Why Mediation Works


by Michael Roberts

August 2000

Michael Roberts

"Traditional litigation is a mistake that must be corrected... For some disputes trials will be the only means, but for many claims trials by adversarial contest must in time go the way of the ancient trial by battle and blood. Our system is too costly, too painful, too destructive, too inefficient for really civilized people."
Chief Justice Warren E. Burger, (Ret.) U.S. Supreme Court.

We are in the midst of a litigation crisis. The high cost and long delays associated with the trial of civil matters often make litigation an impractical method of resolving disputes. It is not uncommon for the attorney's fees, expert witness fees, jury fees, court reporter fees and other related costs to exceed the amount in dispute. Parties increasingly find that they are spending more to litigate than the cost to settle the matter.

The increasing number of lawsuits filed each year is indicative of the unwillingness or inability of parties and their attorneys to effectively utilize negotiation to resolve disputes.

Because the current legal environment discourages the early settlement of disputes, society is demanding a new approach for resolving disputes more efficiently. That new approach is mediation.

WHAT IS MEDIATION?

Mediation is a process for resolving disputes by which an independent mediator assists the parties in reaching a mutually satisfactory settlement. It is an extension of the parties own negotiations and is sometimes referred to as a "supercharged negotiation."

A mediation session involves a discussion of the dispute by the parties, as opposed to the formal presentation of witnesses and evidence such as takes place in a trial or arbitration. The session will normally be attended only by the mediator, the parties and their attorneys. Because of the informality of the process, a mediation can usually be completed in a day or less.

The mediation process is entirely voluntary and non-binding. The mediator has no power to render a decision or to force the parties to accept a settlement. Rather, the mediator's role is to assist the parties in their negotiations by identifying obstacles to settlement and developing strategies for overcoming them.

A mediation session is private and confidential. It is normally held in a private office or meeting room and no public record is made of the proceedings. If no settlement is reached any statements during the proceedings are inadmissible as evidence in any subsequent litigation.

A mediation session typically begins with a joint meeting of the parties, their attorneys and in some cases, insurance company representatives. The mediator first explains the format and discusses the confidential and non-binding nature of the proceedings. The mediator will then ask the attorneys for each of the parties to make a presentation of their case, identifying the issues in dispute.

Following the joint meeting, the mediator will usually separate the parties and begin meeting with them in a series of private, confidential meetings called "caucuses". In these caucuses, the mediator works with each of the parties to analyze their case and develop options for settlement. Normally, the mediator will caucus numerous times with both sides until the case either settles or it becomes apparent that settlement will not be reached.

Mediation is different from an arbitration in that the mediator does not render a decision. Instead, mediation allows the parties to make their own decisions and fashion their own settlement. The mediator generally doesn't make recommendations but rather, allows the parties to make their own decisions based on a realistic analysis of their case.

WHY MEDIATION WORKS

The American Arbitration Association reports that over 85% of all mediations result in a settlement. This is true even where all prior attempts at settlement have failed, where the parties are pessimistic about the prospects of settlement, and where the parties have spent substantial amounts of time and money preparing for a trial. So why does mediation work, when the parties have been unable to settle the case themselves? There are a number of reasons.

First, negotiations between parties or their attorneys may never take place without the assistance of a third party mediator. Attorneys often fear that the making of any "reasonable" settlement offer will be taken as a sign of weakness or will be used by the other side as the starting point for the next round of negotiations. Mediation provides a safe environment for negotiation because the mediator can control and direct the communications. In this fashion, unproductive discussions can be avoided and concessions or proposals will be communicated only if they are likely to lead to a settlement.

Second, in those cases where some negotiations have taken place, they are often unsuccessful because the parties lack essential negotiation skills. Attorneys are often more interested in posturing, than in resolving disputes. As a result, they often employ hard bargaining tactics which emphasize the differences in their positions rather than seeking a common ground for settlement. Since the mediator's job is to keep the parties focused on exploring productive avenues to settlement, posturing and hard bargaining are often reduced or eliminated.

Third, mediation provides the opportunity for all parties to meet at the bargaining table for the express purpose of discussing settlement. All decision-makers necessary to resolve a problem are normally present. These decision-makers, who otherwise may be unavailable or distracted by other business matters, are able to focus their entire attention on reaching a settlement.

Fourth, during the mediation session, each party is given the opportunity to directly educate and influence their opponents in the opening presentation. Important issues can be emphasized and facts can be presented in a more favorable light. Also, the intensity of a party's feelings or emotions can be conveyed. As a result, the mediation session normally provides each side with a more realistic view of the opposing position (one not filtered through lawyers) and often results in the consideration of settlement proposals that otherwise would have been rejected.

Fifth, mediation allows each side to "test market" a settlement proposal by privately conveying the proposal to the mediator in a caucus. Unless authorized to do so, the mediator will not convey the proposal to the other party. The mediator will, however, be able to receive confidential proposals from the other side. As a consequence, the mediator will be able to determine whether a proposal is feasible without actually disclosing it to the other side. This allows each side to fully explore settlement options without negotiating against themselves or appearing to "give in".

Sixth, mediation offers each party a "realistic" look at their case and what results they are likely to achieve in court or arbitration. As the parties become clear on what they can realistically expect to achieve, their positions on settlement become more reasonable and flexible.

Seventh, mediation assists the parties in developing options for settlement. The more options that are developed, the greater the chances of success. Experience demonstrates that attorneys often excel in developing facts that support their positions but bog down when it comes to developing settlement options. The mediator can assist the parties to clarify their real objective and to consider alternatives that might be overlooked by attorneys engaged in battle.

CONCLUSION

The bottom line is that mediation works! It works because it brings all necessary parties to the bargaining table where they can "realistically" evaluate their positions and safely explore settlement options. It works in settling over 85% of the cases in which it is utilized, including those where the parties have been unable or unwilling to negotiate, or have taken unrealistic or intransigent positions.

Today, parties litigate because they know of no better alternative. However, as the benefits of mediation become more widely recognized, it will undoubtedly become the most utilized tool for resolving civil disputes in the future.

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Biography




Michael J. Roberts is a full-time professional mediator involved in resolving disputes throughout the United States. He hasĀ 36 years of major law firm experience as a senior litigation partner. Since 1985, Mike has served as a mediator and special master in more than 4,000 cases with aggregate settlements in excess of $800 million. Mike's mediation practice consists primarily of major financial controversies and complex multi-party matters with emphasis on business, real estate, construction, employment and insurance. Mike's clients include real estate developers, contractors, publicly held companies, institutional lenders, health care providers, educational institutions, governmental agencies, insurance companies and the like. He is a frequent speaker at professional and industry seminars throughout the United States on various topics involving alternative dispute resolution.

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Website: www.mediations.com

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