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Mediation is becoming an increasingly attractive option for dispute resolution, offering parties a faster, more cost-effective, and collaborative way to resolve legal claims. As courts and litigants continue to embrace mediation, understanding its benefits and challenges is key to achieving successful outcomes.
What is mediation?
Mediation is a form of alternative dispute resolution (ADR) in which a neutral third party—the mediator—helps parties voluntarily reach agreement. Mediation often allows parties to avoid the time and expense associated with litigation and presents a less formal environment than trial or arbitration.
What is litigation?
Litigation is the adversarial dispute resolution system in which parties on opposite sides of an issue build and present their sides of a legal case through motion practice and ultimately a trial in front of a judge. If litigation proceeds to a jury trial, the jury will decide all facts that remain in dispute. The judge will preside over the trial and determine the proper application of the law. At the end of the trial, the jury returns a verdict and the court enters a judgment which is binding on both parties.
What is arbitration?
Arbitration differs from litigation in that instead of presenting their case to a judge and jury, the parties make their arguments to an individual or panel of arbitrators. The arbitrator(s) hear the evidence presented and enter a decision, acting as both judge and jury. Like a trial, both parties are required to adhere to the arbitration decision.
How is mediation different?
Mediation is similar to arbitration in that a trained, third-party neutral is retained to examine the evidence and arguments presented by both parties. However, the mediator does not issue a decision at the end of the proceedings. Instead, the mediator's job is to help the parties reach a collaborative resolution. By listening to the parties and pointing out the various strengths and weaknesses in their arguments, the mediator guides the parties to ultimate compromise.
Why is mediation playing a larger role in civil and commercial cases?
Mediation is growing in popularity as an alternative means to resolve civil and commercial disputes. In fact, even when parties choose to file lawsuits and pursue formal litigation, judges increasingly suggest or even require that the parties engage in good faith mediation at some point before trial. Even if it is unsuccessful, mediation can help parties understand the opposing perspectives and fine-tune their legal theories.
What are the main benefits of mediation?
Cost Savings
Between voluminous document discovery, expert witness testimony, motion practice, and various other factors, trials are notoriously expensive for all parties involved. Mediation circumvents many of these costs and, therefore, represents an attractive option to parties seeking to resolve a dispute at a significantly lower price point.
Speed
Litigation can proceed for years before it reaches trial, and even final judgments are subject to a lengthy and burdensome appeal process. Mediators, who are often former judges or lawyers, offer a significantly quicker timeline for parties who don't want to be embroiled in a dispute for years on end.
Confidentiality
Unlike public court proceedings, mediations are entirely confidential. This makes mediation an ideal choice for parties concerned that their involvement in a dispute could have negative implications if publicized.
Collaboration
Since the goal of mediation is voluntary agreement, both parties are encouraged to engage in active negotiation and discussion with one another. This collaborative approach allows parties to better understand the perspectives, beliefs, values that undergird their initial demands.
In what types of cases has mediation proven most effective?
While mediation can theoretically be employed in almost all civil cases, certain practice areas are uniquely well-suited to benefit from mediation.
Employment Cases
Many employers include in their employment contracts an automatic ADR clause, meaning employees must attempt to resolve disputes through arbitration or mediation before they may file a lawsuit. Thus, mediation and arbitration are frequently used to resolve employment disputes. The Equal Opportunity Employment Commission (EEOC) even offers a mediation program as a default option in employment cases in which they are involved. Mediation is a popular and effective option in employment cases in large part due to its confidentiality, which can help protect both the employer and the employee.
Commercial Cases
Mediation also effectively helps opposing business entities reach their goals in commercial disputes. Because commercial litigation impacts the revenue and expenses of both parties in commercial cases, minimizing cost is of critical importance. If a resolution can be reached without disadvantaging both parties through expensive trial litigation, parties are likely to opt for that alternative dispute strategy. This is particularly true in cases where the amount of money in question is lower, as expenses from protracted litigation could seriously offset any potential winnings or avoided losses that would result from a win at trial.
Class Action Lawsuits
Class action lawsuits greatly benefit from the speed and confidentiality of mediation. Defendants in class actions often want to keep disputes confidential so as to not dissuade the public from purchasing their product or service. Additionally, the complexity of class action litigation can exponentially increase the time it would take to litigate the case at trial, making mediation a far more efficient avenue for resolution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
