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Text Box:  For many claims, trial by adversarial contest must, in time, go the way of the the ancient trial by battle and blood.  Our litigation systems is too costly, too painful for a truly civilized people.
Chief Justice Warren Burger, U.S. Supreme Court

 

 

 

     

 

Frequently Asked Questions About Mediation

The following information is intended to respond to some of the most commonly asked questions about mediation.  If you have any specific questions that are not addressed below, please feel free to submit them to Accord by clicking here.

  1. What is mediation?

  2. How does mediation differ from arbitration?

  3. Is mediation binding?

  4. Does a mediator determine the outcome of  the mediation?

  5. Does the mediator issue an opinion on the dispute?

  6. What happens during the actual mediation proceeding?

  7. What happens before the mediation hearing?

  8. Are there any records of the mediation hearing?

  9. How long does mediation take?

  10. What is the likelihood that mediation will succeed?

  11. What qualifications should the mediator have?

  12. What role do attorneys play at a mediation?

  13. Are experts witnesses allowed in mediation?

  14. How does a mediation conclude?

  15. What if a mediation does not result in an agreement?

  16. Is mediation used only for settling lawsuit and business disputes?

  17. Who pays for the mediation?

  18. How much does mediation cost?

  19. When is the best time to commence mediation?

  20. How should I prepare myself for the mediation?

 

1.  What is mediation?

Mediation is a process where opposing parties engage a neutral third party to assist and guide  them through a process of discussion and negotiation with the intent of resolving a dispute or conflict. Through a combination of joint discussions and private sessions with the mediator, the parties exchange information, define areas of agreement and disagreement, identify their respective interests and develop options to achieve such interests in the form of a mutually agreed resolution to the dispute or controversy.

2.  How does mediation differ from arbitration?

Arbitration, another form of alternative dispute resolution (ADR), requires the parties to abide by the decision of an impartial third person who renders a binding decision after hearing each side’s factual and legal arguments.  Arbitration is essentially private litigation; it is a "rights-based" process where one party generally wins and one party loses.  There is typically no substantive right to appeal the binding decision of the arbitrator(s).   Mediation allows the parties to design a process for achieving their own agreement and to fashion remedies that arbitrators (and judges) may not be able to grant.  Mediation can achieve a win-win result.  For a table comparing mediation, arbitration and litigation, click here.

3.  Is mediation binding?

Mediation is a voluntary process, and no result can be imposed upon the participating parties.  Instead with the help of a skilled mediator, the parties themselves negotiate their own solution to their dispute.  If the parties reach an agreement, the mediator typically prepares a written settlement agreement which is then signed by the parties.  The signed settlement agreement is a binding contract and enforceable in a court of law.  In more complex matters, especially pending litigation, a more detailed settlement agreement is subsequently drafted by the parties attorneys and also signed.

4.  Does a mediator determine the outcome of  the mediation?

No.  The mediator guides the mediation process, but does not dictate the end result which is controlled by the parties.  The mediator remains neutral throughout the mediation.  The parties alone determine whether they are able to reach an agreement regardless of the mediator's viewpoint, which rarely, if ever, enters into the mediation.  Since the parties themselves control the end result of a mediation, the background of the mediator (e.g., pro-defense or pro-plaintiff) is much less of a concern than when parties are selecting an arbitrator.  For the same reason, ex parte communications prior to the mediation are not problematic and are often beneficial in laying the proper groundwork for a successful mediation conference.

5.  Does the mediator issue an opinion on the dispute?

No.  Mediators rarely offer their own opinion regarding an appropriate outcome.  There are, however, different styles of mediation including facilitative and evaluative models.  In facilitative mediation, the mediator poses questions to the parties, re-phrases their arguments and issues, and provides focus on their respective interests to facilitate a negotiated agreement.   A facilitative mediator effectively moderates the negotiation between the parties but does not inject his or her own judgments.   Evaluative mediation allows the mediator to assist the negotiation process by focusing on the case’s value in litigation and offering his or her views on the merits of the case.  Some degree of evaluative mediation generally increases the probability of achieving agreement.  Most mediators employ a combination of facilitative and evaluative mediation.   In either model, the parties still control whether they reach an agreement.

6.  What happens during the actual mediation proceeding?

A meditation conference may be conducted in many and varying ways, but it is always much more informal than litigation or arbitration.  Mediation does not rely on rules of evidence or witness stand testimony.  The mediation almost always commences with a joint session between the parties.  The mediator introduces the parties and reviews the ground rules.  Next, each party presents its opening statement and has the opportunity to question the opposing party after its opening statement.   Then the mediator will raise further questions and seek to clarify any ambiguities.  Additional discussion may ensue between the parties; eventually the mediator may ask to "caucus" or meet separately with each party.  Any information or positions shared by a party with the mediator in a private session cannot be disclosed to the other party without the expressed approval of the disclosing party.   From this point, the mediator may choose to bring the parties back together for further direct negotiations or "shuttle" between the separated parties, or use a combination of both approaches, to develop options and alternatives to realize the parties' perspective  and progress toward a mutually satisfactory negotiated resolution.

7.  What happens before the mediation hearing?

The parties generally enter into a mediation agreement containing confidentiality provisions, procedural rules and other terms.  Generally, pre-conference submissions are submitted to the mediator including statements of fact and position, theories of liability, expert reports, the history of any settlement discussions and the status of any concurrent litigation.   The parties may agree to exchange all or a portion of their pre-hearing statements.  The parties' attorneys and the mediator can also work together to customize a mediation procedure that will be most appropriate for the facts and circumstances of the dispute and the personalities of the parties.  The mediator may also conduct separate confidential pre-hearing conferences with the parties or their attorneys to better understand the history of the dispute and the parties current positions and interests.  One very important issue to be addressed prior to the actual mediation conference is determining the specific individuals who will attend the hearing on behalf of each party and confirming that these individuals will have sufficient authority to settle the dispute.  Thorough pre-hearing preparation and adept process design will set the stage for an efficient and effective mediation session. 

8.  Is there any record of the mediation hearing?

No. The mediation agreement signed by the parties prior to the hearing requires a confidentiality, which is one of the key advantages of mediating a dispute.  The mediator usually takes personal notes during a mediation, but only to assist him or her during the process.  Any such notes are generally destroyed immediately after the mediation has been completed.   Mediation proceedings are generally granted the same status as settlement discussions and accordingly are not admissible into evidence in any subsequent legal proceeding if the parties do not achieve agreement through mediation.

9.  How long does mediation take?

It is difficult to predict with precision how long a given mediation will take.   A typical mediation of a commercial dispute can usually be completed in a day or less.  Occasionally a follow-up session may be necessary to achieve agreement.   More complex matters and multi-party mediation, such as environmental cases, may take several days or even weeks, with scheduled intervals between mediation sessions.

10.  What is the likelihood that mediation will succeed?

Many private mediation providers experience success rates of 90% or more when two parties voluntarily decide to submit their dispute to mediation.  In court-mandated mediation programs, where litigating parties are required by a judge to make a good faith attempt to mediate prior to a trial, settlement rates generally range from 45% to 60%.

11.  What qualifications should the mediator have?

The only truthful answer to this question is that it depends upon the mediation.  Of course, any competent mediator should have been trained in a certified mediation program taught by a reputable academic institution or organization.  There are many different applications of mediation; clearly a manufacturer-dealer dispute requires a totally different mediator than a marital dispute.    Even within the realm of commercial mediation, it is very helpful, although not absolutely essential, if the mediator has some substantive knowledge of or experience with the underlying subject matter of the dispute. 

In commercial mediation, there is a preponderance of former judges and litigators who have become mediators, and many are very effective.  But the voluntary nature of mediation and the process of collaborative negotiation require a change from a judicial temperament.  Parties cannot be ordered to do anything and a mediator cannot issue a ruling; some former judges, by their very training, may be overly "evaluative" in their mediating style.  Similarly, the skills and habits of an aggressive trail attorney must be laid to rest in order to facilitate a cooperative negotiation between parties, which may not hinge strictly on legal rights.  

Mediation is an art, and perhaps the most important qualifications of a mediator are the intangible characteristics which (i) assist opposing parties in communicating with and understanding each other and (ii) guide the parties in identifying their underlying interests and (iii) frame options and structure solutions that meet the respective interests of the parties.  A mediation is a facilitated negotiation; and it has been observed that attorneys who are experienced in negotiating transactions, contractual agreements and other "deals" are often highly effective in the role of a mediator.

12.  What role do attorneys play at mediation?

While attorneys aren’t necessarily required in mediation, they are usually present. The parties' attorneys will typically confer with the mediator prior to the mediation and agree on the hearing procedure to be used.  Generally the attorneys will submit written statements of fact and position, theories of liability, expert reports and status of any concurrent litigation.  Each lawyer will have the opportunity to make an opening statement and advise his or her client during the course of the mediation.  While attorneys play an important role in mediation, the parties are far more actively involved in a mediation hearing than they would be in a court proceeding because the parties are ultimately responsible for crafting a resolution that satisfies their respective business or personal interests.

13.  Are experts witnesses allowed in mediation?

Sometimes expert witnesses may be appropriate in a mediation proceeding; this question is often considered when designing the  mediation process prior to the actual conference.  Parties can retain mutually trusted experts or to present their own experts regarding, for example, the value of real property, personal property or a business or the assumptions underlying a damage calculation.  Mediating parties may choose to jointly consult with an accountant or tax expert.   Expert witness can often effectively be utilized to educate the opposing party on the key issues of fact or opinion.

Accord offers the services of an independent neutral CPA, with over 25 years of operational and financial experience in large and small business organizations, who is skilled in the analysis of damage calculations, accounting theories and  financial assumptions made by each party.  An objective review of any financial or accounting issue relating to a dispute can be prepared and provided to both parties and the mediator as an informational tool for understanding the respective claims of the parties and narrowing their potential areas of disagreement.

14.  How does a mediation conclude?

If the parties achieve a complete or partial resolution, the mediator and the attorneys will generally prepare a simple written agreement outlining the basic terms upon which the parties have agreed; this agreement should be signed before the parties leave the mediation.   When signed by the parties, the agreement represents a binding contract which can be enforced in a court of law.  In more complex disputes, especially where litigation is pending, an additional more detailed settlement agreement will be prepared by the parties’ attorneys and exchanged immediately after the successful mediation.

15.  What if a mediation does not result in an agreement?

If mediation does not resolve the dispute, the parties may simply proceed with litigation or attempt other forms of alternative dispute resolution, such as arbitration.  One variant of ADR begins with mediation as the first step and subsequently converts to arbitration (usually with another neutral) if the mediation fails to achieve agreement.  If no mediated resolution is reached, evidence of the mediation discussions, notes, mediation materials and any draft mediation resolution will not be admissible in an arbitration, in court or any other adversarial proceeding; such materials are routinely destroyed.

Many have observed that there is no such thing as an "unsuccessful mediation" since even if no agreement is reached (i) each party walks away with a better understanding of the opposing party's case, (ii) the scope of disagreement may be narrowed even if not entirely eliminated and (iii) discussions during mediation often pave the way to a subsequent settlement.

16.  Is mediation used only for settling lawsuit and business disputes?

No.  Mediation can be and is used to resolve almost any type of conflict.  In addition to all types of commercial and business disputes, mediation has proven effective when used in divorce and custody conflicts, as well as in domestic relations and family controversies.  Community associations and neighborhood justice centers have long relied on mediation to resolve conflicts between individuals and groups living in proximity to one another.  Even school-age children have been trained to mediate conflicts among their peers.

17.  Who pays for the mediation?

It is customary that the parties share equally in the cost of a mediation, although one party may elect to underwrite the entire expense if splitting the costs acts as a barrier to mediating with the other party.  Each party bears their own attorney's fees and expenses incurred in connection with the mediation.

18.  How much does mediation cost?

Mediators charge for their services in many different ways and at different rates.  Some commercial mediators charge by the hour; some bill by the day; and many itemize additional administrative expenses, such as telephone, faxes, photocopies, etc.  Hourly fees in the Chicago area generally begin at $250 (the rate set by the Circuit Court for Cook County), increasing to  to $400 per hour (or as high as $500-600 per hour for the highly sought-after commercial mediator).  Incorporated into an hourly billing will also be the time expended prior to the actual mediation in phone conferences, process design, document review  and preparation for the mediation session.  Flat diem rates typically range from $1,500 for a simple dispute to $5,000 (but can even be can be more ) for a more complex matter.  Multi-party mediations generally cost more in absolute terms but less on a per party basis. 

Accord's current fee schedule is available upon request.  Accord charges on a per diem basis because we believe that the value of our mediation services is not appropriately measured by increments of time.  A successful mediation result always delivers value far in excess of Accord's standard fee.  In addition, we believe that the parties prefer to have a clear “upfront” understanding of the total costs of the mediation at the time they elect to mediate, instead of receiving multiple invoices for variable and unpredictable hourly charges and items the mediator's overhead.

19.  When is the best time to commence mediation?

Prior to mediating the parties need to have a basic understanding of the facts, the damages and the legal arguments of their own case, as well as the opposing party's case.  But one of the great advantages of mediation is that highly expensive discovery, particularly the retention and deposition of expert witnesses, can often be avoided.  In lawsuits that have already been filed, the time for mediation is often ripe after preliminary discovery has been completed and dispositive motions have been filed, but before large sums are spent on "the battle of evidence and experts."  In disputes where a complaint has not been filed or the facts are not as well-developed, an agreed procedure facilitating an exchange of information between parties can be incorporated into the design of the mediation process.  In litigation, formal discovery is an extremely expensive and time-consuming process.  Litigation generally delays any meaningful communication or negotiation between opposing parties and postpones a frank assessment of the dispute.  As a result the parties battle each other procedurally for a year or two, perhaps longer, pay huge legal bills and then settle shortly before or during trial. (Over 95% of all cases filed settle prior to an fully adjudicated result.)  Furthermore, the earlier a negotiated settlement is achieved through mediation, the more dollars there are available for settlement instead of funding the high cost of proceeding to trial.

20.  How should I prepare myself for the mediation?

Parties and their attorneys can prepare by keeping in mind the following seven recommendations:

  1. Come with an open mind.  Commercial disputes, as well as most other disputes, are rarely "black and white" affairs.  Be prepared to listen to the opposing party. 

  2. Analyze each of the three main areas of potential disagreement --  the facts, the basis for legal liability and the scope of damages.  Legal rights often define a party's best and worst alternatives to a mediated agreement, but there are typically significant downsides to pursuing such rights in litigation or arbitration.

  3. Think clearly about your objectives in the mediation, i.e., what are your business or individual interests and what possible options can achieve those interests? (Interests should not be confused with bargaining positions or legal rights.)  Anticipate the likely interests of the opposing party.  How do the interests of the opposing party relate to your interests?

  4. Your primary focus should be on future solutions, not past problems and blame.

  5. Your ultimate mission is to persuade the opposing party, not the mediator.  The mediator ultimately has no decision-making authority. (This is one of the key advantages of mediation - the parties control their own result and attempt to achieve a meeting of the minds.)

  6. Make sure that you come to the mediation with the necessary authority to negotiate and enter into a settlement.  Lack of authority is perhaps the most common reason why mediations fail.

  7. Be prepared to think creatively to structure a mutually advantageous deal -- after all, mediation is simply facilitated negotiation.  Although "win-win" scenarios are not uncommon in mediation, you will probably have to make some compromises.  

If you come to the mediation session with the foregoing seven points in mind, you will be able to resolve your own dispute in a manner that is far superior to having an uncertain result imposed upon you by a judge, jury or arbitrator.

 

Copyright © 2007 by Accord ADR Services .  All rights reserved.  "ACCORD" is a service mark of Accord ADR Services.

 

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