Most parties express satisfaction with the mediation process even when they do not reach full settlement. Proper preparation for the mediation session readies the parties for the arbitration. During the mediation process the parties and their representatives gain a better understanding of their case. This, in turn, helps them focus on the necessary next steps. Further, the mediation process moves very quickly and does not delay the ultimate resolution. Finally, by the end of a single day of mediation, the improved lines of communication often place the parties in a better position to settle the case at a later stage.
When a settlement is not reached, at least both parties know what they were walking away from. Sometimes, stubborn respondent brokerage firms refuse to offer a meaningful settlement and find themselves the subject or securities arbitration awards ordering them to pay multiples of what they could have settled at a securities mediation, together with hearing costs, interest and attorney's fees.
However, it is a two-way street, and sometime the claimant investor walks away from a settlement offer obtained during a securities mediation believing that they are entited to more, or that the offending stockbroker or brokerage firm needs to punished at a final hearing. All too often, however, these are the same investors that get a zero award or lose their cases, or get an award that is only a fraction of what they could have settled their case at securities mediation and also avoid the time, cost and risk associated with a final evidentiary hearing.