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. Nationwide, United States Arbitration & Mediation (USA&M) is the largest mediation provider in the Midwest.
Mediation is simple and straightforward. 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. Unlike a judge or arbitrator, the mediator has no authority to render a decision or force the parties to accept a settlement. In the great majority of cases mediation will result in a final settlement of the matter.
Mediation has been successfully used for tort claims, commercial and business disputes, construction issues, employee grievances, environmental claims, allegations, professional malpractice, product liability claims, maritime and FELA issues, insurance coverage disputes, real estate issues, partnership, corporate and securities-related disputes, class actions and discrimination claims.
It makes no difference whether liability is admitted or hotly contested, whether the case is not yet filed, in litigation, or on appeal, or whether the case involves a few thousand dollars or millions–mediation has proven effective in all of these situations.
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 focusing settlement negotiations much more quickly than if the case proceeds to trial. Proposing mediation is an excellent way to get settlement discussions moving and is not seen as a sign of weakness but of common sense.
The mediation session is designed to educate everyone about the legal and factual issues involved, and this can be particularly helpful to people who are unfamiliar with litigation or claims. For example, many attorneys have told us that their client would not have accepted a reasonable settlement if they hadn’t attended a mediation session.
An early settlement naturally saves litigation expenses and other costs related to the dispute.
Mediation differs from arbitration or trial because the mediator will 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. Consequently, you are in full control of the outcome.
Mediation is particularly appropriate in situations in which the disputing parties will be working together after the dispute is resolved. Some examples: construction projects, commercial leases, partnerships, business suppliers, and employment relations. 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.
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.
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.
Typically, one party to a dispute contact USA&M – either by using a USA&M Case Submission Form or by calling us – and asks us to propose mediation to the other parties. As a general rule, we like to be the ones to discuss mediation with other parties initially, because we feel that, as an impartial organization, we have a greater chance of gaining their participation. Because mediation is such a sensible process we are usually successful at convincing everyone to participate, and under our Fee Schedule we do not charge any fee if a necessary party declines to participate.
Mediations are conducted in accordance with USA&M’s Mediation Procedures.
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, 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 session. After introductory remarks by the mediator and the signing of the Agreement to Mediate (if this wasn’t signed earlier), each party is given the opportunity to explain their position. 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 numerous times.
If the mediation results in a settlement, the parties will be asked to sign a settlement agreement.
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 phone, 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.
Preparing for a mediation session is much easier than preparing for an arbitration or a trial. Please consider the following:
There are usually no pre-session pleadings, although in a more complex case the parties may wish to furnish the mediator with a summary and/or explanatory documents that were prepared for another purpose.
Prior to the mediation session, all parties need to have obtained sufficient information to undertake meaningful 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.
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, claims representatives, etc., should attend.
A short 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 affected them).
Obviously, you need to be prepared to discuss the details of your case.
No filing fee is required upon the submission of a case. USA&M charges a basic administrative fee, and hourly or per diem fees for the mediator’s time.
In many cases the parties agree to divide the mediation costs, although it is not uncommon for one party to pay the entire cost. The parties will execute an Agreement to Mediate prior to the mediation session taking place. Consult USA&M Mediation Fee Schedule for more information.
Arbitration involves the presentation of evidence to an arbitrator for a legally binding decision. Arbitration can be effective, but it may be more time consuming and expensive than a mediation, and the parties give up control of the outcome (although high-low agreements can be used to limit the range of the award).
A judicial settlement conference is also a valid process. Typically parties submit informal evidence to a judge for an advisory decision. However, any time an outside party is rendering an opinion, there is a risk that one party will strongly disagree with the opinion and the other party will be locked in to a settlement only at that figure. This can impair 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.
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. USA&M also provides in-house training in how to identify mediation cases.
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 wide variety of printed material available. Contact us for more information.
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