|What is mediation?
During the last ten years, mediation has grown into one of the most popular alternatives for resolving civil disputes in the United States. Many lawyers, insurance companies, risk managers and legal departments now use mediation on a day-to-day basis to help resolve claims and litigation as quickly and efficiently as possible.
|Mediation is simple and straightforward. At a mediation session, all sides of a dispute sit down with an impartial person, the mediator, to attempt to reach a mutually acceptable settlement. There are no formal court procedures or rules of evidence, and there is very little preparation involved. Unlike a judge or arbitrator, the mediator has no authority to render a decision or force the parties to accept a settlement. Yet in the great majority of cases mediation will result in a final settlement of the matter.
What type of disputes can be resolved through mediation?
All kinds. Mediation has been successfully used for tort claims, commercial and business disputes, construction issues, employee grievances, environmental claims, professional malpractice allegations, product liability claims, maritime issues, insurance coverage disputes, real estate interpretations, partnership dissolutions, securities-related disputes, domestic relation matters, and workers' compensation claims.
It makes no difference whether liability is admitted or hotly contested, whether the case is in litigation or not yet filed, or whether the case involves a few thousand dollars or millions mediation has proven effective in all of these situations.
|CHRISTOS PAPOUTSY, prior director of U.S. Arbritration & Mediation of New England's Northern New England Office, has been an active mediator for many years. With over thirty years of business experience to his name as owner, president and CEO of several companies, Mr. Papoutsy understands the importance of negotiating and communicating, and knows the kinds of contract disputes, miscommunications and misrepresentations that sometimes occur in business relationships. Drawing from his career experience and educational background, which includes a B.S. in finance, an honorary law degree, and recent masters work, Mr. Papoutsy has successfully mediated various commercial and community actions in both New Hampshire and Massachusetts. Mr. Papoutsy is a member of the New Hampshire Mediators Association.|
|What are the benefits of mediation?
Settle disputes now. Almost every case will settle prior to trial. So the real issue is not if a case will settle, but when. A mediation session has the effect of bringing settlement negotiations to a head much quicker that if the case proceeds to trial. And proposing mediation is an excellent way to get the settlement discussion moving.
Save money. An early settlement naturally saves litigation expenses and other costs related to the dispute.
Maintain control. Mediation differs from arbitration or trial because the mediator does not make a decision or force any party to accept a settlement. When you agree to mediate a dispute, you are only agreeing to attend. Consequently you are in full control os the outcome.
Improve everyones understanding. The mediation session is designed to educate everyone about the legal and factual issues involved, and this can be particularly helpful to people who are unfamiliar with litigation or claims. For example, many attorneys have told us that their client would not have accepted a reasonable settlement if they hadnt attended a mediation session.
Informally explore settlement options. Because of the confidential nature of the private caucus, the mediator can explore settlement options without exposing your final position. This can remove the "posturing" that takes place during negotiations.
Organize multiple party negotiations. The mediator can play a major role in simply organizing the discussions. The mediator can work closely, and confidentially, with each side to explore settlement possibilities and put a settlement package together.
Preserve continuing relationships. Mediation is particularly appropriate in situations where the disputing parties will be working together after the dispute is resolved, such as construction projects, commercial leases, partnerships, business suppliers, etc. Mediation allows the parties to stay on the best terms possible by doing everything they can to settle their dispute as quickly and easily as possible.
|What takes place at the mediation session?
All sides to a dispute will be present at the mediation session. For example, participants in a typical tort case usually include the plaintiff and the plaintiffs counsel, an insurance company representative, possibly a defense attorney, and the mediator. In a commercial case, the owners and/or managers would attend, along with their attorneys.
All parties, representatives and the mediator first meet in a joint session. After introductory remarks by the mediator and the signing of the Agreement to Mediate (if this wasnt signed beforehand), each side is given the opportunity to explain its position. These short and informal opening statements, typically no more than ten to twenty minutes long, are a starting point to gaining an understanding of the case.
After the joint session, the mediator will meet with each side individually. These separate meetings, called cauceses, are confidential. In each caucus the mediator will discuss the risks of the case best and worst outcomes, quality of evidence and the costs of litigation. The mediator will also explore possible settlements. It is common for the mediator to go back and forth between the parties for a number of caucuses.
|SAMPLE MEDIATION CLAUSE
Parties to contract, lease, etc. may agree in advance to mediation any disputes that arise in the future. The following clause may be used "as is" or may be altered by the parties.
"Mediation involves each side of a dispute sitting down with an impartial person, the "mediator", to attempt to reach a voluntary settlement. Mediation involves no formal court procedures or rules of evidence, and the mediator does not have the power to render a binding decision or force an agreement on the parties.
In the event a dispute shall arise between the parties to this _______________ [contract, lease, etc.] the parties agree to participate in at least four hours of mediation in accordance with Mediation Procedures of ___________________ [Name of the vendor who is administrating the mediation, with address and phone number].
|COST SAVINGS FOR BUSINESS & ATTORNEYS
The evidence is clear, 78% of extensive uses of Impartial Dispute resolution save money.
A recent survey of attorneys specializing in litigation and general council of Fortune 100 companies, conducted by Deloitte & Touche Litigation Services revealed significant court savings when alternative dispute resolution was used.
How effective is ADR?
When asked about the actual cost savings which occurred when ADR was used, 67 percent of all users and 78 percent of extensive users said they saved money (exhibit 17). Savings typically ranged between 11 and 50 percent of the cost of litigation (47 percent of users had savings in this range). A very small percentage (3 percent) of law firm attorneys said ADR was more expensive than litigation. No company counsel reported an increase in costs because of ADR.
Below are excerts from page 14 and exhibit 17 (cost savings through ADR)