Discourage litigation. Persuade your neighbors to compromise wherever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.
— Abraham Lincoln
Basically, mediation is a structured negotiation process in which the parties are aided by a neutral facilitator (the mediator). In the North Carolina and federal court systems, mediation is required in almost every type of case before the parties are permitted to proceed to trial. The mediator’s role is to assist the parties in their negotiations by engaging with them in an analysis of the strengths and weaknesses both of their case and of their opponent’s, examining the risks of proceeding to trial and discussing other factors that may favor settlement, such as the litigation expense, business costs, lost time from work, possible unfavorable publicity, stress, the certainty that results from settlement, the satisfaction of putting a prompt end to a dispute, and the relative control over the outcome that mediation offers, among other factors. The mediator does not make any decisions for the parties; if the case settles, it will be because the parties have decided that it is in their respective interests to settle, and if they elect not to reach a settlement, they retain their right to go to trial.
Mediation offers other advantages over trial. The parties are at liberty to fashion a solution to their problem that may result in relief that a court could not order; they can be creative in crafting a solution that fits their needs. Mediation also offers privacy of negotiation and the possibility of confidentiality, if agreed to by the parties. If the parties anticipate an ongoing relationship, as in many business disputes, mediation is clearly preferable to litigation. In mediation, the parties are in control of the outcome, rather than yielding control to a judge and a jury, who are strangers to the case.
Mediation need not await the filing of a lawsuit. Often the parties to a dispute decide that before they spend substantial time and money by initiating litigation, they will attempt to resolve it by pre-litigation mediation. The savings to the parties are significant if the case is resolved; however, the parties and their attorneys need to feel reasonably confident that they know enough about their case and that of their opponent to make negotiations meaningful.
Who Must Attend the Mediation?
The mediation rules require that all individual parties, and a representative from each corporate party, must attend the mediated settlement conference and remain until its conclusion. A corporate representative must have authority to enter into a resolution of the case or to negotiate and communicate promptly with someone having settlement authority. If any final, binding settlement must by law be approved by a governmental council, commission, or board, then a representative of the governmental entity must attend and have the ability to negotiate a resolution that the representative will recommend to the governing body. In addition, a representative of any liability insurer must attend and have authority to make a decision or to negotiate and communicate promptly with a person having settlement authority. At least one attorney for each represented party must also attend.
In addition to parties and insurers, lienholders must be given the opportunity to attend the mediated settlement conference, and a party or attorney who has received notice of a lien or other claim upon proceeds must notify the lien claimant of the conference and request its attendance or to make a representative available for communication during the conference.
Any person required to attend the mediation must be physically present and must remain until either an agreement is reduced to writing or an impasse has been declared. The attendance requirement may be modified or excused only by agreement of all parties and the mediator, or by court order. The mediator does not have authority to waive in-person attendance without agreement of all parties.
Mediated settlement conferences are not public proceedings, and no non-party (other than an insurer or lien claimant as described above) may attend without permission from the parties and the mediator.
The Mediation Process
To be a good mediator you need more than anything patience, common sense, an appropriate manner, and goodwill. You must make yourself liked by both parties, and gain credibility in their minds. To do that, begin by explaining that you are unhappy about the bother, the trouble, and the expense that their litigation is causing them. After that, listen patiently to all their complaints. They will not be short, particularly the first time around.
— Prior of St. Pierre, The Charitable Arbitrator (1666)
One of the key advantages of mediation is the flexibility of its process. Therefore the order described below may be varied by the parties, or by the mediator in his or her judgment.
Before the mediated settlement conference, the mediator may wish to discuss the case with one or both counsel, either jointly or separately. It is not improper for a mediator to discuss the case privately with a party’s attorney (or with an unrepresented party), but the fact that such communication has occurred must be disclosed to all parties. In addition, a mediator may encourage the submission of a private, confidential pre-mediation position statement prior to the mediation.
At the mediated settlement conference itself, the process is usually as follows:
The conference begins with all participants present together in a conference room. The mediator briefly describes the process that will be followed and the rules applicable to the conference and offers the parties the option to agree to the confidentiality of their negotiations. The mediator will remind the parties that regardless of their decision about confidentiality of the negotiations, nothing that is said in the mediation will be admissible as evidence, and that the mediator is bound by confidentiality and may not disclose anything said during the conference to a non-participant.
The participants may then make opening statements (usually by the attorneys), which are typically (but not always) brief summaries of the facts and of their position.
The mediator then generally adjourns the joint session and begins meeting with each party privately, listening to that party’s concerns and taking proposals for settlement from one party to the other, seeking to narrow the points of disagreement until either settlement is reached or it becomes clear than an impasse must be declared. The mediator may request additional joint sessions during the conference as appropriate to facilitate resolution. The mediator may also adjourn the conference and reconvene it on another day, if conducive to eventual resolution.
Any partial or global settlement will be reduced to a written Memorandum of Settlement, which must contain the essential terms of the agreement and be signed by the parties. The memorandum is a binding resolution of the case and can be enforced by the court if necessary.
After the mediated settlement conference, the mediator must file with the court a brief report stating that the conference was held as required, the names of the parties in attendance, whether the case settled or resulted in an impasse, and whether the parties paid their shares of the mediator’s fee. The mediation report does not reveal the terms of the settlement or, if the case did not settle, express any opinion as to why it did not settle.