Understanding Mediation in Chicago Construction and Real Estate Disputes

What Is Mediation?

Mediation is a structured dispute resolution process in which a neutral third party helps participants evaluate their positions, exchange information, and explore possible resolutions. The mediator does not decide the outcome or impose a solution. Instead, mediation provides a forum for informed, voluntary decision-making outside of court.

Is Mediation Binding?

No. Mediation is generally non-binding unless the parties reach a written settlement agreement. Participants remain free to end the process at any time, and the mediator has no authority to determine who is right or wrong or to force a resolution.

How Is Mediation Different From Arbitration or Litigation?

Mediation allows the parties to control the outcome. In arbitration or litigation, an arbitrator or judge issues a binding decision that resolves the dispute. Mediation focuses on facilitated negotiation and risk assessment rather than adjudication, often reducing cost, time, and uncertainty.

Is Mediation Required Before a Lawsuit Is Filed?

Sometimes, but not always. Whether mediation is required before filing a lawsuit depends on the governing contract, applicable court rules, or a specific statute. Many commercial agreements include provisions requiring mediation before litigation or arbitration. In other situations, courts may encourage or order mediation after a case has been filed, even if it was not required initially.

Even when mediation is not mandatory, parties may choose to pursue it voluntarily to manage risk, control costs, and explore resolution before committing to prolonged litigation.

When Is Mediation Appropriate?

Mediation can be used at almost any stage of a dispute. It may be effective before a lawsuit is filed, early in litigation, after limited discovery, or later in a case when trial risks become clearer. The appropriate timing depends on the issues involved, the information available, and the parties' willingness to engage in meaningful discussions.

Do Both Sides Have to Agree to Mediation?

Yes. Mediation is a voluntary process, and all participants must agree to take part. Even when a contract or court requires the parties to attempt mediation, settlement itself remains voluntary, and no party can be forced to resolve the dispute.

What Types of Disputes Can Be Resolved Through Mediation?

Mediation is used to resolve a wide range of disputes, including business and contract disputes, real estate matters, employment issues, professional liability claims, insurance disputes, and other commercial conflicts such as construction disputes. It is particularly useful where confidentiality, cost control, or ongoing relationships are important considerations.

Who Attends a Mediation?

Typically, the parties to the dispute and their attorneys attend mediation. In some matters, insurers, business partners, or other stakeholders may also participate. The most important requirement is that those attending have sufficient authority to evaluate settlement options and make decisions during the process.

What Happens During a Mediation Session?

Mediation usually begins with an overview of the process, followed by a series of joint and private discussions facilitated by the mediator. The mediator may meet separately with each side to explore risks, concerns, and potential paths toward resolution. The structure is flexible and tailored to the dispute.

Is Mediation Confidential?

Yes. Mediation communications are generally confidential and are not admissible in later court or arbitration proceedings, subject to limited exceptions. Confidentiality allows participants to speak candidly, explore options, and assess risk without fear that statements will later be used against them.

Do Parties Exchange Information Before Mediation?

Often, yes. Productive mediation typically involves some level of information exchange so that each side can realistically evaluate the dispute. This may include documents, summaries of claims, or expert input, without the cost and formality of full discovery.

What Role Does the Mediator Play?

The mediator manages the process, facilitates communication, and helps identify obstacles to resolution. The mediator may ask difficult questions, test assumptions, and assist the parties in evaluating risk, but does not advocate for either side or decide the dispute.

Does Mediation Mean a Party Is Weak or Willing to Concede?

No. Mediation is widely viewed as a strategic tool rather than a sign of weakness. Parties often mediate to manage uncertainty, reduce exposure, or control costs, even when they believe their legal position is strong.

What Happens if Mediation Does Not Result in a Settlement?

If no agreement is reached, the parties proceed with arbitration or litigation. Even when mediation does not resolve the dispute, it often narrows the issues, clarifies positions, and improves efficiency in later proceedings.

How Long Does Mediation Take?

A mediation session may last several hours or a full day. More complex disputes may involve multiple sessions or a phased approach. Compared to litigation or arbitration, mediation is typically far quicker and more cost-effective.

Do I Need a Lawyer for Mediation?

While parties may participate in mediation without counsel, having an attorney can help ensure that legal risks, settlement terms, and long-term implications are properly evaluated. In complex or high-stakes disputes, legal representation is strongly recommended.