What if Mediation Does Not Settle the Case?

Wiley Miller's "Non Sequitur" comic strip shows a mediator sitting in her office chair with a small table next to her but she is sitting in the middle of a full-size boxing ring. She is speaking to the mediation parties (a man and a woman) and says: "Ok... Since we couldn't reach an agreement in the first phase of mediation, let's move on to phase 2..."

Since a boxing match is not a reasonable alternative to mediation, what are the options if settlement is not reached through mediation? If a case has not yet been filed, the next step may be for the aggrieved person to file the lawsuit and seek relief from the court. As sometimes happens, the information discovered during the mediation process could result in the alleged aggrieved person changing his or her mind and dropping the matter entirely. This is not a common occurrence, but it has happened.

Or, as more often happens, it may be determined in mediation that additional information needs to be discovered by the parties before a genuine meeting of the minds can occur. In that case, maybe a lawsuit and its formal discovery rules (written interrogatories, document subpoenas, recorded depositions of parties and witnesses, experts, etc.) is the path a dispute must take. However, a lawsuit is not required if the parties can come to an agreement to conduct informal discovery for the limited purpose of obtaining key information to assist with settlement discussions without diving headfirst into all-out discovery combat or filing a public lawsuit.

In the event that a lawsuit is ultimately filed, while the attorneys are busy conducting discovery and preparing the case for trial, there is always the option of bringing all the parties back to the mediation table once more information has been produced. Often, the information a party obtains through the discovery process not only helps him/her learn more about the opponent's case, but may also shed light on weaknesses of his/her own case, resulting in a stronger incentive to resolve the case before all those weaknesses are brought to light in court. This typically happens to ALL sides of a dispute, whether the weakness is the uncertainty of witness or documentary support, a lack of money to fund the remainder of the discovery and trial process, or even a lack of emotional stamina by a party to continue engaging in warfare. Any of these, and more, could be reasons that pull parties back to mediation even after one session did not settle the matter and a lawsuit was filed.

On the other hand, if mediation was required under the terms of a contract and the issues were not resolved in mediation, the next required step may be arbitration if the contract calls for it, in which case filing a lawsuit in court is not an option. (See prior post for the differences between mediation and arbitration). In that case, the aggrieved party typically files his/her notice of arbitration pursuant to the terms of the contract to get the arbitration process started.

One last alternative is that the parties, who have at least started to negotiate in mediation, continue their settlement discussions informally and resolve the matter through direct communication through their lawyers - or, if there are no attorneys, with each other. This may not be the typical result, but it does happen.

These are the options in the event that mediation does not settle the case. The more interested both parties are in resolving the case through mediation, the more likely the case will settle and these options will not be necessary.

Whatever the next step, mediation is at the very least a place where productive settlement discussions can start, where agreements can be made on small or large issues, if not the entire matter, or agreements formed to conduct informal discovery to make the next mediation session the one that settles the case.