Mediation is “negotiation through an intermediary. ” Two or more parties meet with a neutral third party, who guides the negotiation process. This neutral party advises and listens to all sides, and helps the parties arrive at a win-win settlement. A mediated settlement is non-binding. If any party in the dispute is unhappy with the outcome, that party may opt out of signing a settlement agreement and proceed to arbitration or litigation.
Mediation is now one of the fastest-growing forms of dispute resolution because:
- it avoids the backlog of the court system;
- it is relatively quick and inexpensive;
- its solutions can be tailored to a specific situation;
- the process is private and confidential;
- and, it is very successful at preserving working relationships
During mediation, the mediator may be asked to render an opinion based on the evidence, but usually remains strictly neutral. Creative solutions are most often the result of the give-and-take between the parties, whose goal is to arrive at a solution. The non-binding, non-threatening nature of a mediation allows each participant to be more open to new ideas, more creative in their approaches and more willing to compromise.
The mediation is usually voluntary. It is increasingly common for businesses to include dispute resolution clauses in their commercial contracts, stipulating that mediation will be tried as a first resort in the event of a dispute. In the absence of such a clause, parties often come to an independent agreement to try to work things out with the help of a mediator. In some situations, however, such as divorce and custody cases or minor criminal matters, mediation is increasingly being encouraged or mandated by the courts. A number of states also have statutes requiring binding arbitration or mediation of civil claims valued at under $50,000.
Opinions are mixed on the effectiveness of mandated mediations. Attorneys have shown that participants who enter mediation voluntarily find the process more effective and the outcomes more satisfactory than those who are ordered to mediation by the courts.
Who Should Use Mediation?
Mediation is suitable for any dispute in which:
- A negotiated settlement is desired
- There is no need to set a legal precedent or example
- The parties wish to keep the proceedings confidential
- Tension and emotions are impeding communication
- Time is a concern
- The disputants want or need to maintain relations
For these reasons, mediation is adaptable to any field and is spreading rapidly across the United States. The AAA Center for Mediation in San Francisco reports that over 90 % of mediations in business disputes result in settlements. Thus, for most business disputes, companies are well advised to try to convince their adversaries to mediate. In fact, mediation is easier to “sell” than other forms of dispute resolution because it is non-binding and therefore risk-free.
Mediation has been successful in every kind of case:
- Environmental disputes
- Divorce and child custody cases
- Insurance and personal injury cases
- Construction claims
- International business disputes
- Labor and employment disputes
- Disputes between security brokers and customers
- Partnership disputes within law firms
- Complex antitrust and multiparty matters
The construction industry has been a particularly aggressive user of dispute resolution, including mediation. Many costs incurred by contractors are variable and unpredictable, and often result in disputes concerning design defects, work delays or changes in plans or specifications. When differences cannot be resolved through “change orders” or negotiations, mediation is a popular alternative. Most building contracts now include dispute resolution through the National Construction Dispute Resolution Committee of AAA.
Making the Decision to Mediate
The best time to choose mediation is before a dispute occurs. This why many commercial contracts with suppliers, customers, unions and joint venture partners now include mediation clauses. Once hostilities have begun, it can be very difficult to find any common ground for agreement. Many business people and counsel also express the concern that if they propose mediation after a dispute has occurred the proposal may be perceived as a sign of weakness by the other side. By making a pre-dispute stipulation that mediation will be used, all sides can enter the dispute resolution process on equal footing.
Some clauses simply state that mediation will be attempted before the parties consider formal litigation. Other clauses are considerably more detailed and may offer step-by-step directions progressing from negotiation to a non-binding dispute resolution procedure, followed, if necessary, by arbitration or litigation. Clauses can also include information about where the parties will turn to find a mediator, and what procedural rules will govern the process.
While the optimal time to choose mediation is before a dispute occurs, mediation can be useful at any point in a dispute and can originate in a number of different ways:
- Mediation can be suggested by a party shortly after the dispute occurs or after it has become clear that negotiations are not fruitful
- Mediation can occur after a lawsuit has been filed, as a way to resolve the matter before trial begins. In this instance, it may proceed before, during or after pretrial “discovery” (the process through which each side obtains case-related information from the opposition)
- Mediation can occur in the midst of, or immediately after, a trial, but before a decision is announced
- Mediation can occur after a trial verdict is rendered, as a way to forestall appeals, or when there is a disagreement over how the judgment will be carried out
- Some federal and state courts require mediation for certain types of disputes
Preparing for Mediation
To prepare for mediation, each party should be certain about its interests, expectations and goals. Before the process begins, each party should prioritize its needs, make sure its proposals are “reasonable” and brainstorm various solutions. Since the goal of mediation is to arrive at a mutually beneficial solution, each side should make a good faith effort to analyze its opponent’s interests.
All participants should clearly understand the roles they will play in the process. If an attorney will accompany a company executive, they should agree in advance who will be the principal spokesperson. If a team of representatives from a company will be taking part in the mediation, each member should know what part they will play. For instance, one could be acting as a negotiator, expert witness or “consultant” to the group.
Each side should prepare to arrive at the mediation with the evidence and documents necessary to support its case. These may include exhibits, documents, graphs, photographs, charts or any other form of evidence.
The mediator can be an excellent resource to help parties prepare fully for mediation. Many mediators offer pre-mediation advice on everything from procedural rules to case preparation.
Choosing the mediator may be the most important decision disputants make in the mediation process. Surveys have shown that the ability of the mediator makes a significant difference to the success of the process.
A mediator is a diplomat, not an advocate. A mediation expert for AAA suggests that a successful mediator possesses a range of innate and acquired skills, including:
- The ability to analyze complex legal issues quickly
- Good judgment
- Excellent communication and negotiation skills
- A good understanding of human nature and practical psychology
- Patience and tolerance
- Good listening skills
- A sense of fairness
- A calm demeanor
- An ability to sidestep and defuse confrontations
- A manageable ego
To this list, it is essential to add absolute impartiality. A mediator must have no interest in the outcome of the dispute; he or she must be neutral in every sense of the word.
During the mediation process, the mediator has been described as “an agent of reality, referee, sounding board, honest broker, intermediary, traffic cop, devil’s advocate, spark plug and lightning rod. ”
In a relatively short time, he or she must set a tone of cooperation and civility and win the trust and confidence of all sides. In this effort, the importance of communication skills cannot be overstated, In many cases the parties are not nearly as fair as they believe; they are simply “not speaking the same language. ” A good mediator can often listen to an argument that one side has rejected and frame it in a way that both parties can understand and are willing to consider. He or she is able to “defuse” emotional language so that intent is clear. In multi-party cases, the mediator must be particularly sensitive to shifting alliances and the development of coalitions among the parties.
The mediator is a guide and facilitator who helps the parties find common ground and develop creative, often original, agreements.
Mediators come from all walks of life. They are practicing or retired attorneys, retired judges, professors, experts in professional or business fields, or lay people, all of whom have been specifically trained in mediation skills. There are numerous dispute resolution organizations, civic organizations and universities across the country that offer dispute resolution training.
The desirable background and experience in a mediator depends on the nature of the dispute. If the problem centers on legal issues, a mediator who is a lawyer or a law professor may be helpful. If the dispute is technical in nature, choosing a mediator who is an expert in a particular commercial or professional field may be preferable to an attorney or judge.
Some disputants actually prefer a mediator who has no expertise in their field, believing he or she will have no preconceived views of the subject matter in the dispute.
In complex cases, the parties or mediator may request that there be more than one neutral party. Some cases have been successfully handled by two mediators, representing different areas of expertise; for example, with medicine law, the two would be able to confer about the evidence and help initiate more imaginative settlement options.
The Mediation Process
A mediation can take place in any, preferably neutral, location that can accommodate both private and joint meetings. Many mediators can accommodate both private and joint meetings. Many mediations are concluded in a few hours. A typical two-party case takes two hours to a full day. Others may be lengthier to accommodate the complexity of the dispute and the needs of the disputants. Domestic disputes, for instance, often involve short sessions over the course of a few weeks.
There is no set format for the actual mediation process. As a general rule, however, all mediations involve a series of joint and separate meetings.
A major advantage to mediation is that this process allows the parties to “vent” and engage in a sort of catharsis by having their “day in court. ” This therapeutic interaction often helps move parties to settlement.
Throughout the process, participants should remember that patience is key to a successful outcome. Detailed, sometimes lengthy presentations of the facts are crucial at the outset to educate the mediator. Mediation also involves a certain amount of “down time” for each side while the mediator holds private meetings with the other side.
A Note About Confidentiality
The process is kept private from outsiders and private conversations with the mediator are protected from the other side. These are defining characteristics of mediation and its most attractive qualities as a dispute resolution method.
Private meetings with the mediator are considered “privileged and confidential,” so the parties feel free to confide in the mediator about the strengths and weaknesses of their cases and to disclose information not communicated in joint session. Thus, as part of the caucus phase, the mediator must make clear what information he or she would like to divulge to the other side and how that information will be stated.
Respecting whatever limits the parties have placed on disclosure, the mediator shuttles between the sides, identifying the main concerns of each and helping them see the case from the other’s perspective.
For this process to succeed, it is essential that the parties be completely candid in their communication with the mediator and that they ensure the confidentiality of this sensitive information.