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The Indiana Supreme Court has adopted rules governing Alternative Dispute Resolution (ADR). ADR includes all types of methods of resolving disputes other than using the court system full litigation. It includes arbitration, mediation, mini-trials, summary jury trials, and private judging. The whole set of rules can be found at http://www.in.gov/judiciary/rules/adr/index.html.
Mediation is a particular kind of ADR where the process allows the parties to resolve the dispute themselves. ADR Rule 1.3(A) describes mediation as “a process in which a neutral third person, called a mediator, acts to encourage and to assist in the resolution of a dispute between two (2) or more parties. This is an informal and nonadversarial process. The objective is to help the disputing parties reach a mutually acceptable agreement between or among themselves on all or any part of the issues in dispute. Decision-making authority rests with the parties, not the mediator. The mediator assists the parties in identifying issues, fostering joint problem-solving, exploring settlement alternatives, and in other ways consistent with these activities."
ADR Rule 2.1 talks about the purpose of mediation: “Mediation under this section involves the confidential process by which a neutral, acting as a mediator, selected by the parties or appointed by the court, assists the litigants in reaching a mutually acceptable agreement. The role of the mediator is to assist in identifying the issues, reducing misunderstanding, clarifying priorities, exploring areas of compromise, and finding points of agreement as well as legitimate points of disagreement. Any agreement reached by the parties is to be based on the autonomous decisions of the parties and not the decisions of the mediator. It is anticipated that an agreement may not resolve all of the disputed issues, but the process can reduce points of contention. Parties and their representatives are required to mediate in good faith, but are not compelled to reach an agreement."
ADR Rule 2.7 sets out the mediation procedure. Important components include the requirement that the parties attend and mediate in good faith, subject to sanctions from the judge, the right of the parties to submit a confidential statement to the mediator, and the power of the mediator to stop the mediation if continued efforts would be fruitless.
ADR Rule 2.11 makes all discussions in the mediation confidential and prohibits any party from using them as evidence at trial, except in limited circumstances. The rule makes all statements to the mediator privileged, meaning she cannot tell anyone without your permission.
ADR Rule 7.4 requires the mediator to be impartial, meaning she is not allowed to favor one side or the other. ADR Rule 7.5 prohibits the mediator from coercing any party or from making a substantive decision on the case.
I have read statistics somewhere that show around 95% of all cases filed in court are settled without a trial. My experience has been that settlements do not occur unless there is some time pressure forcing the parties to settle. This usually means the parties don’t start talking seriously about settlement until just before the trial. Mediation gives us an opportunity to settle the case long before the day of trial. In addition, one author wrote that about 85% of all mediations end in settlement.
There is an additional advantage to using mediation. It is difficult to know or predict how your judge or jury will view your arguments. The judge or jurors may have prejudices that keep them from fully understanding your situation. By taking the decision away from them, you stay in control of the outcome of your case. The mediator has no right to say which party wins or loses, so the mediator is able to focus on ideas that might promote settlement.
Mediation also gives you an opportunity to be part of the process. You will hear first-hand what your opponent and her lawyer have to say. You will not get your information filtered through your own attorney. Many times this can be help settle the case, because your opponent may not be getting good first-hand information.
As you might be able to tell, I think mediation is a very good way to resolve disputes. It shortens the process, reduces attorney fees, and puts the control over the decision in your hands, rather than in some judge you might not be able to trust.