Jim Porter: Mediation is a good option
June 18, 2015
"People with problems, like people with pain, want relief, and they want it as quickly and inexpensively as possible … Our civil justice system is too costly, too painful, too destructive, and too inefficient for a truly civilized society. To continue the use of the adversarial process for the resolution of conflicting claims is a mistake that simply must be corrected."
That remarkable quote came from former Chief Justice of the U.S. Supreme Court Warren E. Berger.
Chief Justice Berger believed in the court system, of course, but recognized that litigation (lawyers in courtrooms) is expensive, time-consuming, at times stressful, and on occasion an inefficient forum for resolving disputes.
Other countries like Iraq and Libya have more expedient means of dispensing justice, or injustice as the case may be, but litigation is more civilized. But it ain't perfect.
One of the options to litigation is mediation, an informal voluntary settlement process where an impartial person, a trained mediator, helps broker an agreement between opposing sides.
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Statistically, mediation is generally successful with success rates as high as eighty percent. If mediation is successful, you don't go to arbitration or to the courtroom.
Sierra Mediation Association
I became certified as a mediator in the early 1990's and even formed a small group called the Sierra Mediation Association. At the time, mediation was very avant guarde, like me, and a rarity, again like me.
Today it is commonplace — the preferred choice of alternative dispute resolution for settling legal disputes.
Here is the usual progression: Dispute develops, e.g. owner v. contractor, the parties negotiate, if necessary they go to mediation, if that fails it's off to arbitration or litigation which is expensive and time consuming.
Porter in 1992
I found an old Law Review column I wrote on mediation in March of 1992, "Mediation is a process, not commonly used in our area, that assists parties and their attorneys by helping them to resolve disputes through problem-solving techniques … The mediator points out risks and potential liabilities while clarifying positions and helping the parties look at their real needs and true motivations … Mediation can be done with or without lawyers … the mediator does not make the final decision; the parties reach a consensus — or try."
I suggest adding a mediation clause to your construction, real estate, business, commercial and other contracts to ensure the right to mediate. If it is successful you save time and money.
Mediation clauses in contracts can be as simple as something like this: "All disputes and controversies arising out of this agreement shall be referred to mediation by a mutually agreeable neutral facilitator before arbitration or litigation."
Put Some Teeth into It
To put teeth into the mediation clause, a sentence like the following, similar to CAR forms, can be used:
"If any party commences any arbitration or court action based on a dispute or claim to which this paragraph applies without first attempting to resolve the matter through mediation, then in the discretion of the arbitrator or judge, the party shall not be entitled to recover attorneys' fees, even if they would otherwise be available to that party in such arbitration or court action."
It would not be uncommon to add a sentence like this: "The following matters are excluded from mediation: (a) foreclosure, (b) unlawful detainer, (c) mechanic's liens (d) probate and small claims matters and (e) provisional remedies like injunctions."
For many of you, this is old news, but old or new, consider adding a mediation clause to your business contracts.
Clause or no clause, consider mediation for dispute resolution. Then send me the money you save on attorney's fees.
Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee, Tahoe City and Reno. Jim's practice areas include: real estate, development, construction, business, HOAs, contracts, personal injury, mediation and other transactional matters. He may be reached at email@example.com or http://www.portersimon.com.