“Does mediation mean settlement?” is a common question when learning about the different processes in alternative dispute resolution. While the goal of mediation is often to settle, the two terms are not synonymous. Mediation is a process that encourages settlement, while settlement is the agreement between the parties. While a settlement will always resolve a case, the mediation process makes a settlement possible, although it does not guarantee it.
This article will focus on connecting these terms and how they interact. It will explore the mediation process and define a settlement, expand on the differences between settlement and mediation, and then discuss the probability of a mediation resulting in a settlement.
Defining Settlement
A settlement is an agreement between the parties to resolve the dispute between the parties. It may happen in various ways, including negotiation, conciliation, and mediation. These agreements are usually reached to give both parties something they hoped to accomplish. They can happen cooperatively or adversarially and often depend heavily on the perceived or actual chances of succeeding at trial. A settlement means that both parties agree on how the interests at stake will be divided. It may happen at any point before a trial.
Defining Mediation
Mediation is a process where the parties work with a neutral third party as a mediator between the two. It allows the parties to discuss settlement in a forum that ensures neutrality and fairness. The process is not usually binding, as the parties can decide whether to settle, agree, or proceed with the dispute. Mediation often occurs in a formal setting arranged by the mediator or the parties, allowing discussion of the dispute in a safe and free space.
Mediation seeks to find the root of the demands and problems to find creative solutions to the dispute. This process usually happens voluntarily when the parties agree to mediate, but sometimes, a court may mandate mediation if they believe it could help the parties. The mediation process typically involves the following characteristics.
Solutions:
The mediator will encourage the parties to come up with solutions to the problems. This separates it from arbitration, which includes suggestions or decisions from the neutral. Depending on the mediator’s style, they may suggest solutions to the parties, while other mediators will allow the parties to drive the discussions and solutions. However, in all cases, solutions to the problems presented are sought.
Neutral:
The mediator will be a third-party neutral in the situation. This is important so all parties feel comfortable speaking freely and sharing their ideas. Neutrality means that the mediator is not tied to any party in a way that may influence their thinking and has no stake in the presented problem.
Bargaining:
The parties will eventually move toward bargaining—either separately through the mediator or in a joint session—and move toward a solution. This will follow most negotiation steps—offer, counteroffer, and settlement agreement. It is unlikely to have many stops and starts in mediation.
Formal:
The parties will hire a mediator who will sit down with them and lead them through the process of coming to a solution. A set of rules will be followed, and a settlement agreement will be reached between the parties and the mediator regarding the process. It will also usually occur in a designated mediation spot for a day or two.
The Mediation Process
Knowing what to expect when preparing for mediation will help a party prepare for the mediation session and feel more at ease when they start. Each mediation will look slightly different because a mediator will adjust the process to accommodate the parties’ needs and the mediator’s specific style. The parties can also drive the process and ask for specific considerations. However, most mediations will have similar steps in the process. These steps include:
Introductions:
At the beginning of the mediation, the mediator and the parties will introduce themselves, and the mediator will lay out the ground rules for the mediation. This usually means that the parties will sign a confidentiality agreement, and the mediator will remind the parties about all that this entails. They will also explain their role and confirm that nothing will impede their ability to mediate the case neutrally. The mediator may also explain how the process will go so the parties can know when things will happen.
Opening Statements:
The first thing that will happen after the mediator finishes opening the mediation is the opening statements by the parties. This is where each side has a chance to present their case and outline why they believe it should be settled according to their case. Each side will have a chance to present evidence and make their case, starting with the plaintiff and then the defendant or defendants. This helps the mediator and the other party see the strengths and weaknesses of the case and see a fuller picture of what could happen at trial if the case does not settle.
Caucuses:
After opening statements, the bargaining process begins. The mediator usually separates the parties and asks them about the case. This allows the parties to speak more freely with the mediator, who cannot tell the other party what was said unless given permission. The mediator also usually discusses each party’s case’s strengths and weaknesses with them. During this time, parties may suggest offers and have the mediator relay these to the other party.
Bargaining:
As the parties continue in mediation, they will move away from the facts of the case and begin focusing on the offers and counteroffers that are moving between the parties. This is where the parties will attempt to hammer out an agreement and devise a solution to the case.
Ending:
The mediation session will end with either a settlement agreement signed by the parties or an agreement that the case will not be settled in this mediation and that the parties need to move forward with the trial.
Differences Between Settlement and Mediation
While settlement and mediation are often discussed together, they are different concepts. Settlement is the goal of mediation, but mediation will not always guarantee a settlement. When examining the difference between a mediated settlement and a settlement that occurs without mediation, several key differences can help illustrate how the two concepts interact. These differences are:
Parties Involved:
A mediation will always include the parties to a dispute and a mediator. A settlement may result from a similar list of people, or it could include only the parties, a facilitator, a conciliator, or others who may help the parties decide.
Structure:
Mediation often has a common structure. While each mediator will have a style and way of doing things, there will usually be a day when the parties meet and follow a pattern to determine if an agreement will be made. A settlement can happen more organically, with the parties talking to each other or with attorneys trying to help the parties reach a settlement agreement. It can also happen over many days or weeks as the parties trade offers.
Timing:
Mediation usually takes a reasonable amount of time before a trial because the parties want to avoid costs and settle early if possible. It also helps the parties understand the case better and know how to proceed. A settlement may happen at any point within the case, from its inception to a few days or hours before trial.
Scope:
A mediation session often ends in a settlement agreement that fully resolves the case. Conversely, a settlement may result in the parties only resolving part of the case and needing to proceed with a trial on other matters. This is often true in complicated cases with many issues.
While one is a process and the other is a result, both mediation and settlements are helpful tools to determine how the parties may be able to move forward without litigation or trial.
The Likelihood of Settlement in Mediation
There is often a question of whether mediation guarantees a final settlement agreement. This is often the case when parties would rather avoid the cost of hiring a mediator and talk amongst themselves. However, there is no guarantee that mediation will end in a settlement, but certain cases tend to have better luck in mediation than others.
For example, a case where the parties have had several discussions about settlement and would like to resolve the matter but are having a difficult time overcoming a few obstacles to settlement would likely benefit from having a mediator help to smooth out those areas or help come up with new ideas. Also, parties that need to keep a relationship after the dispute is resolved, such as business associates or divorced parents raising children, benefit from using mediation to help resolve disputes because it takes much of the pressure off the relationship.
Final Thoughts
While not all cases that go to mediation will settle, a large portion of cases do settle at mediation, and a greater number settle after a mediation conference helped them evaluate the strengths and weaknesses of their case. Mediation helps people better understand the underlying interests and how those affect how other parties negotiate and react. So, even though some cases do not settle during mediation, mediation is a powerful tool to help parties reach a settlement and move forward with their lives. Keeping settlement as the goal will help the parties see the issues and move toward a solution.
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