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The Mediation Process

Unlike arbitration, mediation is not similar to a trial. In voluntary mediation, there is no “decision,” judgment, or verdict rendered. Rather, the neutral mediator acts as a go-between and does not take sides or advocate the cause or defense of any party. The setting is more often informal than not, and the parties may or may not be represented by attorneys (usually, court-ordered mediations are handled by the attorneys representing the parties). Often, the mediation hearing takes place in a conference room at a local hotel, court building, or state bar association.

The mediation hearing itself differs substantially from a trial, in that there is generally no formal presentation of evidence, and generally no witness testimony. Rather, each party summarizes its position in written papers filed with the mediator(s) prior to the mediation. In the written summary, each party describes the evidence it intends to produce at trial, if mediation is unsuccessful. The mediation papers may include photographs, affidavits from witnesses who will appear at trial, formal opinions or reports from experts, etc. There is a summarized statement of the issues and the respective positions of the parties, as well as factual/legal arguments identifying the strengths and weaknesses of the opposing position(s). The mediator(s) will review the premediation documents in order to become familiar with the issues and arguments, and thus be able to facilitate settlement. It is important that mediations are kept confidential, either by express agreement or by law, so as not to affect trial of the matter if mediation is unsuccessful.

Most often, there is a single, neutral mediator who facilitates and encourages open discussion and negotiation between the parties. However, in court ordered mediation, a panel of mediators may be selected. In many states that utilize mediation panels, the preferred number of mediators is three, one of whom is neutral in role and the other two serve as advocates for the causes of the opposing parties. In such cases, the mediators, after listening to both or all sides of the dispute, render a mediation recommendation (which sometimes is referred to as a mediation “award” or a mediation “decision,” but in fact is not binding). The parties will have a set number of days to accept or reject the recommendation of the mediation panel.

In many states that have court-ordered mediation, there are consequences for rejecting mediation recommendations, and/or for failure to negotiate in good faith. For example, if a party rejects a mediator’s recommended “award” of a certain dollar amount to settle the case, and instead goes on to trial, that party must succeed at trial and/or improve his/her position with a substantially better verdict than that recommended in mediation. In other words, the rejection of a mediation settlement offer must be premised on a good faith belief that the party has a reasonable chance of substantially improving its position at trial. If the party fails to do better at trial, a monetary penalty for rejecting the recommended mediation amount may be imposed. The justification for this rule is that by rejecting mediation, the rejecting party has caused the other party to sustain the cost of trial even though the rejecting party has not ultimately obtained a better result at trial. It follows that the rejecting party should bear the cost of this.

Inside The Mediation Process