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What are the mediation processes?
Mediation as a stand-alone process provides the greatest party participation and control. Yet, even then, there are a variety of approaches to consider. Individual mediators often have their personal preference or common practice. Since a particular dispute or personalities of the parties may be better suited to one of the approaches over another, matching the mediator’s style (or making sure he or she is adaptable) is important.
Facilitative or “pure” mediation focuses on assisting parties to negotiate by restoring communication and helping to create options for resolution to help the parties arrive at a settlement.
Evaluative mediation also allows the parties to test the reality of their respective predictions of the strengths and weaknesses of the case by having the mediator include in his or her efforts an independent, third party evaluation.
Combination processes, as the name infers, applies a blend of the facilitative and evaluative approaches.
One combination process that is gaining popularity in the business market is the mini-trial. Despite its name, a mini-trial is not a trial. Instead, it’s a highly structured, formalized and evaluative mediation process. Rather than presenting the case to a judge or jury to make a decision, however, the case is presented to representatives of each side who are authorized to reach a settlement - based on the evidence presented.
Since it is non-binding, it is still fundamentally mediation in nature - yet a great deal of control is surrendered by the parties to their selective representatives. The process is often used by disputing corporations who, for business reasons, are frustrated by the legal process and want to take the dispute out of the hands of their attorneys, yet they don’t want to be completely exposed to a third party decision maker.
Because the process is private, the parties usually negotiate procedures for conducting the mini-trial prior to its initiation. Thus, the procedure is intended to serve as a means for the parties to exchange information necessary to developing a business-oriented settlement. It allows opportunities for advocacy while nevertheless narrowing the dispute and eliminating the legalistic and collateral issues that arise in litigation.
Since the mini-trial requires the participation of non-legal party representatives with settlement authority, it is preferred (and more effective) that the representatives be the CEOs or senior decision-makers from each side. They also should not have been overly involved in the case personally in order to increase their objectivity. The representatives typically will sit as a panel - either alone or with a selected neutral who gives guidance and administers the process. When individuals rather than businesses are involved, the parties can designate a respected friend, relative or maybe an attorney who has not worked on the case to serve as the representative.
Med-Arb (short for mediation-arbitration)
This process combines negotiation, mediation and arbitration in a progressive sequence. It starts with facilitated negotiations via a neutral mediator to encourage the parties to achieve an agreed solution. However, if they do not do so, the mediator becomes an arbitrator and renders an enforceable decision following the mediation process on all issues where the parties failed to reach agreement. This is often a popular process as it assures the parties there will be a resolution to their dispute.
Separate or Integrated
The med-arb process can be “separate” or “integrated.” In the “separate” process, the parties agree that they will attempt to achieve a mediated settlement before the mediator “switches hats” to decide any unresolved issues. In the “integrated” process, the neutral attempts to facilitate negotiations, but makes binding decisions on stalemated issues along the way, so that negotiations on other issues can continue. This form of med-arb is useful in cases where resolution of the dispute depends on the parties reaching agreement on a host of smaller issues. The neutral serves to keep the negotiation “on track”. By deciding smaller issues, the neutral prevents “groundings” along the way from derailing the entire negotiation.
Although med-arb has the advantage of being efficient, it may also affect the level of candor in the mediation itself. To offset this effect, the parties may agree prior to mediation that if agreement is not reached an arbitrator different from the mediator will be employed (known as “med-arb/dif” or med-arb/opt out - indicating either party has the power to demand a different neutral for the arbitration) as opposed to “med-arb/same” or “standard” med-arb.
Unfortunately, med-arb opt out can be time consuming and expensive. Even if they choose the potential arbitrator in advance, the parties may have to educate him or her on the case in an arbitration hearing. To avoid this problem, parties may retain the second neutral - the arbitrator - to attend the joint session of the mediation (but not to participate in private sessions or efforts to facilitate mediation). If the case does not settle, the arbitrator has been at least partly educated. The parties may want to schedule a brief arbitrating hearing to supplement their earlier presentations, offer witness testimony and allow additional questions by the arbitrator. Even where a different arbitrator is to be used, however, the mediator may help the parties get issues off the table and prepare them to present their cases in as concise a manner as possible.
Final Offer Med-Arb
Another variant of standard med-arb when using one neutral is “final offer med-arb”. This process is chosen when the parties want to employ and educate only one neutral to both conduct a mediation process and give a binding decision if an agreement is not reached. Following the mediation portion of the process, the parties make final offers of settlement. Because the neutral will have had expansive conversations in confidence during the mediation phase, discretion of the neutral is limited to the final offer or the final demand given. The neutral then chooses one or the other, and nothing in between, as the final settlement of the case. Thus borrowing from baseball arbitration (discussed in arbitration processes), the parties maximize their control over the final settlement figure.
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