"The Kleros Mediation Bridge: Blending Traditional Mediation & Blockchain Arbitration"
The slide deck of my presentation with Robert Dean at the ArbTech community and our proposal to use Kleros as a mediation support tool.
3. A Hybrid Process
At its core, Med-Arb is
designed to capitalise on the
strengths of both mediation
and arbitration.
4. How It Works
Mediation is a facilitated
negotiation process wherein a
neutral third party, the mediator,
assists the disputing parties in
reaching a voluntary settlement.
5. How It Works
The mediator does not have the authority
to impose a decision on the parties.
Instead, the mediator facilitates
discussions, helps clarify issues, and
guides parties toward mutual agreement.
6. How It Works
The goal of mediation is to help
parties find common ground and
arrive at a resolution that is
acceptable to both.
8. Arbitration
Arbitration is a more formal process
where a neutral third party, the
arbitrator, hears the arguments and
evidence presented by both sides
and then makes a binding decision.
11. Why Med-Arb?
The combination of mediation
and arbitration in a single
process offers parties a
streamlined approach to dispute
resolution.
12. Why Med-Arb?
Med-Arb provides parties with the
flexibility and control of mediation, but
with the assurance that if they cannot
reach a mutual agreement, a definitive
resolution will be provided through
arbitration.
13. Why Med-Arb?
This hybrid approach can be
especially valuable when parties
seek a timely resolution and want to
avoid the potential time and expense
of litigation.
14.
15.
16.
17. How can we have the
advantages of the
med-arb processes
whilst overcoming its
challenges?
43. Step 3
The mediator helps each party
formulate a demand and a desired
outcome for each issue.
Also ensure that all required
documentation, evidence and
arguments are well organized.
44. 4.5M 0.8M
1.5M 0.2M
1M 0.1M
2M 0.5M
Issue 1
Issue 2
Issue 3
TOTAL
Alice
Position
Bob
Position
45. Step 4
Issues where an agreement is
met are settled.
Issues where an agreement is
not met are sent to Kleros for
neutral evaluation.
50. Step 6
The mediator assists parties in
creating a legally binding Master
Settlement Agreement (MSA), a
legal contract formalizing the
settlement and outlining terms
agreed by the parties.
61. Issues
Issue 1: Should BP reimburse passengers?
Issue 2: Should the project be rebranded?
Issue 3: Should the project continue with the
original vision or be repurposed into a research
rocket?
62. Parties agreed that Big Pharma
would refund passengers.
Issue 1: Should BP Reimburse Passengers?
63. Parties agreed that Big Pharma
would stay involved in the
project under a rebranding.
Issue 2: Should the project be rebranded?
64. No agreement was reached on
the proposal of repurposing the
rocket vs seeking additional
funding remains disputed.
Issue 3: Should the Project Keep the Original
Touristic Vision or Be Repurposed?
65. Should the rocket project be
repurposed as a space lab (Option A) or
should additional funding be sought to
maintain the original vision of space
travel (Option B)?
A Decision for Kleros
66. What is the solution
that people will
consider “reasonable”?
70. Reduces Potential for Bias
One of the most frequently voiced concerns
with traditional Med-Arb processes when the
same neutral individual serves as both mediator
and arbitrator, is the potential for bias.
There's a risk that confidential information
shared during mediation could influence the
arbitrator's final decision, even if
unconsciously.
71. Reduces Potential for Bias
As a result, parties might be less candid
during mediation, fearing that the
mediator-arbitrator could form opinions
that might later affect the arbitration
outcome.
72. Reduces Potential for Bias
Kleros operates on a principle of
randomised juror selection from a vast and
diverse pool of potential jurors. Each
arbitration case is assigned to jurors who
have no prior knowledge or involvement in
the mediation phase of the dispute. This
ensures that they come into the arbitration
process with a fresh perspective.
73. Reduces Potential for Bias
By introducing new, decentralised
jurors for the arbitration phase, Kleros
effectively eliminates any preconceived
notions or biases that might arise from
information shared during mediation.
The jurors only consider the evidence
and arguments presented during
arbitration.
74. Reduces Potential for Bias
Knowing that the arbitration phase will
be conducted by a fresh set of neutral
jurors can enhance trust in the Med-Arb
process. Parties can communicate
more openly during mediation, secure
in the knowledge that this will not
influence the potential arbitration
phase.
75. Reduces Potential for Bias
Kleros' integration into Med-Arb allows
parties to fully embrace the
collaborative nature of mediation, while
also being assured of a truly impartial
and unbiased arbitration, should it be
necessary.
76. Simplification as a Catalyst for Resolution
Kleros necessitates that disputes, no
matter how intricate, be distilled into
binary or ranked-choice scenarios. This
process compels parties to simplify
their arguments, clarify their positions,
and zero in on the primary points of
contention.
77. Simplification as a Catalyst for Resolution
As parties work to formulate their
disputes into more straightforward
scenarios, they often find that many
peripheral issues fall away, revealing
the crux of the dispute. This clarity can
be invaluable during mediation.
78. Simplification as a Catalyst for Resolution
As discussions become more centered
on the core issues, there's an increased
likelihood of finding common ground.
The very act of simplifying disputes for
Kleros can, in many cases, bring parties
closer to a resolution during the
mediation phase itself.
79. Other Advantages of Kleros for Med-Arb
The Kleros system can
deliver fast verdicts.
80. Other Advantages of Kleros for Med-Arb
More cost-effective than
traditional arbitration
processes.
81. Other Advantages of Kleros for Med-Arb
All decisions are recorded on
the blockchain, ensuring
transparency and
accountability.
82. Other Advantages of Kleros for Med-Arb
Case data can be
anonymised / redacted where
required.
83. Best Practices with Kleros Med-Arb
Ensure parties understand
the decentralised nature of
Kleros.
84. Best Practices with Kleros Med-Arb
Encourage parties to
familiarise themselves with
Kleros' dispute resolution
process.
85. Best Practices with Kleros Med-Arb
Include a med-arb clause in
the contract, adapting the
clause to include Kleros as an
Arbitrator.