Litigation is an expensive and time-consuming way to resolve disputes. Fundamentally, these factors are often why so many litigation matters end with settlements.
Whether early or late in the case, mediation is often the critical event which leads to a conclusion of the case. Therefore, mediating effectively may be among the most important of a trial lawyer’s skills.
The first step in the process is getting both sides to consent to mediation. Parties are often concerned that mediation will be a waste of money because the other side takes unreasonable positions, or that suggesting mediation is a sign of weakness. While either concern may sometimes be justified, more often such concerns should not preclude attempting to engage in mediation. Lawyers and clients often take unreasonable positions at the front end of litigation, since settlement at that point would rarely be for more than the amounts demanded or less than the amounts offered. And sometimes, unreasonable positions reflect a misunderstanding of the facts and the law—or the risks in relation thereto—which can be adjusted as part of the mediation process. Further, it is unusual for any lawyer or client to be completely unwilling to settle on any terms, so suggesting mediation will rarely be viewed as a sign of weakness.
The next step is to pick an appropriate mediator. In that regard, if one side is doing the initial suggesting, several names should be offered. It is important that both sides have confidence in the mediator. Also, in choosing a mediator, both sides should consider the substantive expertise that the mediator has. A good divorce mediator probably isn’t the person you want for a patent dispute. And a med mal mediator might not be the best to resolve a managed care dispute. You want the mediator to understand the business issues underlying the dispute, and to be able to suggest alternatives or creative solutions that may be necessary to resolve nonfinancial as well as financial aspects of the dispute.
Another key factor in picking the mediator is availability. Some mediators are booked so solidly that it is difficult to get on their schedule, and there may be no ability to get a timely follow-up session. Also, the odds of a successful mediation are very much enhanced if the mediator has the time and inclination to do ex parte calls both before and after the formal session. Finding a mediator who is willing to do this effectively may be the single most important aspect of mediator selection. In some cases, you might look to the court to assist in the mediation; private mediators are being used with increasing frequency because they are generally available for longer time slots, and they may be able to find more time for preparation, as well as more likely to follow up or make themselves available after the mediation to help button up the settlement transaction.
After picking the mediator, the next step should be to enter into a written engagement agreement with the mediator. Key issues here are compensation and confidentiality terms. It should be agreeable to all sides that the mediation will not be referenced or used in the litigation.
The mediator should immediately call a preliminary conference to set a schedule for limited discovery (if necessary) and briefing, and to get an overview of the issues to be addressed in the mediation. Sometimes mediations fail simply because the parties did not share a common understanding of the issues which need to be addressed at the mediation.
The parties should then prepare and submit mediation statements. The parties must agree in advance whether these submissions, or parts of them, will be ex parte or exchanged with the other side. The mediation statement should carefully (and persuasively) address and document the facts and the law applicable to the case. While the mediator does not decide the merits of the case, points of fact and law often become a key element of the mediation process. The statement should also contain a description of settlement issues and each party’s settlement proposal.
At the mediation itself, the process is normally fluid, most often guided by the style of the mediator. It is very important that the mediator gain the trust of the parties. This can be addressed in the mediator’s opening remarks as well as in ex parte communication with the parties. It is also critical that the parties themselves be present, as should any other necessary decision maker or insurance adjuster. While some mediators believe that splitting the parties up and avoiding joint meetings is the best approach, it is generally better to request that the parties meet jointly at the outset. Opening statements in joint meetings setting out legal positions are probably best avoided in most cases, since such statements often create an unhelpful and contentious atmosphere. Positions are better presented in the written mediation statements. After the initial joint meeting, typically, the mediator will want to hold ex parte meetings with each party, at which the parties’ legal and factual positions, along with the settlement terms each party is offering, can be explored.
During these ex parte meetings, the mediator most often will try to educate the parties as to the downsides of not settling, including a discussion of costs of litigation and weaknesses in the party’s case. A good mediator will balance the presentation of weaknesses, framing the issues in a manner that does not lead the individual party to believe the mediator is “against” that party.
Where there are multiple issues to be resolved as part of the settlement, it is often best to tackle the easier issues first. This will encourage the parties by achieving progress toward the end goal.
Typically, neither party will show the mediator its full settlement authority at the outset. This is often worked out by a series of offers and counteroffers. Sometimes it may be wise for the mediator to give counsel to the parties as to what level would be productive and what level counterproductive.
If the parties are at an impasse, the mediator might choose to recommend the settlement terms or amount, or to provide a range. This is often helpful toward final resolution.
Mediations often are not successful after the first session, but ultimately lead to successful settlements in subsequent discussions among the parties. As noted earlier, a key aspect of successful mediation is whether your mediator is motivated to follow up with ex parte calls to the attorneys after the conclusion of the initial mediation session. These post-session discussions are often what lead to a successful conclusion.
Paul E. Knag is a partner of Murtha Cullina. He has extensive experience serving as a mediator on behalf of federal and state courts and as a private mediator representing the American Health Lawyers Association and the American Arbitration Association.