What is Mediation?
In its most simplistic terms mediation is the alternative to the formalized litigation process that has evolved within our system of American jurisprudence. It is a confidential process wherein the parties are given the opportunity to discuss the issues, explore areas of disagreement, clear up any misunderstandings that exist and find areas of agreement. An effective mediation occurs in a safe environment wherein the parties in active concert with the mediator can utilize their own skills and creativity in fashioning an agreement on all or a portion of the overall dispute that is acceptable to all. In those instances where the relationship of the parties is ongoing, the process can also provide a forum to effectively deal with issues that may arise in the future.
Why Mediate?
Litigation, the traditional form of dispute resolution, is burdened with significant costs, some of which are direct and quantifiable, and others which are indirect and oftentimes difficult to measure, but nonetheless significant.
Attorney fees are usually in the forefront when litigation costs are examined. In many organizations, upper managers are reluctant (and rightfully so) to act without the advice of counsel; hence, the tendency to involve counsel at the very early stages of any type of conflict. Modern day litigation is oftentimes fought with teams of attorneys on both sides. The combined team hourly rate can be a significant jolt to the most seasoned and experienced business person, to say nothing of the impact upon an individual. Attorneys have an ethical obligation to zealously represent the client and to utilize all reasonable resources to this end. Anything less subjects the attorney to his own form of dispute management in the form of a malpractice suit or a grievance, or both. Zealous representation comes with a significant financial cost to the client; even more so in the event that either by statute or contract, the non prevailing party can also be required to pay the opponent’s attorney fees, costs and expert witness fees. The retention of one or more experts is commonplace in even the most mundane commercial, personal injury, or matrimonial case. Nearly everyone is deposed; again, at a significant cost to each party. On the eve of trial, attorney fees and costs that have thus far been incurred often become an impediment to a settlement. Early use of the mediation process can usually significantly reduce these expenses of litigation as well as significantly improve the chances of settlement.
Although difficult to quantify, indirect costs related to the litigation process are always present and can be significant. Conflict inherent in the process comes with a price. The stress of meeting with counsel, preparing for and having one’s deposition taken, and the fear of an unjust and financial ruinous result, are just but a few examples. Such stress and worry takes away from the client’s ability to tend to family and employment relationships. Litigation in the context of a business disputes can involve multiple layers within a company. The “business of business” takes a back seat to the seemingly endless litigation process. This diversion of time, energy and profits, is seldom, if ever made up. Anger at this “process” and sometimes at one’s attorney is commonplace. Attorneys, they themselves immersed in the all consuming task of trial preparation, sometimes do not fully appreciate the stress experienced by nearly all clients and the full extent of the indirect costs suffered by the client. Effective and early resort to mediation can go a long way in minimizing this cost to the client.
Delay in getting any disputed matter adjudicated is a given. While attorneys may accept heavy dockets and continuances as routine, most clients are aghast when told that a trial may be held several years down the road, maybe longer. Business people especially, who are required to make daily strategic decisions, are forced to place many such decisions on hold pending a court resolution. In the meantime, extensive and expensive motion and discovery practice is taking place. In the interim, witnesses relocate and memories fade. Although settlement conferences are oftentimes beneficial, they frequently occur near the end of the time line, usually on the eve of trial. Effective use of the mediation process quickly after the parties and counsel have educated themselves as to the legal and factual issues mitigates strongly against the costs associated with delay.
Although each litigant seeks to prevail during the eventual trial, still nearly all of those involved in disputes are nonetheless seeking to minimize if not completely avoid risk. Participation in a trial is rife with risk - financial, personal, emotional and otherwise. So too, is the almost certain appeal process. Mediation allows the parties to explore all settlement options in order to restore some amount of certainty in their lives, to eliminate risk associated with the dispute and to put some closure on what has probably been a stressful and unpleasant experience.
Additional Benefits of Mediation
In addition to the positive attributes associated with mediation as listed above, there are others that may appear less obvious, but are still just as important:
• Where the parties will continue to have to interact with one another on an ongoing or periodic basis, the process can foster cooperation, understanding, and increased knowledge that can lead to a better relationship.
• Mediation is confidential unless otherwise agreed. Scrutiny by the public, business associates, curious family members, and the press is avoided.
• The process allows the parties to have more control over the development of building consensus and the ultimate agreement. Perceived arbitrary and less than comprehensive findings and results by judges and juries are avoided.
• Compliance with agreements that are as a result of the mediation process is generally higher than those imposed by a third party.
• By virtue of the fact that the parties themselves are instrumental in coming to an agreement, the mediation process is perceived as the most effective and fair form of dispute resolution.
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