To mediate in court or out of court, that is the question
October 2015 | EXPERT BRIEFING | LITIGATION & DISPUTE RESOLUTION
Mediation has become a popular method of resolving disputes. In the US, over 90 percent of all civil cases are resolved prior to trial, and many of those cases are resolved through mediation. Mediation has become so popular that many courts have created their own mediation programs that they either offer to litigants or in which they require litigants to participate. However, mediation programs offered by the courts are markedly different to those mediations conducted privately. Knowing those differences can help parties determine whether they want to let the court provide the mechanism to resolve their dispute or to participate in a private mediation before going to the court house.
What is mediation?
Mediation is a tool to resolve disputes. It is a confidential, voluntary, non-binding process. The mediator is a neutral party who does not find facts or issue any rulings of law. Mediation is a formalised negotiating process – it is not an adjudicatory process. If it succeeds the parties execute a settlement agreement. If it fails the case proceeds to be heard by the judge as if the mediation never happened, and no one is permitted to divulge anything that occurred during the mediation.
Mediation is often confused with arbitration. However, they are very different processes. Arbitration is a private litigation process which the parties agree will substitute for court litigation. Arbitration is usually provided for in a contract. The arbitrator is a decision-maker who makes rulings after hearing evidence, like a judge. The rulings of the arbitrator are legally binding, are enforceable by the courts, and are rarely overturned on appeal. Arbitration is simply a private substitute for court litigation.
Who chooses the mediator?
In court-connected mediation programs the mediators are supplied by the court and the parties have no role in choosing the mediators. Typically, the courts contract with non-profit mediation groups to supply volunteer mediators to the court. In some states the courts provide their own mediators. Either way, the court assigns mediators to the case, and there is no cost to the parties. The mediators may be lawyers, but can also be anyone who volunteers for the job. Mediators must take a course to be certified, and receive training in the use of the forms required by the court. In many courts the co-mediation model is used, in which two mediators work with the parties in each case.
Prior to, or during litigation in court, the parties may agree to attempt to settle their dispute through mediation without any involvement by the court. This is private mediation. The process is very different from what occurs when the court is involved. The first difference is how the mediator is chosen. In private mediation the parties or their attorneys choose their mediator by selecting a person both sides agree would be appropriate to mediate their case. It is rare in private mediation for more than one mediator to work on a case. The mediator is paid by the parties; usually the parties share the cost equally. The mediator charges either by the hour or by the day or half-day. The parties should try to find a mediator who is knowledgeable about the subject matter of their case, has experience litigating or mediating similar cases, and who they think has the mediation skills necessary to bring the parties together in a settlement.
How do the mediation processes differ?
In court mediation, the mediators are expected only to assist the parties in reaching their own solution to their dispute. This is often referred to as ‘facilitating’ or ‘conciliating’. The mediators have no prior knowledge of the dispute before the mediation begins. The court clerk hands the file to the mediators and they immediately begin the mediation process with the parties. With all of the parties present, each party is asked to state the substance of the dispute and what they hope to achieve as an outcome. Through re-phrasing and positive reinforcement, the mediators attempt to show the parties that they have been heard and that their interests are legitimate. Mediators are not supposed to suggest ways for the parties to resolve their dispute – the premise is that the parties must find their own solution in order for that solution to be effective. The mediator is not supposed to be a problem-solver, but rather a facilitator for the parties to find their own solution to their problem.
In private mediation, the role of the mediator is very different. Once a mediator is chosen, the parties submit to the mediator copies of briefs and exhibits that they may have filed in court or may have created for the mediator, to educate the mediator regarding the case and the issues that separate the parties. The mediator is expected to read – and to be paid for reading – these materials before the mediation begins. The mediation is then held in an office, usually provided by the mediator, not in the court house. When the mediation begins, the mediator will ask each party to state its case, essentially to make what would be an opening statement in a trial. The mediator then usually will separately caucus with one of the parties, then the other, until either an agreement has been reached or the mediator feels it would be fruitful to bring the parties together again. During these caucuses, the mediator is expected to probe for weaknesses in each party’s case and to attempt to bring the parties’ positions closer together. The mediator is often asked to evaluate the strengths and weaknesses of the parties’ positions, and may even be asked for an opinion of how the case should be settled, but the parties are free to accept or to reject the mediator’s opinion, if the mediator even agrees to give one. While the process remains confidential, voluntary and non-binding, the mediator often develops an aura of authority that causes the parties to alter their positions, and leads to settlement. If a settlement is reached, the mediator will draft, and the parties will execute, a binding settlement agreement that will include the dismissal of the case or the entry of an agreed judgment.
The pros and cons of mediating in court and out of court
Mediations that occur in the court house under the auspices of the court are very different to those that occur privately. The main advantage of court-related mediation is the lack of cost. In small cases where attorneys are not involved, or in which the parties have not conducted discovery, court mediation can give the parties their first real opportunity to discuss the case and to explore whether it can be settled. If the parties do not have attorneys, the cost of this process is only the limited time it takes. However, because whether a settlement can be reached is largely based on the actions of the parties themselves, court mediation is no substitute for private mediation. The disadvantage of court mediation is that unless both parties are sufficiently motivated to settle, the mediator can do little or nothing to bring the parties together.
Private mediations generally only occur where the parties are both motivated to settle, but have been unable to do so through their own negotiations. Because these parties are actively involved in choosing, and paying for, the mediator, any significant case that has not settled through negotiation has a much better chance of settling through private mediation than through court mediation. Another factor leading to settlement in private mediations is the evaluative approach used by most private mediators. These mediators push and pull the parties toward a settlement, and the good ones don’t take no for an answer – they keep looking for ways to meet the interests of the parties. The primary disadvantage of private mediations is the cost. Since these mediations tend to take most of a day to conduct, the parties are paying their attorney, and half of the mediator, to engage in a process that might not result in any settlement. This is a process that makes sense particularly for larger cases, where both parties are represented by counsel.
Both court and private mediations are useful in helping to settle civil disputes. Ultimately, which is best depends on the size of the case and the motivations of the parties.
Thomas I. Elkind is a partner at Foley & Lardner LLP. He can be contacted on +1 (617) 342 4010 or by email: firstname.lastname@example.org.
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Thomas I. Elkind
Foley & Lardner LLP