Mediation: The Better Way to Resolve Your Business Disputes.
By Bruce S. Feldacker, Attorney/Mediator
Do you know what ADR is? If you are in business, and do not know the meaning of these initials, you are missing out on an important way to resolve business disputes, in or out of court, that may save your company considerable time and expense.
ADR stands for “Alternative Dispute Resolution.” It is an alternative to litigation or, if a matter is already in Court, an alternative to a decision imposed by either a judge or a jury. There are various forms of ADR including “Early Neutral Evaluation” (ENE),” mini-trials, arbitration, and mediation. This article will focus on mediation, which, for the reasons discussed below, is becoming the preferred method. Mediation is a procedure under which a neutral/impartial person selected by the parties works with them to reach a voluntary mutually agreeable solution to their dispute. The mediator’s role is to “facilitate” an agreement. The use of mediation is increasing because it enables the parties, with the mediator’s help, to each their own agreement satisfying their interests rather than having a solution imposed by someone else.
The Advantages of Mediation
There are a number of reasons for which mediation is becoming increasingly popular and acceptable in both the legal and business communities. First, agreement is voluntary. A court may order mediation of a dispute in some cases, but no one is ever compelled to reach agreement in this process. Second, mediation is informal. The strict procedural and evidentiary requirements of a trial do not apply.
Thus, in contrast to a trial, in which the parties may sometimes feel as if they are just observers while their attorneys “battle it out,” the parties themselves may fully and actively participate in the mediation process. They are in charge of their own destiny. Third, mediation is private and confidential. Both by statute and by agreement of the parties before the mediation begins, nothing said or done during the mediation session can be revealed to anyone else who is not present at the mediation.
If a dispute is not resolved in mediation, no one participating in the mediation may use any facts or statements made at the mediation session in any legal proceeding. The mediator similarly cannot reveal anything about the mediation to anyone else; nor can he/she be compelled to testify at any trial (Sometimes the parties to the mediation may need to discuss the outcome with another person on a “need to know” basis, such as an outside accountant or attorney or a higher official within a company. In such a case, the person to whom confidential information is revealed is bound by the same rules of confidentiality as the persons who personally participated). Fourth, mediation is far less expensive than a trial. It can save substantial hours in pre-trial preparation by your attorneys as well as the time consumed in the trial itself.
The cost savings are obvious. Mediation can also save you and your company the many hours of time required to assist your attorneys in preparing a case for trial and avoid the business disruptions that trial preparation and the trial itself will cause
Fifth, and perhaps most importantly, mediation avoids the uncertainty as to the outcome that exists whenever a case goes to trial. No case is perfect, and success can never be guaranteed. Mediation takes away that uncertainty, and provides a decision that you can live with, because you made it! Also, if you have a dispute with someone with whom you may have a continuing relationship; whether it is a customer, a supplier, or an employee; mediation may avoid the bitterness that results from protracted litigation. It can help you save a relationship that would otherwise be irretrievably broken.
How Mediation Works
There is no required way to conduct a mediation, and every mediator has a somewhat different style. However, in general, most mediations begin with an introductory joint session at which the persons present introduce themselves, the mediator explains the mediation process, and each party summarizes its view of the facts and the issues. This session is the most formal part of the process. Usually, if there are attorneys present (which is optional in mediation), the attorneys make the opening statements, but the parties are free to add their own comments if they so desire.
After the opening session, the parties are separated into private caucus rooms. The mediator then meets separately with each party. First, the mediator makes sure that he/she fully understands the facts of the dispute from each party’s perspective. The mediator then asks each party to forthrightly analyze the strengths and weaknesses of its own case, and the position of the other party or parties, and to consider the possible remedies that may be necessary to resolve the dispute. The mediator may take several separate sessions; moving from party to party; discussing the facts, the underlying strengths and weaknesses of each side’s position, and the possible solutions.
Of course, whatever the parties tell the mediator about their case is confidential, not revealed to the other side. As the mediation progresses, the mediator will begin concentrating on the possible remedies to resolve a dispute. Usually, the mediator will ask the party bringing the claim to suggest the first proposal for resolving the matter. The mediator will take that proposal to the other side for its consideration and response.
The mediator will then work back and forth between the parties in their separate caucus rooms conveying proposals and counterproposals until the parties eventually reach an agreement. During this process, the mediator will continue to discuss confidentially the strengths and weaknesses of each party’s case and the advantages of resolving the dispute without further litigation and expense. Note that throughout the process, the mediator’s role remains that of assisting (facilitating) the parties in arriving at a solution that meets their interests as well as those of the other party as necessary to resolve the matter. The mediator remains impartial. He/she does not evaluate either party’s position, but, rather, assists them in making their own evaluation and their own decision.
THE TIME REQUIRED
It takes time for the mediation process to work. Most mediations last at least a half day. Many last a full day, but that is still far less time than a trial would take. Occasionally, in a complex case, a mediation may last several days, or even several weeks spread out over a longer period of time. That, however, is unusual. Patience is important. There may be several times during the mediation process when you are sure that mediation will not work and you are ready to leave. However, the mediator may see that agreement is still possible, and encourage you to remain. In my own mediation practice, it is not uncommon for one party to tell me at the beginning that “This won’t take long—settlement is just not possible.” These cases frequently settle before the day is over!
MEDIATION BRINGS RESULTS
Mediation has a good success rate. Thus, statistics kept by the United States District Court for the Eastern District of Missouri indicate that about 53% of all cases submitted to mediation settle. The satisfaction rate of parties participating in mediation is even higher. Thus, a preliminary satisfaction survey conducted by the United States District Court for the Eastern District of Missouri in 2002 indicated that 95% of the participants whose cases settled would use mediation in the future. Even more significantly, 70 % of the participants in cases that did not settle still indicated that they would use mediation in the future. Even the parties who did not settle recognized that mediation helped to clarify and narrow the issues in dispute. ( The complete Satisfaction Survey, containing interesting statistics as to mediation’s success rate by the subject matter of the dispute and a detailed analysis of the participants’ viewpoint on the process) is included on the District Court’s web site).
Of course, you don’t have to wait for litigation to use mediation. Thus, the Equal Employment Opportunity Commission (EEOC) has a very successful voluntary mediation program to resolve charges of discrimination that are filed with the Agency before they go to court. Many employers have entered into voluntary agreements with the EEOC to mediate all charges filed against them. Also, some employers have adopted internal mediation program to resolve employee employment complaints (discrimination charges etc.) before the employee resorts to outside litigation. Many employees who resist the use of binding arbitration because they do not want to lose the right to a court/jury trial may agree to mediation (and end up resolving the dispute!) because the process is voluntary. Mediation provisions can also be included in commercial or business contracts as a prerequisite to either arbitration or a court action.
Sources of Mediators
There are many sources of reliable mediators. The federal district courts have a list of mediators who are certified by virtue of their training and experience to serve in federal court matters. The Missouri Supreme Court also certifies attorneys to be mediators. Most circuit court clerks maintain a list of local mediators who have been so certified. A number of dispute resolution organizations maintain lists of qualified mediators on the organization’s website. This includes such organizations as the Association of Missouri Mediators, the Association of Attorney Mediators, and the Association for Conflict Resolution. The Alliance for Education in Dispute Resolution, an organization jointly formed by a consortium of universities and professional organizations concerned with the development of ADR in the employment law field, lists mediators who have completed its training programs. There are also a number of local organizations that provide mediators and even facilities for mediations to be held. Some of these organizations are listed in the classified portion of the phone book under the term mediation.
Mediation is growing as word about its success spreads and more companies use it to resolve disputes. Give it a try, and you will be a booster as well!
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About the author: Bruce S. Feldacker is an attorney/mediator in St. Louis Missouri. He is a member of the Alternative Dispute Resolution and Labor and Employment Law Committees of the American, Missouri, and St. Louis Bar Associations.
