WHAT IS MEDIATION and HOW DOES IT WORK?
by Leona Beane© (This is an abbreviated version of the article published in the New York Law Journal, October 29, 2007, page 4).
Many have heard and read about Mediation, but still do not know what it is. There are many different possible definitions; this author will provide one which covers most situations: Mediation is an informal voluntary confidential process whereby a neutral impartial third party (the Mediator) assists the parties to resolve their dispute by means of facilitating discussions to consider different options so that the parties can craft an agreement that will be acceptable and agreeable to both parties. Many attorneys mistakenly and erroneously believe that Mediation is the equivalent of a court settlement conference1
Many confuse the word Mediation with the word Arbitration, utilizing the terms inter-changeably. They are both entirely different processes and concepts; both are informal processes to resolve disputes, both utilize an independent neutral impartial third party, but the concepts of each are entirely different. An Arbitrator renders a decision that is binding on the parties.
The Mediator does not render any decision, and does not decide who’s right or wrong; the Mediator assists the parties in resolving the dispute, by encouraging discussions, considering options, problem solving, and creative solutions.
Both Arbitration and Mediation are forms of ‘Alternative Dispute Resolution’ (ADR), which also includes negotiation, early neutral evaluation, mini trials, summary jury trials, and various hybrid forms. However, Arbitration and Mediation are the two most frequently utilized forms of dispute resolution.
There are three (3) major types and styles of Mediation - facilitative, evaluative, and transformative. This article will deal primarily with the facilitative style.
Use of Mediation to Resolve Disputes
In 1998, Congress passed legislation requiring all federal districts courts to implement and establish ADR programs
Mediation is currently being utilized in many different Court programs in New York and across the country. It is utilized extensively by government agencies, such as the U.S. Equal Employment Opportunity Commission (EEOC), and many others – federal, state and local.
Mediation is and can be successfully utilized in virtually all different types of disputes
The only types of cases that most probably would not be appropriate for Mediation are those involving a serious violent criminal proceeding, and cases involving child abuse or domestic violence.
Mediation is a simplified informal flexible process, and is cost effective. Litigating in Court can be very expensive with resulting high costs of attorneys fees, discovery of extensive documents, depositions, retaining experts to testify, and generally is very time consuming and emotionally draining upon the parties and their families. Also, the parties have no input in the end result.
With Mediation the parties have the opportunity to ‘craft’ their own agreement with the assistance of a trained Mediator. The end result may not always be exactly what all parties want, but they will each have had input in the end result, as the process requires give and take from all parties.
When one goes to Court, you never know what’s going to happen; one party wins, and one party loses; many times the result of what happened in Court doesn’t even make sense. With Mediation, both parties have the opportunity to win. There’s always the possibility of obtaining a resolution that could never be obtained or achieved in a Court proceeding.
Confidentiality
Mediation is a confidential process. Maintaining confidentiality encourages the parties to freely speak out, and say what they mean and what they want. The Mediation session is considered the equivalent of a settlement discussion; thus, whatever is said or admitted or provided at the Mediation, can not be used as evidence in a Court or other administrative proceeding, and is thus inadmissible.
Virtually all the different Court annexed Mediation programs and provider organizations contain rules providing for confidentiality. The only mediation statute in New York State providing for confidentiality is afforded to Mediations at the Community Dispute Resolution Centers.1 2.3 of the Commercial Division explained: "It is the policy of this Court, and specifically of the Commercial Division to maintain the confidentiality of submissions and statements made during mediation proceedings. ...One of the reasons for this is to encourage the parties to be completely open with the mediator and each other during mediation proceedings. Such openness makes resolution of actions and compromise of disputes possible. The policy assures the parties that what they submit or say to the mediator will not be introduced at the trial in the event the action is not settled, and will not be disclosed to the trier of facts, including the presiding judge."
2 so as to provide litigants with at least one ADR process. Also, each federal agency is required to take steps to promote greater use of Mediation and Arbitration and other ADR techniques.3. The dispute can involve two or more major corporations entailing large amounts and transfers of large property interests, or smaller amounts, and sometimes the dispute does not relate to any monetary amount at all.4 Mediation has been successfully utilized in international disputes between different countries.5 6 Virtually all the different Court annexed Mediation programs and provider organizations contain rules providing for confidentiality. The only mediation statute in New York State providing for confidentiality is afforded to Mediations at the Community Dispute Resolution Centers.7 8.9 of the Commercial Division explained: "It is the policy of this Court, and specifically of the Commercial Division to maintain the confidentiality of submissions and statements made during mediation proceedings. ...One of the reasons for this is to encourage the parties to be completely open with the mediator and each other during mediation proceedings. Such openness makes resolution of actions and compromise of disputes possible. The policy assures the parties that what they submit or say to the mediator will not be introduced at the trial in the event the action is not settled, and will not be disclosed to the trier of facts, including the presiding judge." 10 Lawyers should try to be cordial, professional and courteous; the attorneys should be less adversarial. It is beneficial that each of the parties has an opportunity to speak, and it is crucial that each side has at least one person present at the Mediation who has full settlement authority. 11, even though the Court refused to permit the Mediator’s file to be subpoenaed. The Mediator should encourage the parties to obtain proper appraisals, appropriate financial information, and have discussions with their financial and legal advisors
Preparing for Mediation
Many attorneys come to the Mediation session as though it were litigation, ready to argue, fight and litigate; by doing so, they are defeating the entire process.
Don’t assume the Mediation is going to last only one or two hours. In order to be effective, the Mediation may need to entail several hours (or possibly several days). The Mediator should remind the attorneys when scheduling that it might be a full day session, so that nobody has to abruptly leave for another appointment. Each mediation proceeds at its own pace. It’s important that the attorneys and clients understand that.
Many of the Court programs and provider organizations, generally require that the attorneys provide to the Mediator in advance a confidential mediation statement of approximately 5 to 10 pages. The attorneys should not overlook this or try to do a shortcut by just sending copies of the pleadings or a set of motion pages. The attorneys should succinctly provide a summary of the issues involved (legal and otherwise) indicating what the attorney and client are looking for; this can be a very good resource for the Mediator. The more the Mediator understands what the dispute is all about and what each of the parties really want (and what they’re willing to compromise on), the more the Mediator will be able to provide assistance to the parties. Attorneys should not overlook nor ignore this opportunity.
The Mediation Session - the Beginning
At the beginning of the Mediation session, the mediator generally provides an explanation of the mediation process that will be followed, and indicates the Mediator’s qualifications and background. The Mediator should provide disclosure of any possible conflicts of interest or any possible or perceived bias. The Mediator explains opening statements by each side; ‘caucus’; and other aspects of the Mediation session. The Mediator should also explain the aspect of ‘confidentiality; sometimes the parties want to draft a more extensive confidentiality agreement to suit their needs. The Mediator should remind the parties that if the matter is not resolved, they will not be able to subpoena the Mediator or the Mediator’s file. At times the parties and Mediator may agree to modify and utilize different procedures. Procedures can be very flexible to fit the needs of the parties and the particular dispute. Mediation is definitely not a ‘one size fits all’ approach. Any agreement as to procedures being followed, the extent of confidentiality, and the agreement itself belongs to the parties. Anything reasonable that they agree to, should be followed and adhered to if at all possible. The Mediator should inquire if anyone has any questions, and answer their questions truthfully.
Although many Mediators are attorneys, the Mediator should remind the parties the Mediator is not acting as anyone’s attorney, and is not there to provide legal advice. Legal advice is provided by the parties’ own legal representatives.
Hearing From Both Sides at the Mediation
The Mediator generally asks each side, the client and/or the attorney to provide a brief overview of the dispute and what they want to say about it. To make it more harmonious, many times as Mediator, I inquire if either side wants to speak first; if neither has a preference, I suggest that the person who commenced the proceeding goes first. I generally try to encourage the actual parties to speak in addition to their attorneys, as it’s important for the parties to have the opportunity to ‘vent’. After the Plaintiff and/or the Plaintiff’s attorney has spoken, the Mediator might ask some questions to clarify matters, so that the Mediator better understands the dispute.
The other side would then provide their explanation of the dispute, and why they believe they are right, and what is important. This is usually done by the attorney and/or the client. Again, I try to encourage the client to speak and provide explanations. It is crucial that there be a representative present in person on behalf of each client who has full settlement authority. Mediation without a client (the actual person with full settlement authority) ends up being a meaningless meeting and very little gets accomplished. .
By having the parties present during the Mediation, the parties obtain a better understanding of the other parties’ interests and positions; they can determine for themselves whether there is true sincerity. They may not necessarily agree with the other side, but at least they will have a better understanding. Better understanding between the parties is very valuable, particularly if they are going to have continuing business relationships.
We all know that the pro se plaintiff or defendant in a complicated litigation in Court is at a tremendous disadvantage. Even though Mediation is more informal, if the dispute involves a major or complicated dispute, the pro se person is likewise at a major disadvantage. Thus, the Mediator should encourage the pro se person to obtain legal representation.
The Caucus
After each of the parties has provided their statements and/or information regarding their dispute and there have been discussions back and forth, the Mediator might find it useful at some point (or sometimes one of the parties request) to have a Caucus, whereby the Mediator meets with each side separately; whatever is said during the caucus is confidential, and is not repeated to the other side unless consent is obtained. If a caucus is held with one side, the Mediator should likewise hold a caucus with the other side.
After a caucus with both sides, the Mediator generally meets with everyone together again. Various discussions are had; many times there is ‘brainstorming‘ along with discussion of several options for resolution. In a business dispute, the Mediator might find it useful to have one or more flip charts to record the many different possible options to consider and discuss further. Many Mediators use other approaches. Each Mediator might have his or her own approach and has developed his or her own ‘style’ for resolving disputes. Just as there are different styles in litigating, there are many different styles that mediators use with different techniques, depending on the type of dispute and the parties.
After the parties have had discussions back and forth and one or more caucuses, sometimes the parties realize they need additional information before they can fully resolve the dispute. Thus, arrangements are made to have a follow-up meeting by telephone or an in person meeting a few days or weeks later, after the necessary information.
In a dispute involving large property interests (including a matrimonial dispute), it might very well be crucial that both parties obtain one or more appraisals, such as valuation of a home or building, a business, or property rights. Without information obtained by appraisal for example, the parties are not able to really understand what they are agreeing to or not agreeing to. Thus, it is crucial to encourage them to obtain appraisals (either one common appraisal or they each retain their own appraisers). A recent New Jersey Appellate Court held that a mediation agreement was unconscionable, and thus was set aside
Update and Additional Mediation Sessions
After the parties have had opportunities to obtain appraisals and other necessary financial information, and discuss matters further, the parties and attorneys might very well meet for another Mediation session or sometimes matters are discussed via a telephone conference with the Mediator, to discuss additional possibilities to further brainstorm, and to keep thinking "outside the box".
Concluding Remarks
Hopefully at the end of the Mediation (whether it’s a few hours, or a few days or weeks), an agreement is reached. It should be in writing and signed by the parties. Sometimes in a simple matter, the Mediator draws up the agreement; in a complicated matter the Mediator might prepare or assist in preparing an agreed term sheet or memorandum of understanding, and the attorneys will prepare the actual agreement. There are many different ramifications.
Sometimes for one reason or another, the Mediation just does not end up with a resolution. They may agree on certain elements, but certain sticky points the parties just can’t agree at that time. There are instances where a few weeks or months later, the matter might later be ‘ripe’ for mediation. Perhaps a year later, when the matter is ready for trial, the parties may want to try Mediation again. The second Mediation might end up resulting in a full resolution. Sometimes the parties just weren’t previously ready, and now perhaps they have further information and with the aspect of the impending trial next week, that might be the impetus for a second mediation that ends up resolving all issues and disputes. .
The following provides an example of how very, very expensive litigation can be. The Bank of Credit and Commerce International instituted a lawsuit against the Bank of England,
2 so as to provide litigants with at least one ADR process. Also, each federal agency is required to take steps to promote greater use of Mediation and Arbitration and other ADR techniques.3. The dispute can involve two or more major corporations entailing large amounts and transfers of large property interests, or smaller amounts, and sometimes the dispute does not relate to any monetary amount at all.4 Mediation has been successfully utilized in international disputes between different countries.5 6 Virtually all the different Court annexed Mediation programs and provider organizations contain rules providing for confidentiality. The only mediation statute in New York State providing for confidentiality is afforded to Mediations at the Community Dispute Resolution Centers.7 8.9 of the Commercial Division explained: "It is the policy of this Court, and specifically of the Commercial Division to maintain the confidentiality of submissions and statements made during mediation proceedings. ...One of the reasons for this is to encourage the parties to be completely open with the mediator and each other during mediation proceedings. Such openness makes resolution of actions and compromise of disputes possible. The policy assures the parties that what they submit or say to the mediator will not be introduced at the trial in the event the action is not settled, and will not be disclosed to the trier of facts, including the presiding judge." 10 Lawyers should try to be cordial, professional and courteous; the attorneys should be less adversarial. It is beneficial that each of the parties has an opportunity to speak, and it is crucial that each side has at least one person present at the Mediation who has full settlement authority. 11, even though the Court refused to permit the Mediator’s file to be subpoenaed. The Mediator should encourage the parties to obtain proper appraisals, appropriate financial information, and have discussions with their financial and legal advisors.12 which entailed 13 years of extensive litigation and cost approximately $196 million dollars in legal fees. If the parties had proceeded with Mediation, it is estimated the matter would have most probably been resolved in a few days or a few weeks or months of Mediation and the cost perhaps would have been thousands, and not millions.
Leona Beane is an Attorney, and a former college law professor. She serves as an Arbitrator and Mediator for several different forums. She has been the Chair of the ADR Committee at New York County Lawyers Association the past 4 years.
(C) - Leona Beane, 2007
|
This site managed with Dynamic Website Technology
from Mediate.com Products and Services |