There is a world of information on the internet. That includes a huge number of websites professing to advise you about divorce. And among the topics often discussed on these sites is mediation. Not a week passes without at least one client asking whether they should mediate one or more issues arising from separation and divorce.
Mediation is non-binding negotiation without lawyers. What could be better? Get the job done without the expense of the lawyers. So, it naturally follows that lawyers must be inalterably opposed to mediation. Right?
When clients ask us about mediating their particular case it does put us in a predicament. If we advise them to mediate, the inference arises that we add no value to their cause by our representation. If we advise against it, it appears that our interest in earning a fee has trumped their interest in avoiding unnecessary legal expenses. So where lays the truth? A monograph such as this can help because our advise is generic and does not apply to any one case.
In mediation the parties sit down with a neutral person, usually trained to mediate, who listens to each party and attempts to forge common understandings about what is in controversy and how each party’s interest can be accommodated. It is quite different in approach from litigation, which often takes on a “winner takes all” approach. Mediators are supposed to remain absolutely neutral through the mediation process. They are not even supposed to suggest a solution that may appear evident to them because they are then interfering rather than expediting the mediation process. Where agreement is reached, they usually will confine their roles to creating a memorandum delineating the understanding and ask the parties to have their respective lawyers prepare an agreement to be signed. There is no question that when a mediator is talented and the parties are motivated to resolve matters, mediation can chop through many controversial issues in quick order.
To be effective, mediation requires three elements. The first is that both parties are motivated to settle a matter. Everyone likes to see themselves as motivated to avoid controversy but most of us come to a controversy with the idea that because we are right, we should get what we want. Mediation has nothing to do with what is right or fair. It is about compromising matters with an eye towards giving each party the most he or she can get from a negotiation. But in just about every bilateral (two-way) negotiation, what I get comes at your loss and what you get comes at mine.
The second element required in a mediated negotiation is that each party comes equally well informed. This is where folks often overestimate their knowledge of their own assets. If I offer to swap $100,000 in money market assets for an $100,000 IRA, is that an equal division? The answer is that it is not, but arguments can be made that either one of the assets is more valuable than the other depending upon the facts. Of course, if I never tell you about an asset or I fail to tell you that a stock option will incur ordinary income tax rates when exercised, I have a decided advantage in the negotiation because I have superior information which I have failed to share. Bear in mind, the mediator is not supposed to ferret the facts. The mediator’s role is to moderate discussions directed toward compromise.
The third and final element necessary to mediate is emotional strength. In divorce related mediation this can often be the fatal flaw. More often than not, men are trained and temperamentally suited to be negotiators. Negotiation is a game at which some win and some lose. Women tend to be motivated to avoid conflict and promote compromise. This often spells doom in a world where the combatant finds him or herself pitted against a party predisposed to settle. This rule is by no means fixed in a sexually stereotypical sense. Again, it is important to note that the mediator does not have the responsibility to level the playing field.
So, having made these observations and noted that there are no hard and fast rules, is there a common sense guideline as to when to mediate and when to avoid it? Yes, but even these rules come with qualifications.
First, custody issues are probably the most productive area to mediate. The reasons are several. The facts are relatively well-known or easily ascertained. Second, custody arrangements are rarely permanent. An arrangement negotiated and making sense today could be useless and silly four months from now. By law, any custody arrangement reached by parents can be discarded by a Court if it later finds that the agreement is not in the child’s interest. Moreover, one can hope, naively perhaps, that each parent has the child’s interest at heart.
When mediating economic issues such as support and property, it is imperative that you feel that you are equally well-versed as the person you aspire to mediate with. When dividing simple assets like bank and brokerage accounts the process can be fairly straightforward. The key is current information and an understanding of how the assets work from a management and tax liability standpoint. If you are not clear on these points, you could be giving away the store without even recognizing it. Some issues, such as stock options, retirement plans and closely held businesses can be so complicated that mediation almost never makes sense.
The other factor which should be kept in mind is that in classic mediation, the mediator gives no thought whatsoever to “what a court would do.” Pennsylvania, New York, New Jersey and Delaware are all equitable distribution states. This means that assets are usually not divided equally, but based upon an imprecise formula that assays how long you were married, how much you can earn, what you contributed to creating the marital estate and other such issues. The outcomes vary from case to case and state to state. You could form what you perceive as a “fair agreement” in mediation to discover that you would have gotten a far different result if you relied upon a court to make the division.
So, should mediation be avoided? Absolutely not. But it is worth knowing the benefits and detriments to the process as it relates to your case before going into the process. Once in mediation, you are not bound by your agreements unless you choose to affirm them outside mediation. But you don’t want to invest in this intensive process only to find yourself abandoning the agreement you said you intended to make. The prudent course is to discuss the process, its potential and peril before actually enrolling this exercise.