Only Good Things Happen When Parties Agree

In Minnesota only about 2 percent of all cases filed proceed to trial.  The remainder are settled between the parties, by default judgment or adjudicated by the court prior to trial.  From my experience, the best resolution is when the parties come to an agreement.  Although one may not be overly happy with a settlement agreement, it takes away the uncertainty of a decision being made by a jury or judge.  When a lawsuit is initiated an early mediation can help bring the parties to an agreement to settle the matter.

I have had clients ask me about mediation.  More specifically, I have been asked the questions:  "What is mediation and how can we get the other party to the table if up to this point they refuse to talk?"

Prior to a lawsuit being initiated there is nothing compelling the parties to talk.  Once a lawsuit has been initiated the matter is governed by Minnesota Rules of Practice Rule 114.  Rule 114.01 states that “[a]ll civil cases are subject to Alternative Dispute Resolution (ADR) process . . .”.  Unless waived by the Court, the Court will require ADR to be completed by a specific date.  Because of this compulsion it may be possible to mediate before a lawsuit is initiated.  Resolution through ADR has several advantages in addition to allowing the parties to collaborate.  First, the ADR process and outcome is not public and can stay confidential.  Second, ADR takes significantly less time and is less expensive then proceeding with the lawsuit.

Rule 114.02 contains several ADR methods, which include, among other methods, arbitration and mediation. 

Arbitration is: 

A forum in which a neutral third party renders a specific award after presiding over an adversarial hearing at which each party and its counsel present its position. If the parties stipulate in writing that the arbitration will be binding, then the proceeding will be conducted pursuant to the Uniform Arbitration Act . . . If the parties do not stipulate that the arbitration will be binding, then the award is non-binding and will be conducted pursuant to Rule 114.09.

The best way to describe arbitration is as a trial before a neutral third party.  Arbitration can be binding or non-biding.  Binding arbitration means the decision of the arbitrator is final and an appeal can only be made to the District Court on the grounds set forth in Minn. Stat. §572.19.  Non-binding means if one of the parties does not like the decision then it can be ignored and the lawsuit continues.  Arbitration is a good process to test your case before a third party.  However, if you are looking for a collaborative resolution as opposed to an adjudicative dictate then arbitration is not the right method.  In my experience, mediation is the preferred method.

Mediation is:

A forum in which a neutral third party facilitates communication between parties to promote settlement. A mediator may not impose his or her own judgment on the issues for that of the parties.

A mediation is governed by the Minnesota Civil Mediation Act and, if there is no agreement, it is not binding on the parties.  Mediation will bring the parties together under the guidance of a third party neutral.  In most cases, the parties are in separate rooms and the mediator will canvass between the parties.  I have seen experienced mediators bring parties, that prior to mediation were entrenched in their positions, come to an agreement to settle the matter.  Also, mediation will help to flesh out your issues, test your theories and uncover any undesirable facts.  Early mediation will allow the parties to attempt settlement before incurring the expense of discovery and motion practice.

Not all cases will be resolved through the ADR process.  However, with only about 2% of all cases proceeding to trial and the positive aspects of ADR, the ADR process, whether before or after a lawsuit is initiated, is a worthwhile and often fruitful endeavor.