What is mediation?
Mediation is much different than arbitration. Mediation is a process by which the parties choose a trained neutral to facilitate settlement negotiations between the parties. A mediator can be an attorney or a retired judge with experience in the particular area of law. Normally, the parties are placed into separate rooms and the mediator floats between the parties as he or she conducts separate “caucuses” to try and understand the dispute and find a resolution acceptable to both sides.
There is no such thing as “binding” or “non-binding” mediation. This means mediation is generally a voluntary process. If the mediation is unsuccessful, the parties continue to litigate. Sometimes a contract may require a party to first mediate his or her dispute before filing a lawsuit, which is common in standard real estate purchase contracts.
Our firm believes that mediation is a useful tool when the parties reach a point where the old-fashioned way of settling a matter (i.e., letter writing or verbal discussions between counsel) breaks down and the parties are unable or unwilling to move any further. At that point, it sometimes makes good business sense to have a trained mediator try and bring the parties closer together to reach some sort of a resolution. Normally, the parties split the cost of a mediator.