WHAT IS MEDIATION?
The vast majority of lawsuits never proceed all the way through trial. They are most often settled informally amongst the parties, or via some form of alternative dispute resolution ("ADR"), which is usually mediation or arbitration.
Mediation involves the use of a neutral third person (the mediator), to help facilitate settlement discussions between the parties. Usually, a retired judge or an experienced attorney will play the role of the mediator. Mediators differ in their personal style. However, generally they will speak to the parties together to set forth the ground rules, and perhaps allow opposing counsel to give a brief presentation of what they expect to prove at trial. The opposing parties will then go into different rooms. The mediator will then go back and forth between the rooms conveying settlement offers and counter offers, the parties' positions on different issues. Occasionally, a mediator may offer a suggestion as to what amount a case should settle. Most often, mediation is non-biding, which means that if a mutually acceptable settlement can't be reached, the parties can just walk away and proceed to trial.
Mediation can also be binding. In such cases, the mediator, or a group of mediators, will decide the appropriate value of the case after hearing both parties' positions and evidence. Binding mediation is rare as parties will usually not agree to it. "High/Low Agreements" may be reached prior to the mediation to set the maximum and minimum amount the mediator may award.
WHAT IS ARBITRATION?
Arbitration is like a simplified, less formal version of a trial held before one or more arbitrators selected by the parties. Like trials, there is often the opportunity for counsel to make opening and closing arguments, to present witnesses to testify, and to cross examine witnesses. Arbitrators are usually either retired judges or experienced lawyers. Arbitrations can be either binding or non biding, and voluntary or involuntary.
In respect to the latter, parties may enter into contract (such as for medical or other services) which require that disputes concerning the contract be arbitrated. In such cases, if one side demands arbitration pursuant to the terms of the contract, the other side will usually be forced to proceed via arbitration rather than a court trial. The rules of arbitration can vary widely per the parties' agreement, per the arbitrators' style, and/or per arbitration clauses found in the contracts that parties may enter. Like mediations, High/Low Agreements may be entered into prior to a binding arbitration.
WHY SHOULD I ELECT MEDIATION OR ARBITRATION OVER TRIAL?
There are numerous reasons for selecting a form of ADR over trial, however the five main reasons appear to be as follows:
1. Uncertainty In The Law:
First, you case may have a significant issue involving an unsettled area of the law. In such cases, there will be some uncertainty in how your judge will interpret that law as applied to the facts of your case. This is why you need a strong legal advocate who can make a compelling argument to the judge why the law should be interpreted in you favor.
2. Uncertainty In What A Jury Will Conclude:
Second, there is uncertainty in what the trier of fact (which can be a judge or a jury), will decide are the true version of the facts, and what amount of damages are appropriate under the facts. This is why your attorney must not only be skilled in making an scholarly argument of the law to a judge, he/she must also be able to connect with the jurors and help convince them that your version of the facts is accurate.
3. Cost & Time Savings:
Third, there is the cost and time of proceeding all the way through trial until a verdict is reached. Even where a verdict is obtained, in some cases an appeal may follow. Such litigation costs are often large enough to bridge the gap between opposing parties in terms of the awards they believe would be obtained at trial. By settling for an amount within that gap, both parties will resolve the case more quickly, and will have saved costs.
4. More Control:
Fourth, and perhaps most importantly, there is the concept of control. Especially in the case of a non-binding mediation, you will have the opportunity to accept or reject a settlement offer. By accepting an offer, you have control over the outcome, and thus eliminate the uncertainty discussed above.
5. Less Stressful:
Fifth, ADR, and mediation in particular, is usually much less stressful to the parties then trial. This is because ADR will usually resolve a case more quickly, and in the case of mediation, the parties will not have to testify before a jury and will not be subject to cross examination by opposing counsel.
For further information regarding arbitration or mediation, please see the link to the American Arbitration Association in our Useful Links section.
