Disputes between parties arise every day. While many adversaries rush to the courthouse to file a lawsuit, this is often the most expensive and time-consuming option. Mediation is an alternative to litigation that deserves serious consideration in many cases. Mediation clauses have become standard fare in the contracts used by many multi-national companies. In regards to Arizona real estate law matters, the Arizona Association of REALTORS® Residential Resale Real Estate Purchase Contract states that the parties agree to mediate any dispute or claim arising out of or relating to the Contract. In fact, mediation has become so common that there are now a number of attorneys who no longer visit the courthouse at all, but serve solely as mediators and arbitrators in an effort to help potential litigants resolve their disputes. So what is mediation, and can it help resolve your matter?

Mediation is a non-binding process where the potential litigants meet with a neutral third-party (the mediator) to discuss the merits of the case and attempt to find a mutually acceptable solution. Each side will often prepare some kind of mediation memorandum setting forth what they believe are the relevant facts and applicable law for the mediator to review in advance. Such memoranda are sometimes exchanged with the opposing party. In other cases, they are kept confidential between each party and the mediator. The mediation itself may involve all of the parties and their counsel sitting down in the same room to discuss the case with the mediator. A common alternative approach, especially in more adversarial disputes, is for the mediator to keep the parties in separate rooms and exercise “shuttle diplomacy”. The mediator will often play the role of a “devil’s advocate,” pointing out the weakness in your case and the strengths in the opposing party’s case in an effort to persuade the parties to find an acceptable compromise.

Mediation offers a number of advantages to parties. First, it is a non-binding process. This means that the parties remain in control of the outcome at all times - from selecting the mediator, agreeing to the manner in which the mediation will be conducted, and what, if any, resolution of the dispute is acceptable to them. A mediator has no authority or power to force any party to accept any particular resolution of a dispute. Second, mediation is often a more cost-effective means of resolving a dispute. The cost of a trial for a complex commercial case can result in legal fees in the five, six, and sometimes even seven-figure range (yes, I am talking about legal fees in excess of $1 million dollars). Finally, mediation may allow the parties to resolve their dispute in a way that a court cannot. A judge or jury is often limited to making an award of monetary damages to a party. In cases where a mere award of monetary damages will not fully or finally resolve a dispute, employing the services of a mediator to help the parties find an acceptable compromise may be the best approach.

While many parties scoff at the prospect of mediation on the basis that it is not binding, and others are skeptical that an adverse party will participate in good faith, statistics show that mediation is often very successful at resolving disputes - particularly in cases of construction defects and other real property disputes. Mediation is an alternative means for resolving your dispute that deserves serious consideration in most cases.

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