It’s The Result That Matters

Tue, Sep 9th, 2025 | by Miles Mediation and Arbitration | Article | Social Share

By Usher Winslett

The purpose of arbitration is elegantly summarized in the introduction to the CPR Non-Administered Arbitration Rules: “The primary objective of arbitration is to arrive at a just and enforceable result, based on a private procedure that is fair, expeditious, economical, and less burdensome and adversarial than litigation.” While most arbitrators would take no issue with this statement, if asked to summarize an arbitrator’s primary obligation, they would reflexively re- spond, “to render an enforceable award.” But note that the word “award” appears nowhere in the CPR’s mission state- ment. Indeed, CPR conspicuously avoids using the phrase “enforceable award.” By using “enforceable result” instead, it puts priorities in the right place. The end result of the arbitration need not be a final award, but it must be fair, expeditious, economical – and, of course, enforceable.

While issuing an enforceable award is certainly an essential goal, it vastly diminishes the arbitrator’s role to call it the primary objective. After all, no final award is issued in the overwhelming majority of cases. And the parties are generally better served when their disputes can be resolved without the need for a final award. So, an arbitrator’s foremost, over-arching responsibility is to provide parties with the most efficient and economical way to resolve their disputes – which may include, but involves much more than, rendering an enforceable award.

To varying degrees, all arbitral institutions encourage the possibility of a result other than a final award and have incorporated explicit requirements for efficiency and economy in their arbitration rules:

Article 26 of the DIS (German Institution of Arbitration) Rules provides: “Unless any party objects thereto, the arbitral tribunal shall, at every stage of the arbitration, seek to encourage an amicable settlement of the dispute or of individual disputed ” And Article 27 states: “The arbitral tribunal and the parties shall conduct the proceedings in a time- and cost-efficient manner ”
Article 17 of the UNCITRAL Arbitration Rules provides: “The arbitral shall conduct the proceedings so as…… to provide a fair and efficient process for resolving the parties’ dispute.”
Article 22(1) of the ICC Arbitration Rules states: “The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner “
The introduction to the ICDR International Dispute Resolution Procedures states: “The ICDR Procedures reflect best international practices that are designed to deliver efficient, economic, and fair ”

So, when parties agree to have their cases arbitrated under these various rules, they have specifically demanded an efficient, economical dispute resolution process, regardless of whether the tribunal will ever issue a final award. Arbitrators and arbitral institutions need to go beyond lip service to economical and efficient dispute resolution and adjust – or perhaps overhaul – their procedures to make sure those goals are the primary focus.

Don’t get me wrong, I am not suggesting that an arbitrator should actively take a mediator’s role or that the tribunal should strongarm parties into settling. Rather, arbitrators and arbitral institutions need to modify arbitration procedures to put economy and efficiency first – providing opportunities for the parties to engage in productive settlement discussions throughout the process and incentivizing tribunals to foster early dispute resolution.

How do we do that? The key elements include:

Maximize client (decision-maker) involvement from the beginning.
Schedule an “early arbitration review” (with decision-makers present), which may set the stage for settlement
Build a settlement discussion window into the sched-
Give arbitrators the tools and incentives to promote early dispute resolution.

From my experience as a litigator, mediator, and arbitrator, early settlements typically occur when decision-makers personally weigh costs and benefits, so their involvement is essential.

No mediator I know would consider conducting a mediation without the ultimate decision-makers in the room. There is a good reason for that. The decision-makers need to understand the case not only from their lawyers’ perspective but from the other side’s perspective and a neutral perspective. The decision-makers also need to get a glimpse of the process. Once they see the sausage being made, they will likely lose their taste for it.

Arbitration rules permit – or even encourage – client participation. For example, Article 24(4) of the ICC Rules allows the tribunal to “request the attendance at any case management conference of the parties in person or through an internal representative.” Nonetheless, arbitrators rarely use this essential tool.

Before beginning my point-by-point description of the procedures I am proposing, I should note that everything I am suggesting should be done with the recognition that arbitration is a party-driven process. And arbitrators should not force or coerce the parties into procedures they do not want. But, that said, these procedures are within the letter and spirit of all major arbitration rules, and offering them to the parties is not just an option – it is an obligation.

Initial Case Management Conference – With Client Participation

Step One: The tribunal should strongly encourage client representatives (preferably the ultimate decision-makers) to participate in the initial case management conference. This will allow the clients to better understand the case and the procedure from the outset. It will give the tribunal the opportunity to convey the option of mediation or non-mediated settlement discussions directly to the parties. And if nothing else, the decision-makers will have a front-row seat to the discussions on how the arbitration will play out. In my experience, when clients are exposed to the minutia of arbitration procedures, they see not only the monetary expense but also the productivity cost – and case fatigue can begin to set in quickly.

At the initial case management conference, the tribunal should encourage the parties to incorporate into the schedule an early arbitration review, followed by a mediation window (or settlement discussion pause) – each discussed below.

Early Arbitration Review – With Client Participation

Before the initial case management conference, the parties will have provided the tribunal, and each other, with their pleadings or the equivalent. Soon after that conference, the parties should produce and provide to the tribunal the documents they plan to rely on at the hearing. Once the tribunal reads the pleadings and the reliance documents, it should have a good initial understanding of the case.

At this point, the tribunal should hold an early arbitration review, giving each party the opportunity to summarize its case and answer questions from the tribunal. This step is like what has become known as a Kaplan Opening, but with a few significant differences. Most importantly, I recommend client participation. I also propose holding the early arbitration review a bit earlier than a standard Kaplan Opening, which is sometimes referred to as a “mid-arbitration review.” In addition, I suggest that the tribunal structure the early arbitration review with a focus on setting the stage for – but not forcing – productive settlement discussions. And finally, unlike Kaplan’s proposal, I suggest that the early arbitration review be followed by a pre-scheduled settlement discussion break, such as a mediation window (discussed below).

The tribunal should actively participate in the early arbitration review. The more questions the better. Tribunal questions are, of course, essential to educating the arbitrators, but they will also focus the advocates’ attention on the issues the arbitrators care about and could assist the parties in assessing their likelihood of success.

This procedure will yield multiple benefits: First, as I noted above, it should set the stage for productive settlement discussions. The lawyers, the tribunal, and most importantly, the clients will leave the early arbitration review with a much better understanding of the case. The lawyers and clients will also have a window into the tribunal’s early views, based on their questions. And the clients will have another look at the internal workings of the sausage factory. All of this should encourage the parties to take a hard look at settlement.

Even if the early arbitration review does not result in productive settlement discussions, it provides multiple other benefits that should lead to a more efficient and economical dispute resolution. In sum, it will ensure that the tribunal is fully up to speed at an early stage, which will lead to more efficient and better decision-making as the case proceeds. And, through the arbitrators’ questions, it will focus the lawyers’ attention on the issues that are most important to the tribunal, providing a roadmap for a more streamlined case presentation.

Settlement Discussion Window

One of the biggest impediments to settlement is fear of perceived weakness. Neither side wants to broach the subject out of concern that the mere mention of the idea may damage its negotiating position. Arbitrators can – and should – provide a way for parties to avoid such a standoff. This can be achieved easily by the tribunal raising the idea of a settlement discussion window at the initial case management conference. If the tribunal treats a settlement discussion window as standard operating procedure, then neither side will need to worry about appearing weak by agreeing to it. And once the settlement discussion window is memorialized in the tribunal’s procedural order, it will be automatic, so neither side will be inclined toward tactical hesitation.

Ideally, the settlement discussion window should immediately follow the early arbitration review. At that point in the proceedings, each side will have just heard a summary of the other side’s case and the tribunal’s questions to both sides. Assuming the decision-makers from each side participated in the early arbitration review, they will be well informed and should be able to rationally analyze the costs and benefits of settling versus arbitrating.

I am using the term “settlement discussion window” instead of “mediation window” because I believe the tribunal should try to incorporate a time for the parties discussing settlement into the schedule even in cases where the parties may not want to incur the cost of retaining a mediator. Nonetheless, the most productive settlement discussions

usually involve a mediator, so I suggest encouraging a “mediation window” and using a “settlement discussion window” as a fallback.

Assuming the parties elect to use a mediator, the next question is who will serve in that capacity? The parties may try to recruit the arbitrator or a member of the tribunal, assuming they can save time and money by using someone who is already familiar with the case. I suggest foreclosing that option at the outset. It is too fraught and, if the case does not settle, could result in a challenge to the award.

In sum, I recommend raising the idea of a settlement discussion window (or mediation window) at the initial case management conference, treating it as standard operating procedure, coupling it with the early arbitration review, and incorporating both into the tribunal’s first procedural order.

Give Arbitrators the Tools and Incentives To Promote Early Dispute Resolution

The arbitration rules and guidelines of major arbitration institutions provide for a mediation option and expressly encourage arbitrators to shepherd the parties toward settlement. Nonetheless, arbitrators rarely incorporate the steps necessary to encourage settlement into their procedures, so we need significant structural changes in terms of both education and incentives.

Arbitration institutions must implement policies to ensure that arbitrators use all available tools to set the stage for productive settlement discussions. The institutions should educate arbitrators on their overarching obligation to resolve disputes in the most efficient and economical way. They need to provide arbitrators with procedural order templates that include things like early arbitration reviews and settlement discussion windows. And perhaps most important, they should modify their fee structures to incentivize – or at least minimize disincentivizing – early dispute resolution.

Although arbitrators routinely put their own interests behind those of the parties, the arbitration institutions, and the arbitral process, it is still an undeniable fact that the compensation structures of most arbitration institutions create a financial disincentive for early dispute resolution. And we need to at least consider the possibility that those existing structures may be hindering adoption of early dispute resolution methods.

I am not suggesting that arbitrators are consciously prolonging arbitrations to benefit themselves. But I am suggesting that arbitration institutions, like any efficiently run business, should align their financial incentives with their goals. And since their primary goal should be efficient, economical dispute resolution, it would benefit both the parties and the arbitrators to financially incentivize that result to the extent possible and practical.

In a system that is largely billed by the hour, it is difficult to incentivize efficiency, and I do not have a silver bullet solution, but a non-hourly compensation system like the one used by the ICC could hold the answer if properly applied. The current ICC Rules include enough flexibility to incentivize efficient early dispute resolution. Article 2(2) of Appendix III to the ICC Rules provides that “[i]n setting the arbitrator’s fees, the [ICC] Court [of Arbitration] shall take into consideration the diligence and efficiency of the arbitrator, the time spent, the rapidity of the proceedings, [and] the complexity of the dispute,” among other things. Unfortunately, even with that flexibility, the ICC rarely compensates arbitrators in a way that puts an appropriate value on a quick, efficient resolution.

Another possibility would be for arbitration institutions to follow the lead of law firms – which routinely front-end load their compensation. When taking on a new case, many law firms will require a recoupable-but-non-refundable retainer payment. The retainer payment addresses the fact that the firm incurs significant transaction costs when initiating a new representation. Among other things, the firm must clear conflicts, and the attorneys who will be working on the new matter must allocate time on their schedules. As a result of both, the firm might lose work from other clients, so it is only fair that a chunk of the firm’s compensation is paid up front. Moreover, if the matter is resolved quickly, everybody wins: the client avoids the cost of a prolonged dispute, and the lawyers are compensated above their hourly rate.

All the above is also true for arbitrators, but the fee structures of most arbitration institutions include nothing akin to the front-end loading of a recoupable-but-non-refundable retainer payment for arbitrators.

Different institutions may choose different procedures, but the bottom line is that arbitration institutions need to revamp their rules – including their compensation structures – to put the proper focus on efficiency and economy.

Conclusion

To summarize, encouraging client involvement, holding an early arbitration review, scheduling a settlement discussion window, and incentivizing arbitrators to promote settlement are key to arriving at a just and enforceable result. But tribunals must also use all available cost-saving tools, like bifurcation, dispositive motions, streamlined procedures (like having the chair alone oversee all issues that arise between the initial case management conference and the evidentiary hearing), and emerging technologies. Bottom line: economy and efficiency should be the overarching consideration in every decision the tribunal makes. If arbitrators focus solely on their mandate to issue an enforceable award, they run the risk of overlooking the broader goals of arbitration. By adhering to the principles already enshrined in institutional rules and employing the procedures discussed here, arbitrators can conduct proceedings in a way that will serve the parties’ fundamental aims. After all, it’s the result that matters.