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Mediation is a voluntary process for resolving disputes by reaching a mutually agreeable settlement. A good deal of mediation takes place outside of the legal system, without the involvement of lawyers. This overview is limited to disputes in which the parties have lawyers, and which are headed to, or already in, litigation or arbitration.

Unlike litigation and arbitration, in mediation there is no decision maker (judge, jury or arbitrator) who determines which side wins and which side loses. In mediation, either the parties reach agreement and the case is settled, or they don’t and the litigation or arbitration goes forward.

Most lawsuits are settled without a trial, and often those settlements are reached between the parties and their lawyers without the assistance of a mediator. Mediation can be useful when, with the assistance of an experienced attorney serving as a mediator, both sides are helped to fully appreciate the risk and expense of litigation or arbitration.

The parties to a dispute can agree to mediation at any time—from before a lawsuit is filed up to the trial or the arbitration hearing. The later in the process that mediation takes place, the more the parties will have learned about the strengths and weaknesses of each other’s case. But, the more they will have spent on legal fees and associated costs.

The mediator is usually selected by the agreement of the parties (except in those situations when the court selects a judge to serve as a mediator). The courts and private mediation services have lists of lawyers who have been pre-approved to serve as mediators, but the parties can usually use any mediator they find mutually acceptable. The fees charged by the mediator may be at his or her usual hourly rate, or may be capped if the mediation is overseen by a private mediation service.

Once the mediator has been selected and a mediation date scheduled, the lawyers will usually send the mediator a letter explaining the nature of the dispute and the parties’ respective positions.

The mediation session is usually held at the mediator’s office or the office of one of the lawyers. Depending on the mediator's approach, the parties might all be in the same room for part or even all of the mediation session. More frequently, the mediator will have the parties in separate rooms, with the mediator visiting one room and then the other, as negotiations progress.

Whatever is said at mediation by the lawyers or their clients is confidential, and cannot be used later in the case if it does not settle. The mediator cannot later be called as a witness if the case does not settle.

A unique kind mediation is the pre-trial settlement conference. Some courts require the parties to attend these conferences, at which a judge serves as the mediator. Other than the location of the mediation, i.e., the courthouse, the process is similar to mediation with a private mediator, but there are no mediation fees.

The primary factors driving the parties’ settlement positions at mediation are:

  • Their estimation as to the likely outcome if the case is not settled and goes to trial or arbitration.
  • Their ability to continue financing the case through trial or arbitration.
  • How much they desire to be done with the anxiety and distraction of ongoing litigation.

Given that almost all cases eventually settle, it’s fair to say that as the financial cost and emotional toll of litigation wears on, many people who initially thought they would never “give in” later come to see the benefits of settling a case over taking the risks and bearing the expense of litigation or arbitration, let alone a possible appeal.

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