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What is mediation?
During the last 15 years, mediation has grown into one of the most popular
alternatives for resolving civil disputes in the United States. Many lawyers,
insurance companies, risk managers and legal departments now use mediation
on a day-to-day basis to help resolve claims and litigation as quickly and
efficiently as possible. Across the country, United States Arbitration &
Mediation (USA&M), through its local offices, successfully mediates
many thousands of disputes each year in a wide variety of legal areas.
At a mediation session, the disputing parties meet with an impartial
person, the mediator, to attempt to reach a mutually acceptable settlement.
There are no formal court procedures or rules of evidence, although careful
pre-mediation preparation and organization are crucial to a successful mediation
outcome. Unlike a judge or arbitrator, the mediator has no authority to
render a decision or force the parties to accept a settlement. Yet in the
great majority of cases, the training and ability of a professional mediator
can help achieve a final settlement of the matter which would not otherwise
be possible.
What types of disputes can be resolved
through mediation?
All kinds. Mediation has been successfully used for tort claims, commercial
and business disputes, construction issues, employee grievances, environmental
claims, professional malpractice allegations, product liability claims,
maritime issues, insurance coverage disputes, real estate interpretations,
partnership dissolutions, securities-related disputes, domestic relations
matters, and workers' compensation claims.
It makes no difference whether liability is admitted or hotly contested,
whether the case is in litigation or not yet filed, or whether the dispute
involves a few thousand dollars or many millions of dollars or issues other
than money--mediation has proven effective in all of these situations.
What are the benefits of mediation?
Settle disputes now. Almost every case will settle prior to
trial. So the real issue is not if a case will settle, but when.
A mediation session has the effect of getting settlement negotiations focused
much more quickly than if the case proceeds to trial. Proposing mediation
is an excellent way to get settlement discussions moving in the right direction
and away from court.
Save money. An early settlement naturally saves litigation expenses
and other costs related to managing the dispute.
Maintain control. Mediation differs from arbitration or trial
because the mediator does not make a decision or force any party to accept
a settlement. When you agree to mediate a dispute, you are only agreeing
to attend the mediation session and participate in a good faith effort to
settle the matter. Consequently, you are always in full control of the outcome.
Improve everyone's understanding. The mediation session is designed
to educate everyone about the legal and factual issues involved in the dispute,
and this can be particularly helpful to people who are unfamiliar with the
litigation or claims process. For example, many attorneys have told us that
their clients would not have accepted a reasonable settlement offer had
they not attended a mediation session.
Informally explore settlement options. Because of the confidential
nature of private meetings, often referred to as 'caucuses,' the mediator
can explore settlement options without exposing your final position. This
can remove the "posturing" that takes place during traditional
negotiations.
Organize multiple party negotiations. The mediator can play a
major role in simply organizing the discussions. The mediator can work closely,
and confidentially, with each side to explore settlement possibilities and
put a settlement package together.
Preserve continuing relationships. Mediation is particularly appropriate
in situations in which the disputing parties will be working together after
the dispute is resolved. Some examples include construction projects, commercial
leases, partnerships, business suppliers, and employment relationships.
Mediation allows the parties to stay on the best terms possible by doing
everything they can to settle their dispute as quickly and easily as possible.
How is a mediation case started?
Typically, one party to a dispute will contact the nearest USA&M office
to initiate mediation scheduling efforts or propose mediation to the other
parties. As a general rule, the parties have discussed the possibility of
mediation prior to contacting USA&M, although it is always an option
to have USA&M initiate the contact about mediation. In some situations,
USA&M, as an impartial organization, might have a greater chance of
gaining the parties' participation in mediation. Because mediation is such
a sensible process, USA&M administrators are usually successful at convincing
everyone to participate. Under the USA&M Fee Schedule
(which varies by office), there is generally no administrative fee charged
if a necessary party declines to participate in mediation.
Mediations are conducted in accordance with uniform USA&M Mediation Procedures.
What takes place at the mediation session?
All parties to a dispute will be present at the mediation session. For example,
participants in a typical personal injury case usually include the plaintiff
and the plaintiff's counsel, an insurance company representative, possibly
a defense attorney, and the mediator. In a commercial case, the owners and/or
managers would attend, along with their attorneys.
All parties, representatives and the mediator first meet in a joint meeting
format. After introductory remarks by the mediator and the signing of the
Agreement to Mediate (if not already signed
earlier), each party is given the opportunity to explain its position in
the presence of the other participants. These short and informal opening
statements, typically no more than ten to twenty minutes long, are a starting
point for the mediator to gain an understanding of the case.
After the joint session, the mediator will meet with each side individually.
These separate meetings, called caucuses, are confidential. In each caucus,
the mediator will discuss the risks of the case -- best and worst outcomes,
quality of evidence and the costs of litigation. The mediator will also
explore possible settlements. It is common for the mediator to go back and
forth between the parties for a number of private meetings, just as the
mediator may bring the parties back together for joint discussions. If the
mediation results in a settlement, the parties may choose to draft a formal
settlement agreement.
What if the case doesn't settle?
Most cases will settle at the mediation session or shortly thereafter. If
a settlement is not reached at the mediation session, the mediator may continue
the discussions by telephone, and in some cases the parties may elect to
have a second session. If a full settlement is not reached, the parties
are free to pursue other options such as arbitration or litigation. Parties
whose cases don't settle in mediation at USA&M do not pay any additional
administrative fee to proceed with arbitration through USA&M.
How to prepare for a mediation session
Preparing for a mediation session is much easier than preparing for an arbitration
or a trial:
1. There are no pre-session pleadings required, although in a more complex
case the parties may wish to furnish the mediator with a short brief or
explanatory documents that were prepared for another purpose.
2. Prior to the mediation session, all parties should have obtained sufficient
information to make settlement decisions. It is common for USA&M and/or
the mediator to help with informal information exchanges. Please make USA&M
or the other parties aware of any information you need prior to the mediation
session.
3. A critical element of a successful mediation is that each side must
be represented by a person with adequate authority to settle the case. This
typically means that clients, business managers, etc., should attend.
4. A ten to twenty minute opening statement should be prepared.
Keep in mind that this is an excellent opportunity to talk directly to the
other side. Representatives should consider whether their clients should
participate in this presentation (e.g., how the accident or dispute has
affected them).
5. Obviously, you need to be prepared to discuss the details of your
case. Have quick access to needed information.
How much will mediation cost?
No filing fee is required upon initial submission of a case. USA&M
offices charge a basic administrative fee and hourly or per diem fees for
the mediator's time, which will be pre-collected at the time of scheduling
or billed after the mediation is concluded.
In many cases, the parties agree to divide the mediation costs, although
it is not uncommon for one party to pay the entire cost. There must be a
clear fee agreement prior to the mediation session taking place.
Consult the USA&M Fee Schedule for more information.
How is mediation different from arbitration
and settlement conferences?
Arbitration involves the presentation of evidence to an arbitrator for a
legally binding decision. Arbitration can be effective, but it is generally
more time consuming and expensive than mediation, plus the parties give
up control of the outcome (although high-low agreements can be used to provide
a limited range for the decision).
In a judicial settlement conference, parties submit informal evidence
to a judge for an advisory decision. However, any time an outside party
is rendering an opinion, particularly about case value, there is a risk
that one party will strongly disagree with the opinion and the other party
will be locked in to a settlement at that figure. This can actually
impair further settlement efforts. Remember that almost every case settles
anyway, so the role of the neutral should be to help parties move toward
settlement. For this reason, mediation is often preferred to arbitration
or settlement conferences.
What cases should be sent to mediation?
As discussed in previous sections, any type of case can be mediated, and
there are often many benefits to mediating. USA&M has developed a checklist of characteristics for selecting cases
for mediation. Each USA&M office also provides in-house training
in how to identify mediation cases.
How are mediation clauses used?
Many businesses and attorneys are routinely inserting mediation clauses
into contracts. By using such a clause, the parties are pre-agreeing to
use mediation in the event of a dispute. See Sample
Mediation Clause.
For further information
USA&M has a library of mediation related articles, video tapes and other
materials that are available upon request, including our corporate video
tape that includes a mediation session taped by NBC Sunday Today.
USAM also provides in-house training in Advocacy in Mediation and other
ADR topics. We would be happy to furnish you with references.
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