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Mediation – What It Is and What It Is Not

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The next logical topic to cover after negotiation is mediation. After all, mediation can be thought of as a negotiation with a referee. Folberg says that mediation

“is a process of assisted negotiation in which a neutral person helps people reach agreement.” (Folberg p. 223)
 and Dauer says that mediation is a
“special form of negotiation.” (Dauer, 8-33)
Completing the trifecta, Nutshell says that mediation
 “is an extension of the negotiation process,” and that it is a “short-term, structured, task-oriented, participatory intervention process.” (Nutshell p. 60, 62)
Like we said – negotiation with a referee.

Thinking of mediation in this way is also helpful in understanding one of the most important features of mediation – it is not binding. Just as might occur with negotiation, parties may enter into mediation and yet not arrive at a mutually agreeable result. When we move to our study of arbitration we will learn that in arbitration, parties are given a decision by the arbitrator. That decision, just like a judgment rendered in court, is binding on the parties. Further, in arbitration, a decision will be rendered, barring extraordinary circumstances, just like in court. With mediation, however, there is no decision handed down and no order issued. Instead, the mediator can only try to help the parties arrive at their own decision to agree, and then help them draw up a binding contract to that effect. The mediator herself cannot force any result or bind the parties in any way.

EXAMPLE (1): Frank N. Bines, a local butcher, is suing one of his supplies for selling him bad meat. The case goes to court and is heard by a judge. Although the judge’s decision may be appealed by the losing party, a decision will nonetheless be handed down.

EXAMPLE (2): Ray Gume is a regional produce supplier who has his customers (primarily large supermarkets) sign order contracts which include a clause requiring that all claims under the contract be arbitrated. When one of his customers fails to pay the bill for a period of several months, Ray initiates arbitration proceedings. We will discuss how this works in later chapters, but for now suffice it to say that the arbitrator will make a decision about what damages are due to whom, and that decision is binding on Ray and his customer.

EXAMPLE (3): Karl O’Santana is a luthier who specializes in making custom guitars for high-profile musicians. Fred G. Retch, a famous guitarist, placed an order with Karl 8 months ago for a particularly ornate piece. Now that the guitar is done, Fred decides he doesn’t really want it and is going switch to the kazoo. Because Karl’s reputation is his livelihood, rather than seek some formal resolution he tries negotiating with Fred, offering the guitar at a lower price and also offering, for no extra charge, to build the world’s finest kazoo using only Brazilian Rosewood, mother-of-pearl, and real gold flake. Karl’s negotiations might or might not lead to an acceptable resolution for the parties and does not commit either party in any way (except insofar that the contract rules of offer and acceptance, etc. apply). That said, Karl has always had an excellent relationship with Fred and is confident that they can work this out between themselves.

EXAMPLE (4): Karl has another client, Whine Ona, who is not quite as easy-going as Fred. Whine is also trying to go back on her promise to purchase a custom-ordered guitar. Karl has never done business with Whine before but has heard horror stories about others whose paths she has crossed. Still not wanting the publicity   surrounding even the most mundane celebrity trials, Karl suggests to Whine that they hire a mediator to help them work out their differences. “It’s kind of like marriage counseling for business,” says Karl, in an attempt to explain his proposal to Whine. “If we don’t like what she suggests, and we can’t come to an understanding with her help, we’re not really any worse off than we are right now. Isn’t it worth a few bucks and a few hours to give this a shot?”

Karl’s description of mediation is not so far afield as one might think. Admittedly, mediation is starting to become somewhat more formalized, and 

“[i]n many jurisdictions mediation programs are being grafted onto the judicial department, by statute or by rule of court.” -Dauer 8-32.

However, by and large, mediation remains a loose and flexible problem-solving mechanism. Some mediators, just like some marriage counselors, will take a more active approach in assisting the parties before them, subject always to the parties’ approval of such a role.

Because of the informal nature of mediation, we cannot easily precisely delineate the mediator’s role. There is no universally accepted rulebook by which the mediator must play. There are, however, some general rules of thumb which apply in most mediation settings. In addition, the American Arbitration Association has promulgated its own “Mediation Procedures” which many, but not all, mediators use as a guideline.


Assist parties in developing an approach to solving the problem

Dictate to parties how the mediation will proceed without their authorization

Help keep discussions on point and focused
Cut parties off simply because the mediator has heard enough
Help the parties understand each other better
Speak on behalf of either side or introduce new points into the negotiation in favor of either party
Make sure the parties consider the probable results and costs of litigation, and encourage reaching agreement through mediation
Force the parties to come to an agreement or prevent a party from excluding him/herself from the mediation process
Encourage solutions-seeking in ways which might not have been considered earlier in the process
Limit the realm of solutions available to the parties
Help parties draft a valid negotiation agreement if an agreement is reached, and possibly help the parties implement their agreement

Enforce the agreement or police the parties following mediation to ensure strict compliance with the agreement

Consider the information above and what it means for parties who are compelled by law to enter into mediation before seeking further remedies. Unlike mandatory arbitration, where a result is inevitable, parties to mandatory mediation cannot be compelled by the mediator to reach an agreement, and the mediator has relatively little power over the parties themselves. Thus, even as mandatory mediation becomes more prominent, we can only hope that this results in more negotiated settlements (via mediation). However, that outcome is by no means guaranteed.

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