In our two installments, we looked at the drawbacks to utilizing litigation and arbitration to resolve disputes. These systems involve both sides trying to prove their case in a competitive setting – with the result being a huge degree of preparation – and therefore expense and inconvenience. As a result, many are wisely looking to mediation as a way to resolve disputes more efficiently. However, as currently used mediation has a whole list of its own problems.
Mediation Defined
“Mediation” refers to a meeting between both sides of a dispute, including their lawyers if they have them, and a neutral or unbiased mediator. The purpose is to try to discuss the dispute, and determine whether the parties can come to an agreement to resolve it. The process is confidential, and neither side can use statements made in mediation as evidence if the case continues. The mediator can not impose a solution, but can only try to get the parties to come to an agreement.
Non-binding
This last point gives us the first problem with mediation. Because it is non-binding, parties going into mediation have no idea whether or not they will leave with a resolution. No agreement is reached unless the other side makes an offer you can live with. If the other side persists in being completely unreasonable, you will never be able to come to any agreement.
Most mediators do not provide analysis or legal advice
This raises a second problem. Most mediators believe that they can do nothing to challenge a party that is being unreasonable, because they believe that they are prohibited by law from giving legal advice in mediations. Therefore, a party who makes unreasonable legal or factual claims will not be challenged by the mediator, and therefore may continue to stand on them.
Conventional mediation comes too late in the process
Finally, although mediation is designed to avoid the expense and loss of time that comes from litigation or arbitration, it usually fails to meet that goal because mediations typically occur far too late in the process. After the parties hire attorneys, the attorneys will tell them that there will be mediation, but that it must occur much later, after the parties have filed motions, taken depositions, hired experts, demanded and produced thousands of documents, etc. By the time you get to mediation, you’ve already incurred huge legal fees and disrupted your business irreparably.
We’ve discussed litigation, arbitration, and mediation, and talked about severe problems with each of them. So what is the answer? How can business people efficiently resolve business disputes? We discuss the solution in our final installment next time.
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Sam Ventola has a wide variety of experience in litigation, legal education, and mediation. He has been an attorney on both sides in business litigation, employment disputes, probate litigation, and personal injury cases. When he is not resolving business disputes, he enjoys volunteering in his community and spending time with his family, especially his grandson, Jack.
Ventola Mediation serves the Denver Metro area including Arvada, Aurora, Boulder, Brighton, Commerce City, Castle Rock, Golden, Lakewood, Littleton and Arapahoe, Adams, Douglas and Jefferson Counties in Colorado.
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