Mediation is a structured settlement negotiation process in which parties to a dispute meet with a neutral mediator in an effort to reach an a settlement. Mediation is very flexible and can be used at any stage of the dispute: before a lawsuit, after a lawsuit is filed, or even when a lawsuit is on appeal.
Mediation is flexible in another way that is sometimes overlooked: Everything can be on the table. To put this in perspective, litigation is a fairly inflexible process, meaning that someone is going to win and someone is going to lose, usually based on the payment of monetary damages, or in some instances, the court granting an injunction, which is an order directing one party to do something or to stop doing something. Litigation also involves a public forum.
In contrast, mediation allows the parties to explore all possible means of resolution in a confidential setting. The parties ultimately control the process: No one can be made to settle in mediation unless they agree. Mediation can provide a means for exploring a business resolution that makes sense for both parties, or, at the very least, makes more sense than the expensive binary process provided by litigation.
Unfortunately, parties do not always take advantage of this flexibility. I remember one mediation in which the mediator seemed to view his job as getting a monetary offer from each party, then noting the midpoint, and urging the parties to move toward it. There are usually many more possibilities.
Here are a few examples how parties might use the flexibility of mediation:
- Reaching a cross-licensing arrangement to resolve an intellectual property dispute.
- Restructuring a business contract so that the parties can continue to do business on a profitable basis.
- Crafting a mutually agreeable "business divorce," including a mutual press release announcing resolution of the dispute and allowing the parties to move forward in a positive manner.
- Allowing a private apology by one party to the other. People are often surprised at how far genuinely acknowledging another person's feelings will go in resolving a dispute.