Here is a definition for mediation (taken from the Community Mediation Maryland Website):
Mediation
is a voluntary and confidential process in which one or two neutral
mediator(s) help two or more people find win-win solutions to their
conflict. The process is implemented by volunteers who are
professionally trained and are recruited to represent the diversity of
the neighborhood they serve. The community mediators guide the
participants through a process that helps them to first identify their
issues and then generate their own solutions.
There are different styles of mediation. The one I will be detailing below is one of them that is performed in community mediation by many state Maryland, county mediation centers. All these centers are non-for-profit organizations and they provide their mediation, facilitation services for free. You can find a list of conflict resolution centers in the state of Maryland with their contact information here: http://www.marylandmediation.org/centers.htm
Mediation starts with mediators (in a co-mediator model) explaining participants what to expect from the process. They give them clear description of the steps of the process (the list above). They explain a mediators role in the process, and other logistical details. Following this step, comes the information gathering stage. Mediators use a technique called strategic listening. By asking open ended questions (as oppose to yes/no questions or long speeches) mediators encourage participants to provide information. The goal here is to capture the feeling, the value, i.e. what is important to the person, and the topic. Most of the time conflict is not about one thing, and this process allows the participants to explore, in dept, what their values are and how they feel about what takes place from their position. Mediators reflect back based on what they heard from the participants; their feelings, what is important to them and associated topic around which the conflict intensifies. The reflections must be in a neutral language and not the reiteration of participants' positions (positional statements by the mediators can cause feeling of side taking on behalf of the participants).
In the third stage, the mediators inform the participants about the topics around which an agreement can be worked out. One important point here is that the agreements cannot be about the values of the people (I am yet to see a single example that an individual voluntarily negotiates about their values). Yet most of the time a conflict escalates from the point of views associated with the values. Hence it is important for a skillful mediator to point out, in this stage, what the topics are (say, it is about the fence that separates the yards of two neighbors). Mediators ask for confirmation if the participants recognize those topics as something they want a resolution around. Mediators remind the participants, based on the information they gathered in stage two, what was important to the each participant individually about that topic (say privacy for one neighbor who puts the fence and aesthetic of the neighborhood for the other neighbor) and how they said they felt about it; hence the importance of determining the values of the individuals.
Once a full list of topics have established and the participants feel that it is a complete list, that is to say if they find a resolution for each topic the conflict would be resolved, mediators inform the participants that they can move to the brainstorming stage. At this stage, participants are ask to come up with ideas as solutions related to a topic at hand. The comments on the ideas' feasibility or whether or not they are agreeable are left for later. All the effort is focused on the creative thinking for solutions. No idea is to be left out! Mediators facilitate the brainstorming stage by reminding what was important to each participant and how they felt around that topic. Once there is a long enough list of ideas collected, participants can move to select the those that are agreeable to them. Skillful mediators push the participants to come up with a large number of ideas. Most of the time participants get stack after couple of ideas, which are related to their initial positions and which they were pushing during the escalation of the conflict before they come to mediation. It is at this point mediators encourage them to think outside the box without giving them suggestions themselves. In my experience most of the agreeable ideas come after participants break this wall.
At the last stage, participants are asked what ideas are agreeable to them on the list. Note that the mediators are not asking them what is not agreeable; which could create a re-escalation of the conflict between the participants. Ideas that are readily agreeable to all the participants are marked with the other ideas that participants feel that they can agree on it after some adjustments. At the end of the process mediators list the ideas that are acceptable to all participants. Mediators work with the participants to clarify the details around the agreeable ideas, particularly about time commitments, dates, individuals that will be involved and what the participants will do if there were unexpected developments. After details are established and participants are satisfied with them, the agreed points are written down, and process moves on with the next topic. At the end, all the written items gathered together in an agreement and signed by all participants and copies of the agreement are distributed to each individual. The agreement can sometimes be an enforceable contract by law.