Mediation is often confused with settlement conferences. There are some fundamental differences. Settlement conferences involves competition resulting in compromise. Mediation involves co-operation resulting in an agreement. I developed the set of diagrams below to demonstrate these processes.
The parties’ positions on the diagram below represent the outcome they are aiming for. The primary questions in a settlement conference are “What is your position?” and then “What is the least you are prepared to settle for?”. Neither party can have all that they want. They will each need to compromise to reach a settlement.
Referring to the diagram, the most efficient settlement will be a compromise found somewhere along the red line. In a best case scenario, if there are ten units available, all ten will be shared. However, in any case other than the most efficient negotiations some units will be lost in legal fees, other advisors’ fees, time, and emotions. This loss may be considerable because the process is competitive. In these cases, the settlement will be in the grey area and will involve less or much less than ten units. A unit could represent anything tangible which each participant wants and is important to them.
The diagram below represents the fundamental difference that mediation offers.
The participants’ placement on the graph represents all that is important to each. The primary question in a mediation is “What is important to you?”. Each participant can have all that is important to them. They will each need to be creative to reach a mediated agreement.
Referring to the diagram below, the most satisfactory outcome will be an agreement found in the dark blue square. In a best case scenario, if there are ten units available, all ten could be available to each participant. Realistically, it is likely that some units will be lost in legal fees, other advisors’ fees, time, and emotions. However, because the mediation process is co-operative this loss will be minimal.
Referring to the diagram below, in a mediation it is likely that the agreement will be in the lighter blue areas. Each participant has the potential to gain up to ten units of what is important to them.