMS is headquartered in Irvine, California, with 26 offices across the country. Among the seven partners around the world, SCMC is its only commercial mediation partner in China. JAMS has more than 400 registered mediators, all of whom are local and even American legal professionals with outstanding achievements, and nearly half of them are engaged in arbitration and mediation full-time. JAMS handles an average of 18,000 cases every year. The dispute settlement fees include mediation/arbitration fees and case management fees. Mediators charge more than $5,000 per day, and top mediators and arbitrators charge $15,000 per day. Since the current CEO took office in 2008, JAMS has gone through a transition process from non-governmental organization to corporatization. The scope of enterprise management includes decision-making and execution, effective organization of personnel and other resources, business operation and daily management, which has become an important guarantee for the market-oriented and efficient operation of JAMS dispute resolution services.

III. Mediation Experts

In March 2016, JAMS sought the best partner in China, and then established a close strategic cooperative relationship with Shanghai Commercial Mediation Center (SCMC), becoming its seventh international member. In September, 2020, the two sides jointly launched the Sino-US International Commercial Joint Mediation Mechanism. This breakthrough mechanism is the product of experience and expertise accumulated by JAMS and SCMC after five years of close cooperation. As dispute settlement organizations with considerable experience in the fields of trade, investment, securities, intellectual property, real estate and insurance, the two sides fully considered the differences in culture and legal systems between China and the US when preparing for the Joint Mediation Mechanism, and jointly formulated the International Commercial Mediation Rules and set up the "11+11" Sino-US International Commercial Joint Mediation Panalist. Through the application of online mediation technology, joint coordination of mediation, intensive discussion of mediation skills and mediation, the Joint Mediation Mechanism provides resolution for cross-border commercial disputes.

In the Sino-US International Commercial Joint Mediation Mechanism, the parties could choose one mediator from 11 JAMS’ penalists and one mediator from 11 SCMC’s penalists to form a joint mediation court. All of the penalists are leading figures in the legal service industry with many years of ADR experience, including Mr. David Perkins, who has more than 40 years of experience in the field of intellectual property, and Rebecca Westerfield (former) judge who has solved thousands of domestic cases and cross-border disputes throughout the US. Mr. Richard Price, who is recognized as one of the leading patent and trademark lawyers in the UK, and Ms. Zee Claiborne, who has been engaged in mediation full-time since 1998, etc. They can provide international commercial disputes in various fields such as securities, insurance, concession, real estate and construction, intellectual property, medical and health, energy and infrastructure, maritime affairs, sports and entertainment, etc.

IV. Professional Opinions

Negotiations have reached an impasse, but both sides agree on one thing: you need help resolving the dispute. You engage a neutral mediator to do just that. Rather than acting as a judge who decides who “wins” or “loses,” a third-party mediator in this mediation assists parties in reaching an agreement.

Negotiators often feel unprepared for mediation. The very fact that your “negotiation” is now officially a “dispute” is enough to make you approach the next stage with trepidation. Here’s how the mediator is likely to proceed and how to take advantage of his presence to secure the best possible deal for your company.

The Stages of the Mediation Process

Stage 1: The Joint Session. Though your mediator may contact you and the other side in advance regarding logistical matters, mediated negotiations typically begin with a joint-session that serves to educate the mediator, to uncover any differing views of the facts, and to clarify what each side considers a satisfactory resolution to be. The number of people present will vary, but each side generally includes a spokesperson (typically a lawyer), one or more people involved directly in the dispute, and someone with the authority to enter in to recommend a binding settlement.

At the joint session, the mediator is likely to encourage all participants to introduce themselves and present what they view to be the facts and the desired outcome of the dispute. The mediator will also ask questions that enable him to better understand the dispute and its underlying dynamic.

Some mediators will continue discussions in joint session, hoping that the open exchange of views will quickly resolve the dispute. Many mediators, however, will at some point move to a second stage of separate meetings with each party known as caucuses. One mediator says that she transitions to the caucus stage when exchanges in the joint session begin to “generate more heat than light.” If emotions are running especially high, the mediator might bypass the joint session altogether and proceed directly to caucuses for fear of undermining settlement efforts.

Stage 2: Caucuses. Your mediator will typically begin separate sessions with each party with a statement such as this: “As you know, whatever you say to me in caucus is confidential. I will not repeat anything to the other side that you don’t want me to repeat.” Having provided this assurance, the mediator begins collecting information about each side’s interests. He’ll want to know the underlying needs or concerns implicated in the dispute, as well as the importance you attach to each.

Armed with such information, the mediator begins moving back and forth between the teams for a series of conversations, suggestions, proposals, and counterproposals aimed at building a resolution that will satisfy each party’s core interests, a process sometimes called shuttle diplomacy. The mediator will want to know what settlement terms you’d find acceptable – and that you think the other party might accept. He may also try to identify your non-settlement alternatives.

Depending on the complexity and importance of the matters in dispute, it can take several hours, days, months, or even longer to reach an agreement. Ultimately, mediation leads to resolution in approximately 80% of all mediated disputes. Sometimes the resolution is truly “win-win.” At other times, one side is thrilled with the deal, and the other considers it barely acceptable – though better than a long, uncertain, and expensive journey through the courts.

[Note] This article is published on the Program On Negotiation of Harvard Law School, and adapted from “Get the Best Deal Possible in Mediation,” by Professor Stephen B. Goldberg of Northwestern University Law School, first published in the Negotiation newsletter, November 2006.  To save space, the following text is omitted and the full text can be read by clicking https://www.pon.harvard.edu/daily/mediation/navigation-the-mediation-process/

[References] 

1. Qi Shujie, American Mediation System, People's Mediation, No.10, 2019; 

2. Lei Zhao, Taking JAMS Company as an Example to Analyze the Corporate Operation Mode of American Mediation, People's Court News, June 22, 2018, 8th edition. 

[Laws and Regulations] 

1.Civil Justice Reform Law (1990) https://www.congress.gov/bill/101st-congress/senate-bill/2027/text 

2. ADR Law (1998) https://www.congress.gov/bill/105th-congress/house-bill/3528

3. Uniform Mediation Law (2002) https://www.uniformlaws.org/HigherLogic/System/DownloadDocumentFile.ashx?DocumentFileKey=571ba947-af50-45c2-ffb9-2322fd87fe6e&forceDialog=0

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