Alternative Dispute Resolution Part 1: Mediation

News reports and television dramas often make reference to mediation, but rarely explain what mediation means.  And when there is an attempt to explain mediation, the explanation may not be accurate.  So what is mediation?  And why is it useful?

Mediation is an effort to negotiate a settlement among two or more parties that have a dispute, using the assistance of a neutral person.  Although mediation is often used in the context of a pending lawsuit (and is often ordered by courts before trial), parties that have a dispute don’t have to wait to file a lawsuit before hiring a mediator to try to help them resolve their dispute.  The benefit of using mediation is that the parties may be able to resolve their dispute early, without the expense and emotional toll that can accompany full-blown litigation.

Here is how it works.  Suppose Jane and Jim are arguing over a contract that they signed with each other.  Rather than have a judge or a jury resolve the dispute, they can hire someone else to help them negotiate a solution.  Typically the mediator is someone with legal experience that is relevant to the legal issues the parties face.  For example, in the case of Jane and Jim, they might hire an attorney who has experience trying lawsuits involving disputes over contracts.

Once the mediator has been hired, he/she will be expected to become familiar with the general facts and issues in dispute, and then meet privately with each party to explore the strengths and weaknesses of each party’s case and also to discuss potential solutions to the dispute.  To make the mediation more efficient, these private meetings typically occur at an office in conference rooms near one another, so that the mediator can move quickly between meetings with the parties while conversations are still fresh in everyone’s mind.

Information provided to the mediator during private sessions with the parties must be kept confidential by the mediator.  This means that a party will not be able to find out what the other party has told the mediator about the strengths and weaknesses of the case, or about that party’s goals for resolution.

In addition to gathering information during private meetings with each party, the mediator will also convey settlement proposals from one party to the other, and also suggest new approaches that may result in a resolution of the dispute.  This is where the mediator’s experience handling similar types of disputes comes in handy.  The resolution will typically involve each party giving up something in order to resolve the dispute.  How much a party gives up will generally depend on factors such as the strength of the party’s case, a party’s eagerness to achieve closure, and the cost of continuing with litigation.

Although mediation can be economical because a successful mediation will cut off future attorney’s fees associated with the dispute, in most instances mediation is not free.  The parties generally are expected to each pay half of the mediator’s fee.   This arrangement can be changed as a part of any negotiated settlement.

If the mediation is successful, the parties will achieve closure and put the matter behind them.  If mediation is unsuccessful, the parties and the mediator will be prohibited by law from disclosing information learned during the mediation in any subsequent litigation.  This rule encourages the parties to be candid and open-minded during mediation sessions, thereby improving the likelihood that a dispute will be resolved in mediation.

Please note that this article is not intended to be comprehensive, but briefly summarizes the mediation process.  Counsel can advise regarding whether mediation may be appropriate as to specific disputes that may involve you or your business.

The analysis set forth in this article is provided for general understanding only and should not be considered legal advice.  Counsel should always be consulted for advice regarding a specific situation.

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