To ensure effectiveness at mediation– whether general session or caucus– the attorneys should prepare zealously as if for trial. An attorney’s presentation at mediation can have a dramatic impact on the outcome behind the closed doors, averting a public trial, saving time, money, and otherwise risked goodwill for the clients. These are some things attorneys can do to produce a favorable outcome at mediation.
All too often, attorneys mediate with limited preparation. Counsel should not only be prepared for the mediation as if for trial, counsel should also make clear that preparedness to the opposing parties. Many believe they can figure out the details on the spur of the moment. This is risky because your opposing counsel can detect your level of preparedness and perceive an advantage actually trying the case. There is also a reputational factor to consider. Everyone else at the mediation will walk away with a perception of the level of preparedness or the lack of preparedness of the counsel. Preparation influences opinions about the attorney for the future– and that includes willingness and ability to try cases. This is not to say that an agreeable mediated settlement is not advantageous or that settlement should be avoided because of reputational factors. The attorney’s duty is ultimately to the client’s best interest and not that of the attorney. Sometimes that best interest is impasse resulting in a trial and appeal. Only through preparation of the facts and nuanced research of the law can the attorney reliably advise the client and be ready for any outcome.
Part of the preparation is recognition of the strengths and weaknesses of the case— doing the prep work necessary to formulate a cogent opinion about the good and the bad of the case. The mediator is the agent of reality, and the lawyer needs to know enough about the matter to recognize these realities when presented by the mediator, if not yet ‘heard’ from the opposing side. On the other hand, after full exploration of a case and careful consideration of the settlement positions of the other side, there are indeed cases in which it is appropriate to walk out of mediation.
Not all mediations begin with a joint session. My general preference is to do an opening session but there are exceptions, notably in family law and non-amicable divorce situations. Family law practitioners may only have family law mediation experiences starting in separate rooms, while commercial litigators may have more of a mixed experience. The disconnect between practitioners of different specialties can result in some confusion in discussions of mediation strategies. When I do a joint opening session, after a greeting and an introductory presentation about how the mediation works and what to expect, I routinely turn to the party bringing the suit or claim to make a presentation. This is not the time for either side to be overtly aggressive or upsetting to the other side. This is a time to be diplomatic, perhaps firm, show organization and understanding of the matter, and to help the mediator understand the case, though the presentation is to the other side. The opening statement that inflames emotions of the opposing side, that raises anger or a level of hostility, can immediately reduce the likelihood of settlement at the mediation. The mediator should gauge the level of hostility beforehand and can play a role in helping counsel to keep remarks more toned down. For example, the attorney can express the client is steadfast in his or her position in the case and that the client is attending to listen intently and to participate in good faith, and that the attorney is also there for that purpose.
Conversely, the more overtly offensive an opening remarks by counsel, often the less the opposing side will hear the underlying reasoning of the client’s position. The joint session is only one of the available venues for these arguments to be presented; the other is in caucus. At causus, the mediator can privately raise objective concerns about that party’s positions without the opposing side hearing that communication. Whereas a party with strong feelings about its opposing party may shut down its listening and only hear— meaning ‘feel’— emotion during a joint session, the party’s ears are more open to hearing the exact same reasoning from the mediator instead. Even so, the attorney who hears and privately reinforces to the client the reasoning expressed by the mediator can help the client to gain a broader and more reasoned perspective. This can help the client internalize the facts, risks, and advantages, distilled from the emotion. An evaluative mediator can do an effective job keeping the evaluation private until the client is, in the mediator’s perception, at a point and place where the input will be heard.
Mediation success is contingent on the folks being in the room who have a stake in the conflict. But not everyone who is part of the conflict is served with a lawsuit; sometimes they’ve settled out long before mediation begins. Resolution in terms of dollars and cents is not necessarily emotional resolution, or resolution with input as to facts that is heard by all the potential parties. Communication with each party’s attorney (whether joined into the lawsuit or not) can help with resolution for other parties. Bringing the necessary parties to the table can mean compulsory joinder of necessary parties. Still, when there’s a possible “dec” action, i.e. a possibility or uncertainty as to non-coverage, the parties who should be present include both a representative of the casualty and liability insurer, as well as the counsel for the named defendant. Stakeholders have to be in the room to get necessary approvals. In a commercial matter, this includes indemnitors, sureties and guarantors. In a closely held company’s dispute, minority shareholder input can prove helpful and preventative of a future dispute or later attempts to backtrack— signor’s remorse— on a settlement achieved.
A significant challenge to conflict resolution effectively amounts to a form of bad faith: mediations with those who lack authority to settle. Communication among those present (attorneys, party representatives— even if lacking authority— and the mediator) can help get things closer to resolution. On the other hand mediation with a mediator, attorneys, and those with authority can result in actual resolution. Sometimes a side is going about the steps of mediation for reasons other than ultimate resolution: to obtain discovery, gain information, run up a bill, placate a court that ordered the mediation, to test parties as witnesses, or even to cause the other side grief. Other times there is a representative with authority just a phone call away. It is essential that such third party is not only a phone call away but that that party is available and consciously awaiting that call. At complex hierarchical organizations such as some conglomerates, there may even be some kind of internal procedure such as a committee that has to hear the proposed resolution and approve it.
Just because there is a “procedure” does not mean that approach to mediating necessarily honors a Judge’s potential perception of good faith mediation. Counsel, when ordered to mediate should, bring to the Judge’s attention possible snags such as the other side’s corporate approval structure and ask the Judge to clarify the expectation of good faith through having present a party with meaningful settlement authority. When a Judge expresses that someone with sufficient authority is present at the mediation, this can sometimes cut through the internal bureaucracy so the company gets its ducks lined in a row before walking into the mediation. Sometimes a mediation can be recessed to gain approval from within a company’s hierarchy. When pre-suit, the threat of the looming potential lawsuit may be enough to bring parties together for mediation before filing, but has less of a chance of having all parties with authority in the room. Mediation failures can loom, seemingly from out of nowhere, when the hard work leading to the first offer results in the other party saying it needs to get approval for higher ups or via a time consuming internal procedure. When the mediator is able to interact with the decision-makers, the chances for success can increase dramatically. When the decision makers simply cannot be present, which is potentially possible with a complex government entity or some conglomerate as the first party, the attorneys, to be in good faith, should get authority and know the limits in advance. It is a reality that no organization representative is advanced limitless authority, besides perhaps the CEO. So a mediator beforehand should be in contact with the attorneys to inquire and encourage potential proactive steps toward gaining authority or extended limits of permission. The higher the defense representative’s authority, the greater the likelihood of settlement.
Some matters are mediated before litigation, some during, and some are mediated even after litigation is concluded, i.e. with risk of appeal. The success of mediation can be directly affected by how procedurally advanced a matter is. No one size fits all, however, as each situation is unique in its own way. Mediation at any point can, at least, help to hone the problems or to underscore where more work needs to be done before the matter can be resolved. Sometimes that work is legal research to be able to know the risks of proceeding with litigation. When a matter is pressing of the moment, a fast track to mediation can nip a problem in the bud. This is especially true where the maintenance of harmonious relations between two parties is in an overall best interest of the parties or those organizations for which the parties are employed. The furtherance of a continuing business relationship can necessitate mediating smaller problems, or even large ones, before they get out of hand to the point of disrupting the business relationship itself. The time selected for mediation can impact the success of the mediation.
Mediation takes time. they do not happen like contracts of adhesion or clicking “agree” on a software licensing agreement. Successful mediations often require an opportunity for parties to share and reveal frustrations, anger, and other emotions. Venting and being listed to are essential to moving emotionally charged parties forward to a practical solution. Sometimes the party has become so emotionally entrenched in supporting a long-held position that shifting to a new perspective or position that will allow for resolution takes significant time to. And even if a party is resistant to doing the hard work, there is no real impasse until the mediator so declares. One approach is the use of an offer and counteroffer to reflect movement in positioning by the parties. This can demonstrate some good faith and intentions to negotiate from one side to the other, and vice versa. Where a starting offer never changes will inevitably result in impasse unless the opposing party has no intention of actually pursuing the matter further. The mediator, however, may have confidentially confided information that the offer presented differs from the best offer possible. So the parties should trust the mediator on gauging the potential that impasse is reached. As difficult and emotionally draining as mediation can be, trial before judge and jury (and the public) with threat of appeal can expend far more emotion. The hard-fought mediation can result in an amicable settlement, whereas the hard fought trial can result in total dissatisfaction for one of the sides. Settlements become possible through the hard work of the parties and get clients derisking and the closure sought.
Counsel need to prepare for mediation. The more prepared the better. This ensures the negotiation can reach fruition without leaving to chance unknowns that can only come from additional advance preparation. There the attorneys and parties know about the matter and associated legal issues, the more empowered they are to achieve relative comfort from particular terms of settlement.
While the mediator will be addressing the strengths and weaknesses of the case with each party in caucus, an attorney should be prepared to explain where the mediator is perceived as wrong or mistaken. The mediator needs candor to do the best job the right way, yielding a desirable conclusion. Even so, the parties and attorneys should listen carefully and with an open mind to what the mediator says as well. Few things empower a mediator as much as a document that proves a point verbally alleged by one side to another. The more the mediator knows, the more effectively the mediator can bring about a reasoned response from the opposing side. By the same token, a mediator should also diplomatically challenge allegations that are over broad or unfounded. Moving clients and counsel off a strong-held position without a basis can be part of what shifts the perspective toward resolution. Clients need to be prepared by their attorney. This necessity of preparation is no different whether trial, deposition, a statement to an authority, or any other negotiation. Part of the preparation is ensuring the client understands the mediator is impartial, that what is said at mediation is not admissible, that the negotiations are not binding until reduced to a signed Agreement. The attorney should advise about the strengths and weaknesses of the case before the mediation begins. The lawyer who fails— until mediation— to express the downside of the client’s position risks loss of client trust. Some of the typical downsides include possible attorney fees, costs, affirmative defenses, and motions to dismiss on the basis of summary judgement as a matter of law. These are all topics astute mediators will raise and the client (and the lawyer) is each better served to have heard these first from the lawyer, and not first from the mediator. Whether a party should reveal its bottom line to the mediator is a question for debate. The closer the mediation gets to conclusion, sometimes, the closer the negotiated consideration approaches that bottom line. But other times the consideration is nowhere close to the reaches of a party’s negotiation limits.
Overall there are many things an attorney can do to better the odds of optimal outcome for clients at mediation. The more prepared the attorney and client, the better.
About the author: Andrew Tolchin is an attorney and mediator in the greater Houston area, and founder of 713 Mediator, LLC and Tolchin Law Firm, PLLC.