When parties want to minimize litigation costs and court fees, they typically turn to alternative dispute resolution (ADR) to resolve their problems, typically at a fraction of the cost of full litigation. There is within the realm of ADR multiple options, mediation, arbitration or even something called binding mediation.
Binding mediation begins and follows the same trajectory as does normal mediation, the two sides meet, discuss, negotiate, and hope to reach a mutual agreement in the end. The mediator that sits in on the process will have closed meetings with each side separately, where it is likely the mediator will be told information that the party wishes their counterpart not know, or even for a judge to know had they decided to litigate. The mediator is given more information by both parties than is normally the case.
If at the end of the mediation sessions there fails to be an agreement made by the two sides and full blown litigation is the only likely arena that will provide a result in the case, the two parties could decide to try a binding mediation instead. The parties can agree to allow the mediator to resolve the case. The mediator will have had the opportunity to gain a plethora of knowledge from both sides, information and thoughts that neither side wishes their counterpart to know.
Once the two sides agree to the binding mediation, the mediator’s decision is final and cannot be overturned. Further, once the mediator is given this role of final decision maker, he or she cannot return to the role of intermediary between the two sides.
There are two instances in California, Bowers v. Lucia and Lindsay v. Lewandowski, where the side that felt wronged by the mediator’s final decision in binding mediation wanted to get the mediator’s final decision overturned. In both cases the court denied to overturn the mediator’s decision. The Court found that both parties were fully aware of what they were agreeing to when they decided to go with binding mediation, and mutually consenting to what the mediator would ultimately decide as the result. The parties had to accept the decision as binding and enforceable under the law.
So what does all this mean; simply that, just like it is vital to be prepared when going into litigation, it can be just as vital when deciding to use ADR mechanisms to resolve issues without entering the courtroom. This is most definitely the case when considering binding mediation. Do not leave anything on the table when talking in private to the mediator, do not leave anything out when going through the mediation process. Just like in the courtroom, do not leave anything to chance.
The next time you find yourself looking at a situation that will likely require litigation to produce a final result, don’t just generally think about ADR as a long shot to get a final decision. If the cost and length of litigation is too much to handle, consider binding mediation as a valid alternative. A final binding and enforceable outcome will be rendered, with what is likely to be a fraction of the costs of formal litigation. However, if binding mediation is decided, be as thorough there as you would be during a trial in the courtroom. There are no take-backs in binding mediation.