During litigation, you may hear your lawyer refer to a process called mediation. Mediation is an informal method of attempting to settle the case. It is not a judicial proceeding and it is not binding on the parties. Here is how it works.
Generally, one of the parties will suggest trying to mediate the case. If both parties are agreeable, they will get together and select a mediator. A mediator can be any disinterested third party, without ties to either side, who can objectively hear the facts and the evidence and bring both parties to a mutually agreeable settlement. Mediators are usually lawyers who have been specially trained in the methods of mediation.
Once a mutually acceptable mediator has been selected, the parties then agree that the fees of the mediator will be paid by one side or split between the parties. Then the parties agree on a place and time to mediate the case.
On the day of the mediation, the mediator brings both parties to one room and explains how he has no interest in the outcome of the case. He also explains his credentials in mediating past cases. Then, everyone signs an agreement stating that all statements made at the mediation cannot be used in any court proceeding and that the mediator cannot be called as a witness.
After each side makes a brief opening statement to the other side, the parties will then be separated to different rooms. The mediator will spend the rest of the day going back and forth between the two rooms to discuss the strengths and weaknesses of the case with each party. He will also communicate settlement offers back and forth.
Usually, unless he is instructed to keep something that is said in confidence, he will argue your case to the other side (in an attempt to get more money from them if they are the defendant or to tell them to take less money if it is the plaintiff).
This back and forth process continues until the parties reach a mutually agreeable number at which they are willing to settle the case or until the mediator is satisfied that the case cannot be settled in its present posture.
The mediator’s only interest is in having the case resolve. He does not care whether the case settles for one dollar or for one million dollars. He is there to objectively evaluate both parties’ arguments and defenses and point out the strengths and weaknesses of the case to get the parties to realistically evaluate their chances of winning the case. He will explain that a settlement reduces each side’s risk of a worse outcome.
Sometimes, the parties feel like the mediator is only telling them the bad parts of their case and not focusing on the good parts. However, when he goes to the other side, he does the same thing; tells them the bad parts about their case (the good parts for your case). Since the parties are separated, they do not see how the mediator “works” both sides to get them to agree on a common number.
Once the parties agree to a number, a brief statement is written up and signed by both parties. More formal settlement documents and money are usually exchanged within 30-60 days. If the case does not settle, the parties proceed to trial and nothing said in the mediation can be used by either party. It is non-binding on the parties.