MEDIATION & ARBITRATION
Mediation (Also Known As) Alternative Dispute Resolution
Many years ago, I was about to commence a custody hearing before a very wise Montgomery County Circuit Court Family Law Master. Just as the case was about to commence following his hearing a brief outline of the issues that were to come before the Court, the Master looked at both the mother and father. What he said next I will never forget.
He looked at the Mother and inquired:
“Madam, do you love your children?” She answered yes.
“Sir, do you love your children?” He answered yes.
The Master then said:
Well, I don’t love your children. I do not even know your children. I do not know you or you. So with you both knowing that I do not know either of you or your children, and knowing that I have never been to your home, why would you want me to decide what is best for you and your children?
The Master concluded by telling the parents that with the aid of their attorneys, they should go outside of the courtroom and fashion a parenting agreement that was best for them and their children. Fortunately, the talk worked, and the parties settled.
What is ADR?
ADR is an acronym for Alternative Dispute Resolution. ADR refers to the process known as “mediation.” The Association of Family and Conciliation Courts defines mediation as:
a cooperative problem solving process in which a neutral professional helps people in conflict clearly define the issues in dispute and to reach agreements that are in the best interests of their family. Mediators help participants resolve misunderstandings and communicate more clearly with each other by reducing hostile and competitive feelings.
At a mediation session, you and all of the other party(ies) involved in your case meet with an impartial person who is known as the mediator. The goal is that during a mediation session, the parties will attempt to reach a mutually acceptable settlement to some, most, or all of the issues involved in the lawsuit.
There are no formal court procedures, testimony is not taken, no rules of evidence, or anything that is deemed to be “litigious” at a mediation session. Careful pre-mediation preparation is involved and the Mediator will work hard to keep the issues organized and concise to facilitate a successful mediation outcome. Mediators have no authority to render a decision or force the parties to accept a settlement (in contrast to an Arbitrator who does issue a ruling). In many cases, the training and skills of the Mediator are paramount to the parties obtaining a final settlement of their case which would not otherwise be possible. Mediation differs from arbitration because the mediator, unlike an arbitrator, does not make a decision or force a party to accept a settlement.
When does mediation occur?
At any time before or during litigation. You and the opposing party (or parties) schedule to meet with a mediator. The scheduling of mediation may be before or after your case is filed. Mediation can occur on several occasions. There are no set rules. Oftentimes a case will settle after one of the party’s has had it paying attorney’s fees. Mediation can occur voluntarily, by Order of Court, or at the suggestion (urging) of the Court. In Maryland, mediation is mandatory in ) at a specific date and time or before some future date. Mediation may also occur at a mutually agreeable time for all of the parties and their attorneys.
Does mediation work?
In one word, YES. Accurate statistics are hard to come by. In one study, when the claimant was represented by an attorney the parties settled 56% of the time compared with 44% in those cases where the parties were “pro se” (self-represented) claimants. Another study from the Cobb County Georgia Superior Court noted that settlements via mediation ranged from over 70% in “separate maintenance” cases to just under 50% in cases involving child custody. Statistics for the Maryland Courts are hard to come by, however, in a Circuit Court for Baltimore study, in excess of 70% of attorney’s surveyed reported that ADR was helpful in resolving cases.
What types of cases can be resolved through mediation?
All kinds. We at Shechtel and Associates, P.A., have been involved in successful mediation sessions in cases that involve: juvenile cases, tort claims, real estate contract disputes, commission disputes, commercial and business disputes, construction issues, employee and employer cases, malpractice allegations, debtor and creditor cases, insurance coverage disputes, partnership dissolutions, domestic relations matters, workers’ compensation claims, IRS Tax matters, and criminal cases. Mediation also occurs in: products liability claims, maritime issues, securities-related disputes, education, environmental claims, and much more. In short, all cases can be resolved through mediation.
In mediation, it makes no difference whether liability is contested, if the case is in litigation or not yet filed, or whether the dispute involves: no money, a few dollars or millions of dollars. Mediation has proven effective in all situations involving all kinds of issues. The truth is: mediation works, and it can save you money, lots of money. Mediation can also save you aggravation, and the pain of having a Judge rule against you.
What are the benefits of mediation?
Short answer #1: Mediation saves money. Most party litigants do not realize that the for the typical family law case the average cost for just one day in court is $6,000.00. And in some cases, $6,000.00 per day is a bargain after paying for: expert witness fees, attorney’s preparation, exhibit preparation fees, transcripts, jury consultants (not in family cases), and coping charges. If a paralegal is present during your trial to keep track of exhibits and to assist your attorney, the cost is even more. At mediation, none of those costs are incurred. The Attorney does have to prepare for mediation, and in some instances is mandated to prepare a Mediation Summary for the Mediator, but that cost is substantially less than the costs to prepare for a trial.
Short Answer #2: Mediation allows the parties to control the outcome. With a trial, you have no control over what the Court will decree. Judges and Juries operate independently of the parties, and are frequently known to render verdicts that leave both parties either unhappy or wondering how they reached their decision. When the parties agree to mediate, they agree only to attend the mediation session and participate in a good faith in an effort to settle their differences. Only the parties may agree to the terms of settlement (which is normally reduced to a Consent Order). Consequently, the parties remain in full control over whether their case settles, and under what terms or conditions.
Short Answer #3: Mediation is quick. There is no waiting for a Court to become available. Settlement negotiations cut through all of the formal rules of court. In mediation the parties get to the heart of their dispute quickly and they become focused on what is important, and what is not, in their case.
Short Answer #4: Mediation is informal. Because there are no formal rules of court and also because mediation sessions are supposed to be confidential, the trained mediator is free to explore different settlement options without having to disclose a party’s final position. The trained Mediator knows what are the hot buttons vs. those that are not, and they can then move the parties towards a middle ground that is a workable solution. Mediation also allows the parties to involve multiple parties in negotiations at one time. During mediation, a mediator will work closely, and confidentially, with all parties to explore possible settlement scenarios that may ultimately result in a settlement package (also known as a global settlement).
Short Answer #5: You learn what is really at issue in your case. At mediation, the mediator will get to the heart of your case. The mediator will thereafter meet with you to improve your, and the opposing party’s understandings about what is really at issue. Mediation sessions are purposely designed to educate the parties about the legal and factual issues involved in their case. This also results in a secondary benefit in that litigants who are not familiar with the process of litigation are able to learn what is foreseeable if they were to allow their case to proceed to a merits trial.
Short Answer #6: The parties are able to preserve whatever relationship they had before entering into litigation. Mediation is particularly appropriate in situations where the disputing parties will be working together after the dispute is resolved. Some examples include construction projects, commercial leases, partnerships, business suppliers, and employment relationships. Mediation allows the parties to stay on the best terms possible by doing everything they can to settle their dispute as quickly and easily as possible.
Is mediation mandatory?
Well, yes and no. Absent a legitimate reason why parties should not mediate (such as in cases that involve domestic violence), all parties involved in family cases are expected to participate in several mediation sessions. Most typically, you will be requested (required) to attend mediation sessions with and without your attorney being present (assuming you have retained custody Counsel) to resolve issues involving the custody of your children. If your case involves divorce too, you will be requested (required) to attend at a minimum one mediation session with your attorney being present (assuming you have retained divorce Counsel). In addition to attending court ordered mediation, your attorney may encourage you to engage in voluntary mediation sessions too.
What is a Mediation Agreement?
In most courts, before mediation commences, the parties (and Counsel) must agree in writing to submit to mediation, that what is discussed during mediation cannot be used against a party at a future trial, and that the Mediator cannot be subpoenaed to testify (absent some very specific exceptions). The Montgomery County Circuit Court mandated Mediation Agreement provides:
The parties and attorneys whose signatures appear below agree that all proceedings at their mediated settlement conference and at any extension of such conference, including any statement made or document prepared by any party, attorney or other participant, are privileged and shall not be disclosed in any subsequent proceeding or document or construed for any purpose as an admission against interest. As used herein, the phrase “document prepared by any party, attorney or other participant” shall not be deemed to apply to any settlement agreement that may result from their mediated settlement conference; and this agreement shall not apply to any such settlement agreement. The parties agree not to subpoena the mediator or any documents prepared for mediation. In no event will a mediator voluntarily testify on behalf of a party.
No party shall be bound by anything said or done at the conference(s) unless and until a settlement agreement is reached and one of the following occurs: (1) such settlement agreement is reduced to a writing signed by all parties; or (2) the specific terms of such settlement agreement are entered into the record by an officer authorized by law to administer oaths (such as a court reporter) in the presence of and with the consent of all parties (or their authorized representatives); or (3) the specific terms of such settlement agreement are recorded by audio or video tape and each of the parties (or his/her authorized representative) audibly acknowledges on the audio or video tape that the terms are correct and that he/she consents to be bound by those terms.
If you participate in mediation in most Maryland counties, you will be required to sign this form or a similar form.
Are there different types of ADR?
Yes, there are several different types of ADR (e.g., negotiation, mediation, collaborative law, and arbitration). These processes are differing alternatives to having your case decided by a judge. Although most courts will maintain that the process of mediation is voluntary, in reality it is not. Parties are strongly encouraged to participate in ADR, and many judges will not allow your case to proceed to trial absent some minimal involvement/participation in ADR. All Maryland Courts offer ADR services at any time during the pendency of any civil or family case.
What happens if the Court Orders me to participate in ADR?
If you are ordered to ADR by the Court, you will be offered the opportunity to select a trained mediator from a list of court approved mediators. Mediators who have been approved by the court have agreed to charge a reduced hourly fee of $200.00 (a real bargain), which is shared equally between the parties. Court Ordered ADR sessions are scheduled in three (3) hour blocks of time and maybe held at the Circuit Court Library, or at a mediator’s office at the option of the parties.
Most Maryland Circuit Court’s use the services of retired Judges as Mediators. This is a great resource for the party litigants because for the bargain price of $200.00 per hour, they are able to have a retired judge take a look at the facts of their case and let them know why settlement is in their best interests.
Do I have to request ADR?
Not in all cases. Most times in family law cases, you will be mandated to participate in two forms of ADR. Your first ADR sessions (two) will be with a Family Services social worker (without your attorney being present). Family Services attempts to resolve issues of custody, access and support. Thereafter, if your case does not settle, you then move to ADR with a trained mediator.
In the Montgomery County Circuit Court, once Counsels agree on a mediator, an Order will be generated appointing the selected mediator (provided that the Mediator is on the court’s list of approved mediators). Counsels may also request that the Court appoint a Special Master will select a mediator with specialized training and experience to mediate cases that require specialized training, experience, or knowledge. Once an ADR Order is issued by the Court, Counsel and/or the pro se litigant(s) will receive a packet from the court that includes: (1) the Order for ADR, and (2) a confidential ADR statement form. Prior to the mediation session commencing, the parties and Counsel will be required to sign an Agreement to Mediate (see above).
What happens in ADR?
After everyone appears in the conference room reserved for mediation, they will be introduced or greeted by the Mediator. The Mediator will then verify that the mediation agreement has been signed by all parties, and if not, will pass around the mediation agreement for execution. Following execution of the mediation agreement, the mediator will explain to the litigants what mediation is, the process that is going to be followed, and whatever ground rules that the Mediator will require for the mediation session. The mediator will act as a guide to insure that everyone is able to communicate what they perceive to be the issues being litigated. It is up to the Mediator to insure that everyone has a chance to be heard. Generally, your attorney will speak for you so as to avoid the possibility of insulting or angry statements being made that could have a chilling effect upon the mediation process. After “opening statements”, the parties are generally separated into separate rooms so that the Mediator is free to discuss with the parties the issues one issue at a time in strict confidence. The Mediator will explore various solutions with the parties separately to assist them in reaching a possible resolution. Most trained mediators will develop their own settlement options while others offer suggestions that they believe would work to resolve a case. However, any final agreement is always up to the parties to accept. While a settlement is “ripe” the Mediator will reduce the settlement agreement to a written document that is signed by all parties. In many of Maryland’s Circuit Courts, if you reach a settlement during ADR, you will go before a Judge or Master who will have the settlement read (placed) onto the record, and you will be asked several questions (voir dire) to confirm that you are freely and voluntarily entering into the settlement agreement. Once on the record and confirmed, the settlement agreement ultimately will become an Order of Court that is not subject to appeal.
What happens if my case does not settle?
Nothing… and you proceed to trial in the normal course. Sometimes, if your case does not settle, the Mediator may attempt additional sessions to settle your case. The mediator may continue settlement discussions via telephone, or in some cases, a second mediation session is scheduled. Our experience with ADR is that more than ninety (90%) of all complex litigation cases (that includes family law) resolve through mediation even if the first mediation session did not result in a settlement.
Should I prepare for ADR?
Yes. Everyone should prepare for ADR. We at Shechtel and Associates, P.A., will work with you well in advance of your mediation session so that you are fully prepared to frame the issues to be resolved, have the facts (including necessary evidence) to provide to the mediator to counter what the opposing side may be trying to sell to the mediator. We also work with you to develop a set of goals that you want to achieve from your mediation session. We know that although mediation is far less expensive than a trial, it is nevertheless not cheap. At mediation, you have to pay for half of the Mediator’s fee, your attorney, your lost time from work, and the costs to prepare for your mediation session.
Although the below list is not complete, we suggest that you do the following in preparation for your mediation session:
a. At least two weeks in advance of mediation, send to your attorney what your position is with respect to the issues to be mediated. If you do not have a set list of issues to be mediated, establish a list of items, in order of priority, that you would like to have resolved at mediation.
b. Provide to your attorney a list of all documents that you believe should be put into a mediation packet for the mediator. If you have not already done so, provide your attorney with all of the documents on your list.
c. Ask to review with your attorney the Confidential ADR Statement that is to be provided to the mediator by your attorney.
d. Meet with your attorney just prior to the mediation session to finalize your mediation plan.
Is mediation different from arbitration and pre-trial settlement conferences?
Arbitration is litigation where the judge is replaced by an arbiter. An arbitration hearing involves the presentation of evidence to an arbitrator who upon the close of the proceedings will issue a legally binding decision. In our opinion, arbitration is nothing more than a substitute for a court trial, and are generally more time consuming and expensive than a court trial (you are required to pay for the arbitrator). We at Shechtel and Associates, P.A., generally advise clients not to sign agreements that have arbitration clauses and we can advise you why you should not do so.
As is noted above, Mediation is a litigation settlement process that provides for the party litigants to have an opportunity to work out an agreement to settle their differences through negotiations. In mediation, the parties never give up control of the outcome.
In a pre-trial settlement conference, the parties submit informal statements to the Court (Judge or Master) who then works to try and find a resolution (similar to a mediated settlement). Most Judges will inject their advice into the process. It is generally accepted that the Judge handling a pre-trial settlement conference is disqualified as the trial court judge because they have received confidential information about the parties respective positions relative to a settlement. In those cases where a pre-trial settlement conference Judge issues their advisory opinion about a case, there exists a risk that a party will disagree with the Judge’s opinion, and thereafter the party that deems themselves to be on the losing side of the Judge’s opinion may shut down, which results in the pre-trial settlement conference abruptly ending. Not that the “losing party” may be the “winner” who does not believe that the pre-trial settlement conference Judge is being too miserly, or the “loser” who believes that the pre-trial settlement conference Judge is too generous.
Is mediation different for family law cases?
The process of mediation is not different, but the issues are substantially different than most cases. In the typical divorce, there are many issues that involve your children. Then there those issues that involve marital property. Most courts separate out custody from property, so you may be required to engage in ADR to try and resolve the children and property issues on two (or more) separate occasions.
What the biggest difference is in separation and divorce cases are the emotional aspects of the case, and secondly the physical changes that will affect your family. When a couple separates, they will confront many issues, including: parenting plans for children, child support, division of marital (or joint) property, and other future financial arrangements. According to most psychologists, divorce is the number one cause of stress, with being involved in litigation a close second. Put together, you have the number one and two stress generators all rolled into one conflict.
As a result of the particularly high stress that comes along with divorce, the manner in which conflicts are explored and resolved greatly influences you and your family’s ability to adjust to the pressures of separation or divorce. Conflict resolution methods such as ADR bring about a productive airing of those differences that may otherwise have gone unsaid. ADR also leads to creative solutions to what may appear at first to be unresolvable, or overly complex. ADR provides an excellent opportunity to address the changing needs of family members.
Your involvement in ADR allows you to determine your future, as well as the future of your family. You are able to take control over your future by taking the decision making process away from an uncaring court system. Through the process of negotiation, you are not leaving the hard decisions involving your future to a judge or jury. In ADR, you are not a bystander but an involved party whose voice is heard.
Mediation in the family law setting.
Mediation is a way for family members to resolve their conflicts during and after a separation or divorce. Though ADR, it is possible for you to reach an agreement that addresses your interests and those of your family in a manner that you control the outcome. Though ADR you will be able to face the pain, anger, fear and hurt of your predicament. Mediators are trained neutral professionals. They are there to help you define the issues in your case, keep lines of communication open, and help you to reach a rational discussion on what is important to you so that an acceptable resolution can be had. Mediators do not make decisions for you. They help you make decisions that you believe are in your best interests along with the best interests for your family.
Mediation does not work in all cases. In the vast majority of cases however, mediation does work. You must be willing to work 100% to resolve your case or mediation will fail. Just as you must be willing to work 100% to resolve your case, so must the other party or parties. With our help, we can and will assist you so that you are able to give mediation the best possible chance to succeed.