What is Mediation, and Why Does it Work?

By: Stephen T. Helmer

In recent years, I have developed a busy practice as a mediator, while also continuing to pursue my very active litigation practice.  What is mediation?  It is a voluntary settlement conference, in which the parties to a dispute try to negotiate an agreement resolving their differences, with the assistance of a neutral third-party facilitator, called the mediator.

Like arbitration, mediation is a form of “alternative dispute resolution” – meaning that it is an alternative to litigation in court.  But mediation and arbitration are very different.  Arbitration is like litigation, but in a private setting rather than an official government courtroom – and with a private arbitrator paid by the parties who is basically both judge and jury, with the power to issue a binding decision in favor of one side and against the other.   A mediator, unlike an arbitrator, has no authority to issue a binding ruling in a case; a mediator simply tries to help the parties reach a voluntary settlement agreement.  In a mediation, if the parties cannot reach an agreement that is acceptable to both sides, they are free to walk away, and to litigate against each other in court.

So if a mediator has no real power to decide a case, does mediation actually work?  My experience is that it does.  In fact, with a skilled mediator, mediation produces a settlement agreement more often than not.  And even when mediation fails to produce an immediate settlement, it often lays the groundwork for a later agreement.

Why is mediation effective?  For one thing, people tend to listen to a mediator.  This is partly because a mediator is neutral and impartial; a mediator does not represent one side or the other, and a mediator is typically paid jointly by both parties.  Unsurprisingly, parties are more receptive to hearing about their case from a neutral mediator than from their opponent or their opponent’s lawyer.  People also tend to listen to mediators because most mediators are seasoned litigators or retired judges, who can draw on years of experience in the “trenches” of litigation when advising parties about the merits of their case.

In addition, mediation provides a way for parties to engage in settlement negotiations without having to talk directly to each other.  A skilled mediator will often separate the parties, positioning them in different rooms while the mediator takes turns talking with first one side and then the other.  This can keep negotiations moving while avoiding the kind of acrimony that often results when opposing parties talk (or shout…) directly to each other about their case.

Mediation also works because it is confidential.  The parties typically agree in advance that anything said in a mediation cannot be used outside of the mediation – especially that nothing said in mediation can be used later in court, if the mediation fails to yield a settlement.   And during the mediation, each party can choose what to tell – and not to tell – the mediator, and what to authorize the mediator to tell the other side.

I have served as mediator in numerous cases involving subjects including commercial contracts, shareholder disputes, trust and estate matters, personal injury, civil rights violations, medical malpractice, and insurance coverage.  I also have frequently served as a lawyer representing parties participating in mediation.  In my experience, mediation is often the best and most cost-effective way to resolve a difficult case, either before litigation begins or in the early stages of litigation before a case proceeds all the way to trial.  I encourage our clients and friends to consider mediation the next time they face the prospect of long and costly litigation.