Mediation Within Arbitration: Like Turkeys Voting for Christmas?

During London International Disputes Week in early June I had the privilege of joining Lord Burnett of Maldon KC PC (ex-Lord Chief Justice of England and Wales), Kelly Stricklin-Coutinho (Chair of the Civil Mediation Council) and Kevin Nash (Director General of the LCIA), for a panel discussion at Blackstone Chambers. The title was deliberately provocative. But the question it raises is a serious one. Why does mediation remain so underused in arbitration, and what might change that?

Part One: The Barriers

The Economics Work Against Early Resolution

The financial architecture of arbitration is not designed to reward settlement. Arbitrators are engaged across months, sometimes years. Counsel are deeply invested. There is an uncomfortable truth here — one that was raised during the discussion — that counsel instructed on a single high-value arbitration, with no long-term client relationship at stake, may be less drawn towards early resolution than those who carry clients through ongoing work. And mediation, as a form of ADR, is sometimes framed as an "Acute Drop in Revenue." That framing is a cultural problem, not just an economic one.

Arbitration Is Sometimes Not About Resolution at All

Some arbitrations are not genuinely aimed at resolving disputes. Large claims are sometimes filed to price the opposing party out of the process. Investor-state arbitrations can function as instruments of political pressure. In such cases, mediation — which depends on parties genuinely engaging with resolution — is simply not the point.

Arbitrators Are Reluctant to Suggest It

There is a widespread professional instinct amongst arbitrators (and some counsel) that a tribunal's mandate is to decide, not to facilitate resolution. Raising the subject of mediation risks being read as signalling weakness in the claimant's case. This concern is not just limited to the issue of suggesting settlement but also, as was debated by Paula Hodges in a panel at LIDW's main conference, to other issues, such as costs. How far can an arbitrator go in trying to control costs or suggest settlement without risking a procedural challenge from one of the parties to the dispute? A view from the floor was that parties choose their arbitrators carefully and that they want them to decide the matter - not send their clients to mediation. If settlement discussions might be possible that should be led by the parties and their counsel themselves - not by the tribunal.

There Is No Equivalent Enforcement Lever

In Churchill v Merthyr Tydfil Borough Council [2023] EWCA Civ 1416 the Court of Appeal confirmed that the courts can stay proceedings and order parties to engage in ADR. The judiciary's backing — combined with costs consequences for unreasonable refusal — has changed behaviour and culture in litigation.

Arbitration has no equivalent. Party autonomy is paramount. Many arbitral institutions (including the LCIA) have Mediation Rules but, to my knowledge there is no jurisdiction given to the institutions or the tribunals to order mediation although few (SIAC for example) do now provide for the tribunal to suggest it.

The Data Simply Do Not Exist

No major institution publishes reliable figures on how many of its cases involved a mediation referral, at what stage, or with what outcome. For example, the LCIA registered 362 referrals in 2024. 5 of these were for mediation. However, we do not know (although the LCIA publishes a wider range of statistics than most organisations) how many of the 318 arbitration referrals were settled by mediation during the course of the process. The absence of data across the industry allows cultural resistance to persist unchallenged.

Part Two: Progress in the Right Direction?

Institutions Are Moving, If Slowly

There is movement however.  The LCIA is actively consulting on rule reform in its LCIA Rules Revision Consultation, where it is specifically reviewing its Mediation Rules and ADR integration. Meanwhile, a meaningful development was the publication of the 2025 SIAC Rules which increased focus on the promotion of mediation throughout the entire arbitration process. This has been seen to move the role of the arbitrator to being more active case managers rather than purely passive decision-makers.

The important distinction, in my view, is between asking the question as a matter of institutional rule and the tribunal asking it of their own volition. The former is a neutral procedural step. The latter risks being misread as a signal about the merits. Codification matters.

I also see merit in structured mediation windows — defined points in the arbitral process where the parties are invited to consider whether mediation is appropriate. Not mandatory, but a deliberate pause for reflection, ideally at the midstream point after issues have crystallised but before the full hearing machinery has been deployed.

Contract Design Can Do a Lot of the Work

Building a mediation commitment into arbitration agreements at the drafting stage is one of the most practical and low-cost steps available. My own thinking on multi-tiered clauses has evolved. I used to favour the multi-tiered approach which mandated mediation before arbitration or litigation but I now see that can be too rigid a tool. Asking parties to come back to the mediation table when they have probably just failed to resolve the matter through their own negotiation might be counterproductive. Instead, I believe that parties need to have felt the time, financial and business pain of the dispute before they can then mediate seriously. I would advocate for a new form of clause - one which commits parties to mediate within a defined window after the dispute has arisen — perhaps within the first twelve months of the dispute giving time for their view of the dispute and their own positions to evolve but still binding them into settlement discussions.

The responsibility for making this standard practice is shared — between institutions providing model clauses, law firms building it into drafting habits, and in-house teams requiring it through approval processes.

The Singapore Convention Is Gaining Ground

Arbitration's enforcement advantage has always been the New York Convention: binding awards enforceable in 172 states. The Singapore Convention on Mediation provides a nascent equivalent for mediated settlements — 60 signatories and 22 formal state parties as of July 2026. Uptake has been slower than the mediation community had hoped, but its long-term significance should not be underestimated.

The UK signed in May 2023 and is proposing to consult on implementation. Ratification will matter — both as a practical step and as a statement about what kind of dispute resolution jurisdiction London intends to be. In the meantime, the Arb-Med-Arb structure prevalent in Singapore and also incorporated by the LCIA in its Rules offers a practical route: settlements reached during arbitral proceedings can be recorded as consent awards and enforced under the New York Convention.

Transparency Might Accelerate Change

If institutions published meaningful data on mediation referral rates — even a single figure showing what proportion of cases involved any ADR referral — it would create pressure for improvement. Institutions are sensitive to how they are perceived in the market. If settlement rates through mediation became a visible performance metric alongside case volume and award turnaround, behaviour would follow. An institution that describes itself as being "in the business of resolving disputes" should be able to demonstrate it.

The Cultural Shift Is Real

I left the discussion more optimistic than I expected. The conversation between arbitrators, mediators, litigators, and institutions is now happening in ways that it has not before. My hope is that lawyers trained in a post-Churchill, pro-ADR environment will be more integrative in their instincts. Each dispute has its own dynamics and the skills of the best advisers and lawyers will be to use the various dispute resolution tools available to the best effect. For example, arbitration or litigation might be used to determine liability but mediation might be used to settle quantum or costs.

The barriers to mediation in arbitration are economic, cultural, and motivational. Changing rules is the easy part. Changing incentives is harder. But the fact that this question was debated - by those who can shape the landscape — is itself a meaningful step forward.

A Practical Note

For lawyers advising on arbitral proceedings or drafting arbitration agreements, the implications are direct:

• Consider mediation at every stage. Not as a concession, but as a genuine assessment of whether continuing to a final award is proportionate to what early resolution might achieve.

• Build the option into the clause. A mediation commitment at the drafting stage costs almost nothing and preserves substantial optionality.

• Engage with the reform consultations now under way. The institutions are listening, and practitioner input — even brief — shapes the direction of reform.