This article was also published by the American Bar Association’s Section of Litigation, Alternative Dispute Resolution Committee.
In Minkowitz v. Israeli, A-2335-11T2, 2013 WL 5336454 (N.J. Super. Ct. App. Div. Sept. 25, 2013), the parties agreed to submit a divorce and custody dispute to binding arbitration. Prior to conducting the arbitration, however, the parties entered into discussions, with the assistance of the arbitrator, which led to the settlement of many of the issues in the case. When it came time to arbitrate the remaining issues, however, Plaintiff’s counsel moved for the arbitrator’s recusal, arguing that having acted as a mediator, he could no longer serve as an impartial arbitrator. The arbitrator denied that he had acted as a mediator, rejected the recusal request, and conducted the arbitration. The trial court subsequently affirmed his arbitration award.
The Appellate Court reversed, first finding that the arbitrator had acted as a mediator. The Court reached this conclusion because the arbitrator had participated extensively in settlement discussions, and in particular, aided in securing a settlement agreement that recited that it was the result of mediation. The Court next concluded that, absent an agreement by the parties, a mediator could not act as an arbitrator. The court noted that parties make confidential disclosures to mediators that are outside the rules of evidence, and that the parties are assured these disclosures will play no role in future litigation. This ability to talk confidentiality to the mediator, the court found, was one of the fundamental underpinnings of the mediation process. Serving as a mediator, therefore, is inherently incompatible with subsequently serving as a neutral arbitrator. It is important to bear in mind, however, that one party opposed having individual who acted as a mediator subsequently serving as arbitrator. Had the parties agreed, there would have been no problem.