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Chapter 9
Jurisdiction | United States |
What Is Mediation?
Mediation is a form of alternative dispute resolution (ADR), meaning that it is an alternative to both the trial court option as well as arbitration. Some trial courts and some ADR entities require that mediation be undertaken as a first step to litigation or arbitration. They do so because mediation can proceed quickly and at lower cost.
Mediation differs from arbitration in important ways. As it is often said, "The goal in mediation is to persuade rather than defeat." A mediator helps the parties fashion their own agreed-upon solution and does not render a decision or award unless the parties have requested such a result. A primary benefit of mediation is that it preserves relationships.
In arbitration, the parties turn over the power to end the dispute to a third party—the arbitrator. In mediation, the parties retain the power to end the dispute, but they bring in a third party to provide a detached view of the situation and to help them develop a solution that they both can live with.
Because mediation is more informal than arbitration and is less costly than litigation and arbitration, it is a process that can preserve confidentiality, and once concluded it usually results in a signed settlement agreement. If a party breaches the settlement agreement, a party can arbitrate or litigate that breach.
The Mediation Process
Mediation is an assisted negotiation. The mediator is neutral but has no authoritative decision-making power. The role of the mediator varies. A mediator normally facilitates communication between the parties, provides each party a neutral assessment of their case (if appropriate), and helps generate options for settlement. The goal of the mediator and the mediation process is to help the parties themselves reach a mutually acceptable resolution of the dispute.
Mediation is particularly useful when the parties have a history of working together and hope to continue that despite the current dispute. Mediators place a high value on preserving relationships.
Mediation may take place in what is called a Med-Arb. In such cases a contractual clause will require the parties to first mediate and then, if that fails, arbitrate their dispute. Of course, the parties may agree to mediate selected issues and arbitrate others, or negotiate ultimate outcomes.
The following is an example of a pre-dispute clause from AAA establishing a Med-Arb: "If parties to this agreement have any kind of dispute...
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