The Difference Between Mediation and Litigation

The real estate mediator listens to both parties and makes suggestions. (Zivica Kerkez/Shutterstock)

Dear Monty: We recently sold our home. Everything went smoothly from beginning to end. A week ago, we received a letter from the buyer. They want us to write a substantial check because they discovered a problem they claim we failed to disclose. The reason for contacting you is that they are requesting that we agree to mediation as opposed to litigation. We are just now becoming familiar with mediation. Should we decide on mediation or call an attorney to handle it?

Monty’s Answer: Mediation is an alternative method deployed to help parties resolve a problem. Mediation differs from litigation in the following respects. No. 1: No courtroom, judge or jury is part of the process. No. 2: The mediator may or may not be an attorney. No. 3: There are often two mediators. No. 4: Mediation is voluntary. The mediator is an impartial participant in the mediation and will not resolve the dispute or offer advice about its resolution. The goal is to have the two parties reach an agreement together rather than a court decision.

The mediator is there to listen to both sides and to make suggestions. This conversation happens when both parties are in the same room. Suppose one party is uncomfortable asking a question or making a statement in the mediation. In that case, they can request short breaks for private conversations. Either party can terminate mediation at any time.

A Comparison

Mediation is different in that it is outside of the courts and other formal venues for dispute resolution. When you go to court, each side presents its case, the other side rebuts arguments and a judge or jury decides the outcome. This process takes time. For each party to tell their side of the story to their attorney takes time. One consumes more time waiting on the court docket and for the lawyers to try to negotiate a settlement before trial. Time is money, and expenses for both parties can add up quickly. The judge or the jury may make a mistake. Sometimes, one lawyer is better prepared to articulate the story.

Your Options

No. 1: Agree to mediation.

No. 2: Obtain legal counsel.

No. 3: Attempt to settle the dispute directly with the buyer (they suggested mediation already).

Consider contacting both a mediation center and an attorney. Some attorneys (and courts) recommend mediation. Taking the time for this will allow you to be fully informed before you proceed in either direction.

In Conclusion

Full disclosure: I have not personally participated in a mediation, but I have researched it and know people with personal experience. Decades of operating real estate brokerages have resulted in significant exposure to litigation. I support the mediation concept for the following reasons. No. 1: It is readily available in your community or online. No. 2: It is educational and enlightening. No. 3: It is easy to participate. No. 4: It is low cost. No. 5: Anyone can use it. No. 6: It is efficient. No. 7: It is a better alternative to litigation in many cases. No. 8: Mediators undergo specific mediation training. No. 9: Most of all, it works. Here is an article from Justia that gives a helpful perspective.