A mediation is an informal meeting with a third party to see if a settlement can be reached. How it generally works is that we will usually start with all of the parties in the same room so that the mediator can go over the terms of the mediation and some basic ground rules. The mediator may also ask some basic questions regarding the facts of the case or each party’s position. The parties will then be placed into separate rooms. The mediator will go between the rooms and talk with the parties regarding the various facts of the case and possible settlement offers. The mediator will generally point out the strengths and weaknesses of the parties cases but will generally focus on the weakness as it is the mediator’s job to get the parties to settle. Therefore, when it feels like the mediator is being overly critical of your case, please know he or she is doing the same thing in the other room.
Before leaving the room, the mediator will get a settlement offer to be relayed to the other party. The parties have complete control over any settlement offers, and while the mediator and the parties attorneys may provide advice based upon what they think might be reasonable and/or what might be accepted by the other party, it is entirely the client’s call on what to offer or accept during a mediation.
All conversations that occur during mediation are confidential. The mediator will only relay information that you allow him or her to share and nothing the parties say can be used at trial. Therefore, the parties should feel comfortable talking honestly about your case during the mediation.
With that being said, a mediation is not a trial and you should not expect the mediator to review the evidence or to make a determination as to who will who is right or wrong. Therefore, there is little preparation needed for a mediation. Prior to the mediation, your attorney will prepare a short statement for the mediator outlining the facts and providing a few key documents. Moreover, your attorney will often bring or have access (e.g., via computer or iPad) to the other documents and photos, if necessary. With that being said, you should not plan on reviewing each document or photos with the mediator as this would be expensive (mediators are paid) and would not aid the mediator in ultimately finding a resolution both parties can accept.
Historically, a high percentage of cases settle at mediation. With that being said, as neither party is required to accept any settlement offers or recommendations of the mediator, it is possible that nothing is resolved during the mediation. In order to increase the possibility of settlement, the parties should come to the mediation with an open mind as to what the parties might accept as a settlement to avoid the continued cost and uncertainty of litigation. Please keep in mind that in mediation neither side will walk away with everything they want and it is often said that during a good mediation both parties walk away unhappy (one paid more than he or she wants and the other excepted less than he or she feels she is entitled to). On the other hand, it is a great opportunity to find a resolution to a dispute so as to move forward with the other aspects of your business or life. This piece of mind can be extremely valuable. Moreover, by agreeing to a settlement, the plaintiff avoids the need to collect on a judgment, which can often significantly delay the time it takes for the plaintiff to receive his or her money even if he or she prevails at trial. This also saves the plaintiff continuing legal fees associated with trying to collect a judgment.
If a settlement is reached, the mediator or attorneys will usually draft a short settlement agreement (generally very informal) to outline the terms of the settlement and make it binding on both parties. Alternatively, if the mediation is with a judge, the judge may choose to put the terms of the settlement “on the record” or on the court’s recording system. Regardless of the method selected, this helps to ensure that the matter is fully resolved when the parties walk away from the mediation and provides time for the drafting of a more formal settlement agreement.
In most instances, the attorneys will draft a more detailed settlement agreement following the mediation that includes all of the important terms that may not have been included in the quick agreement signed at the mediation. For example, the formal settlement agreement may include a provision providing for the terms of the settlement to be confidential or may include terms related to the timing of the dismissal of any pending litigation. Because both attorneys will have the opportunity to review and revise the agreement, this may not be completed until several weeks after the completion of the mediation.
It is rare for money to be exchanged at mediation as usually time is provided to obtain checks and make payment. With that being said, the timing of payment is a point that can be negotiated in mediation. In other words, if the defendant needs more time to come up with the money, he or she might propose a payment plan or delayed payment. On the other hand, the plaintiff may agree to take less if the payment is made promptly. So as to ensure all payments are made in accordance with the settlement terms, the settlement agreement will usually provide for the party who fails to honor the settlement agreement to pay the attorney fees of the other party. With that being said, please note that short delays (e.g., a few days) are often forgiven by the court (especially if it is the result of the time for mailing). Therefore, I recommend that clients not plan on having a payment on a specific day so as to avoid having financial obligations that can not be met if the payment is a few days late. Additionally, there may be time needed for the settlement check to be cleared into the attorney’s trust account prior to payment being issued to the client.
Finally, one of the great advantages of mediation is that the parties can consider creative resolutions. In court, there is usually only a winner and a loser. It is almost always a “winner takes all” situation. In mediation, the parties can negotiate for something that may not be considered by the court. For example, if the dispute is over a portion of land, the parties could agree to share the land on certain terms. If it is a business dispute, the parties could negotiate the terms of a buyout with a transition period. The possibilities are limited only by the parties involved and creative attorneys and mediators can often find resolutions that were never previously considered by the parties.