Mediation is a private, voluntary settlement process where the parties’ negotiations are facilitated by an impartial third party trained in negotiation and facilitation techniques.  It’s a non-binding procedure.  The parties must agree to the terms of any settlement, and no agreement can be imposed on the parties. However, any agreement reached in mediation is legally enforceable. The mediator works with the parties to fashion their own solution and at all times the parties remain in control of both the process and the outcome.  Parties are free to end their participation at any time they feel the process is not serving their interests.  Nevertheless, a good measure of patience, persistence and tenacity are necessary to get the most out of mediation.

Mediation is informal and flexible and can be custom-tailored to the particular case.  For instance, depending on the nature of the conflict and the stage of the dispute at which the session is convened, the parties may at some point meet face to face in a joint session to discuss the issues and exchange information that will assist them in reaching a solution. The mediator helps the parties define the issues and identify their underlying goals, interests and objectives. Typically the process lead to the development of options for resolution, including offers, counter-offers and even the development of creative options that could not have been foreseen before coming to the mediation.  The mediator ensures that the discussions remain focused and productive.

Mediation is confidential. This is important as it allows parties to be more open and frank in their discussions. With rare exceptions, information disclosed at mediation, including any proposals or offers for settlement, cannot be used in any later legal proceedings.

How Does Mediation Differ from Arbitration?

Control

In mediation the parties control all aspects of the process and most importantly, the outcome. As they negotiate a mutually acceptable agreement they can take into consideration a broad range of issues that may be important, such as protecting business interests or preserving future relationships. In agreeing mediate, the parties still retain their option to arbitrate or litigate.

In arbitration, the parties select a third party to serve as a “private judge” to make a final and binding decision based on his or her evaluation of the facts, the evidence and the law.

Process

Mediation involves a voluntary and informal exchange of information. The information exchanged isn’t limited by the formalities of an adversarial trial. There is no examination of witnesses or formal authentication and introduction of exhibits.  The rules of evidence don’t apply since the essential “process model” is that of a “conference” rather than a “hearing”.  The goal is to exchange information that is relevant to the parties’ objectives and to make their negotiations efficient and productive. Parties are active participants throughout the process.

An arbitration is a “streamlined trial” – an adversarial hearing where direct participation by the parties is limited to answering lawyers’ questions on direct or cross examination.

Outcome

A mediated settlement agreement is the decision of the parties with the mediator having no decision making power.  Because the result is mutually agreed, relationships can be preserved or even enhanced. The result can be a win/win situation.

Privacy

Written agreements to mediate and, in some states, statutes or court rules, provide that mediations are private and confidential.  With very limited exceptions, none of the discussions, nothing disclosed, produced or conceded during the mediation is admissible as evidence in any subsequent proceedings, unless that same information would be otherwise discoverable under the procedural rules of the judicial system.

Arbitration hearings are private, but there is no general prohibition on public disclosure of decisions without special rules or agreements to that effect.

Cost

Because of mediation’s informality and its immediate focus on the crux of the dispute, it doesn’t require as much preparation time as a trial, or even arbitration. Often issues can be resolved in a one-day mediation session, though more complex cases may be scheduled over a number of days. Because mediation can take place early in a dispute, a mediation session can be scheduled long before a dispute is ready for arbitration or litigation. Other than monetary costs, another important consideration is the savings of time. The expedited nature of mediation lessens the amount of valuable time that parties must divert from running a business or dealing with other important matters.

In all but the simplest cases, arbitration is more expensive than mediation because the time necessary to properly prepare and present a case in a formal hearing process.

Is Mediation Always the Best Choice?

Any dispute that’s a candidate for settlement is a candidate for mediation. Sometimes interpreting the law or establishing a precedent is very important to the resolution of the dispute. On occasion, the parties are so polarized in their positions that they are unwilling or unable to negotiate effectively.  In these situations, a process that utilizes a third-party decision maker may be a better option.  Mediation works when there is a willingness to negotiate and the desire to reach a resolution is stronger than the need to be vindicated.  Mediation can be the best option when parties:

·          are concerned about preserving an ongoing relationship

·          want to minimize cost both in terms of both money and time

·          want to ensure confidentiality

·         prefer to reach an agreement based on the satisfaction or protection of their underlying interests rather than one grounded purely on the legal merits.

What Is a “Successful” Mediation?

Generally, the vast majority of disputes that are mediated result in a settlement.  However, even if a full agreement is not reached, mediation can still be useful. Sometimes there is a partial settlement, leaving fewer issues to be resolved in follow-up arbitration or trial. The parties can gain insight into the important issues and make significant progress that will help them reach a settlement at a later time. Meeting face to face (or just with the mediator) and being allowed to vent feelings and explain positions often diffuses emotions, allowing the parties to resume a dialogue that’s more focused and productive.

Who Are The Mediators and What Is Their Role?

Mediators are specially trained neutral third parties. The parties must agree on the selection of the mediator. Prior to the mediation, the parties are provided with biographical information on the mediator, including information on his or her experience, education and training. If any relationships exist that might be perceived as affecting the mediator’s impartiality, such relationships must be disclosed in writing. It is then up to the parties to decide if they want to proceed or select a different mediator.  All AMERICORD^® mediators subscribe to the Code of Ethics promulgated the Minnesota Supreme Court’s Alternative Dispute Resolution Review Board.

The mediator’s role is to help the parties focus on what they need to reach agreement and explores innovative and creative solutions that are often overlooked. While meeting privately with each side, in what’s called a “caucus”, the mediator tries to identify any business or personal interests underlying their positions. The mediator often plays the role of “devil’s advocate”, helping parties examine the strengths and weakness of their case, and ensuring that they reflect on the consequences of not reaching an agreement.  The mediator’s “value-added” contributions to the effectiveness of the parties’ negotiations include facilitating the identification and transcending of barriers to agreement such as:

·       Unverified assumptions – Sometimes parties are simply wrong in what they think about an opponent’s motives, needs or objectives.  The mediator is often the first to identify this barrier, and can then help parties move beyond what was really an “artificial” roadblock.

·       Information deficits – Despite thorough formal discovery, certain key bits of data become lost in the shuffle, simple errors made in assembling information create confusion, or one party has sole possession of important information that could change the whole dynamic of the negotiation if it were shared with the other.  A mediation can be a “safe” place to parcel out this information in a measured way to test whether the other side will respond in a way that is productive to settlement.

·       Unproductive patterns of communication – There are times when both sides have been afraid to indicate their willingness to seriously explore settlement out of fear of “telegraphing weakness”.  Sometimes the press of litigation tasks has kept the parties from setting aside enough time for productive settlement discussions.  Mediation can create a “settlement event” where efforts to reach agreement are the sole focus.

·       Personal or Professional “Fireworks” – Occasionally parties – or even their lawyers – have trouble maintaining a business-like environment, whether because of the intensity of the dispute, their history with each other or incompatible personal styles.  In these situations, the mediator may be able to deliver a message from one party to another and avoid the emotional baggage that might accompany an attempt to communicate directly.