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What is Med-Arb?
Jan L. Warner & Jan Collins

Question: My wife and I have been having marital problems throughout our marriage, and we have stayed together for the sake of the children and because our finances are so intertwined that we did not want to go through the trouble of sorting it all out. Both of us inherited money during our marriage which was used to begin a family business. We have two children, one of whom has graduated from college and is working, and the other who is a senior in high school.

Our problems have intensified during the past year to the extent that we can no longer live together, but there is one thing we agree upon: we do not want to be bait in the legal shark tank and have our lives to be even more disrupted by lawyers and judges. We have looked into mediation, but are not convinced that a mediator lawyer or social worker without business expertise is the answer because of the tangled financial situation in which we find ourselves. We both know that one misstep could economically damage both of us. Are there other ways in which we can privately resolve our disputes without selling our souls to the legal system?

Answer: Given your and your wife’s aversions to being cast into the court system, you have several options: 1) continue to live together (which you say you can’t do); 2) sit down and resolve your difference yourselves (which you are not able to do); 3) submit your problems to mediation (which you don’t want to do); or 4) look into mediation with an arbitration component, called “MedArb.”

Mediation and arbitration are methods of “alternative dispute resolution” by which differences can be resolved without going to court; however, mediation and arbitration take very different approaches to the dispute resolution process:
1) The mediator is there to help adverse parties reach an agreement and has no authority to compel a decision. If there is no agreement, the mediator’s work is finished. 2) On the other hand, an arbitrator reviews the facts, hears the parties’ positions, and then has the authority to make a ruling that can be final and binding, depending on the terms of the arbitration contract.

In recent years, a hybrid technique has been developed called “MedArb”. Here, you can begin the process with mediation and, if an agreement can not be reached, you can move directly into arbitration and secure a ruling. Some mediators contend that they can not switch roles to become the arbitrator because they are not trained in that area or because they see the switch in roles as a conflict.

The main purpose of these dispute resolution techniques is to resolve your differences in private without court intervention. Since you and your wife have a business and other economic issues involved, we believe that before you move ahead, you decide how to deal with the economic issues. First, since you have a certified public accountant who has been working for both of you, a decision must be made whether you, your wife, and the CPA feel comfortable having him or her participate in what could well be an adversary situation. If not, you should each secure an independent advocate or hire one forensic accountant as a “joint expert.” Second, you and your wife will still need lawyers to represent you. Third, by using this process, you and your wife will be able to pick and choose the person (or persons) who will help you make the decisions. It may be a good idea to find a qualified person who lives in the next town to become your “private judge.” In our view, arbitration and MedArb will become more and more popular as the number and complexity of matrimonial cases continues to escalate.

SoloFact: The American Academy of Matrimonial Lawyers has been training both mediators and arbitrators whose names can be found at www.aaml.org.




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