Mediation and Adjudication: Procedural Effects and Practical Observations

Mediation and Adjudication: Procedural Effects and Practical Observations

Introduction: Thoughts triggered by a mediation

"Lawyer, the judge organized us to mediate last week. We talked for a long time and couldn't reach an agreement. Do you think this will affect the judge's subsequent judgment? Will he feel that we don't give him face and are deliberately 'looking for trouble'?"

I’ve heard concerns like this almost every month in my practice. When litigants enter the court, they often hope to obtain a “fair and just” judgment. But litigation is not a physical experiment in a vacuum. It is full of interactions between people. The "mediation" link, especially the "pre-litigation mediation" and "pre-trial mediation" that are strongly advocated in civil and commercial cases, is undoubtedly one of the stages where judges and parties interact most frequently and exchange information most intensively.

China's judicial practice has always had the tradition and policy orientation of "mediation first". "The case is settled" is the goal pursued by many judges and is also an important indicator in the court assessment system. Some research and practical observations have indeed shown that the preliminary mediation work of judges in civil and commercial cases is not just a matter of "making peace" or going through the motions. It can indeed, and in many cases, actually have an impact on the judges' final judgment ideas and results.

This impact is by no means a simple linear logic of "because mediation failed, the verdict is unfavorable." It is a complex, multi-dimensional interactive process, like an underwater undercurrent, which is difficult to detect, but may quietly change the course. Today, as a lawyer who has long observed and participated in it, I would like to have an in-depth chat with you based on some practical experience and observations of different practices at home and abroad:

In what aspects will mediation "penetrate" into subsequent referees?

Is this impact good or bad? Is it inevitable under the priority of efficiency, or is it a potential threat to judicial fairness? Especially compared with common international practices, how is our model different?

As parties or attorneys, how should we understand and respond to this impact?

From the perspective of institutional design, what suggestions can we make to make the "double-edged sword" of mediation better?

1. “Spring River Plumbing Duck Prophet” – How Mediation Opens the Door to Judges’ “Cognition”

Theoretically speaking, court trials are "based on facts and the law as the criterion." Judges need to ascertain facts and apply the law through statutory procedures such as court hearings and cross-examinations. However, the mediation process, especially mediation that occurs before a formal trial, often gives judges early access to information that goes well beyond the pleadings and preliminary evidence.

1. “Three-dimensional portrait” beyond the dossier: subtle shifts in fact recognition

"Informal channels" for information acquisition: In formal court hearings, both parties attack and defend around claims and evidence, and the information is presented in a relatively formatted manner. But in the mediation room, the atmosphere is relatively relaxed (and sometimes tense). The judge can talk directly to the parties and hear more complaints, difficulties, true intentions beyond the "French language", and even some background information that the parties are unwilling or afraid to state publicly in court. This process may supplement or revise the judge's previous understanding based solely on written materials.

Perception of "temperature" and "attitude": Mediation is not only the exchange of facts, but also the collision of emotions and attitudes. The judge will observe which party is more willing to communicate, which party is tough, and which party seems to be hiding something. Although this intuitive feeling about the “character” and “credibility” of the parties should not be the basis for judgment, in the use of free evidence, it will inevitably affect the judge’s tendency to judge vague facts in a subtle way. For example, if a party behaves unreasonably during mediation, even if the evidence chain is relatively complete, the judge may be more cautious about the authenticity of his statement.

"Preview" of the focus of dispute: The mediation process is often the first intensive "fire reconnaissance" of the focus of dispute between the parties. By guiding both parties to explain their reasons and propose plans, the judge can grasp the core contradictions of the case earlier and more deeply. Even if the mediation fails, these focal points that are repeatedly discussed during the mediation are likely to become the focus of the judge's subsequent court investigation and judgment reasoning.

2. "Sand table deduction" of legal application: interpretation of rules and management of expectations

“French-style” mediation: In order to facilitate mediation, judges often need to explain relevant legal provisions to the parties and analyze the legal risks and possible judgment results of both parties. This process is not only a "law education" for the parties, but also a "preview" of the judge's own application of the law. The judge may guide the parties to consider different legal application angles. In this process of “teaching and learning,” the judge’s own understanding of legal provisions and ideas on how to apply rules in specific situations may also be strengthened or adjusted.

The inertia of the "mediation caliber": If a judge repeatedly emphasizes a certain legal point of view or interpretive caliber during mediation to persuade a party to make concessions, then when the case is transferred to the judgment process, unless there is very strong counter-evidence or new legal understanding, the judge is likely to be inclined to maintain the "calibration" he has formed during mediation in order to maintain the coherence of the adjudicative thinking (or avoid self-denial).

Outcome-oriented “fine-tuning”: The success of mediation may affect the severity of the sentence. In practice, if the two parties are very close to reaching an agreement during mediation and the dispute breaks down due to only a few differences or minutiae, the judge may be inclined to issue a result that is not significantly different from the mediation plan in subsequent judgments, believing that this is more in line with the true wishes of both parties and the goal of "closing the case." On the other hand, if one party is extremely uncooperative and shows no sincerity during mediation, the judge may make a relatively unfavorable judgment within the scope of his or her discretion.

2. The tug-of-war between efficiency and fairness: the underlying reasons why mediation affects referees and comparisons between China and foreign countries

Why does early mediation have such a complex impact on subsequent referees? There are both individual judges and institutional factors behind this, and it is significantly different from the common international practice.

1. The performance pressure and psychological tendency of “emphasis on adjustments and light on judgments” (background with Chinese characteristics)

Assessment baton: In many Chinese courts, the mediation and withdrawal rate (the proportion of mediation and withdrawal cases in the total number of cases) is an important indicator for measuring the performance of judges. A high withdrawal rate often means high efficiency, low appeal rate and good social effects. This kind of assessment pressure may cause some judges to devote more energy to mediation, and even develop a psychological tendency to "promote mediation at all costs." The judge’s preference for mediation and its impact on personal development may make “heavy mediation and light sentencing” a realistic option.

Cognitive shortcuts and path dependence: Successful mediation means the case is over, and there is no need to spend time writing judgments, and subsequent troubles such as appeals and enforcement are avoided. For judges with many cases and few cases, mediation is undoubtedly a "shortcut". Once you are accustomed to solving problems through mediation, you may give priority to "mediation" rather than "adjudication" when facing difficult and complex cases, and your adjudication ideas may also unconsciously tilt in the direction of "more easily accepted by both parties" rather than "most consistent with legal provisions".

"Psychological anchoring effect": This is an important psychological phenomenon. The numbers and plans repeatedly discussed during the mediation process are like an "anchor" that will affect the judge's subsequent judgment on the amount of compensation, proportion of liability, etc. Even if a judge strives to be objective, it is difficult to completely get rid of this "preconceived" anchor point.

2. The dilemma of choosing “investigation model” and its international perspective

In China, there are different models as to who is responsible for mediation and trial, which is directly related to issues of information flow and role conflicts.

(1) "Mediation and trial in one" model (one of the common models in China): that is, the same judge (or the same collegial panel) is responsible for the mediation and trial of the case.

Advantages: The judge has the most comprehensive and in-depth understanding of the case, no need for handover, and high efficiency.

Disadvantages: It is this in-depth knowledge that creates the greatest risk. Under this model, judges are prone to prejudgment and bias. The "out-of-court information" and subjective impressions of the parties heard by the judge during mediation are difficult to completely "clear" in subsequent trials. The parties may also be worried about this, afraid to communicate candidly during mediation, worried that "saying the wrong thing" will affect the judgment, and even worry that the judge will "press down the mediation with judgment" (using the power of subsequent judgments to force the parties to accept the mediation plan).

(2) The "separation of mediation and trial" model (explored by some courts in China and mainstream internationally): that is, a specialized mediation judge (or mediator) is responsible for mediation. If the mediation fails, the case will be handed over to a trial judge for trial.

Advantages: It ensures the neutrality of the trial judge to the greatest extent, reduces the risk of prejudgment, and is more in line with the requirements of procedural fairness.

Disadvantages (encountered in practice in China): There may be information transmission obstacles and efficiency losses. The large amount of valuable information obtained by the mediation judge may not be transmitted to the trial judge effectively and neutrally, causing the trial judge to need to re-familiarize himself with the case and even repeat the work. The poor connection between mediation and trial procedures is a pain point in practice. In practice, there is a lack of unified regulations on how to transmit the "mediation opinion" or "mediation summary" of the mediating judge, in what form, and how the trial judge refers to it, leaving room for manipulation.

(3) Separation of investigation and trial from an international perspective: common practice and experience reference

It is worth noting that internationally, the separation of the roles of mediation and trial is a more common principle and practice. Most countries ensure the independence of mediators and judges through institutional design.

Core reason: Mainly to avoid role conflict and potential bias. If the same judge both mediates and adjudicates, the impression or tendentious opinions formed during the mediation may contaminate the fairness of subsequent trials. At the same time, it can also protect the voluntariness of the parties, reduce the risk of the parties being "forced" to accept the mediation plan because they are wary of the judge's jurisdiction, and avoid the coercive tone of "prejudicing the mediation with judgment."

Typical approach: For example, in the United States, court-attached mediation is usually conducted by a court-appointed mediator or an independent third-party professional mediation agency, and the trial judge generally does not participate in the mediation process. In the UK, Germany, Japan and other countries, similar mechanisms are mostly adopted, whereby mediation is conducted by mediators and mediation committee members outside the court, or by judges who are specifically responsible for mediation (not the trial judge in this case). If mediation fails, the case will be handed over to a completely neutral trial judge.

Guarantee mechanism: These countries usually strengthen the effect of separation of mediation and trial through institutional separation (such as the establishment of independent mediation centers), procedural isolation (such as stipulating that mediation records are confidential and shall not be submitted to trial judges), and legislative guarantees (such as the law clearly stipulates that mediators shall not serve as trial judges in the same case).

In contrast, in China, the current situation of “unifying mediation and trial” is still relatively common, or the “separation of mediation and trial” is not fully implemented, making the potential impact of mediation on referees more prominent. Both models have their own advantages and disadvantages. The core is how to find the best balance between efficiency, information integrity and judicial neutrality. International experience undoubtedly provides important reference.

3. The distance between ideal and reality - the bottom line and challenges of independent trials

With so much talk about the potential impact of mediation on adjudication, does it mean that judges’ independent adjudication becomes empty talk? Not so.

Rigid constraints of the law: Regardless of the mediation process, the final judgment must be made based on the ascertained facts of the case and clear legal provisions. The judge's final decision must still be based on law and evidence and follow the principles of fairness and justice. The judgment needs to be made public, state the findings of facts, application of law and reasons for the judgment, and must withstand scrutiny by the parties and the superior court. This institutional "hard constraint" is the bottom line to prevent judges from making arbitrary decisions due to mediation.

Judges’ professionalism: Most judges have basic professional ethics and professionalism. They are well aware of the functional differences between mediation and judgment, and will strive to return to the role of neutral referees after mediation fails. Information in mediation should theoretically be considered "informal" and cannot be directly used as a basis for judgment unless it is corroborated by legal evidence in subsequent trials.

Procedural error correction mechanism: If the parties believe that the judgment was indeed unduly affected by the mediation process, resulting in incorrect fact finding or unfair application of the law, they can still seek relief through appeals, applications for retrial and other procedures.

However, challenges remain:

It is difficult to avoid subconscious influences: Even if the judge strives to be fair subjectively, the subconscious influences such as impressions and anchoring effects formed during mediation are difficult to completely eliminate and prove.

Room for discretion: The law is often not precise in every detail, and judges have certain discretion in determining facts (especially when the evidence is insufficient) and applying the law (such as the amount of compensation, the proportion of liability, etc.). Information and tendencies in the mediation process are most likely to work in this "twilight zone".

The embarrassing status of “mediation transcripts”: Although mediation transcripts are not statutory evidence, they may be used as auxiliary materials for reference by judges. In practice, the nature, effectiveness and boundaries of use of mediation transcripts in subsequent trials are not entirely clear, especially under the combined mediation and trial model.

4. Ways to deal with it from a lawyer’s perspective: how to “seek advantages and avoid disadvantages” in mediation

Now that we understand the impact that mediation may have on referees, how should we, as parties or attorneys, respond?

1. Understand patterns and adjust strategies

First, we need to understand whether the presiding judge adopts the "unification of mediation and trial" or "separation of mediation and trial" model (in practice, this may need to be judged through communication or observation).

If it is "unity of mediation and trial": During mediation, we must not only show sincerity, but also be more cautious in our words and deeds. Avoid making admissions of material facts that are detrimental to you and irrevocable. Mediation can be viewed as a “mock court,” observing the judge’s tendencies and testing the other side’s bottom line, but with extreme caution in the disclosure of key concessions and core facts. Clearly distinguish between what are “options that can be explored in order to promote mediation” and what are “the bottom line of facts and rights that we insist on.”

If it is a substantial "separation of mediation and trial": relatively open communication can be achieved because the opinions of the mediation judge/mediator theoretically do not directly affect the trial. However, it still needs to be noted that information during the mediation process may be transmitted to the trial judge in some form (such as a mediation summary), and failure to mediate may also affect the speed of case circulation and the trial judge's preliminary judgment of the difficulty of the case.

2. Stick to the bottom line and play rationally

Mediation is based on the principle of voluntariness. No matter how the judge guides or exerts pressure, he must be clear about his core demands and unyielding bottom line. Don’t accept an unfair plan out of fear of “offending” the judge or pursuing so-called “harmony.”

Be well prepared and have a professional and rational prediction of your own legal risks, the other party's weaknesses, and possible verdict outcomes. In this way, we can be reasonable and well-founded during mediation and not be easily shaken.

3. Make good use of mediation to collect information

Mediation is not only "making peace" but also an important opportunity to gather information and test strategies. This can be used to understand the other party’s true thoughts, evidence preparation, negotiation style, and even observe the judge (especially the judge under the combined trial model)’s preliminary views on certain key facts or legal issues (the judge’s questioning methods, reactions to the arguments of both parties, etc. may reveal information).

4. "Call a halt" at the appropriate time and move to trial

If it is obvious that the mediation cannot reach a consensus, or the plan proposed by the other party/judge is far below one's own bottom line, the mediation must be ended decisively and a clear request for a legal judgment. Avoid endless back and forth, which wastes time and may obscure your position through repeated concessions.

5. Record communication and retain evidence

Although mediation transcripts are of a special nature, the key statements of the other party and important instructions or commitments of the judge (especially those involving procedural matters) during the mediation process must be consciously recorded for subsequent reference or reminders to the judge when necessary.

5. Reflections and Suggestions at the Institutional Level: Learning from International Experience and Putting Mediation and Judgment in Their Place

To fundamentally solve the possible undue influence of mediation on referees, optimal design at the institutional level is needed, and learning from successful international experience may be a feasible path.

1. Clarify the "investigation relationship", standardize the flow of information, and promote substantive separation

Learn from the international mainstream and promote and optimize the "separation of investigation and trial": For most civil and commercial cases, especially ordinary first-instance procedures, we should be more inclined to adopt a substantive "separation of investigation and trial" model to clarify the separation of the roles of mediators and judges. This is a common international practice to ensure judicial fairness. The key is to establish a standardized, neutral and efficient information handover mechanism. For example, the mediation judge can prepare a "Mediation Situation Summary" that only includes a "list of undisputed facts", "main points of dispute" and "the parties' final mediation plan (if any)" to avoid adding subjective evaluations and details of the mediation process for the trial judge's reference. Establish a "firewall" system to ensure that informal information during mediation is not brought into the trial.

Clarify the effectiveness of mediation transcripts: Legislation or judicial interpretations should further clarify the nature of mediation transcripts. In principle, they should not be used as a basis for determining the facts of the case, and in particular, they should not be transferred directly to the trial judge. Unless both parties unanimously confirm a certain statement in the mediation transcript in the subsequent court hearing, or submit it as evidence and undergo cross-examination.

Clearly define the role of the judge: The role of the judge in mediation must be clearly defined. Judges are neutral facilitators, not lobbyists or “peacemakers” for one party. Over-involvement and excessive pressure should be avoided, and the wishes of the parties concerned should be respected.

2. Reform performance appraisal and weaken the "only mediation rate theory"

The court's performance appraisal system should be more scientific and diversified, and should not just use the transfer rate as the main criterion for measuring the quality of judges' work. Factors such as the quality of the case trial, the legal and social effects of the judgment, and the satisfaction of the parties (differentiating between mediation satisfaction and judgment satisfaction) should be comprehensively considered. Reduce the pressure on judges to sacrifice judicial impartiality in pursuit of mediation rates.

3. Strengthen the training of judges to improve their awareness of neutrality and anti-interference ability

Strengthen the training of judges, especially those who still need to undertake part of the mediation work, so that they are fully aware of the cognitive biases that mediation may bring (such as anchoring effects, confirmation bias, etc.), learn how to effectively "isolate" early information after mediation fails, and remain neutral and objective. Emphasize the importance of procedural justice.

4. Protect the parties’ right to choose procedures and their right to know

Fully respect the parties’ right to choose mediation or judgment. Before mediation is initiated, the nature, procedures, confidentiality principles of mediation, and the possible connection method with trial procedures (whether it is the same judge or a different judge/mediator) should be clearly and clearly explained to the parties, so as to protect their rights to know and to choose.

5. Explore the deep integration of diversified dispute resolution mechanisms

Draw on international experience and vigorously develop professional mediation organizations and industry mediations that are independent of the courts, so that more disputes can be resolved through more neutral and professional third-party mediation before litigation. This will not only reduce the mediation pressure on courts and judges, but also reduce the occurrence of "mediation conflicts" from the source and provide more diverse and flexible dispute resolution options.

Conclusion: Find the best fulcrum on the balance between efficiency and justice

The impact of judges’ early mediation work on subsequent judgments is an objective issue that exists in China’s judicial practice and deserves in-depth discussion. It is not only related to the improvement of judicial efficiency and the resolution of social conflicts, but also touches the bottom line of judicial fairness and the vital interests of the parties. Looking around the world, countries are constantly exploring how to handle the relationship between mediation and trial.

We cannot deny the important value of mediation in resolving disputes; but we cannot turn a blind eye to its possible negative effects, especially under the "unity of mediation and trial" model, allowing the independence of referees to be potentially eroded.

As lawyers, we need to help clients understand the complexities and formulate rational litigation strategies. As a member of the legal community, we look forward to continuously improving the system and absorbing useful international experience, so that mediation can truly become a tool to promote fair and efficient dispute resolution, rather than an "invisible hand" that affects the fairness of adjudication. The ultimate goal is to find the best fulcrum on the balance of efficiency and justice that can firmly support social trust.