Mediation

Resolution (i.e. arbitration and litigation) is that the mediator does not impose a solution but rather works with the parties to create their own solution. Mediated solutions often include relief not available in arbitration or litigation.

Mediation is flexible and creative. The actual process varies from case to case depending largely on the parties’ needs and the mediator’s style. Usually, the parties meet to discuss the issues face-to-face. The mediator helps the discussions remains focused and productive. The mediator may hold private caucuses with each party separately, and will carry messages (clarifications, questions, proposals, offers, and counter offers) back and forth between them. The mediator uses the private caucus and other techniques to facilitate the negotiation.

Securities mediation is non-binding. The emphasis is on fashioning a solution satisfactory to all. However, if the parties cannot negotiate an acceptable settlement, they may still benefit from the process by narrowing the issues to be arbitrated or litigated.

The mediator can defuse hostile attitudes and remedy miscommunications. The mediator is a mirror of reality, who can help soften or eliminate extreme negotiating positions. Through the mediator, parties assess weaknesses in their own case and recognize potential strengths of the other side. The parties can more clearly view matters previously distorted by anger and emotion.

Securities mediators are knowledgeable in the subject matter of the controversies. Within the privacy of the caucus, mediators can help each party analyze the strengths and weaknesses of its complete case. Most significantly, the mediator can explore creative and innovative solutions that the parties–caught up in adversarial negotiations–might never contemplate.

Many Mediators are also Arbitrators with training and experience in resolving securities matters. However, the skills required for each role are unique, and the two neutral pools are separate and distinct. To qualify as a securities mediator, an individual must submit four letters of reference from parties who have observed the applicant’s mediation technique. Formal mediator training and experience as a mediator are additional requirements of service.

All parties must agree to the selection before a mediator is assigned to a case. Either side can stop the mediation process if dissatisfied with the mediator.

Mediation usually entails lower legal and preparatory costs, there is minimal interruption of business or personal life, lost productivity is kept to a minimum, and the fees and expenses of mediation are modest.

The joint session may start with an opening statement by the mediator. The mediator explains the framework of the session, encourages active participation, and reminds all parties of the shared goal of resolving the conflict and of the confidentiality of the settlement negotiations. In the joint session, the mediator gives each party the opportunity to make a presentation and asks for a commitment by all participants to work hard toward resolution.

Party presentations generally address facts, liability, and damages, as well as background information, key issues, and needs. The tone is one of respectful communication. Each presentation is directed to the mediator and to the other side. Participants do not provide sworn testimony and are not subject to cross- examination. At the conclusion of the presentations, the mediator may ask clarifying questions.

The second stage of the mediation may then involve meetings, or “caucuses,” held by the mediator privately and separately with each party. Caucuses are confidential so that each party can be open and candid about the case. Only if a participant grants permission will the mediator reveal information disclosed in these private sessions. This gives the mediator the opportunity to help the parties examine strengths and weaknesses of the case, analyze risks objectively, and develop options for resolution. The mediator explores each party’s needs and underlying interests in resolving the dispute. Through a series of caucuses, the mediator can compare settlement expectations, facilitate the exchange of settlement offers, and help the parties reach common ground.

It is critical to the success of any mediation process that all individuals with authority to resolve the dispute attend the mediation session. The failure to bring parties or representatives with authority to settle will hamper the efficiency of mediation.

Neither the parties nor the mediator may disclose anything said during the mediation in any other proceeding, unless authorized by all other parties or compelled by law. No verbatim or other record is made of mediation sessions.

Most parties express satisfaction with the mediation process even when they do not reach full settlement. Proper preparation for the mediation session readies the parties for the arbitration. During the mediation process the parties and their representatives gain a better understanding of their case, which helps them focus on the next steps. Further, the mediation process moves very quickly and does not delay the ultimate resolution. The improved lines of communication often place the parties in a better position to settle the case at a later stage.