ADR

This is the seventh article in a series on mediation advocacy. The sixth article, published June 29 (“Mediation Preparation: Don’t Let the Informality Fool You“), discussed how to prepare for the mediation. The article continued a scenario in which the parties, Widgetronics and DesignMetrics, entered into a contract containing a dispute resolution clause and became embroiled in a dispute over Widgetronics’ alleged wrongful termination of the contract. The parties participated in the preliminary mediation conference, during which the mediator requested pre-mediation submissions. This article covers how to approach that submission.

As explained in the prior article, many attorneys make the mistake of underestimating the importance of preparing for the mediation. Given the high success rate of mediations, counsel should treat their preparation for mediation as they would any other case-dispositive event and prepare their pre-mediation submissions with the same focus and attention to detail as they would any other key briefing. The pre-mediation submission is a golden opportunity to educate the mediator regarding information that will help settle the case and to establish credibility with the mediator. Considering its importance, the pre-mediation submission should be prepared by an experienced attorney who understands effective mediation strategy and advocacy.

While some cases may not require pre-mediation submissions, most mediators are well served by having the parties prepare some form of pre-mediation submissions, which provide the mediator with an understanding of facts and circumstances that may not be apparent from the legal issues in dispute. These submissions also ensure that the parties perform at least a basic assessment of their case in preparation for the mediation. Even when the mediator hasn’t requested a pre-mediation submission, counsel should consider submitting one that will permit the mediator to plan an informed strategy for the mediation.

Pre-mediation submissions can be either exchanged (the parties exchange their submissions and send copies to the mediator) or ex parte (the parties send their submissions only to the mediator). If the mediator and the parties agree to both exchanged and ex parte submissions, the parties may prepare the submissions as two separate briefs or as one brief with the ex parte portion redacted in the submission delivered to the opposing party.

Exchanged submissions are more common when the parties have not had much communication, conducted discovery or otherwise learned about each other’s case (e.g., through other briefing). The advocacy of the exchanged submissions typically focuses on the facts and merits of each party’s case, with an aim to educate the mediator and the opposing party about the strengths of the drafter’s case and the weaknesses of the recipient’s case. Exchanged briefs enable the parties to perform better case assessment and risk analysis. They also give the parties a better opportunity to prepare for the mediation and may prompt the parties to bring to the mediation information, documents or cases that uncover weaknesses in the opponent’s position or buttress strengths in their own cases.

Ex parte submissions are particularly preferred in cases in which the parties have sensitive or confidential information to share with the mediator. The advocacy of the ex parte submissions focuses more on providing insightful perspective about the dispute and the individuals involved in the dispute, as well as explaining the challenges and opportunities the mediator may face in helping the parties settle their case. Ex parte submissions also permit the parties to provide the mediator with an evaluation of their case — both a critical exercise for the parties and useful information for the mediator. Ex parte submissions should provide clients with a transparent view of their case, including the risks involved in not settling, the realistic alternatives to settling and the options (possible terms and conditions) for a settlement.

In our hypothetical case, counsel for Widgetronics and DesignMetrics have agreed to prepare two sets of pre-mediation submissions — exchanged and ex parte. The mediator has asked that the submissions include the following information:

• A list of the issues that need to be resolved. This can be in dispute in some cases. The issues list should be included in the exchanged submissions so that the parties and mediator may discern any discrepancies between the lists.

• A recitation of the factual and legal positions and the relief sought, as well as citations to and copies of the most important cases supporting those positions and the relief sought. Including this information in the exchanged submission permits the opposing party to confront previously unknown issues.

• Any court opinions, orders and judgments issued in other actions concerning the issues in this case, and any other pending proceedings dealing with similar issues to those in this case. (This information would typically be included as an appendix to the exchanged submission.)

• A discussion of the strengths and weaknesses of each party’s case. If the parties prepare exchanged submissions, they would certainly discuss the strengths of their own cases in those submissions. Any discussion about weaknesses of their case and the strengths of their opponent’s case would be included only in the ex parte submission. Some counsel hesitate to include this in any detail even in the ex parte submission. One way to frame this information in a more palatable manner is to discuss weaknesses in terms of what the opposing party may argue are the drafter’s weaknesses and the strengths of its own case.

• The prior history of settlement discussions and any thoughts as to why the discussions have been unsuccessful to date. This information also can be included in the exchanged submissions, which gives each party the opportunity to “compare notes” before the mediation regarding whether they have the same information and perceptions about settlement discussions. The parties may also include a discussion about settlement history in their ex parte submission to provide the mediator with information they do not want their opponent to know.

• Each party’s interests and needs, and its understanding of the opposing side’s interests and needs. This confidential information would be included in the ex parte submission. Widgetronics, for example, may disclose that it is seeking capital investors and does not want the matter to go to litigation.

• Each party’s own BATNA and WATNA (best alternative and worst alternative to a negotiated agreement), and an assessment of the other side’s BATNA and WATNA. This confidential information would be included in the ex parte submission.

• Options for settling the case other than exchange of money. This is confidential information that would be included in the ex parte submission. In our hypothetical, for instance, DesignMetric might suggest offering an exclusive license agreement to Widgetronics involving an innovative product it recently designed that is superior to a similar product being sold by Widgetronics.

• Material terms and conditions for settlement. Sometimes parties include this kind of information in the exchanged and the ex parte submission, such as including general ideas they would entertain or not accept in the exchanged submission and providing more detail in the ex parte submission.

In the unlikely event that the mediator does not specify what the parties should include, this list contains most of the items counsel should address in their submissions. Counsel should be guided by the purposes of the submission, as well as what information is most likely to help the mediator help the parties. Counsel also should consider attaching any documents that the mediator should know about, highlighting them or explaining their significance so that the mediator can easily see why they are important to the case.

When drafting the pre-mediation submission, counsel should also keep the following admonitions in mind:

• When discussing the parties’ strengths and weaknesses, the objective is to provide sufficient explanation to help the other side learn the risks it faces, as well as to enable the mediator to develop an appropriate strategy for the mediation. The pre-mediation submission is not a brief on the merits to a judge or arbitrator; no judgment will issue as a result of this submittal.

• Be brief. In most cases, the exchanged and ex parte submissions should each be no more than 20 pages. Include only the most salient facts or elements of the case. If pre-mediation submissions are long and jammed full of information, the mediator will have difficulty ferreting out the truly important information for purposes of the mediation.

• Help the mediator understand the interests and needs of the client and why certain objectives are important.

• For exchanged submissions, be persuasive but not combative or argumentative. The goal is to have the opposing party read the submission, because it might be the first opportunity to educate the other side about certain facts in the dispute, and have them understand how those facts and the relevant law may create weaknesses in their case. You don’t want your opponent to dismiss the submission as hyperbole.

• Involve the client in the preparation of the submissions, particularly the ex parte submission. Not only will this help prepare the client for the mediation, but it also may elicit client insights that improve the quality of the submission and the strategy for the mediation.

• Make sure to address the weaknesses of your case and the strengths of the opposition. The other side undoubtedly will include these, and the pre-mediation submission is an opportunity to cast these potential weaknesses in their best light. Addressing them head on also enhances credibility with the mediator.

• Consider including an offer, with an explanation of the basis for the offer. The parties will need to do this at some point in the mediation, and providing it in advance can help establish reasonableness and flexibility and help the mediator prepare.

• Don’t spend a lot of time on legal issues. Mediation is not rights based, and settlement rarely occurs because of the strength of the legal arguments.

• Provide to the mediator any critical information (e.g., winning argument, desired business arrangement or significant legal or business strategy) that will enable the mediator to guide the settlement discussions and suggest options.

You and your client are now fully ready to participate in the mediation, which is coming up in about six weeks. Fortunately, right before the mediation, you’ll have an opportunity to read our next article, which will provide tips on effective advocacy during the mediation session. •

Judy Weintraub is the founder of Weintraub Legal Services and ACCORD LLC, and co-founder of Advanced Business Law Resources. She has more than 25 years’ experience negotiating complex commercial transactions and has handled more than 50 mediations and arbitrations. She can be reached at jweintraub@ablr.biz.

Harrie Samaras is the founder of ADR & Law Office of Harrie Samaras and co-founder of Advanced Business Law Resources. She focuses her practice on commercial cases, including disputes involving intellectual property, business and technology and other commercial contracts. She can be reached at hsamaras@ablr.biz.