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.