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1. What is the difference between mediation and arbitration?
2. Why would someone want to mediate?
3. What are the benefits of mediation?
4. What are the risks of mediating?
5. When is the best time to consider mediation?
6. What can the mediator add to a two party negotiation?
7. Is mediation a binding process?
8. How much does it cost and who typically pays?

1. What is the difference between mediation and arbitration?
This is one of the most frequently asked questions, by lawyers and non-lawyers alike. Simply stated, mediation is a facilitative problem solving process in which the mediator helps the parties reach a mutually acceptable agreement or solution. The parties control the outcome, not the mediator. In contrast, an arbitrator controls the outcome of an arbitration. After receiving evidence from the parties the arbitrator will make a decision about who wins and loses and will issue an award. This may be binding or non-binding depending on what the parties have agreed to in advance. Generally, a binding award may not be appealed.

2. Why would someone want to mediate?
There are many reasons for selecting mediation: it is confidential, inexpensive, fast, very low risk, lets the parties control the outcome and can result in a "win-win" solution for all parties involved. Today, most people and businesses file a lawsuit when they have a dispute. Unfortunately, litigation is the least efficient way to resolve a dispute. It is very expensive, can take years to complete, rarely results in an outcome that the parties are happy about, is adversarial by nature and therefore destroys important personal and business relationships and exacts an incredible toll on the participants. Because mediation is non-adversarial, parties are working together to reach an agreement that meets their needs. If an agreement cannot be reached, the parties are free to pursue other methods for resolving the dispute, such as arbitration or litigation. The parties legal "rights" are not usually affected by mediating the case first (the Statute of Limitations is a possible exception and parties should consult an attorney if there is any question about when a lawsuit has to be filed.)

3. What are the benefits of mediation?

Quick resolution of the dispute.
Confidentiality.
Cost effectiveness.
Potential for creative "win-win" solutions.
Preserves important personal and business relationships.
Enhanced communication between the parties.
An agreement that meets the parties needs.

4. What are the risks of mediating?
There are very few risks to using mediation to resolve a dispute. Perhaps the greatest fear is that the parties will have to "show their hand". However, if parties have information they truly do not want disclosed to the other side, they can tell the mediator during a "caucus" which is a confidential meeting between the mediator and one party. The mediator will keep any confidential information disclosed during a caucus confidential. Otherwise, there really is no risk. The parties will have to spend some time in the mediation, and will usually have to pay the mediators fee. However, even if the matter is not resolved, the investment made in trying to resolve the dispute through mediation usually pays off later during the course of the case.

5. When is the best time to consider mediation?
Mediation is successfully used at any stage in a dispute. However, the parties should have enough information available at the time of the mediation to make the long term committments necessary to resolve the matter.

In disputes involving business continuation and ongoing relationships or where the "rights" of the parties are not as important, mediating at the earliest possible moment is most beneficial. The parties can get on with their business, they save the most time and money and they avoid turning the dispute into a distructive adversarial case which becomes even more difficult to resolve. As soon as someone begins to wonder if a disagreement could develop into something more is when mediation should be considered.

Far too often however, parties to a lawsuit will opt to mediate at the outset of a lawsuit in a well meaning attempt to resolve the matter before significant costs are incurred. Unfortunately what frequently happens is that the parties, or possibly their insurers or attorneys, do not have enough information to make a reasonable evaluation of the risk of the case, and are therefore unwilling to seriously consider resolving the matter. This occurs most frequently in "rights based" mediations where the parties are more concerned about who's right or wrong. In such a premature mediation, the parties hope the mediator will "work miracles", which of course isn't possible. The consequences of participating in a mediation which is conducted too early without a real committment to resolution is the parties become more entrenched in their positions because they have wasted their time and money.

6. What can the mediator add to a two party negotiation?
First and foremost, by agreeing to mediate, the parties are agreeing to meet face-to-face in order to resolve their differences. Trying to reach agreement by phone, fax or letter is very difficult because the parties have to set their positions out in such a way that it is difficult to back away from them. The mediation brings the parties together with a neutral third person who will moderate and facilitate the process.

Mediators do many things. Building and preserving a sense of trust is one of a mediators most important roles. The mediator serves as a sounding board, helps the parties identify issues and interests which need to be met, acknowledges parties feelings, plays devil's advocate, keeps the process moving and much more.

7. Is mediation a binding process?
The question of whether a mediation is binding or not creates a lot of confusion. Mediation, by its nature is confidential which means, among other things, that if no agreement is reached, it is as if nothing ever happened. The party's respective rights are not affected because the mediation took place and did not result in an agreement.

However, when a mediation results in a mutually acceptable agreement, the parties can and usually do make the agreement binding and enforceable. The agreement can become a new contract between the parties, or, in a legal setting, can be turned into a judgment of the court if that is what the parties desire. The essence of reaching an agreement is that it puts a final end to the dispute.

8. How much does it cost and who typically pays?
While mediation is often available for free from community based agencies, these mediations are usually for neighborhood and landlord-tenant disputes.

Most commercially based mediations are conducted by highly trained professionals. Mediator fees range from about $100 per hour to as much as $10,000 per day and can vary by city and region. In the San Francisco area, commercial mediators typically charge from $250 to $500 per hour. There may be extra charges for opening a case, cancellation fees, and travel fees and expenses depending on the particular mediator or firm. Be sure to ask!

The costs of mediation are usually split evenly between the parties, ensuring a sense of fairplay and avoiding any bias on the part of the mediator. Sometimes however, one party will offer to pay for the entire mediation as a way of encouraging the other party to participate. Parties can make fee agreements which are quite creative, and they are free to do so. Some parties will even agree to pay the entire fee only if agreement is reached. Such a fee agreement further serves as an incentive to reach agreement.

While the mediators fee may equal or exceed an attorneys hourly fee, remember that the mediation is usually conducted in less than one day, usually results in a full resolution of the dispute limiting any further costs or legal fees to the parties, and is shared by all parties to the dispute. DRS Fees

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