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Real estate, land use and zoning attorney. I use my twenty-five years of experience and bar licenses in CA, NV, OR and WA to assist landowners and land trusts in large-scale conservation easement projects.

Arbitration and Mediation in Conservation Easements

A recent thread in a land trust listserve began with the question of whether land trusts should include arbitration provisions in conservation easements.  The following discussion is my take on the issue.

In responding to the initial query, I agreed with the other posts that pointed out that contracts and conservation easements that include an arbitration provision typically also include a mediation provision.  The reasoning for using both types of provisions is to create a tiered approach to dispute resolution in which the least formal, least legalistic and least expensive approaches are used before resorting to the more time consuming, stressful, expensive and public process of filing a lawsuit and going to court.

However, over time the nature of arbitration and of mediation have changed.   Probably the first change was for arbitration to become increasingly lawyer driven, bare knuckles and strategy intensive.  As this was happening, arbitration became its own industry, with services and professionals for hire, often for big dollars, to help conduct arbitration.  In other words, modern arbitration has become essentially litigation, but without the legal rights of a jury trial and appeal that one would normally receive under the judicial process.

According to many observers, the same trend is now infiltrating mediation.  Just because a process is called mediation, it doesn’t mean you can keep the lawyers out, and once you have lawyers involved, any process can become adversarial and dominated by competing strategies (though not always of course and depending upon the directions given by the clients).  Also like modern arbitration, there are now mediation “industries” than provide mediation services, often at considerable expense to both parties.

In deciding whether to include mediation or arbitration provisions or both, I recommend keeping in mind the relative wealth, size and bargaining power of the parties.  In a worst case scenario for the typical land trust (and these scenarios do happen), a powerful corporate landowner will possess the financial and legal staff resources to engage in hard-ball mediation and arbitration, processes that can wear down and financially deplete a small land trust.  Thus, the game can be to beat down and defeat the weaker party before it is even able to crawl to the courthouse door.  (This is not to say that such practices are unethical.  To the contrary, our legal system is inherently adversarial and corporations are legally obligated to “play to win” on behalf of their shareholders.  The point instead is that both parties should have an eyes-wide-open approach and be prepared to negotiate or walk away.)

If parties want to insure some kind of an informal discussion and negotiation process before letting the cannons loose in a judicial proceeding, then a well crafted custom provision in the conservation easement could likely do this.  I.e., avoid the now standard boilerplate that locks the parties into expensive and complex mediation and arbitration processes.

For those who would like to research this important topic more, you may be interested in the following articles:

“Is Arbitration the New Litigation” by Peter Lattman (Wall Street Journal, 2007)

“Arbitrability and Vulnerability” by Carolyn Dessin (Temple Political & Civil Rights Law Rev. 2012)

“Mediation: The New Arbitration” by Jacqueline M. Nolan-Haley (Harvard Negotiation Law Review 2010)


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