Does Mediation Deter Settlements?

Litigation is expensive and time-consuming.  It often draws out disputes over a number of years.  It has a tendency to lead to a litany of unintended consequences that leave all participants bitter in the end.  As a result, it is unsurprising that alternative dispute resolution (“ADR”) has proliferated as a means of resolving disputes.  They are less formal and often less intimidating.  They are also quicker and often do not involve the same amount of intrusion into quasi-relevant aspects of an individual or company involved in the dispute.
Mediation is a form of alternative dispute resolution.  Unlike litigation or even arbitration, it is not handled in a hearing format.  Rather, it is more a settlement conference format.  Each side with their counsel come together to discuss their issues with a neutral third-party, who helps generate communication between the parties in order for them to attempt reach a settlement.
However, there is a sense that the growth in use of mediation is having a negative, unintended consequence.  Specifically, it is causing attorneys and parties to be less conciliatory in the lead-up to the mediation and throughout.  In Dial Back the Vitriol, found in the October 2012 issue of California Lawyer, Mr. John B. Bates, Jr. portrays his observations regarding the type of negative relationship between parties that he suggests mediation is causing to inspire.  As an experienced mediator, he has encountered different types of relationships litigators adapt to when trying to settle their conflict. Mediation, which is intended to generate faster settlement between opposing parties, has instead increased disrespect between lawyers and lead to more recrimination and provocation of disputes.
Mr. Bates examined the common mentality among attorneys prior to the growth of ADR.   It was common for lawyers to be amiable with each other, keeping the line of communication open between them, knowing at some point in the litigation, each side would want to discuss settlement. However, from Mr. Bates’ experience of doing mediation for 20 years, the rise of ADR has diminished the civility as well as the communication between the opposing parties.
Mr. Nelson C. Barry III, also examined the issue and authored Mediation: Getting your Client and the Other Side to the Table.  In this article, Mr. Barry went more in depth along the lines of where the difficulty and rise in vitriol stems from.   A lot of it has to do with inexperienced and insecure attorneys.  Basically, attorneys fear the flexibility and uncertainty of the mediation process.  They oftentimes fear that they will not be in control during the mediation or are worried that the mediator would not be neutral and choose the best outcome.  In the attorney’s mind, this lack of control could lead to the client not getting the same type of deal they’d get in the court room.  Specifically, if only the attorney could plead their case in the confines of a court room, governed by the rules of civil procedure,  in front of an impartial judge or jury of their peers!
Mr. Barry found that most of this fear is misplaced.  Rather, mediation is oftentimes voluntary and not binding.  Either party can walk away at any time.  And mediation does not result in a dictacted result.  Rather, both sides have to agree.  Granted, pressure WILL be applied to try to get either side to accept the mediated settlement – which more often than not will contain terms that BOTH sides find unsatisfying; however, that it positive pressure to avoid an expensive, protracted and publicized dispute in court.  The result in court is not a mutually decided one – it is dictated.  After both sides present their case, the judge or the jury decides.   And they can decide completely in favor of one of the parties or fashion a remedy that neither of the parties find particularly agreeable.
Thus, as mediation grows more popular, Mr. Barry – and our law firm – recommend that clients and their attorneys research their options.  Oftentimes, through a little research and communication with the other side, a mediation that is comfortable and will lead to a positive resolution can be found, structured, and pursued.  Mediation – when embraced by all parties – has a high percentage of working and a high likelihood of being faster and cheaper than litigation.