When Should Mediation Begin?

Filed under: Business Law, Real Estate Law

In any legal conflict, mediation may ultimately pave the way to a solution. It can shorten the length of the conflict, save money for both involved parties, and often provides the opportunity for a more creative settlement. Especially due to the high cost of litigation or arbitration, the large majority of real estate and business cases resolve before trial, often at mediation.

However, there is some disagreement over the timing of mediation. Should it be attempted in the beginning of a conflict, before either side becomes too entrenched in their positions? Should it be attempted sooner in order to prevent litigation costs from getting out of hand? Or should mediation begin later, after discovery has been completed, to prevent either side from settling before all facts are known?

It’s clear that the timing of mediation is important. Mediate too soon and one or both parties may sign an agreement that they later regret. Wait too long and much of the cost savings have already been lost in litigation proceedings.

The best way to answer this question may be for each side to ask themselves what they hope to gain. The true purpose of mediation is to resolve conflict, and much of any conflict is emotional rather than logical. Is it really all about the amount of money in question? Or is one or both parties hoping to prove a greater point?

Both parties should also ask themselves how much money is at stake, and how far they are willing to go for that amount of money. Is it worth potentially years of their lives? Is it worth the cost of litigation or arbitration, time off of work, and the stress of pursuing a lengthy case? In some cases the answer really might be yes – and those might be the cases for which mediation is not pursued.

In many everyday cases, however, the conflict revolves around emotion rather than cold hard cash. In these situations, face-to-face mediation can often get to the root of the problem and solve it, before the proceedings become too expensive and time consuming for either party.

One final point, in cases based upon real estate contracts, there is typically a provision that mandates mediation before any legal action is taken, with the penalty for failing to mediate being the loss of the right to recover attorney fees. Given that it is attorney fees that often drive such cases, then timing for mediation is taken out of the hands of the principals – it must be undertaken at the start of a dispute, although its chances of success are greatly increased if the parties exchange all relevant information before any mediation session.

Empowering your real estate and business decisions with accuracy and accountabilityContact Us
Learn More »

Real Estate Law

Real Estate Law

As veteran Southern California real estate attorneys, we protect your transaction and your assets with experienced legal representation.

Already involved in a dispute or situation that requires legal counsel?  Contact us today and let us handle the stressful details.

Learn More »

Business Law

Business Law

Whether you are just getting started and need a business entity formed, or you are well established and require outside general counsel with a contract, Larson & Solecki LLP has the expertise and experience you need.

Our team of business attorneys has seen nearly every situation and can advise you on the proper action, whether in San Diego, Temecula, or throughout Southern California.