Mediation is a simple and informal settlement process in which the Mediator acts as a facilitator to assist the parties in reaching agreement. The Mediator holds joint conferences with all parties as well as private separate conferences with the parties to discuss the facts, issues, and risks. The Mediator's experience and understanding of the issues and neutral perspective enhance the possibility of reaching a settlement by agreement of the parties.
In mediation, the mediator does not act as a judge and does not make any decision about who is right or wrong. In arbitration, the parties present their witnesses and evidence to the arbitrator who decides the case in favor of one or more of the parties. Mediation is more informal and is more of a collaborative process than arbitration. A mediation can be scheduled anywhere the parties and mediator agree. Usually, it takes place in a conference room at a location convenient to all parties and can resolve many disputes in a half-day or less.
Almost all disputes are good candidates for mediation. Mediation can be used in a wide variety of contested matters or adversary proceedings such as: valuation, fair market value, amount or validity of secured status, lien avoidance, exemption issues, discharge and dischargeability, marital distribution matters, plan disputes, adequate protection issues, financing and restructuring issues and labor disputes.
There are many advantages of mediation including cost savings, direct party input and participation, neutral third-party input and confidentiality as provided by law. Mediation is a flexible and informal process that enhances communication and leads to swift resolution. There are also established procedures that address a variety of subjects and govern the Bankruptcy Court Mediation Program.