What is Mediation?

Mediation is a dispute resolution process facilitated by a neutral third party, known as a mediator. In collaboration with disputing parties, who typically are represented by attorneys, the mediator assists in facilitating dialogue, identifying issues, encouraging understanding, and guiding towards a mutually acceptable resolution. A good mediator has to be a very good listener and must be evaluative. Mediation is a process that prioritizes open communication, flexibility, and collaboration among all parties in developing the resolution of their dispute.

What is Arbitration?

Arbitration is a dispute resolution process where a neutral third party, known as an arbitrator, is chosen to hear the arguments and evidence presented by the disputing parties. Like a court proceeding, the arbitration process takes a structured approach, and the arbitrator makes a decision based on evidence and arguments presented by attorneys.

Key Differences Between Mediation & Arbitration

Voluntariness

Meditation is a voluntary process. Additionally, parties can choose to withdraw at any time during the process. Arbitration can be voluntary, where parties agree to arbitrate a dispute, or it can be mandatory, where a pre-existing agreement or court requires arbitration. Unlike mediation, once arbitration begins, parties have a limited ability to withdraw. The binding nature of this process limits the ability to opt out without consequences.

Formality

Mediation is a highly flexible process. Arbitration is a more formalized process, similar to that of traditional litigation.

Control

In mediation, the disputing parties work in collaboration with the mediator to achieve resolution. In arbitration, the arbitrator controls the flow and structure of the proceedings. Then, the arbitrator makes a final decision based on the arguments and evidence presented by the disputing parties.

Decision-Making Authority & Enforceability

Parties in mediation possess full control over the outcome of the dispute. The mediator facilitates discussions and assists parties in exploring potential solutions. However, the final decision is determined by the disputing parties. In arbitration, the arbitrator has the authority to render a final, binding decision. Once the arbitrator issues a decision, it is legally enforceable.

Similarities Between Mediation & Arbitration

Third Party Neutrality

Mediation involves a neutral third party, a mediator, who facilitates discussion, assists in problem-solving, and helps parties reach a mutually acceptable agreement. Arbitration also involves a neutral third party, an arbitrator, who listens to evidence, evaluates arguments, and renders a decision.

Confidentiality

The content of discussions that occur during mediation sessions is confidential by statute. This includes the parties’ offers, statements, and any materials generated throughout the process. Additionally, mediators are bound by confidentiality. Arbitration proceedings are more formalized, and the rules regarding confidentiality may vary based on the arbitration agreement and applicable laws; however, the process is generally considered private.

Time & Cost Efficiency

Both mediation and arbitration are often viewed as faster and more streamlined processes compared to traditional litigation. Additionally, the associated costs of mediation and arbitration can be much more cost effective than litigation.

Mediation provides parties with a high degree of control over the resolution process and outcome, fostering collaboration and flexibility. On the other hand, arbitration involves a more structured and formal process, with the arbitrator holding decision-making authority. The choice between mediation and arbitration depends on the nature of the dispute, the desired level of control, and the overall goals of the involved parties. A comprehensive understanding of each method allows for an informed decision to be made regarding how to move forward in achieving effective resolution.

To seek counsel from our Alternative Dispute Resolution group, please reach out to request a consultation or call us at 216-696-1422.

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Gender may matter in dispute resolution, but other factors, especially in such an interactive field of behavior, may trump or smooth out or make more complex any gender differences in the pursuit of dispute resolution. In short, gender matters, but context may matter more.[11]

The Literature

This sub-topic is much too large for a detailed presentation, but I will try to mention what I view as some of the more important points. The literature is vast regarding gender differences in negotiation.[12] Surprisingly, the literature is sparse regarding gender differences in mediation, which, of course, is a type of negotiation, but the presence of a neutral substantially alters the model. Indeed, the neutral is part of the context referred to by Ms. Menkel-Meadow, a leading author in this field.

Stated concisely, the literature on negotiation differences is not all that enlightening. It refers to the stereotypes of women being more caring and collaborative while men are more direct and combative. It refers to men being more assertive and tending to try and dominate while women are less assertive and more subtle. And it bolsters the idea that men tend to interrupt more while women are more patient and, frankly, more polite.

Menkel-Meadow’s article does, fortunately, focus on gender differences in alternate dispute resolution. A significant point made by Menkel-Meadow, which she refers to as “context”, is the number of variables at issue in trying to assess gender differences in mediation. What is the nature of the dispute? Is the mediator male or female? Are the parties male or female or a mixture? Are the lawyers male or female or a mixture? If a mixture, is the plaintiff represented by a male or female? The defendant? In a multiple party mediation, do the female lawyers outnumber the male lawyers? Do the female parties outnumber the male parties?

Tamara Relis found that women, as parties in mediation, were more concerned with emotional, as opposed to compensatory, aspects of their cases and were more likely to want defendants to attend the mediation with a hope for direct communication about legal and “extra-legal” aspects of their disputes.[13]

The studies as to female mediators versus male mediators are even more rare than those already referred to. Relis found that female plaintiffs were more likely to be overpowered by a male mediator than were male plaintiffs, and she acknowledges that gender differences are still part of the experience.[14]

Reflections

Some words about my own experience. An obvious, but important, point is that generalizations are dangerous. Thus, I will avoid them, as the following observations are specific to mediations where I was either the mediator (a substantial majority) or counsel for one of the parties.

A good number of the cases in which I have served as a mediator involved construction disputes over expensive homes. All the mediations, except one, were attended by husbands and wives, as plaintiffs. Without question, the wives (most of them were working outside the home) had stronger feelings, perhaps grounded in emotion, than the husbands. Without question, they were tougher negotiators. While they started out as less direct, conforming to one of the stereotypes, they certainly did not remain that way as the mediations progressed. In those mediations, all parties were represented by male attorneys. Had there been some female attorneys (see below), I tend to think that the process would have been somewhat different, but I’m not sure the outcome would have changed.

I have also mediated several cases with husband-and-wife teams as defendants. In those, I found the female part of the team to be somewhat happy, as best I could tell, to let their male counterparts and their counsel do most of the talking.

As to female counsel, I have seen no discernible differences between them and their male counterparts.

As an advocate, I have represented parties where the mediator was female, although the sample size is small. The female mediators were slightly calmer than their male colleagues and more nuanced.

This blog post is part of David Schaefer’s peer-reviewed article, “Some Thoughts About Mediation,” published in the Litigation Counsel of America’s Litigation Commentary & Review. For more information or assistance regarding alternative dispute resolution, please reach out to request a consultation, call us at 216-696-1422, or visit David’s bio for his contact information to reach out to him directly.

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[11] Carrie Menkel-Meadow, Women in Dispute Resolution: Parties, Lawyers and Dispute Resolvers, What Difference Does “’Gender’” Make? 18 No. 3 Disp. Resol. Mag. 4 (Spring, 2012)

[12] See e.g., F. Peter Phillips, Gender and Negotiation: An Interesting Study of a Perennial Topic

[13] Tamara Relis, Perceptions in Litigation and Mediation: Lawyers, Defendants, Plaintiffs and Gendered Parties (2009).

[14] Id. at 220-225

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The ultimate goal, of course, of a mediation is to resolve the dispute at the mediation. When this does not occur, most litigators and their clients will say that the mediation “failed”. To view mediation in this fashion is to, at least sometimes, elevate form over substance.

Setting the Table

Some mediations do not settle on the day of the mediation, but the “table is set” for a settlement, either by the judge in an upcoming settlement conference or by the mediator through subsequent negotiations. This has occurred in many of my mediations, and without the mediation itself, a settlement would not have been reached. Thus, it is not accurate to say that the mediation “failed”.

Hunt for Information

Even a mediation that “only” sets the table for settlement, typically results in the exchange of information previously unknown to counsel and the parties. While this is sometimes characterized as “free discovery”, such characterization is not accurate because the clients are paying their counsel, the mediator, and spending their own time at the mediation. Nevertheless, information received at a mediation is typically less expensive than that obtained through the discovery process. This is another example of the mediation not being a failure.

“Lack of Authority”

The reason the heading is in quotes is because, as a mediator, one never knows if there actually is a lack of authority or whether that is an excuse for not wanting to continue the mediation. If it is sincere, then a phone call to a supervisor or a chief financial officer can be made. Often, such phone calls are successful in allowing the mediation to continue and move toward settlement. Before the advent of cell phones, another statement frequently heard was, “I can’t reach anyone with more authority.” On rare occasions, that is still true, but I am usually skeptical when told that such a person cannot be reached.

Seeking Victory

It would seem obvious that no party “wins” a mediation. Nevertheless, some parties and their counsel come to a mediation with the goal of “winning”, which apparently is measured by the amount saved from what the defendant is actually willing to pay or the amount increased over what the plaintiff was willing to accept. Another type of “win” for the defense is to spend most of the time dwelling in the weeds about the merits without making any serious monetary offer. From the mediator’s standpoint, this is extremely frustrating, and when I encounter this, I wonder why the defendant agreed to mediation. The converse can be, but in my experience is less often, true. That is to say that plaintiff may also get lost in the weeds without making even a semi-serious demand until near the end of the day.

Let’s Blame the Mediator

If a mediator lacks the characteristics referred to previously, supra pp. 1-3, and/or lacks knowledge of impasse breaking techniques or both, the mediation may fail. Astute counsel, however, even when faced with such a mediator, can prevent the mediation from failing by being aggressive with their offers and counter-offers and making suggestions to, or even instructing, the mediator how to proceed. In the latter situation, the mediator actually becomes a facilitator simply carrying messages from room to room and occasionally offering an observation of her/his own.

It Does Happen

In my experience, some mediations are truly failures. Invariably, it is because one side (or in a multiple party mediation, several sides) came to the mediation with virtually no intention of resolving the case. They view the mediation as a “hoop” to jump through on their way to summary judgment, trial, or settlement on the eve of trial. This type of defendant perceives the eve of trial to be the point at which it will have to pay the least amount or, for a plaintiff, the highest amount it can obtain with neither side truly taking into account the amount of time and money spent to get to that point. I can’t speak for other mediators, but I find this type of attitude very frustrating. Several years ago, I actually had an attorney tell me, about two hours into the mediation, that his client had no intention of settling and simply agreed to mediate to obtain “inexpensive discovery”. Nevertheless, he continued the mediation process for approximately an additional two hours before he was willing to adjourn.

Another reason mediations fail is because of unrealistic expectations. Relatively recently, I mediated a case on two separate occasions. At the end of the second mediation, the parties agreed to consider a mediator’s number. The defense accepted the mediator’s number, which was rejected by plaintiff. The case went to trial, and the jury awarded $25,000 less than my mediator’s number. Thus, I wasn’t the only one who viewed plaintiff’s expectations as unrealistic.

This blog post is part of David Schaefer’s peer-reviewed article, “Some Thoughts About Mediation,” published in the Litigation Counsel of America’s Litigation Commentary & Review. For more information or assistance regarding alternative dispute resolution, please reach out to request a consultation, call us at 216-696-1422, or visit David’s bio for his contact information to reach out to him directly.

The post Some Thoughts About Mediation: Part 5 appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Mediators must be able to apply different techniques when the parties are at impasse or near an impasse arising out of traditional (ping pong style) negotiations. If your mediator doesn’t suggest these, you should.

Brackets – The Range of Resolution

When I first started serving as a mediator years ago, I did not like using brackets because the parties and their counsel immediately focused on the mid-point of the proposed bracket, which, in part, defeats the purpose of using them. The real purpose of brackets is to inform the other party of the range within which you are willing to negotiate.

Bracketing is a type of high-low bargaining. In a recent mediation, where plaintiff originally demanded $2 million and defendant originally offered $100,000, the negotiations stalled after three rounds. Plaintiff then proposed a bracket with the high number of $1.7 million and a low number of $600,000. Defendant countered with a bracket of a high number of $600,000 and a low number of $300,000. The parties then returned to single number demands and offers, and the case was settled. Brackets accelerated the timing of the settlement. In more recent years, I have found brackets to be useful tool to speed up the negotiations, particularly when the parties or their counsel are becoming impatient.

A simple variation of this approach is when one or both parties ask the mediator to propose a bracket. Not surprisingly, this is referred to as a “mediator’s bracket.” In making such a proposal, the mediator should be guided primarily by the prior negotiations.

Mediator’s Number/Mediator’s Proposal – After All, You Picked Her/Him

This is usually used when traditional negotiations and/or brackets do not resolve the impasse. If this technique is used at the mediation, I usually propose only a settlement amount and refer to it as a “mediator’s number”. If it is used after the mediation, usually the next day, I communicate my proposed settlement amount and other terms by email and refer to it as a “mediator’s proposal.”[8]

In either situation, the mediator proposes a single number to resolve the case. The responses are kept confidential. If both sides accept the proposal, then the mediator informs both sides that there is a settlement. If one side accepts the proposal, and the other side rejects the proposal, the party that rejects is not told that the other party accepted. The party that accepted is told that the other party rejected, and both sides are told that no settlement has been reached. If both sides reject, the mediator simply tells both sides that no settlement has been reached.

Private Numbers[9] – I’ve Got a Secret

With this technique, both sides provide the mediator with their near final numbers. The mediator keeps them confidential and decides if the parties are within striking distance. If they are, the parties are told that they are within striking distance, and then typically the parties return to traditional ping pong negotiations.

If the parties are not within striking distance, then they are told that this is the case and that there are now several options. The one that is chosen is often a function of the length of time spent at the mediation. The most common one is a mediator’s proposal made the next day by email. The parties can also return to traditional negotiations; they can try a mediator’s number or they can adjourn for the day and let the negotiations “rest” to be continued another time either by phone or a second mediation session.

In this approach, the mediator usually determines what constitutes “striking distance”. A variation of this approach is to have the parties agree on what constitutes striking distance. The advantage here is that the parties have more control over the process. The disadvantage is that it removes the element of the mediator’s judgment, which is somewhat counter-intuitive because the parties picked the mediator to guide the process.

Mediation/Arbitration – ADR’s Split Personality

While there are too many forms of med/arb to cover in this article, this approach typically involves arbitration after mediation has not resulted in a settlement of the case. The arbitration sometimes is a full-blown traditional arbitration hearing that leads to an adjudicated decision by the arbitrator who can be, and often is, the same person who served as the mediator. Using the same person for both causes concern because the parties and their counsel worry that facts disclosed during the mediation, but not admitted into evidence during the arbitration, will be used by the arbitrator to decide the case. I suggest to you that this concern is overblown and can be solved simply by waiting 60 days to have the arbitration hearing after the mediation has been completed. By that time, most mediator/arbitrators will have forgotten what they have been told in the mediation and will not review their mediation file prior to or during the arbitration.

Arbitration/Mediation – Split Personality Revisited

This approach reverses the sequence of the previous one. After an arbitration hearing, the arbitrator prepares an award but does not disclose it to the parties. The parties then mediate their dispute, and if the mediation results in a settlement, the matter is concluded with an executed settlement agreement. If the mediation does not result in a settlement, the award is disclosed and is binding. This process provides more information to the mediator and the parties going into the mediation and obviously avoids the issue of the mediator using information learned in the mediation when deciding the arbitration. The primary disadvantage to this process is cost.

Arbitration/Mediation/Arbitration – Are You Kidding

This approach begins as an arbitration, and either at a break between hearing days or simply because of the arbitrator’s intuition, a mediation is conducted.[10] If the mediation does not result in a settlement, the arbitration is reconvened so that the hearing can be completed, and an award can be issued. If the mediation results in a settlement, the matter is concluded with an executed settlement agreement.

This blog post is part of David Schaefer’s peer-reviewed article, “Some Thoughts About Mediation,” published in the Litigation Counsel of America’s Litigation Commentary & Review. For more information or assistance regarding alternative dispute resolution, please reach out to request a consultation, call us at 216-696-1422, or visit David’s bio for his contact information to reach out to him directly.

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[8] A variation of this is sometimes referred to as “online mediation” in which both sides (rather than the mediator) submit confidential settlement offers. If the offers fall within a certain range, the case is settled half-way between them. See New Trends in Mediation, Texas Trial Handbook §5:12 (3d ed.)

[9] These techniques (brackets, mediator’s number/proposal, private numbers) are considered hypotheticals. If they don’t result in a settlement, it is as if they never occurred.

[10] Similar to judicially conducted settlement discussions during trial.

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The Act will have wide-standing implications in the field of employment litigation.

The Act amends the Federal Arbitration Act (the “FAA”), Title 9 of the United States Code, with respect to the arbitration of disputes involving sexual assault and sexual harassment. A sexual assault dispute is broadly defined as a dispute involving a nonconsensual sexual act or sexual contact, including when the victim lacks capacity to consent. Likewise, a sexual harassment dispute is broadly defined as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law.

In general, the Act states that, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no pre-dispute arbitration agreement or pre-dispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under federal, tribal, or state law and relates to the sexual assault dispute or the sexual harassment dispute.

Of course, pre-dispute arbitration agreements are frequently found in employment agreements and such arbitration agreements typically require arbitration of employment-based claims involving quid pro quo sexual harassment, hostile work environment based on sex, and retaliation claims based on reporting sexual harassment and participating in investigations of sexual harassment. Those types of employment-based claims would now fall within the Acts prohibition of forced arbitration of sexual assault and sexual harassment claims in the workplace.

The determination of whether the Act applies with respect to a dispute shall be determined under Federal law by a federal or state court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. Further, under the FAA, states are prohibited from passing or enforcing laws which are inconsistent with the FAA.

Update on Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – March 4, 2022

On March 3, President Biden officially signed H.R.4445. The law went into effect immediately upon signing, effectively voiding any mandatory arbitration clauses in Employment Agreements when it comes to claims of sexual harassment or assault in the workplace. Employers are strongly advised to consult with legal counsel for full review and revision of existing employment agreements and should immediately negotiate the conclusion of any active or in progress arbitrations in these matters.

For more information or assistance, please reach out to request a consultation or give us a call at 216-696-1422.

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