Multi-tiered and hybrid dispute resolution instruments

As shown on this website, each dispute resolution instrument has distinct characteristics and benefits. In some cases, the most suitable solution is not to apply a single instrument, but to apply several instruments (multi-tiered). Another option is to combine different instruments or specific features from the various instruments (hybrid).

The individual facts and circumstances of a dispute will guide the application of appropriate dispute resolution instruments, whether they be single, multi-tiered or hybrid applications.

Example 1: Mediation plus Arbitration

Probably the most common form for multi-tiered dispute resolution applications is the jointing of mediation and arbitration.

In most cases, the mechanism will provide the first step, where the parties will try to reach an amicable agreement through mediation. If an agreement cannot be reached they will submit their dispute to arbitration. The reason for this approach is so the parties will firstly attempt to reach an amicable solution themselves before a third person is introduced.

However, the parties are free to adapt their approach. For example, the parties may find it more suitable to first initially undergo arbitration proceedings and then interrupt the arbitration in order to try to mediate the dispute. If the parties reach an agreement during the mediation, the parties may ask the arbitral tribunal to resume the proceedings and to issue an arbitral award which simply incorporates the amicable agreement, a so-called "award on agreed terms". This means the amicable agreement becomes final, binding and, most importantly, enforceable.

Example 2: Litigation plus Mediation

Further examples of how the different dispute resolution instruments can be combined are offered by the Hamburg state courts. They offer parties the possibility to suspend litigation proceedings and resolve their dispute with the help of a mediator.

One option for the parties, is to mediate their dispute with the help of a "court mediator" in a so-called "court-annexed" mediation. In this case, the mediator will be a judge who is a specially trained and qualified "mediator". The judge acting as a mediator cannot be the same person who will be called upon to decide the dispute in case mediation fails. The advantage of this approach is that the amicable agreement will be recorded in a court-settlement which can be enforced. Alternatively, the parties may also seek the assistance of an external mediator.

Example 3: Cooperative or collaborative practice

Cooperative or collaborative practice (CP) is an example of a hybrid dispute resolution instrument. It is hybrid because it has similar, but not identical features to that of mediation proceedings. In both cases facilitative principles are applied and the parties will try to successfully negotiate a settlement. In CP proceedings the parties' legal representatives are actively and directly involved in providing immediate advice. Whereas, in mediation, the mediator has the lead and the legal representatives will play a minor role, if any at all. Should the CP proceedings fail, the legal representatives are precluded from appearing in subsequent litigation proceedings. Thus, a real incentive is set for lawyers to assist the parties in reaching a settlement.