Mediation Packet

Even the best-intentioned buyers and sellers occasionally have honest disputes with other parties. There is an ongoing need for an efficient, economical mechanism to resolve such disputes. Arbitration is valuable, but mediation is simpler and easier.

Diane Disbrow, a REALTOR® and Trainer, highlights the advantages of mediation as means for resolving disputes between real estate professionals.

What is Mediation?

The act or process of mediating; intervention between conflicting parties to promote reconciliation, settlement, or compromise.
–Webster’s Ninth New Collegiate Dictionary

  • Arbitration and mediation are valuable in resolving business disputes.
  • Both mediation and arbitration are private and neutral/with expertise.
    But . . .
  • Mediation is an attractive alternative to arbitration.

MediationArbitration
Low or no costModerate cost
Little delayModerate delay
Win/win outcomeWin/lose/split
CollaborativeAdversarial
Maximum range of solutionsResult limited to monetary award
Improves relationshipsMay damage relationships

Key Features

Voluntary*/Private Process
  • Parties decide to enter the mediation process.
  • Parties can leave the mediation process at any time.
  • Parties have complete control over the outcome.
Neutral/Impartial Mediator
  • Understands issues quickly because typically, the facilitator is familiar with real estate practices and customs.
  • Mediates only matters in which he/she remains neutral and impartial.
  • Discloses conflicts of interest (parties may agree to continue following disclosure or terminatensession).
  • Facilitates and assists with negotiations – controls the process, not the substance.
  • Honors the concepts of self-determination, respect, and civility.
  • Enhances the parties’ abilities to understand their own and each other’s needs.
  • Helps parties understand the alternatives to settling.
  • Should possess these qualities, according to William Simkin in Settling Disputes:
    • wisdom of Solomon
    • the hide of a rhinoceros
    • the patience of Job
    • abilities of a half-back
    • wit of the Irish

*Voluntary unless REALTORS® are required to mediate by their association

Confidential Process

  • Mediation is a confidential settlement process.
  • Neither the mediator nor the parties disclose the communications or conduct of the mediation, unless all parties agree (with limited exceptions, such as risk of harm).
  • Ethical violations discovered as a result of participation in the mediation are not reported.
  • Settlements discussed in mediation are not admissible in arbitration.
  • Generally a mediator is not a witness in arbitration or court.
  • Information gathered and exchanged may be used in arbitration only to the extent that it was obtained independently from the mediation process.

Why Mediation Works

  • Most disputes are successfully resolved
  • High speed
  • Low or no cost
  • Flexible
  • Maintains/improves relationships
  • Improves poor communication/clarifies misunderstandings because parties come together and talk
  • Discovers/addresses the true interests of parties
  • Moves beyond different views of law/fact
  • Allows creative solutions beyond win/lose
  • Mediated resolution is just as binding and enforceable as an arbitration award

When It Will Not Work

  • When a precedent is necessary
  • When there is no relationship and it is cheaper to contest the claim
  • When vindication/punishment remains the main objective
  • When the “jackpot syndrome” is involved (maximize/minimize recovery)

Process Overview

Pre-mediation Preparation

  • Ten days prior to session, parties receive a letter explaining the mediation process and logistical issues.
  • Parties agree to mediate.
  • Mediator is selected/appointed by random rotation, mutual request, or objection to a proposed mediator.
  • Arrangements are made via letter or telephone.
    • Pre-mediation concerns are addressed.
    • Date and time typically scheduled at the convenience of the parties after a request for arbitration or mediation is received or following the grievance committee’s determination of arbitrability.
  • Witnesses and/or attorneys may attend, but this is not necessary because the process is non adversarial; there are no “findings of facts.”
  • Information is exchanged.
    • Parties need not prepare exhibits or extensive documentation. If a document will clarify an issue it may be used, but parties are reminded that mediation is not a fact-finding conference.

Mediation Conference

  1. Mediator’s opening statement/questions
    Explain process and rules/goals, including the mediator’s and parties’ roles, voluntariness, neutrality, and confidentiality.
  2. Parties’ initial statements/questions
    1. Understanding perspectives
    2. Venting
  3. Identification of issues
  4. Create agenda
  5. Cross-talk
    Parties respond to each other and explain/explore information, needs, ideas and feelings.
  6. Caucus (private meeting)
    Mediator may meet privately with the parties to clarify needs and explore options for resolution and proposals.
  7. Building an agreement
    With the mediator’s assistance, parties explore and refine workable solutions.
  8. Conclusion
    Agreement is reached/signed before leaving mediation or all agree that no further progress can be made, in which case parties are free to pursue arbitration.

Mediators

Kim L. Kirn
Mediator and Attorney
326 North Central Avenue
St. Louis, MO 63105
O: (618) 791-8491
klkirn@gmail.com
$325 per party for 1/2 day of mediation

Angie Zahn
Strano & Associates
705 E. Hanover
New Baden, IL 62265
O: (618) 588-9876
C: (618) 973-7880
ma.zahn@sbcglobal.net
$50 filing fee (non-refundable)
$150 per hour, minimum of 1 hour

What is Arbitration?

Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts. The parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters,” or “arbitral tribunal”), whose decision (the “award”) they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.
SOURCE: National Association of REALTORS®

Diane Disbrow, a REALTOR® and Trainer, highlights the differences between arbitration and mediation as means for resolving disputes between Real Estate Professionals.

If you wish to file a complaint with the Illinois Department of Financial & Professional Regulation, please click here.