Written By: Joseph J. Narulli
Timing Is Everything: Bringing a case to mediation at the wrong time: or Timing is Everything.
It is well known by most experienced litigators that there comes a crucial window of time when the attorney knows 85-95% of the information about the case, yet only 10-20% of the cost of going to trial has been expended. This is the optimal time to take the matter to mediation, particularly in cases where the cost of litigating the matter through trial is significant.
In contrast, it is more difficult to justify mediation when the parties have expended the majority of their litigation budgets and are ready to go to trial. However, even these cases often are good candidates for mediation, since often both parties remain more interested in having control over the outcome of the litigation than giving that control away to a judge or jury. A common mistake, however, is attempting to bring a case to mediation when a crucial deposition has not been taken or some other discovery procedure, which is a lynchpin to a meaningful settlement discussion, has not been completed.
When the parties bring a case to mediation prematurely, it is usually an empty exercise since, by definition, a settlement cannot be reached because one or more of the parties does not feel that they have sufficient information to formulate a settlement.
Making this mistake can have disastrous effects, often setting a possible settlement up for failure, since when the time comes that the parties are in a position to mediate, the attorneys run the risk of encountering resistance from their clients, who have gone to one unsuccessful mediation that they have expended the time and money for, and they do not want to take the chance of another fruitless experience.
If this occurs, work with the Mediator to find a way early in the mediation to finish that critical deposition, etc. as soon as practicable and then resume the mediation as soon as possible thereafter. It is critical not to lose momentum; otherwise the chances of successfully mediating the matter plummet dramatically.
Preparation Is Everything
Any discussion of the most common mistakes made by attorneys would be remiss without a discussion of the issue of preparing the client for the mediation, and having the attorney prepare himself for the mediation, as he would any other important legal event such as an important motion or the trial of the matter itself.
Preparation Of A Client
Turning first to the preparation of the client – the attorney must thoroughly explain to the client what to expect during the mediation process. In particular the attorney needs to carefully explain to the client what mediation is and what it is not. The client must understand that mediation is not arbitration or a mini trial. The client must understand that no resolution of the case can take place unless the client consents to it, that the client remains in control throughout the process, and unlike arbitration or trial that control cannot be taken away from the client.
The client must understand the status that Alternate Dispute Resolution now enjoys in the judicial process, and that engaging in mediation is in no way a sign of weakness. The client must understand that the mediation process is confidential; that what goes on at the mediation cannot be used against any party to the mediation.
Probably most importantly, the client must be made comfortable with what to expect when the client participates in the mediation. The client needs to have a full explanation of the joint session or sessions, the private caucuses, and what the role of the Mediator is, the role of counsel, and especially the role of the client. The client must understand that the Mediator is a neutral with all that this implies, and that the Mediator’s function is to objectively evaluate the case and facilitate a mutually acceptable settlement, without violating any confidences that are shared with the Mediator by either side during the mediation. The client should be prepared as to how client is expected to interact with the neutral. The client needs to understand the role that the attorney expects the client to play, if any, in telling the clients’ story.
The role of client’s counsel must be carefully explained and re-explained to the client. The client must understand before the client arrival at the mediation that the attorney will serve not only as an advocate but as a counselor, working with the Mediator and client to evaluate fairly and honestly what a fair settlement would be under the totality of the circumstances. The client must be pre-conditioned that they will be seeing a different side of counsel at the mediation, not the pure advocate but more the evaluator. If this is not done and done well, the attorney runs the risk of having the client perceive that the attorney has suddenly “gotten soft” on client’s case.
The attorney should prepare the client for the “give and take” negotiating nature of mediation. Do not neglect to prepare the client for the possibilities of some negative occurrences during the mediation, such as “outrageous” demands or offers being made by the other side. It should be explained in advance that this often happens during mediation, but with a skilled Mediator, these obstacles are often overcome.
The attorney should discuss with the client prior to the mediation what the strengths and weaknesses of the client’s case are and what a good range for settlement in terms of dollars would be. I say range, because I think it is very important not to get fixated on a particular number, but instead to narrow down a dollar range over which both client and attorney feel comfortable in resolving the matter, i.e. $150,000 -$200,000.
Discuss with the client the so-called “below the line issues” or “non-economic issues” that might play into a settlement. For example, in a business case, if there is the possibility of doing future business with the opposing party, it should be discussed how the issue might be used as a component of any settlement. It is important to interject the concept of “face saving” for all concerned in the mediation (this issue will be discussed further).
The greatest key to a successful mediation, and the most difficult to achieve, is convincing the client to be flexible during the mediation process. If an attorney is unable to get this concept at least grudgingly accepted by the clients, counsel’s chances of a successful mediation will be severely hampered, and counsel’s chances of being perceived in the right light as both an advocate and a counselor will be compromised.
Be sure to educate the client on who the Mediator is, what the Mediator’s qualifications are, and why he or she would be a good Mediator for the case. Involve the client in the process of selecting the Mediator. Give the client the opportunity to review at least a few candidates with the attorney so the client will feel that the Mediator is not just the attorney’s choice but also the client’s choice. During the process the attorney shares with the clients the potential Mediator(s)’ Curriculum Vitae, articles they may have written, materials about their style supplied by the mediation practice, and articles by and about these potential Mediator(s). If the attorney takes this approach the attorney will not have to labor hard in transferring attorney confidence about the Mediator to the client. The client will have gained confidence in the collaborative effort to select the best possible Mediator for the client’s case.
Selecting The Right Mediator
A fact that cannot be overemphasized is that the attorney must choose the right Mediator for the client’s particular case.
First, be sure that the prospective Mediator has the right substantive background for the case. Rarely are all Mediators equally skilled in handling every type of case that our judicial system has to offer. There are few mediators who seem to defy this principle, but they are few and far between. For example, in an employment matter or a sophisticated personal injury matter, look for a Mediator who has a background and mediation experience in that particular area of practice.
Remember, the Mediator is someone who is going to be hired by the client, so interview the Mediator! Discuss the issues that are going to come up in the mediation, and do not be afraid to inquire as to the Mediator’s experience in dealing with those issues. The attorney should inquire as to how many mediations he or she has conducted in that particular field.
Importantly, the attorney has to get a feel for the temperament of the proposed Mediator. How is the Mediator going to interface with the client? How is he/she going to interface with the opposition?
Obtain references from attorneys that have had dealings with the Mediator. Most mediators are happy to give references; often one can inquire with the local bar and find individuals with whom the attorney can discuss the potential Mediator’s qualifications.
The attorney should attempt to learn what the particular Mediator’s style is, and how it might mesh with the client’s personality. The so-called “impasse breakers” – does this Mediator use them? Under what circumstances does the Mediator make use of them? Clearly, it is important to inquire what the Mediator expects the role of counsel to be, and be sure that counsel is comfortable with that role.
What To Have In Place Before The Mediation Begins
It is imperative to have briefs to the Mediator well in advance of the mediation. Mediators are people; if the brief “rolls in” on the fax machine at 9:50 a.m. for 10:00 a.m. mediation, the Mediator is not likely to have warm feelings about counsel’s client. This is especially true if the Mediator has asked for briefs of a certain length to be delivered, for example, 10 days before the mediation. The attorney unintentionally broadcasts to the Mediator that neither the attorney nor his or her client take the mediation seriously.
Contrast this with opposing counsel who files a professional, thoughtful brief in advance. Opposing counsel walks in with the “halo” effect and consciously or unconsciously the Mediator is going to give opposing counsel extra consideration during the mediation.
Consider preparing both a non-confidential brief and a confidential brief for the “Mediator’s eyes only”. In the first brief, which would be exchanged with opposing counsel, the attorney can be the advocate. In the confidential brief, the attorney can be candid with the Mediator as to the strengths and weaknesses of the case, what non-economic (below the line) considerations there are, and what possible below the line solutions there may be. In the appropriate case, the attorney can indicate what the attorney believes the range for settlement, in terms of dollars should be, and why. Make sure that the client has seen and has input as to the second confidential brief. Visual aids should not be overly inflammatory; or intentionally or unintentionally make the dispute a personal attack upon the opponents. Determine in advance with opposing counsel and the Mediator how the mediation is going to be conducted.
Joint Session Or No Joint Session, That Is The Question
Sometimes joint session is valuable, giving counsel the opportunity to show both opposing counsel and the other party (and perhaps an insurance adjustor) how attorney’s case is going to look at trial. However, careful consideration should be taken as to the joint session; the custom of having a joint session is not sacred. In fact, it is often better not to have one at all. It should be carefully considered whether the personalities, the history of the parties, and the types of allegations being made in the lawsuit are such that a joint session may actually do more harm than good. If the attorney sincerely feels, after analyzing these issues with the Mediator, and opposing counsel, that some other format might be better, that is what should be done. The goal is a successful mediation, with hopefully a settlement, not a demonstration of counsel’s presentation skills. There are many alternatives – a modified joint session may be utilized in the appropriate situation, where the parties are brought together briefly and the joint session is limited to an introduction by the Mediator, as to who he or she is, what his or her background is, the signing of the Confidentiality Stipulation, advising counsel and the parties of how the process will work: i.e., that they will be broken into separate “caucuses” and that the Mediator would be meeting with each side separately.
In any particularly difficult situation, for example a legal “malpractice case” or something of that nature, the situation might require that the parties never have a joint session, that they stay in their respective separate caucus rooms with the Mediator traveling between them as their only contact. In bitter, contentious situations such as partnership dissolutions, corporate dissolutions, malpractice cases, etc., the biggest mistake an attorney can make is to become part of the “feeding frenzy” by fanning the flames of hatred against the opposing side.
Client Involvement – Do Not Overlook A Willing Ally
Evaluate the client’s involvement and how to utilize the client as a “part of the team” in presenting the case at mediation.
In some cases there may be legitimate reasons to limit the role of the client at mediation, but often counsel can show off the client’s effectiveness in telling client’s story, as well as client’s effectiveness and credibility as a witness. The advantage is that the message will inevitably be relayed to the opponent that in the eyes of the neutral, the client is an effective proponent of client’s position, a fact which should be taken into consideration in evaluating settlement. Conversely, in the case where the client would be an effective storyteller of his/her position, failing to allow him/her to do so may unintentionally convey to the Mediator and/or the other side the exact opposite, that the client is not a credible witness, or perhaps even worse, that the client does not have the “stomach” or resolve for the fight and might be susceptible to intimidation, or does not intend to go to trial, but in the end will settle for “peace at any cost”.
Honestly Counsel The Client Concerning The Pros And Cons Of Settlement Versus Litigation
When in private caucus the attorney must learn to be a counselor at law, not merely an advocate. The attorney must step back and evaluate with the client and the help of the Mediator, the case’s strengths, weaknesses and strategy for settlement. First and foremost, the attorney must be truthful about the following based on counsel’s experience and knowledge of the case and the judicial process:
- Likelihood of success
- The cost of “going all the way” to trial
- The emotional toll of going forward with litigation
- The inability or ability to collect on a judgment
- Most importantly, the fact that the client loses control once the case goes before a trier of fact, judge, jury or binding arbitrator.
Again, this realistic approach should be instituted before the mediation is commenced. This is the best way to avoid the tendency of the client to reject offers “out of hand” without giving them any consideration.
Address Adversaries’ Concerns And Arguments
First and foremost – Listen: The best way to win the opponent’s trust is to effectively listen and although there is no need to agree with the opponent’s position, letting the opponent know that the opponent has been heard and understood, is central to counsel’s gaining credibility with the ultimate audience – opposing counsel and his client. This approach also gives the Mediator the ammunition that is needed to effectively bridge the gap between the parties.
Remember, it goes both ways – if the opposition becomes convinced that counsel is listening to position(s), they will be more disposed to listen and consider both positions. Creating this climate of dialogue is one of the most important ways that the attorney can insure the best possible chance of successfully coming to a mediated settlement.
Do Not Go To The Bottom Line Too Soon
It is a tremendous mistake to immediately discuss one’s bottom line and “numbers” at the outset. The attorney’s first priority is to create the proper rapport with the adversary, one of trust, credibility and an overall atmosphere of good faith negotiations are what counsel wants to pursue. This is most important if counsel is involved in a case where the demand amount is large. Conversely, if counsel is on the defense side of the equation, the amount that is being offered is quite small. Money matters should always be left to private caucus sessions where the Mediator can aid in strategy and in presenting these offers. It is important that the attorney has a firm grasp of the justification for counsel’s demand or offer in terms of the law and facts that will support it. Negotiating based on pure “air” is the quickest way to destroy credibility and erode trust. Additionally, making outrageous demands or offers, which can’t be supported by the facts and law, is one of the worst mistakes that can be made in mediation. This approach almost always inflames the opposing party, and often the opposing party will counter with an outrageous counteroffer. Credibility and trust again are the keys. Perhaps interjecting the underlying concept of negotiating in “good faith” is appropriate at this juncture. Counsel must convey that counsel is negotiating in good faith. Unless the demand or offer has a reasonable basis in fact and law, it is impossible for the opposition to take it seriously, and rather than enhancing the possibility of resolving the dispute in a negotiated settlement, it becomes a virtual impossibility.
Do Not Demand Total Surrender – Everyone Has A Need To “Save Face”
If a party is going to come to the mediation and negotiate in terms of being absolutely right about every fact, issue or potential settlement term, the party is his or her own worst enemy. This usually occurs when the party that perceives that it has the upper hand in the case attempts to dictate an unconditional surrender. Counsel must always allow the other side to “save face”, irrespective of what culture one is dealing with. This is incredibly important since if one fails to allow the opponent to save face, one is undoubtedly going to alienate the opponent to the point where the opponent will react negatively and dash any hopes of reaching settlement. The key is to treat the opponent with respect, to build confidence and trust, remembering always that unless those concerns are dealt with, resolution by settlement is unlikely.
Engaging In Personal Attacks
It should go without saying that engaging in personal attacks is the last thing that counsel or the client should be doing in mediation. The key to successful mediation is being professional, showing the opposing party appropriate respect at all times, and keeping the focus on the facts, issues, and ways of resolving the case, and not on mudslinging, which will only hamper any chances of settlement.
Failing To Understand The Mediator’s Role And To Effectively Utilize The Mediator
The Mediator is a neutral and not an agent for the opposition. It is the Mediator who can best “evaluate” from an objective perspective the strengths and weaknesses of the case; in essence, give the case a reality check as to how it stacks up, unburdened by the emotional involvement that is invested in the case. The Mediator also evaluated the opponent’s position, and within the confines of the confidentiality owed both parties, the Mediator is in the best position to strategize a settlement position.
The most common mistakes that I see in conducting mediations are made by the attorneys who obviously have conveyed to their clients that the Mediator is someone not to be trusted, and that the Mediator’s oath of confidentiality is not to be taken seriously. In essence, that the Mediator is a “spy” in the caucus room for the opposing party.
I immediately know that this is the dynamic is when I, as the mediator, am asked to leave the caucus room on a consistent basis during caucus. There are certainly times when the attorney has a legitimate need to confer with the client without the Mediator present. However, in mediation the parties and their attorneys have ample time when they are alone to discuss these confidential matters. Perhaps the lesson here is to not alienate the Mediator either by making him or her feel that they are not part of “the team” or worse, to look upon the Mediator as an adversary. The attorney wants the Mediator to utilize all of his or her skills and insight to work hard for a “win win” settlement for both sides, especially counsel’s!
Use The Mediator And All The Tools That The Mediator Has At His Or Her Disposal
In mediation, it is essential that the attorney use the process to his or her greatest benefit. Be prepared to have the Mediator use whatever “impasse breakers” that he/she may think would be effective and appropriate. The Impasse Breakers such as baseball mediation, golf mediation, binding mediation and high-low mediation etc. are methods that most attorneys are familiar with. Often when mediation has been going for quite some time with slow or no real progress, both sides are looking for a way to break the impasse. The Mediator, who has been in both rooms many times, will suggest one of these impasse breakers to the parties. The Mediator has taken the pulse in both rooms and is in the best position to determine what approach may be acceptable to both sides, and how appropriate that method might be. Keep in mind that the impasse breakers should not be utilized early in mediation; they are rarely going to be accepted by either side at this stage. These approaches should be utilized as a last resort, when traditional mediation has not resulted in closure or a settlement. On the other hand, it is important that counsel educates the client before mediation of the potential use of these techniques, what they are, and how they are in fact utilized. The attorney would be surprised how many clients already know about some of these techniques, and if they do not, how fascinated many of them become with these concepts.