The growth in the use of mediation to settle a wide variety of disputes means more and more parties – and their lawyers – are considering this alternative to litigation. As mediation grows in popularity, it might be beneficial to review the characteristics of this type of alternative dispute resolution and how the process works.

Not Litigation

Mediation is a consensual process that bears no resemblance to litigation. The mediator has no independent power to resolve the dispute, which can only be concluded through the mutual agreement of the parties. The mediator conducts a series of joint sessions and separate caucuses with the litigants to facilitate agreement. The parties rarely submit evidence or witnesses, because evidence has no legal significance in the outcome of mediation. The mediator can explore a wide variety of issues and concerns in helping the parties address the underlying problems that gave rise to their dispute. Mediators meet separately with the parties as an ordinary part of the mediation process. In the event an agreement is reached, a term sheet is ordinarily prepared.

In the event no agreement is reached, the mediator may follow up at a later date, but cannot resolve the dispute without agreement by the parties. Mediation is most effective when the parties have sufficient information to exchange settlement proposals and when party representatives with full authority are present at the mediation.

Timing and Speed of Mediation

Mediation can be instituted at any time, even prior to the filing of a lawsuit.

Information transmitted to the mediator during the private caucuses is kept confidential by the mediator, unless permission to disclose is otherwise given. Therefore, a party can safely disclose to the mediator information that it would not ordinarily disclose to the other side at an early stage in the negotiation process. Candor enhances clarity of understanding, facilitating settlement.

Absent mediation, neither side might be expected to reveal its true concerns at an early stage in the litigation. A mediator is able to obtain this information without compromising the negotiating position of either side, because the mediator will keep the information confidential.

Consensus & Confidentiality

Mediation is consensual, and the ultimate solution is in the hands of the parties. The mediator can create a casual atmosphere in which creative problem-solving takes place. Clients are encouraged to speak and be a part of the process.

Mediation is also confidential. There are two components of confidentiality. First, the communications between the parties and the mediator in their separate caucuses are kept confidential, unless a party permits the mediator to make disclosure to the other side.

Moreover, the entire process remains confidential. A party can avoid hanging out “dirty laundry” for competitors and others to observe – no public pleadings, depositions, or transcripts. Mediation is generally conducted in the privacy of an office and the parties determine who will be in attendance. Confidentiality can be extremely important in preserving trade secrets and the value of a business while issues are resolved.

Problem-Solving Approach

Mediation focuses on problem-solving, rather than truth-seeking. The mediator’s primary focus is to help create solutions, not to assign blame. Mediation does not seek to resolve issues of “right” and “wrong,” but rather focuses on resolving the dispute in a constructive fashion.

As the use of mediation increases, it is important to keep the above features in mind when considering using this type of dispute resolution. As with most things, the right ADR process is the one that’s the best fit for the parties. Mediation, however, is a very powerful and effective tool.