Lewis Page Represents Clients in the Legal Mediation of Business Disputes.
Timely mediation often helps clients. Most lawyers now embrace legal mediation as a useful tool in resolving disputes of all kinds.
Alternative to a Litigated Adjudicated Ruling
Mediation is one of the main alternative dispute resolution (ADR) processes. It is an alternative to allowing a judge, jury or arbitrator to decide a case. A neutral mediator, normally a lawyer or retired judge, is selected by the parties or sometimes the judge. The mediator’s job is to meet with the parties and their counsel to attempt to reach a negotiated settlement. The mediator facilitates discussions among litigants to assist them in identifying the underlying issues and in developing a settlement agreement that meets the needs of the parties.
Mediators Do Not Compel Settlement
The mediator facilitates voluntary settlement. The mediator has no authority to compel a settlement. The mediator makes no findings of fact, no conclusions of law, no decision on the merits, and no recommendations to the judge. Should the mediator suggest a settlement, either party is free not to agree. If the parties do not settle in the mediation, they retain the right to proceed with either litigation or arbitration. They may choose to return for a later mediation if they agree.
Legal Authority for Mediation
Alabama has a mediation act together with civil and appellate mediation rules for cases pending in Alabama state courts. The rules permit parties to agree to follow the rules prior to the filing of a complaint in Alabama courts. Under the Act, with some exceptions not pertinent to most business disputes, the parties jointly, a party on motion at its expense, and the court on its own motion may compel mandatory legal mediation. If a lower court judge fails to order mediation which is mandatory, a petition may be presented to the Supreme Court to compel entry of an order for mandatory mediation.
The U.S. District Court sitting in Birmingham has an ADR plan applicable to cases pending in federal court. This plan is a truncated version of the more detailed state requirements.
Privacy and Confidentiality
Both the state and federal mediation requirements establish privacy for the mediation sessions and confidentiality for the information stated. With some variation, they both generally provide that no record of the sessions will be made; the mediator is prohibited from testifying; and the mediator and the parties are prohibited from disclosing what was said and what documents were used. The whole process is to be treated as compromise negotiations which are generally inadmissible under both state and federal law.
Once an order for legal mediation is entered, a date, time and place is determined usually by agreement, which is often the mediator’s office. The mediator may ask for a pre-meeting position statement from all sides.
When the session convenes, the mediator reviews the purpose of mediation, the tentative schedule, the privacy and confidentiality rules, and other preliminary matters. The mediator may call a joint session in which parties have the opportunity to make presentations to each other, but the mediator may decide that the parties should not be brought face to face. The mediator always meets privately and confidentially with each party to explore in detail their positions. Realistically this provides an often needed opportunity for the parties to vent.
The balance of the session is generally devoted to the mediator shuttling between each side’s rooms, conveying information. A party has complete freedom to instruct a mediator not to disclose information. The mediator is obliged to comply. The mediator will carry between the parties questions, answers, new information, new arguments, settlement ideas, offers and counteroffers seeking to find a basis for a negotiated settlement.
If an agreement is reached, either an outline of the agreement or a full settlement agreement may be prepared, which will be signed by all parties, counsel and the mediator. The mediator will the next day advise the judge whether the case settled or not, without any other comment. Once an enforceable settlement is finalized, then the parties will implement the settlement.
Legal Mediation Costs
The parties contract directly with the mediator. All fees are negotiable. Most mediators have a minimum fee for either a half or full day, and may charge more for more parties. Solely for estimating purposes, the cost for a business dispute will range around $200 to $400 an hour. Legal mediation may result in settlement in a few hours, a day, a late-night day, or days. The settlement usually stipulates who will pay the mediator.
Keys to Success in Mediation
There is no guarantee of success in legal mediation because neither side is bound to settle. Allowing the mediator to persuade and empower both sides to see the case realistically and to agree on an acceptable settlement agreement requires the same objective-driven, respectful, based on fact and law, and tenacious methods as in ordinary negotiation.
One difference from party negotiations is that the mediator’s personal self-interest is to perform well as a mediator. His or her pay is normally just hourly, without any success premium. The mediator does not care what the settlement terms are, but only that there are mutually acceptable settlement terms.
That’s what he or she is looking for — something both sides will sign. The mediator does not get paid any more when the parties settle, but keeps score partially on the basis of number of cases “successfully” resolved. Accordingly, it is important to not be the most persuadable and agreeable party in the mediation, but instead to negotiate as tenaciously as the other side. You and your lawyer are the only ones in the room taking care of your interests.
To discuss retaining Lewis to look out for you in mediation negotiations, call Lewis.