Bargaining in the Shadow of the Mediator: A Communitarian Theory of Post-Mediation Contracts

Ohio State Journal on Dispute Resolution, 2010

Bar Ilan Univ. Pub Law Working Paper No. 10-10

53 Pages Posted: 3 Jul 2010 Last revised: 24 Aug 2010

Elad Finkelstein

Ono Academic College Faculty of Law

Shahar Lifshitz

Bar-Ilan University - Faculty of Law

Date Written: July 2, 2010

Abstract

Mediation traditionally has been regarded as a private, extra-legal institution. Recently, however, legal regulation of mediation has evolved. Yet, under the conventional private approach, mediation law focuses almost exclusively on the mediator-parties relations, and leaves the internal relationship between the mediating parties and the post-mediation contract to be governed by conventional contract law.

In this article we challenge the conventional private, contractual approaches to mediation and advance, in their stead, an innovative communitarian theory of mediation that focuses not only on the mediation process, but also on the post-mediation contracts. Drawing on insights from social psychology and public policy, our analysis uncovers the substantial public components of mediation. We show that mediating parties perceive mediation as a community act that affects their self-identity as community members. We thus argue that the legal encouragement of mediation should be accompanied by the appropriate mechanisms to ensure procedural justice as well as fair outcomes.

Based on this communitarian theory, the article develops a new mediation regime designed to preserve mediation as an institution that is different from court litigation while preventing it from becoming a site of exploitation and injustice. The communitarian regime encompasses not only the mediator-parties’ relationship but also the internal relationship between the mediating parties, thus offering a unique contractual regime that subjects mediation’s procedural justice as well as its substantive outcomes to judicial review. Furthermore, while prevailing law separates mediators’ duties from the internal relationship between the mediating parties, under the proposed regime, a violation of mediation law by the mediator could impact the legal validity of the entire mediation process, including the post-mediation contract.

The article also addresses, and then rejects, the standard objections to judicial review, which raise concerns that judicial review harms mediations’ confidentiality and finality, thereby increasing their cost and discouraging litigants from participating in mediation. We propose a novel mechanism of optional ex ante substantive court approval of post-mediation contracts, demonstrating that, when properly used, this mechanism together with the ex post special contractual regime are likely to enhance parties' willingness to participate in mediation.

Suggested Citation

Finkelstein, Elad and Lifshitz, Shahar, Bargaining in the Shadow of the Mediator: A Communitarian Theory of Post-Mediation Contracts (July 2, 2010). Ohio State Journal on Dispute Resolution, 2010 ; Bar Ilan Univ. Pub Law Working Paper No. 10-10. Available at SSRN: https://ssrn.com/abstract=1633744

Elad Finkelstein

Ono Academic College Faculty of Law ( email )

104 Zahal St.
Kiryat Ono, 55000
Israel

Shahar Lifshitz (Contact Author)

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900
Israel

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