Should You Try Mediation Instead of Filing Suit?

By: Denise A. Davenport and Lisa A Stegink

Even if your association can afford to litigate a dispute, suing may not be your best option. By pursuing alternative dispute-resolution methods such as mediation, you may be able to reach a settlement that preserves relationships and saves money. (Titled "Agreement Without Aggression" in the print edition.)

We're a litigious society. Perhaps the hype surrounding multimillion-dollar jury awards and our profound inner need to be right are to blame. In any event, people have come to realize litigation is not necessarily the best or only approach to resolving conflicts. It can be expensive, time consuming, disruptive, and—potentially most important for associations—damaging to relationships.

One of the available options is called alternative dispute resolution. As a concept, ADR has been around in the United States for close to a century, but it wasn't until the 70s that it took hold as a movement to peacefully resolve conflicts that defined much of the 60s. Today, ADR is common in institutions like the federal government, where agencies such as the Air Force have had ADR programs in place for more than 20 years.

Mediation is one of several ADR methods in addition to arbitration, negotiation, collaborative law, and conciliation. Mediation involves the participation of a "neutral" third party (the mediator) to help disputing parties achieve a mutually acceptable agreement. Mediators do not render advice or decide the outcome of a dispute. Instead, they facilitate discussion between and among the parties through negotiation and compromise, ultimately drawing out consensus and helping the parties come to an agreement, and, when appropriate, salvaging the relationship.

Many courts in the United States and abroad also offer—and sometimes require—parties to participate in ADR processes such as arbitration or mediation prior to taking cases forward to trial or decision by a judge. Though parties cannot be forced to come to agreement through mediation, some courts urge parties to participate in mediation to minimize use of limited court resources.

For the association executive concerned that mediation doesn't carry the same authority as a decisive (if unwanted) lawsuit, it's important to know that mediation can offer parties specific legal protections and has certain advantages over litigation, which include the following:

  • Mediation cannot happen without the voluntary consent of both sides. Mediation is nonbinding, meaning that either party has the right to abandon the process without legal consequences, except to the extent their agreement is captured in writing. Not so in litigation, where parties do not have the benefit of choosing to participate and the consequences of nonparticipation or noncompliance are potentially severe.
  • Discussions held during the mediation are confidential. Norecord of the process exists, with the exception of the final agreement. Discussions held during mediation are not admissible in court by either party, and the mediator cannot be called as a witness in the case. Litigation, as we all know, can be sensational. Hearings and trials are open to the public and the rules of evidence apply, meaning that documents and statements made may be used against a party.
  • Though a mediator also may be a lawyer and even provide legal information during mediation, a mediator's role does not include giving legal advice. A mediator's purpose is to facilitate a conversation between two disputants. That does not mean, however, that disputants cannot or should not consult legal counsel. At any point in the process, a party may consult an attorney or choose to have an attorney present at a mediation. Additionally, parties are encouraged to have any agreements reviewed by legal counsel before signing.

Saving Time (and Relationships)

The benefits of mediation are varied but generally consistent. Below are a few that may be particularly appealing to associations:

Less time and money are spent. Court dockets are so full that getting on the calendar can take up to a year. Getting to trial can take much longer. Add the cost and expense of motions and appeals, the disruption of day-to-day business, and the fact that litigation detracts from an association's leadership and staff time and attention, and the costs can skyrocket.

Mediations can be scheduled promptly, at the parties' convenience, and can take anywhere from a few hours to several weeks. Court costs are nonexistent, and mediators typically charge by the hour rather than assess fees based on a percentage of the award or settlement. While litigation certainly has its place, applying member dues to solve an issue with civility might be a better long-term investment for an association.

Parties negotiate directly and determine the outcomes. No judge, jury, or other third party imposes their judgment on the situation. The mediator helps participants explore alternatives and provides a safe environment for negotiation but does not tell the parties what the outcome will be.

Relationships can be preserved. In associations, great value is placed on preserving business and personal relationships. Groups of competing organizations or professionals come together in an association to advance the industry or profession as a whole. In order to work together effectively, relationships must be attended to, especially where viewpoints diverge. Mediation and mediation-like processes help parties focus on larger goals and deeper interests while bringing diverging viewpoints together in a manner designed to minimize direct personal conflict.

The odds for success are good. Because of the level of confidentiality attached to ADR, tracking the number of successful mediations is difficult. However, the American Bar Association (ABA) reports that mediations end in agreement 70 to 80 percent of the time. The American Arbitration Association estimates that more than 85 percent of all mediations result in a settlement. ABA also reports that mediations "have high rates of compliance," meaning parties are more likely to fulfill obligations and commitments to which they have voluntarily agreed.

Bringing ADR to the Association

Mediation, and the techniques and tools of an effective mediator, are not limited to formally resolving disputes between organizations or individuals. Mediation also can be an effective tool in the boardroom, at committee meetings, and in other groups within associations.

An individual experienced in facilitating discussions among groups with highly diverse views or in emotionally charged situations can unearth the deeper concerns of the voices around the table. He or she can find intersecting values and goals and create space for new possibilities to emerge where at first only strong, divergent opinions prevailed. That's the quintessential role of the mediator: to look past positions and unearth interests and principles underlying those positions.

Mediation techniques can successfully lead boards in strategic discussions, help failing organizations focus on fundamental goals, and find solutions to seemingly opposing member positions in regulatory negotiations with government agencies. Even having a third party facilitate a potentially charged board discussion can help neutralize inflammatory comments, ensure that all board members and viewpoints are heard, and reveal underlying concerns that may not otherwise be voiced when a CEO or chief elected volunteer officer is tasked with leading such a discussion.

Mediation techniques can help improve the culture and dynamic of the boardroom, promote independent thinking among board and committee members, and improve decision making overall. This is particularly true where the board facilitator has knowledge of board governance requirements and practices as well as an intimate understanding of board and organization dynamics.

That understanding can be just as helpful with components and volunteer groups as it is in the boardroom. When the views, goals, and strategies of volunteer leaders of a national association and its chapters are in sync, the relationship hums like a well-oiled machine. If a little "rust" appears, however, attention may focus on who is to blame. Mediation processes can refocus the conversation on how to repair the "rust" and prevent further damage within the organization. In the same way that mediation tools can be effectively used in the boardroom, relations with chapters, volunteers, and other constituents may be improved through the use of mediation and facilitation techniques.

The process of mediation in component and volunteer relations empowers members. It gives a voice to volunteers who may have raised concerns that were ignored. It empowers members who may have ideas on how to fix the "rust" but were excluded from the discussion because the root cause was a larger problem requiring the attention of the national leadership. While the process seeks to draw consensus, a skilled mediator is able to convey empathy, insight, and understanding to those involved in the conflict so that everyone walks away with a better understanding of differing points of view—vital to salvaging cherished volunteer relationships.

Mediating chapter and volunteer relationships may be as informal as holding discussions when needed or as formal as adopting and implementing procedures to resolve conflicts among volunteers or the national and chapter leadership. Be careful, however, not to let conflict-resolution procedures become the focus of the organization (e.g., resolving conflicts among board members) when its real focus should be how to best serve members. For example, while one national professional association had formal procedures in place for resolving conflicts among volunteer chapter leaders, it discovered the organization was needlessly spending resources on conflict-resolution when it could rely on existing policies to handle bad volunteer behavior (e.g., through removal provisions). That realization has allowed the association to focus instead on serving members and only using the conflict-resolution procedures when the outcome is likely to lead to more than just a short-term fix.

Mediation also can be an effective way to handle disputes with and among employees. The Air Force uses primarily mediation (among all ADR techniques) to resolve employment disputes. While participation is voluntary, the Air Force successfully uses mediation to handle all types of disputes including employee grievances, unfair labor-practice charges, and Merit System Protection Board appeals. Mediation is growing in the private-employment arena as well, with many mediators skilled in handling employment-related cases.

Many agreements with vendors, consultants, and other providers now include mediation clauses. Again, while the parties cannot be forced to come to agreement through mediation, a contract clause can be added that, if any disputes arise under the agreement, the parties must first seek to resolve the disputes through mediation before resorting to arbitration or litigation. (See "A Mediation Plan in Writing" above for a sample mediation clause.)

First Steps

If a law has been broken, your first step as an association executive is to contact legal counsel for advice. Discuss with counsel the possibility of mediation to address the organization's specific circumstances. After that, consider consulting a mediator.

A word of caution: Unlike the practice of law, mediation is not a licensed and regulated field, and anyone can claim the title of a mediator. In many states, mediators are certified by courts in order to mediate certain disputes; check your state and local court systems for similar information. The Association for Conflict Resolution, American Arbitration Association, and other alternative dispute resolution and mediation websites have more information.

Moreover, being a mediator—or even a lawyer—does not ensure a person has the necessary skills or training to mediate a dispute or discussion within your organization. As you decide whether mediation can help you, check references, ask about mediation training and facilitation experience, and make sure the mediator you hire is familiar with association governance and the issues to be resolved.

As both a formal and informal process, mediation can be a useful and valuable part of your association's toolkit. As a formal process, it is a means to resolving disputes quickly and confidentially with minimal financial and human resources. As an informal process, facilitative mediation provides a forum for everyone to be heard, and that's always an important element in a member-driven organization.

Sidebar: 5 Questions to Ask a Potential Mediator

Whether you are looking to hire a mediator to resolve a formal dispute or facilitate a boardroom conflict, here are a few questions to ask to help you evaluate whether the person has the skills and experience you need:

  1. What type of mediation training or certification do you have?
  2. What practical experience do you have? More specifically, what types of disputes have you mediated?
  3. What do you know about associations and association law and governance, including issues of ethics and conflicts?
  4. What is your experience facilitating board discussions?
  5. What references can you provide?

Sidebar: A Mediation Plan in Writing

Edward G. Modell, president of the International Coach Federation (ICF), based in Lexington, Kentucky, uses the alternative dispute resolution clause below in the association's agreement with its association management company.

Dispute Resolution Procedures. The parties agree that any disputes arising hereunder that the parties cannot resolve between themselves shall be addressed in the following manner:

[a] Mediation. First, the parties shall engage the services of a mediator through the American Arbitration Association. The parties shall share the costs of the mediation equally. Unless the parties mutually agree otherwise, the mediation shall be in the Commonwealth of Kentucky at a time reasonably agreeable to both parties. Each party may be represented by counsel at such mediation, and AMC shall have present a member of its senior management and ICF shall have present a member of its executive committee or its designee, each with full authority to bind said party to any resolution that may be mediated.

[b] Binding Arbitration. Second, in the event mediation fails, any controversy or claim arising out of or relating to this management agreement, or the breach hereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as in effect at the time of such controversy or claim, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Unless the parties otherwise mutually agree, the arbitration hearing shall be held in Lexington, Kentucky.

Online Extra Sidebar: More Resources on ADR

Here are some additional resources for those considering alternative dispute resolution:

"Mediation in the Non-Profit Organization" by Eugene Henderson

From the article: "When conflicts occur within the ranks of the non-profit, a unique need arises in the quest of an equitable resolution. Conflicts, left to themselves, always grow! They must be resolved as quickly as possible. Mediation in the non-profit is the most efficient means for achieving dispute resolution!"

"What You Need to Know about Dispute Resolution," from the American Bar Association Section on Dispute Resolution

From the article: "Dispute resolution processes, such as mediation, have several advantages: It can be a cheaper and faster resolution with greater involvement by both parties in reaching a solution, thus giving them more control over the outcome. In addition, dispute resolution processes are less formal and have more flexible rules than the trial court."

"The Three Little Pigs Go to Mediation"

An animation produced by the U.S. Department of Veterans Affairs that takes a playful look at the elements of the mediation process.

Denise A. Davenport is senior advisor at the National Rural Electric Cooperative Association in Arlington, Virginia, and is certified by the Supreme Court of Virginia to mediate court-referred cases. Lisa A. Stegink is an association lawyer and a founding member of Chicago Law Partners, LLC. Emails: [email protected], [email protected]

Denise A. Davenport