Mediation

What is Mediation?

Mediation is a process in which a neutral third party (a “mediator”) helps people or businesses resolve a dispute through negotiation. The mediator does not decide who wins the case. Instead, the mediator helps the parties identify the issues, evaluate possible solutions, and work toward an agreement. Mediation is a form of alternative dispute resolution (ADR).

In real estate disputes, mediation is often used as an alternative to going through a full trial. In many California Association of Realtors (C.A.R.) contract-based disputes, mediation may be a prerequisite to filing a lawsuit if a party would like to preserve its right to recover prevailing-party attorneys’ fees from the other side in the event of a win. The result depends on the language of the applicable contract and the circumstances of the dispute.

How Mediation Works?

A mediator, often a retired judge or experienced attorney, facilitates discussions between the parties. The mediator may meet with everyone together or separately and can help clarify the strengths and weaknesses of each side’s position.

The mediator does not represent either party and does not have the authority to impose a decision. The parties remain in control of whether they reach a voluntary settlement.

At Schorr Law, we find the most effective mediators use breakout sessions and do not require the adverse parties to meet face to face in a “joint session.” During these private sessions, also known as caucuses, the mediator can discuss the dispute confidentially with each side and communicate settlement proposals between the parties.

Is Mediation Binding?

Mediation itself is generally non-binding. A settlement is not reached unless all parties agree to the proposed resolution.

If the parties reach an agreement, the terms can be put into a written settlement agreement that becomes legally enforceable and binding. If no agreement is reached, the parties generally retain their ability to continue with litigation.

California law generally provides that communications, negotiations, and settlement discussions made during mediation are confidential and are not admissible in court, subject to statutory rules and exceptions. This gives the parties the ability to negotiate more freely without worrying that their settlement discussions will later be presented to a judge or jury.

Mediation in Real Estate Disputes

Mediation can be particularly useful in real estate disputes because the parties often have an ongoing relationship or a shared interest in the property.

It may be used to resolve disputes involving:

• Purchase and sale disputes
• Leasing disputes
• Property boundaries and encroachments
• Easements and access rights
• Partition actions
• Landlord-tenant disputes
• Construction disputes
• Ownership disagreements

Resolving these issues through mediation can sometimes avoid the time and expense of a trial. It can also give the parties more flexibility to negotiate practical terms that may not be available through a court judgment.

Even if the case does not settle at mediation, you always learn something. The process may help the parties better understand the evidence, the disputed legal issues, and the other side’s settlement position.

At Schorr Law, we have mediated hundreds of real estate disputes. We don’t do this blindly. We try to find the right mediator based on case dynamics, party personalities, and the type of case. We have people we like to use and are open to others. What we try to avoid is the “limp” mediator who does not put much effort into the mediation and just shuffles numbers back and forth.

Benefits of Mediation

One of the biggest advantages of mediation is that the parties maintain control over the outcome. Rather than having a judge impose a decision, the parties decide whether they are willing to compromise and what terms are acceptable.

Mediation can also be more private and flexible than court proceedings. It may allow the parties to resolve a dispute while preserving a business or personal relationship. Depending on the case, mediation may also reduce the cost, delay, and uncertainty associated with trial.

Common Legal Issues

Mediation does not guarantee that a dispute will be resolved. Parties may disagree about the value of a claim, the appropriate settlement terms, or whether they are willing to compromise at all.

If mediation is unsuccessful, the dispute may continue through litigation, arbitration, or another dispute resolution process, depending on the parties’ agreement. The parties may also continue settlement negotiations or return to mediation after exchanging additional information.

Mediation vs. Arbitration

In mediation, the mediator helps the parties negotiate but generally does not decide the dispute. In arbitration, an arbitrator hears the dispute and may issue a binding decision. Learn more about the difference between mediation, arbitration, and litigation.

California Law Considerations

California courts and attorneys commonly encourage mediation as a way to resolve disputes without the need for trial. In some types of cases, mediation may be required or strongly encouraged before certain proceedings move forward. In fact, some judges require parties to participate in mediation or another ADR process before they will let the case go to trial.

Because settlement through mediation is voluntary in many circumstances, the parties generally remain free to reject a proposed settlement and continue pursuing their legal claims. Even when participation in mediation is required by a contract or court order, the mediator generally cannot force the parties to settle.

Real Estate and Financing Terms

If you are involved in a real estate dispute and mediation has been requested or required, speak with a real estate litigation attorney before agreeing to settlement terms.