Why Mediate?

Why Mediate?

The picture above is a typical real estate dispute. Two couples (here two mating pairs of nasca boobies on Genevieve Island in the Galapagos) are arguing over possession of a prime piece of real estate (a nesting site). These two couples spent hours chirping back and forth at one another, resolving nothing. Because the avian world does not know from either mediation or litigation, this argument will continue until either one of the couples (who knows which one) gives up in exhaustion, or the time comes for one or both of the females to lay their eggs. A possible result is that, with both couples distracted or exhausted by the argument, the mating cycle of one or both couples will be interrupted, or the eggs will be vulnerable to predators – a result neither couple wanted when they began their argument.

Similar arguments arise between humans as well. Two parties claim a superior right of possession to or use of a prime parcel of real estate. In the context of residential multifamily rental property, disputes (other than simple evictions for non-payment of rent) frequently arise concerning such issues as subleasing, use of the leased premises, maintenance and habitability, withholding of rent for repairs, etc., etc., etc. And, as in the avian world, where the dispute is resolved through what amounts to a war of attrition, the consequences (and unintended consequences) of such a resolution may be something that the “winning” party never anticipated or wanted.

However, humans have one big advantage over our avian friends. In the human world, if a dispute cannot be resolved by mere discussion (argument) between the parties, humans (unlike birds) have other means of resolving the dispute – mediation or litigation.

Litigation (whether by lawsuit in court or through arbitration) is the process by which a third person (a judge and/or jury in a lawsuit, an arbitrator in arbitration) decides that one party wins, and the other loses. As any decent lawyer will tell you, in most cases where there is any plausible argument on each side, proceeding to a litigated result is a crapshoot. You could win, you could lose. And it is impossible to predict with any certainty which fate you will experience. One thing you can count on, however, is that litigation will be time consuming, anxiety provoking, distracting, and expensive. Indeed, litigation is not that far different than the method used by the nasca boobies pictured above – the fight goes on until one party either is defeated or gives up due to exhaustion.

The alternative to the “fight to the death” war of attrition or litigation (which also sometimes becomes a war of attrition) is mediation. Mediation is the engagement of a neutral person (the mediator) to meet with the parties, together or separately, and assist all parties to come up with a negotiated settlement which, while possibly not as good as getting everything, is far better than getting nothing. Further, a mediator can also assist the parties in exploring “out-of-the-box” solutions that result in a win-win for the parties, as well as preserve a good working relationship between the parties that is usually jeopardized by the all out fight to the end (in litigation or otherwise). Also, if employed at an early stage of the dispute, it can result in substantial savings of cost, time, and energy. The cost of a mediator is relatively small, particularly when compared to the cost of attorneys’ fees, court or arbitration fees, opportunity costs, and the angst, anxiety, and risks inherent in litigation.

In mediation, each side shares with the other (through the mediator) only those facts which he or she wants the other side to know, and only those documents which he or she wants the other side to see. Anything said to a mediator in confidence remains confidential and is not disclosed to the other side. This enables the mediator to explore with you in confidence the strengths and weaknesses of your case, the ultimate objectives of the parties, and whether there are any areas of common interests or partial agreements that can lead the way to an ultimate “win-win” resolution.

There are those who fear that suggesting mediation is a “sign of weakness” – much like making the first settlement offer. However, often the opposite is true – when faced with a stubborn adversary, suggesting that a mediator be engaged can be seen as a sign of strength – that you are willing to have your case evaluated by a neutral party, and are inviting your adversary to do the same. And in mediation, a mediator has the chance to discuss with each side (in confidence) not only the strengths and weaknesses of your and your adversary’s case, but also the costs of not reaching a resolution. Moreover, this issue can be avoided by including in your documents a provision for mandatory mediation, with consequences for any party who refuses to participate.

It is important to keep in mind that a mediator cannot make a decision for you, or force you into a settlement you do not want to make. A mediator, unlike a judge, jury, or arbitrator, does not make any findings of fact, does not make any decisions, and cannot force any party into a settlement he or she does not want to make. However, a mediator can make both sides aware of the impact of the facts known to them, of what the possible results of a litigated result could be, and the costs of reaching a litigated result. The ultimate decisions whether to settle or not settle, what demands to make or what concessions to offer, are made by the parties, not the mediator. However, with the help of the mediator, those decisions can be made with full knowledge of the facts and risks involved.

In the vast majority of cases where there are reasonable parties and reasonable attorneys on both sides, mediation results in a negotiated resolution, ending the dispute more efficiently, more economically, more expediently, and with more certainty, than pursuing the case to a litigated conclusion. However, not all cases will settle. Sometimes the opposing parties or attorneys are not reasonable. Or sometimes the positions of the parties are so entrenched that neither side is willing to make the necessary concessions, regardless of the costs of not doing so. Nevertheless, even in these situations, there are benefits from having engaged in the mediation process:

First of all, if your opponent or his attorney is unreasonable, mediation provides an opportunity to learn that, so you can plan and prepare accordingly.

Second, going through the mediation process will educate you about your case, and your opponents. It will help you focus on those areas that you have to shore up, or areas on which you should focus your discovery efforts.

Third, even if a full settlement is not reached, it is possible to reach partial agreement on certain issues, narrowing the issues that have to be litigated (and thereby lowering the cost of litigation).

Finally, even if the parties reach an impasse during the mediation session, it can lay the groundwork for future negotiations that will lead to a settlement at a later time.

Reproduced with permission of Stephen H. Marcus. Copyright 2014 Stephen H. Marcus. All Rights Reserved.