Mediation as an Alternative Method of Dispute Resolution

What Is Mediation? How Does It Work? When Is It Appropriate?

When you have a legal disagreement with another person, you can file a lawsuit, gather evidence, and go through a trial, if necessary, in an attempt to get the outcome you want. Such an approach can, however, be time-consuming and costly. There are alternative forms of dispute resolution (ADR) that can save you time and money and limit the acrimony between parties. One of the most effective forms of ADR is mediation.

Civil disputes commonly resolved through mediation include contracts, consumer- and car-accident claims, employment claims (e.g., wrongful termination, discrimination, sexual harassment, ending a partnership), landlord–tenant disputes, real estate disputes, and family law disputes.

What Is Mediation?

Mediation can take a variety of forms, but at its most basic level, it involves a structured process whereby parties to a dispute work with an unbiased or neutral third party in an effort to resolve disagreement. The person facilitating the mediation, known as the mediator, typically does not take testimony from witnesses (other than the parties) and does not consider or make determinations of law or fact. Instead, the mediator encourages open communication between the parties, with the goal of finding mutually beneficial ways to settle the dispute. Participation may be mandatory or voluntary, but the parties typically are not required to resolve a dispute through mediation. Judges sometimes require parties to engage in mediation before proceeding to resolve the dispute with a trial.

Mediation in the United States

Every state offers some type of mediation as an alternative means of settling a legal dispute, though the precise mechanism for accomplishing that objective can look very different from state to state. Mediation generally takes one of two forms:

• Facilitative mediation—Far and away the most common type of mediation, this process focuses on finding commonality between the parties. In facilitative mediation, the mediator doesn’t assess the relative strength of the opposing claims but instead looks for ways that the parties can be in agreement. That typically involves validating all points of view, looking for any potential concessions either party may be willing to make, and helping all parties understand the potential time and expense of failing to find accord.
• Evaluative mediation—With this approach, the mediator considers the strength of the respective cases and may work more directly with a recalcitrant participant who they consider to have more to lose by going to trial. While the mediator refrains from making any rulings of law or fact, he uses his knowledge and experience to drive the parties toward an optimal solution.

The History of Mediation as an Alternative Form of Dispute Resolution

The impetus to use mediation as a means of resolving legal differences stems from the labor struggles and social unrest of the late 19th and early 20th centuries. As unions grew in power and influence, they started to use mediation as a way of establishing the terms of collective bargaining agreements. Because of the success of such efforts, unions began to use mediation to resolve other issues. In the 1960s, as court dockets became overcrowded, and legal proceedings were delayed months or even years, courts began experimenting with the use of third-party neutrals to find mutually beneficial solutions.

The Distinct Characteristics of Mediation

The common features of mediation include:

• At least two parties who have a legal disagreement
• The participation of a neutral third party, also known as the mediator, who neither represents either party nor has any type of stake in the outcome
• A non-coercive process, in which the parties voluntarily provide information and are free not to agree to any proposed solution
• A primary goal of identifying and implementing a mutually beneficial solution
• A high level of confidentiality, including a prohibition that anything said or discussed at the mediation will not be used in any subsequent proceedings

The Advantages of Mediation to Resolve a Legal Dispute

Mediation provides a number of benefits:

• It’s faster and cheaper than litigation. With mediation, there’s no need to engage in expensive discovery, such as depositions or document requests. In addition, parties don’t have to get in line with everyone else on the court’s docket and can often resolve disputes with a single mediation session.
• The parties to a mediation have far more involvement in, and control of, the process than in a civil lawsuit, where they must rely on the determinations of a judge and/or jury. The parties to mediation can propose any outcome and can also reject any proposal by the other party.
• Both sides to a mediation can attain some of their goals, and agreements are entered voluntarily, which often makes them more effective and easier to enforce.
• Mediation proceedings are not a matter of public record, so the parties enjoy increased confidentiality.
• There are fewer formalities in a mediation proceeding.
• Disputes can be resolved more amicably. In situations where you need to maintain a relationship with the other party (e.g., a neighbor or family member), mediation avoids the bitterness that is common to litigation.

The Mediation Process in the United States

Once the parties have elected (or been required) to use mediation to settle their differences, they select a mediator and agree to the time and place for the mediation (often the mediator’s office or some other neutral location). Many mediators will ask the parties to submit information in advance, so that the mediator has some advance knowledge of the areas of dispute. Many mediators have an information form for parties to complete and submit.

At mediation, the process moves through the following stages:

• Mediator’s opening statement, where the mediator fully explains the process, the goals, and the respective roles of all parties
• Parties’ opening statements, where each party has the opportunity to tell their story without interruption
• Joint discussion, where the mediator and the parties identify all the issues that need to be resolved and identify those upon which there may already be agreement
• Private caucuses (if necessary), where the mediator meets individually with one of the parties, identifying specific needs and working to move the party toward a solution
• Joint negotiation, where the parties openly discuss what they need and what they are willing to give in exchange—If neither party makes an initial proposal, the mediator may ask one or both of the parties to make a settlement offer.
• Closing, where the mediator reiterates the agreements of the parties and discusses how the process will move forward

If the parties agree on a solution, the mediator summarizes the agreement in writing. Each party signs the written agreement and may have an attorney review it. The parties also may create and sign a legally binding contract. If a court has required the mediation, the agreement of the parties will be filed with the court. If the parties do not reach an agreement, the mediator reviews the progress made, and the parties can meet again at another time, or they may decide to try arbitration or go to court.

The Difference Between Mediation and Arbitration

The mediation process looks very different from an arbitration:

• In an arbitration, the facilitator (an individual arbitrator or an arbitration panel) controls the outcome, whereas, in mediation, the parties determine the outcome.
• A mediator helps the parties move toward agreement, but they do not take testimony and do not render decisions of law or fact. In contrast, an arbitrator is typically a person with special expertise in the area of the dispute, and they will determine the validity and weight of facts, and issue rulings and awards.
• In arbitration, the parties typically go through the standard discovery process, gathering all relevant evidence. The parties may be compelled to produce documents or participate in discovery, albeit with simplified rules compared to litigation. In mediation, there is generally no discovery process, although the parties may voluntarily exchange information for the purpose of facilitating an agreement.
• In arbitration proceedings, the parties are generally not active participants—the proceedings are controlled by lawyers. Mediation, however, requires active participation by the parties to the dispute.
• An arbitrator will make a decision based on the facts and the law. A mediator will seek a mutually-agreed solution based on the needs of the parties.
• In arbitration, one side wins, and the other side loses. In mediation, both parties get something they want.
• The decisions of the arbitrator may be on the public record. Communications in mediation are typically confidential.

The Success of Mediation in Modern Litigation

According to a study conducted by the Small Business Development Center Network, the potential success of mediation depends primarily on whether the proceeding is voluntary or mandatory. When judges compel mediation, the success rates are generally below 10%. Conversely, when the parties voluntarily enter into mediation, the dispute is successfully resolved more than 85% of the time.

Summary

When you have an unresolved legal dispute, you can take your claim through the traditional legal process, but you can expect months or even years before the dispute is settled. Traditional litigation can also be extremely expensive. Mediation can save significant time and money. Mediation also offers a better chance at a win-win situation, where both parties get some of the things they seek.

In the United States, mediation can take a number of different forms. In some jurisdictions, it’s done without the direct participation of attorneys, as the parties work directly with mediators to identify solutions. In other jurisdictions, a mediation can look like a mini-trial, where each party is represented by legal counsel who actively work to find a mutually beneficial solution. Unlike arbitration, the primary objective of mediation is to help the parties agree to a resolution. A mediator typically doesn’t take testimony and doesn’t rule on legal issues but acts as an intermediary between the parties to move them toward agreement.