You’ve probably heard that few cases that are filed in court actually are resolved by a trial. Although reported statistics vary, most depict that upwards of 90 percent of litigation results in a pre-trial settlement. These settlements can occur within days of the lawsuit being filed, after the discovery process has concluded, or even right on the steps of the courthouse as the parties arrive for trial. Considering the prospects of actually litigating a case to the end are minute, the parties may want to consider participating in mediation, which could lead them to settle the suit earlier and before a large expenditure of legal fees.
Mediation is a process in which one or more third-party neutrals help the parties resolve a dispute. In some jurisdictions, when litigation is commenced the court orders the parties to mediate the dispute at the outset; if the mediation is not successful, then the litigation proceeds. In other instances, a contract between the parties may require the parties to first attempt to mediate any disputes before resorting to other avenues for resolving the issue, such as litigation or arbitration. But even in situations in which a court does not order, and no contract requires, the parties to mediate a dispute, the parties can voluntarily agree to mediate a dispute instead of engaging in litigation or arbitration. There are several organizations that offer mediation services for a fee, such as the American Arbitration Association, JAMS, and the McCammon Group.
In a typical mediation, key representatives of each party and their counsel will meet together with the mediator or mediators at a mediation session to discuss the dispute. Prior to the mediation session, the parties usually submit position papers to the mediator – and sometimes to each other – advocating their views of the dispute. During the mediation session, the parties may initially meet together and present opening statements to the mediator of their positions. The parties will then be placed in separate rooms, and the mediator will meet with each party individually, often several times. During these separate meetings with the parties, the mediator will work to bridge the gap between the parties and help them reach a resolution. The mediator may relay settlement offers and counteroffers to the parties, as well as provide a neutral party’s assessment of the strengths and weaknesses of each party’s case. If the mediation is successful, the parties will reach a settlement agreement by the end of the session. The mediator does not render a decision as to which party is correct. Rather, a good mediator will help the parties see both the benefits and risks of their positions so they can realistically gauge the likelihood that they will receive damages in a certain amount (in the case of a plaintiff) or will not be held to be legally liable (in the case of a defendant).
There are numerous benefits to mediating a dispute. If the parties are able to mediate the dispute shortly after the dispute arises and before they have engaged in extensive litigation, they may be able to save on litigation expenses and attorney’s fees. Furthermore, unlike litigation, mediation is confidential so sensitive or embarrassing information that could be open to the public in litigation is shielded from the public’s view in mediation. In addition, mediation can result in a more expedient resolution of a dispute. Courts often have heavy dockets, resulting in litigation dragging on for years. In mediation, the parties have more control over how quickly the process goes. Lastly, the parties may be able to obtain a settlement that includes types of relief that are not available in litigation or arbitration.
There also are some downsides to mediation. For instance, if the parties are not able to successfully resolve the dispute, and end up in litigation, they will have wasted both time and money on mediation, and will still have to expend additional funds on litigation or arbitration to resolve the dispute. However, even in these cases the parties most likely will have learned more about each other’s positions, the amounts they may be willing to settle for, and the personalities and credibility of key witnesses, which should be beneficial during the litigation (although, this may also be a downside because just as a party receives this type of information, it also reveals the same type of information to its adversary). In addition, even if the parties do not resolve the dispute the day of the mediation session, they may be able to resolve it soon after because the process has enlightened them as to the strength and weaknesses of their cases and given them a realistic view of how much the case is worth.
In determining whether mediation would be a beneficial avenue to pursue, parties should consider the following:
Whether the parties’ have unrealistic views of their case. If a party believes its adversary is being particularly unreasonable, mediation may be beneficial because it could allow a third-party to inform the adversary that its case is not as strong as it believes it to be.
Whether the parties have sufficient information to resolve the dispute. Most of the key information regarding the underlying facts in dispute may be in one party’s possession. If the parties have not yet engaged in any discovery, the party that does not have access to the underlying facts may not be willing to settle the matter because it could unknowingly undervalue the strength of its position (or the weaknesses in the other party’s position).
Whether the parties intend to have an ongoing relationship. If the parties have had a long-standing business relationship, and the dispute is a blip in an otherwise good relationship that can be salvaged, the parties may want to mediate the dispute. Protracted litigation can inflame emotions and cause the relationship to deteriorate beyond the point of repair.
In conclusion, mediation is a helpful conflict resolution tool that parties should seriously consider. Even in cases in which mediation does not seem likely to end the dispute, sometimes it does, saving the parties’ time, money and stress. The success of mediation depends on the quality of the mediator, and the parties’ willingness to work together and compromise.