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The vast majority of reinsurance disputes are decided by
alternative dispute resolution methods. Binding arbitration is the
most widely used method. Recently there has been increased interest
in mediation. There is, however, a third alternative that has not
traditionally been widely used in the reinsurance context but which
may have advantages over both arbitration and mediation for the
right cases. This third alternative is commonly referred to as
binding mediation.
Binding mediation is a procedure under which a mediator is
appointed and is responsible for attempting to get the parties to
voluntarily settle their dispute. However, unlike in typical
mediation, in the event that the parties are unable to settle their
dispute, in a binding mediation, the mediator has the power to
impose a resolution on the parties. The mediators' binding
resolution is intended to be treated like an arbitration
panel's decision and
