FREQUENTLY ASKED QUESTIONS
Mediation is a voluntary process that assists the parties to a dispute reach a mutually acceptable resolution of their issues. The mediator does not dictate the result but rather facilitates discussion and dialogue, suggests approaches to resolution and brokers an acceptable solution. There are a number of reasons why mediation has become an accepted method of dispute resolution in a variety of situations and at almost any stage of a controversy, including during litigation.
Control. Mediation allows participants to retain control over the outcome, rather than ceding the decision-making to a judge, jury or arbitrator. The solution to the dispute cannot be imposed upon these participants – they have chosen the mediation forum, they choose the mediator and no settlement is reached until they agree to the terms.
Certainty. A successful mediation concludes when all parties agree to a solution, avoiding possible protracted and unforeseen consequences of litigation and perhaps unfavorable legal rulings and precedents. In the United States, close to 80% of civil litigation cases settle during the first day of the mediation session. Another 10% settle within a month of the initial mediation session.
Confidentiality. To facilitate frank and open discussion, all the statements made during the mediation session are strictly confidential and cannot be used outside the mediation context. In addition, any party or any party’s lawyer can have direct and confidential communication with the mediator about the dispute at any time. This is a hallmark of the mediation process and results in creative solutions.
Speed. Mediation takes place on the participants’ timeline. No matter what the stage of the disagreement – before a case is filed, on the eve of trial or even during trial – it is possible to mediate and settle a case. But obviously if the costs and uncertainties of litigation are to be avoided, an early mediation produces a more cost-effective result.
Cost. Litigation can be expensive and the total cost is unpredictable. Mediation typically costs less because the focus is on reaching a solution, not on discovery and pre-trial motions. These motions are substantively and procedurally necessary in the litigation process but can be costly and time-consuming.
Creative Solutions. Other than confidentiality and the ground rules set out by a good mediator, there are no rules in the mediation process that impede creative solutions. Learning what is important to the participants and what is necessary to bridge their differences is part of the process. There are many well-understood and time-tested techniques which can be employed by a mediator whose goal is to influence the participants to reach a successful outcome.
Most civil disputes can be mediated at any stage of a controversy, before and during litigation. Abby Silverman specializes in cases involving employment relationships and related business disputes such as founder/director controversies, confidentiality, trade secret, non-compete and privacy issues, and cross-border employment issues. Disposing of a controversy prior to a business transaction or prior to an employee taking a new job may be a key to choosing an early mediation. In discrimination or sexual harassment cases, it often is the confidentiality guaranteed by a mediated dispute resolution process that motivates the parties to choose mediation. But parties to any sort of employment or business case can choose and benefit from mediation.
Typical employment or business cases are resolved in a full day of mediation. Some can be resolved after only a half day. Cases with multiple parties can last longer. Major business disputes that involve corporate employment agreements, acquisitions or sales of business entities, or ending a partnership may require several mediation sessions; but the absence of rules and deadlines means they can be scheduled flexibly.
Mediation has no formal procedures or rules, but a typical mediation involves a combination of the following:
Mediator’s Preparation. In what is called the “litigated case,” the mediator will review the lawyers’ or the parties’ written submissions − which can include a statement of the dispute, strengths and weaknesses, and the settlement history to date. The mediator also may talk to counsel separately before the mediation to determine if there are any unusual problems or barriers to settlement. If no lawyers are involved, the mediator likely will learn about the case from the parties at the mediation session.
Starting the Mediation Session. Many mediation cases begin with a joint session with all participants present. But prior to that, the mediator will discuss the process with the participants to make sure that this is the best procedure for the particular controversy. At some point at the beginning of the session, the mediator sets the ground rules for the mediation based on the input from the parties. If there is a joint session, each party is invited to describe the dispute, how the individual or the company has been affected by it, and to present some general ideas about resolving it. This gives the parties and their lawyers the opportunity to advocate, but more importantly it gives them a chance to listen to the other side and perhaps gain perspective on how the issues can be resolved. Depending on the case, the mediator may encourage the parties to respond to the opening statements or ask for clarification. The mediator initially will try to bridge disputes about the issues that need to be addressed.
Private Caucuses. The real work is done in the private caucuses which follow. The mediator meets with one party and the lawyer, if the party is represented, or with several parties who have common interests. These sessions give each party the chance to discuss privately with the mediator the strengths and weaknesses of the individual’s or the company’s position and proposed ideas for settlement. The mediator likely will caucus with each side many times throughout the process.
Joint Negotiation. After the caucuses, the mediator may bring the parties or their lawyers or some combination back together to offer suggestions for resolution or to have them negotiate directly.
Mediator’s Suggestions. Sometimes if there is little progress, the mediator will make proposals that can move the process along. Again, because there are no rules, creativity and a variety of well-understood and accepted techniques are important.
Closing. If an agreement is reached, the mediator will either document the terms of the settlement or ask the parties to do so. Before the parties leave the mediation they will sign some form of the agreement. If no agreement is reached, the mediator will review whatever progress has been made and advise the participants of the options, such as meeting at a later stage in the litigation process or some other form of dispute resolution.
Follow Up. If appropriate, the mediator will contact the participants to find out if the definitive agreement is signed or, if the case has not settled, to continue working on promising aspects of the session with the goal of a later settlement.
There are no rules in mediation so participants can appear without a lawyer. In some cases, the employer has a lawyer and the employee may not have one. In other cases, a party has consulted a lawyer but does not bring the lawyer to the mediation session. The mediator, however, does not give legal advice and when it comes to the legal consequences of possible settlement terms, participants may want to consult with a lawyer before reaching a final agreement.
What is arbitration?
Arbitration is a contractual dispute resolution procedure. The parties either have agreed to the arbitration process as part of an existing contract before a conflict arises, or they may agree to arbitration as an alternative to the litigation process. The arbitration hearing can be more informal than a court proceeding but often includes opening statements, witnesses providing testimony under oath, documentary evidence and closing arguments. The arbitrator makes a binding decision based on the evidence and the law and provides the parties with an enforceable arbitration award that can be filed in court as a judgment.
How is the arbitrator chosen?
The parties choose the arbitrator using pre-established rules set out in the agreement to arbitrate. The arbitrator is not officially appointed until the parties are satisfied that the arbitrator has no conflicts of interest and is truly a neutral and knowledgeable decision maker.
Why choose arbitration?
Control over the decision maker and the rules. Some people prefer arbitration to a court proceeding because the parties have control over selecting the decision maker and over the rules which govern the process. The arbitrator maintains neutrality by adhering to strict rules which prohibit separate ex parte communications with any party or lawyer.
Cost. The costs of arbitration are more predictable than the costs of litigation and are typically less because there is limited discovery. The focus of arbitration is reaching a fair decision, without stressing the procedural aspects of preserving a record for trial.
Certainty. The arbitrator’s decision is binding and except under extremely limited circumstances arbitration decisions cannot be appealed. The parties have determined in advance the procedures which will be employed if a dispute arises, and those rules usually involve less pre-trial discovery, a shorter time frame for completing the pre-hearing tasks, and flexibility in setting hearings and other deadlines.
Confidentiality. There is no mandate that arbitrations are confidential. But once a case is in arbitration, the documents are not “filed” publically, and public access to the records is limited. Likewise, the arbitration hearing is not necessarily confidential, but the arbitrator usually limits attendance to the parties, the lawyers and the witnesses.