The Neutral Third Party
The arbitrator may be the person who conducts the mediation or the parties may select one person to mediate and another person to arbitrate. A person who acts as the mediator and then as the arbitrator is known as the mediator-arbitrator.
Some contend that using the same person to mediate and to arbitrate is advantageous because it gives the neutral more leverage in the mediation process - the parties know a solution will be imposed upon them if they do not come up with one of their own. Others assert that mediation-arbitration compromises the integrity of the mediation process and the arbitrator’s neutrality, because the neutral may have received confidential information relevant to the merits of the dispute int he course of the mediation before deciding the arbitration.
Because of concern over the neutrals receiving confidential information during mediation, so agreements provide for one person to mediate and a different person to arbitrate. However, this is more costly and time consuming than using the same person as the mediator and the arbitrator. in addition, it does not allow for further attempts to mediate once the process reaches arbitration. However, if the parties are concerned about the perceived bias of the mediator-arbitrator, then the use of different persons as the mediator and the arbitrator is appropriate.