A mediation is another term for a settlement conference. The person that assists the parties in reaching a settlement is called the mediator. Unlike an arbitration where an arbitrator decides the case through a decision following the presentation by both parties, a mediator has no authority or power to resolve the case. In a mediation, only the parties have the authority or ability to settle the case and only if both sides reach an agreement to do so.
Prior to the mediation, each side submits a memorandum outlining their respective positions so that the mediator has an understanding of the case. Mediations usually take place at the office of a mediator and only the parties (and their respective attorneys) attend. Each party is placed in a separate room with only his/her counsel present. Separating the parties helps to ensure a less-stressful, non-confrontational environment. Everything discussed at the mediation is confidential and cannot be used later against either party at trial should their case not settle. This confidentiality enables the parties to freely discuss their case without the fear that what they say to be used against them later.
The mediator usually discusses the case with the plaintiff (persons asking for money from the defendant) first. The mediator wants to know the plaintiff’s positions and what amount the plaintiff is willing to accept as a settlement. The plaintiff’s attorney will usually speak on behalf of the client, though the mediator may ask some questions or want to hear directly from the plaintiff. The mediator, who is impartial, will usually present the plaintiff with the mediator’s perspective of the case and will often point out any problems the plaintiff may have at a trial should the plaintiff not settle. The mediator will then meet with the defendant to share the information received from the plaintiff (including the plaintiff’s initial offer to settle). The mediator will usually point out the problems with the defendant’s case and provide the defendant with the risks he or she may face at trial should the matter not settle.
If the parties reach an amount they both agree upon, the mediator will usually draft a brief settlement agreement for the parties and their counsel to review and sign. If they do so, they will have settled their case. The parties will typically agree that despite the signing of the agreement, they will prepare a more formal agreement to be signed by the parties that contain more extensive language- such as confidentiality clauses, etc. If they do not reach an agreement they will proceed with the case through the court system. The parties can still attempt to settle their case as they move forward in litigation.