The CPA Journal

THE CPA IN MEDIATION AND ARBITRATION

Expanded Use of Court-Ordered Mediation in New Jersey

By Michelle V. Perone

The New Jersey judiciary has been working to expand the use of mediation in civil, general equity, and probate cases. As part of the implementation of civil best practices, judges are encouraged to refer civil cases to early mediation. Growing numbers of New Jersey litigants and attorneys are experiencing this “new” and arguably kinder way of doing business. As part of that effort, a pilot program has been operating in the counties of Hudson, Cumberland, Gloucester, Mercer, Salem, and Union, in which 12 specific case types are presumptively referred early in the litigation to mediation.

Mediation is a dispute resolution process in which an impartial third party—the mediator—facilitates negotiations among the parties to help them reach a mutually acceptable settlement. Its advanges include the following:

The result may benefit both or all sides and thus present a “win/win” solution.

The outcome can be tailored to meet the unique needs of the case and the particular parties.

Specially trained mediators assist the parties in fashioning more creative solutions not customarily occurring with litigation and other dispute resolution techniques.

Mediation can be a more cost-efficient, less formal, and more meaningful alternative to the traditional trial process.

Mediation has been used successfully in a broad range of cases that exhibit certain characteristics. For example—

The parties have an ongoing business or personal relationship or have had a significant past relationship;

Communication problems exist between the parties;

The principal barriers to settlement are personal or emotional;

The parties want to tailor a solution to meet specific needs or interests;

Complex technical or scientific data require particular expertise;

The parties have an incentive to settle because of time, cost of litigation, or drain on productivity;

The parties wish to retain control over the outcome of the case; or

The parties seek a more private forum for the resolution of their dispute.

The major distinction between mediation and arbitration is that in arbitration, the arbitrator makes a decision about the outcome of the case, while in mediation, the parties, with the assistance of their attorneys, work toward a solution with which they are comfortable. The purpose of mediation is not to decide who is right or wrong. Rather, its goal is to give the parties the opportunity to—

vent and diffuse feelings,

clear up misunderstandings,

determine underlying interests or concerns,

find areas of agreement, and, ultimately,

incorporate these areas into solutions devised by the parties themselves.

Parties can be required to participate with a sense of urgency and in good faith in three hours of mediation before any party can opt out. The three hours include the mediator’s preparation time, an organizational telephonic conference, and at least a one-and-one-half-hour mediation session. The purpose of this session is to expose attorneys and their clients to the mediation process and educate them about how it works. In the presumptive mediation pilot counties, the court assigns a mediator to each case on a rotating basis from the approved roster of mediators, with an effort made to match the mediator’s expertise to the case. In the other counties, cases can be assigned to a mediator from the roster. However, some judges may also explore the possibility of referring the case to mediation with counsel and may attempt to have counsel agree on the mediator to be selected. If the court selects the mediator, counsel may nevertheless jointly stipulate in writing within 14 days of the date of the mediation referral order as to the name of any other individual agreed upon to serve as mediator in the matter, whether or not she appears on the roster. The roster is published on the judiciary’s website: www.judiciary.state.nj.us.

How Mediation Works in New Jersey Courts

According to New Jersey R.1:40-6(c), the court may in the mediation referral order stay discovery for a specific or an indeterminate period of time. The hope is that by staying formal discovery, the mediator may assist the parties in avoiding unnecessary discovery costs. Even when the court does not stay formal discovery, mediators nevertheless facilitate a focused and informal information exchange so parties feel comfortable proceeding to mediation without full-blown discovery.
The mediator will ask participants to follow certain ground rules. The first and most important is that with a few exceptions covered in R.1:40-4(c), what goes on in mediation is confidential. That is, what is said in mediation cannot be discussed outside of the mediation process unless the parties consent. Prior to mediation, the mediator will usually ask the attorneys to prepare a brief summary of the issues in dispute. At the mediation session, the mediator will ask attorneys and their clients to make brief presentations about the issues from their own perspectives. After that, the mediator will help the parties to explore areas of possible compromise and to develop a solution that meets everybody’s interests. Sometimes the mediator may meet with the parties separately for a private discussion that may help move the parties toward a resolution. If the parties reach an agreement, the mediator will notify the court and a document will be prepared detailing the terms of the agreement. Thereafter, the mediator will notify the court that the case can be dismissed.

Editor’s note: For additional information regarding this program, contact Michelle V. Perone, Esq., Chief, Civil Court Programs, New Jersey Administrative Office of the Courts, at (609) 292-8471.

Editor:
Philip Zimmerman, CPA, APM
Mediator and Arbitrator

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The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.