By Lloyd W. Felver
It has amazed me when I’ve attended attorney conventions and heard statements, even by some very experienced attorneys, that makes me think that they don't fully understand what mediation is all about. Maybe it’s because we attorneys are trained to be advocates and adversaries, and suspicious of our opponent’s motives in litigated matters. Some attorneys, and their clients, seem to take the position that once the dispute arises, they will do battle “to the death” so to speak, or take their case “all the way to the Supreme Court” if necessary to get what they want. This is not always in the best interest of the client however. The outcome of any case that is tried before a judge, jury, or taken up on appeal is far from certain. No two jury verdicts are exactly the same, and it has been my experience that the cases that seem like the outcome is certain and there is no way to lose are the ones where something unexpected will happen to make the outcome turn out to be exactly the opposite of what was expected. Even in the appeals process, there is no guarantee that the Supreme Court, whether State or Federal will even agree to hear the case. A great deal of time, energy, and expense can be expended for very little added benefit.
A trial is often the single most expensive aspect of any case. Experts are often needed, and they charge for the time it takes them to testify in court. The trial is certainly the most time consuming part of a case for the court, and the final preparation for it by the parties, which usually includes depositions of experts who charge for their time at depositions in addition to their time to testify at trial, is more expensive than the earlier stages of the litigation. Because of this time and expense, and the resulting delay and backlog on the calendars of the court, ways have been sought out for many years to attempt to reach a resolution prior to the parties incurring that expenditure of time and money.
The first of those was a Mandatory Settlement Conference, or MSC, where the court would require the parties and attorneys to meet with a judge or even an experienced attorney to try to reach a settlement. While settlement discussions have limited admissibility as evidence in court, there was and is no guarantee of confidentiality of the proceedings or the discussions between the parties or between the parties and the settlement officer. The judge or settlement officer would be selected by the court with no input by the parties involved.
Later, a process known in California as Judicial Arbitration was created, in which the rules of evidence were relaxed somewhat to allow some reports and other documents to be used instead of requiring live testimony. This is still an adversarial proceeding similar to a trial, and is held before a person called an arbitrator. In that process, parties are generally given a list of proposed arbitrators by the court, and each is allowed to reject one proposed arbitrators name, leaving the court to appoint the arbitrator from the remaining names. At the hearing, the arbitrator will receive the evidence and testimony offered by parties, and then make a decision. In California, if either party is not satisfied with the award, they can reject it, and the case will proceed to trial. No official record of what occurred at the arbitration is made, and what occurred at that hearing as well as the arbitrator’s award cannot be talked about at the trial.
Both the Mandatory Settlement conference and the judicial arbitration are still usually adversarial proceedings, with each side not willing to be totally forthcoming with all the evidence they might have in their favor, because they don’t want to lose a tactical advantage for the trial.
Judicial arbitration is not the only kind of arbitration. In many contracts, the parties agree that instead of resolving any dispute about the contract by filing a lawsuit in a court, the dispute will be resolved by arbitration. In essence, the parties choose one or more people to act as a judge, and they present their cases to the arbitrator as if he were a judge. Often, the agreements provide that the decision of the arbitrator would be final or “binding”, and that the parties could not take their claim to court at all after such a “Binding Arbitration”.
Eventually, a procedure called mediation, which has been in existence in society in one form or another for centuries, came to the forefront in litigation. When this procedure first became part of the court process, many people, including attorneys, felt that a mediation was another word for an arbitration, and treated it as such. There have even been instances where some contractual agreements will call for “binding mediation”, with an expectation that the mediator would provide a decision that the parties would be bound by.
The term “binding mediation” however is a misnomer. Mediation is a negotiation. The mediator does not make a decision that can be forced upon the parties. The most important facet of a mediation is that the results are in the control of the parties. The mediator cannot force the parties to accept any resolution. The mediator may suggest, cajole, and even figuratively twist the arms of the litigants, but he does not make the decision. The ultimate decision of whether a resolution of the dispute is reached is made by each of the parties. Though the agreement reached by the parties as a result of the mediation is binding if written properly, the parties are not forced to come to that agreement, or any agreement in mediation.
In litigated matters there are two types of mediation. There is “court ordered mediation” in which the court, usually with the acquiescence of the parties, assigns the matter to mediation and the parties usually select a mediator from a list of mediators that is kept by the court who either provide the mediation for free or at a fee set by the court. A “private mediation”, on the other hand, can be agreed to by the parties at any time in the dispute; even before litigation is filed. In such mediations, the parties chose the mediator they want to preside over the matter from any source they choose, and the mediator’s fee is determined on the open market.
A simple explanation of the differences in the types of dispute resolution is that in trial court, the state picks the person who decides what will happen to your dispute. In an arbitration, the parties have a say in picking the person who will decide the dispute. In Mediation, the parties decide how the matter will be resolved, and they may have some say in who is picked as the person to help them work with the other side to resolve it.
A successful mediation is one that resolves the dispute in a way that is acceptable to all the parties. This does not mean that one or the other of the parties gets everything that they want. On the contrary, the result is usually that neither party gets everything that they want. But, each party makes a decision as to what they can accept and live with, and what they can give up or do without. If they are not able to reach an agreement that is acceptable to them, the mediation is not successful, and they can return to the option of allowing the judge, jury or arbitrator decide the matter.
Because mediation is essentially a voluntary process requiring the parties to agree, the first step in a successful mediation is to agree to mediate. This does not mean that the parties agree to agree; just that they agree to make an attempt to agree. Suggesting or agreeing to mediation does not necessarily give a sign of a party’s lack of faith in their case. It can mean exactly the opposite. What it does mean is that the party is willing to work out the problem in a more economical, and often more successful or satisfying manner. If a person wins a case in court, they must still enforce any judgment they get. The court does not do that for them. The same is true for a non judicial arbitration. If the parties agree on a result, as they do in mediation, it is usually easier to get everyone to comply with that result. Also, judgments appear on a party’s credit record, and can result in difficulties with the party’s credit rating. It also means that the parties wishing to use mediation want to maintain control of the outcome. Once the dispute is submitted to the judge, arbitrator or jury for decision, the result is completely in their hands and no longer in the hands of the parties, and no matter how strong a party feels their case is, the judge, jury or arbitrator could decide against them.
The second step to a successful mediation is to agree on the person to act as the mediator. Some people take the position that they will not agree to any mediator suggested by the other side. Their rational is usually that the other side is suggesting the mediator because they have had success with that mediator before, and therefore, the mediator may somehow be biased toward the party making the suggestion in order to obtain more business from that party in the future. The safeguarded against this concern however, is the fact that it is the parties, and not the mediator, who have the ultimate decision and control over the outcome of the mediation. The mediator does not make the decision, nor can the mediator force a decision on one of the parties. Further, California law requires disclosure of any relationships that might be considered conflicts of interest, and it is again the decision of the parties as to whether, given those disclosures, they still want to use that mediator. Additionally, the mediator should refrain from handling the matter if they cannot be neutral. Finally, a mediator that earns the reputation of not being fair to both sides by favoring certain parties or their attorneys will quickly find themself reducing their business rather than increasing it. If the parties cannot agree to a mediator, it is doubtful that they will be able to agree to anything else, and there is very little likelihood that the mediation will succeed.
Who to choose as a mediator though is dependent on the individual factors of each dispute. Each mediator has their own style, their own strengths, and their own knowledge base. It may be helpful to choose a mediator that has familiarity with the type of the dispute. For instance, it may be helpful for someone to have a background in business law to mediate a business law dispute. But most importantly, the parties should feel that the mediator is fair, trustworthy and ethical. Many retired judges have become mediators, and some people feel that their experience on the bench will be helpful. However, while there are many excellent mediators who were once judges, a retired judge may not always be the best mediator for a particular case. Retired Judges have come from a career where they have been making the decisions, rather than helping others make their own decisions. They may not have extensive expertise in certain areas of the law, as they have been dealing with a wide variety of cases on the bench. On the other hand, some cases require the perceived authority of a retired judge and that evaluative methodology in order to entice some parties to compromise. Attorney mediators often have experience from “the trenches” of litigation. They know what it takes and costs to put together a case for trial, and may be less dogmatic, encouraging compromise, creative thinking, and offering possible alternatives rather than championing a particular result. The type of mediator desired for a particular case therefore will often depend upon the peculiar aspects of each case and the parties involved.
By the time the parties reach the actual mediation they have necessarily made two agreements already; to actually mediate, and who the mediator will be. If each side is prepared, and knows the strengths and most importantly weaknesses of their own case, and has done sufficient work to have a good idea of the strengths and weaknesses of the other side, the possibilities for a successful resolution are greater. Each party must understand that in order to resolve the matter they must be willing to give something up, for instance pay something, or accept less than they wanted. This could be as simple as agreeing to accept payments instead of insisting on an immediate lump sum payment. It is a willingness to keep an open mind to the possibility of a resolution that is not solely acceptable to oneself. If even one of the parties is not willing to do that, then there is no use in even attempting mediation. The essence of a mediation is give and take. Each side explains their position, and negotiates, either through or with the assistance of the mediator, with the other side to reach that mutually acceptable result.
Sometimes this can be accomplished rather quickly; in a matter of minutes or hours. Other times, even if the parties are willing to negotiate, it may take a long time, even several days, to overcome their differences and discover that mutually acceptable resolution. But, it is a solution that is more likely to actually work because they reached it themselves. It may not be perfect, but it was not forced upon them by someone else who has not lived the situation.