Does Mediation Mean Settlement?

“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, mediation makes it possible for a settlement to happen, although it does not guarantee it.  The connection between these terms and how they interact will be the focus of this article.  It will explore what the mediation process looks like 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 a variety of ways, including negotiation, conciliation, and mediation.  These agreements are usually reached in a way that gives both parties something that they were hoping to accomplish.  They can happen in a cooperative or adversarial way and often depend heavily on the perceived or actual chances of succeeding at trial.  A settlement means that both parties agree on the way that 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 who serves 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 are still free to choose if they would like to settle and agree or move forward with the dispute.  Mediation often takes place in a formal setting arranged by the mediator or the parties and allows 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 by the parties agreeing to mediate, but in some places, 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 person who is neutral in the situation.  This is important so that all the parties feel comfortable speaking freely and sharing their ideas.  Neutrality means that they are not tied to any party in a way that may influence their thinking and that they have no stake in the problem presented. 
  • Bargaining: The parties will eventually make their way to bargaining—either separately through the mediator or in a joint session and will move toward a solution.  This will follow most of the steps of negotiation—offer, counteroffer, and agreements.  It is unlikely to have many stops and starts in a mediation.  
  • Formal: The parties will hire a mediator who will sit down with the parties and lead them through the process of coming to a solution. There will be a set of rules to be followed and an agreement between the parties and the mediator regarding the process.  It will also usually take place 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 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 own specific style.  The parties will also have the ability to drive the process and ask for specific considerations within the process. However, most mediations will have similar steps in the process.  These steps include: 

  1. 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 there is nothing that will impede their ability to mediate the case neutrally. The mediator may also explain how the process will go so that the parties can know when things will be happening.  
  2. 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 the case showed 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.  
  3. Caucuses: After opening statements, the bargaining process begins.  The mediator will usually separate the parties and ask 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 will also usually have a discussion with each party about the strengths and weaknesses of their case.  During this time, parties may suggest offers and have the mediator relay these to the other party.  
  4. 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 come up with a solution to the case.  
  5. Ending: The ending of the mediation will either be an agreement signed by the parties or an agreement that the case will not be settled in this mediation and 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 other people who may help the parties decide.  
  • Structure: Mediation will often have a common structure.  While each mediator will have a style and way of doing things, there will usually be a day where the parties meet and follow a pattern to determine if there is an agreement to be made.  A settlement can happen more organically, with the parties talking to each other or with attorneys trying to help the parties find an agreement.  It can also happen over many days or weeks as the parties trade offers. 
  • Timing: A mediation will usually happen a reasonable amount of time before a trial because the parties would like to avoid costs and settle early if possible.  It also allows the parties to have a better understanding of the case and know how to move forward.  A settlement may happen at any point within the case, from its inception to a few days or hours before trial.  
  • Scope: Mediation will often end in an agreement that fully resolves the case. A settlement, on the other hand, may result in the parties only resolving part of the case and needing to move forward 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 using mediation will guarantee a 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 for whether mediation will end in a settlement or not, but there are certain types of cases that 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 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.  

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 gain a better understanding of the underlying interests and how those interests affect how other parties are bargaining and reacting.  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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