Mediations in Business

Mediation is a process where a neutral party assists in negotiations outside of court and off public record over a dispute between two parties.

Key Takeaways:

• A mediator helps parties negotiate to resolve their disputes and is kept confidential.

• If the mediation is successful, the parties will sign their agreement in a settlement agreement.

• If the mediation is unsuccessful, the parties will report to the court that the mediation was unsuccessful, and the case will continue in court.

Let's say we have John and David and they have a contract.

John thinks that David broke the contract. And David says that John breached the contract. Now they could go to court. But litigation in the United States often takes a long time. Also, sometimes it can cost a lot of money. Also, it's public (other people are going to know about it).

John and David decide they don't want to go to court right now, but what else can they do?

• They could try to negotiate and settle their differences.

• Maybe they try to have a discussion. But their negotiations might not go well.

Now, let's say they bring in a neutral party, Tom, to help them negotiate. Tom will work with John and David to help them negotiate by assisting in negotiations. Tom is a mediator.

A mediator helps parties negotiate to resolve their disputes. However, a mediator can't force parties to resolve their dispute. Nor, does a mediator decide who should win the case. But by going to a mediation, the parties are choosing for now, not to go to court.

The mediator will talk to John and David together about the dispute. Tom will probably speak with David privately. And then probably also talk to John privately. The discussions in a mediation are generally confidential. They're kept secret.

If the mediation is successful, the parties will reach an agreement. The parties will probably write down and sign their agreement in a settlement agreement. For example, the parties might agree that David will pay $75,000 and the dispute is over. But let's say David refuses to pay. Now John will probably have to go to court. And the judge will probably enforce the settlement agreement and make David pay.

Sometimes courts will force parties to try mediation. This is usually called: a court ordered mediation. But no one can force the parties to settle the dispute. If the mediation is unsuccessful. The parties will report to the court that the mediation was unsuccessful, and the case will continue in court.