What Happens During Mediation of a Commercial Contract Dispute?

If you are going to mediation because you are required to do so by a contract or a court order, you should read the agreement or court order carefully and consider retaining a lawyer to help you understand the specific process you are obliged to follow.  Mediation that is subject to specific court or institutional rules might unfold differently than what is described below.

Pre-Mediation Contact

A mediator might contact the parties involved in a dispute before the mediation to get a better understanding of the dispute, what the parties have tried unsuccessfully to do to resolve the dispute, and whether the parties have ideas for fair and workable solutions.  The mediator might want to learn about the parties, and if the parties are companies, organizations, or families, about the people who will represent the larger group in the mediation.  If there are lawyers involved, the mediator might also want to talk to the lawyers representing the parties, with or without the parties themselves, to get a better understanding of the legal positions of the parties.

What Happens During the Joint Mediation Session

Whether online or in-person, a joint mediation session is usually held with representatives of all parties present.  Although called a joint session, the mediator might talk to the parties separately, in “caucuses,” during the joint session.  The mediator will generally help to clarify the issues and reach a shared understanding of the various facts and views involved in the dispute.  The mediator might work with the parties to evaluate new information, communicate clearly, consider possible solutions, and prepare responsive offers.  Typically, through the iterative sharing, evaluation, and modification of proposals, the parties reach a solution that is preferable to enduring the problem or pursuing litigation.

Documenting an Agreement Reached in Mediation

If an agreement is reached, the parties or their attorneys will normally write it down.  The mediator may provide a general form or ask questions to clarify the agreement but will not generally prepare the written agreement.  The written agreement might be reviewed or further negotiated after the joint mediation session, sometimes with a follow-up mediation session to finalize the details.  Once the parties are content with the written agreement, signed copies are exchanged.  The agreement might say that it is meant to be a binding and enforceable contract.

Planning for Complex or Multi-Party Disputes

Mediators have different styles and even the same mediator might use a different process or different techniques in different cases, but in general the mediator is trying to identify and improve on potential solutions until a mutually acceptable solution is found.  This can be time consuming, especially in complex, high-value, or multi-party disputes.  Ask your lawyer or mediator about how long you should plan to be in mediation, because mediation will be much less stressful and more productive if you have arranged suitable back-up for your other obligations and can remain focused on the process.  Remember that a long day or couple of days in mediation might resolve a long-term problem.  This is an investment to get time and energy back later, when the dispute is resolved and no longer needs your attention.