Mediation is a useful tool that can help reduce the financial and emotional toll of litigation and other disagreements. Below I will explain what mediation is and how it can be used to resolve disputes.
What is Mediation?
Mediation is a process whereby a neutral third party mediator works to try to settle a dispute with the help of the parties to the case. It typically takes the form of the principal parties to the dispute along with their attorneys meeting at on office location or the courthouse in order to try and settle the matter.
There are many different ways that the proceedings can be held. As mediation is a collaborative process, often the mediator will get input from the participants’ attorneys as to how they want to proceed. Some mediations begin with the parties all sitting in the same room around a conference table and making an opening statement, providing the mediator with a brief overview of each sides’ view and arguments of their respective case.
Other times the parties involved in the mediation process are put in separate conference rooms upon arrival. In that case, the mediator shuttles back and forth between the parties, learning about the case and eliciting settlement offers. In these types of mediations, one often never sees the other side or their attorney at any point during the mediation process.
The mediator will typically spend a fair amount of time at the beginning of the process with each party learning its view of the facts and the legal arguments that the party believes will enable it to prevail. In this process, I find it is important to let the client speak at length to the mediator directly. People are usually very emotionally involved in their case and talking about it seems to allow people in the process to let go of that emotion in order to make a more logical decisions about settling the case.
After the mediator has gone through the process of learning about the case, the next step is the settlement offers. If a settlement offer has never been made by either party, custom and practice is that the plaintiff in the case will make the first settlement offer. In the most simple way of looking at it, the mediation then continues with offers back and forth until the parties reach a settlement. As they say in the courthouse, a good settlement is one where both parties are equally upset about the final resolution of the case.
Don’t confuse mediation with arbitration. They are not the same. In an arbitration, the arbitrator hears all the evidence in a more formal process, similar to what takes place in a courthouse. In an arbitration, the arbitrator will render a decision and final judgment in the case. In a mediation, there is no such binding ruling. The mediator merely tries to bring the dispute to a resolution and settle the case. If unsuccessful, then the dispute between the parties goes on.
When to Mediate:
You do not have to be in a lawsuit to use mediation. Mediation can be used as a tool before a lawsuit is filed in other to try to keep the parties from incurring the cost and expense of having to file a lawsuit, perform discovery and go to court, all of which can rack up huge attorney bills in the process.
Pre-litigation mediation is not for all cases though, although I wish it was. Early mediation is good for cases where the facts are well known to both sides, both parties are motivated to work in good faith towards a settlement and the parties are as personally invested in the case. The problem is, in most situations that is not the way the case is positioned.
In my experience, most people that go to the effort of filing a lawsuit are pretty passionate about their case. They also have pretty entrenched views about the strength of their case and also most likely have a belief about the value of their case. They want their “day in court” and when the case has just been filed, aren’t willing to settle for anything less than they believe the case is worth.
The litigation process is very costly, time consuming and emotionally draining. In most cases, the respective parties have to be worn down by that process in order to become a bit more reasonable about their settlement options. So perhaps where someone was unwilling to settle the case for less than a certain amount when the case started, that same person might now be willing to settle for half that just to get back to their normal life.
Consequently, mediation is usually more appropriate after the parties have had the chance to obtain documents, take depositions and learn about their opponent’s case. This happens closer to the trial date so that is where the mediation process comes into play and is most successful. In my home venue for instance, the court regularly schedules a mediation-type conference one month before the trial date. For those cases, in my personal experience, 50% or more settle at that pre-trial settlement conference which evidences the value of mediation at that point in the proceedings.
The costs to mediate a case can vary greatly and obviously should be compared to the amount at issue in the case. For example, the program that is offered in my local courthouse is free to the participants. By that I mean there is no cost for the services of the mediator. But, you get what you pay for. The quality of the mediators vary and while you may get the judge on the case, most of the time the mediators are local attorneys that volunteer their time to the court. Such volunteers generally do not have the experience of full-time mediators and may not command the same amount of respect as an actual judge. I find that the cases that end up in this category are generally settling in the range of $10,000 to $100,000, with the larger cases utilizing the services of a private mediator rather than the case judge or local volunteer mediator.
There are large organizations that are in the business of providing mediation services. These private mediation companies hire panels of respected judges upon their retirement and also hire attorneys that have made a profession of becoming mediators. The mediation service provides the mediator and the mediation facilities. But this all comes at a price. Most charge by the hour which can range from $500 to $1000 an hour or more. In addition to the time spent actually mediating the case, there is time spent reviewing mediation briefs, legal research and other work. As you can imagine, mediations can get really expensive very quickly. For that reason, these private mediation services rarely make any sense unless there are hundreds of thousands of dollars in dispute.
However, in some smaller cases where it may not be cost-effective to utilize the services of a large private mediation service, you can still obtain the services of a private mediator. There are many attorneys or private mediators working on their own, that work for what is a more typical attorney hourly rate of around $300 an hour. Without all the overhead of the large mediation firms, these mediators offer a lower cost alternative for parties to try to settle their disputes.
Mediation may not come cheap, but its value cannot be overstated. It can allow the parties to settle a case, get on with their lives and save large expenditures on attorney’s fees. Some people do not see that initially, but they always they come around. Remember over 90% of cases settle one way or another before they ever get to trial. As such, do not discount the value of mediation if you find yourself in a dispute.
The information contained herein is for informational purposes only and should not be relied upon in reaching a conclusion in a particular area. The legal principles discussed herein were accurate at the time this article was authored but are subject to change. Please consult an attorney before making a decision using only the information provided in this article.