March 12, 2019

Some In-House Views on Mediation Involving Professional Engineering Firms

Beverly M. Tompkins

Introduction

From mediator selection to who attends mediation to what information a party shares with the other party(ies), everything in mediation is a strategic and tactical decision.  Whether your client is a bit player in a multi-party action, or a primary player as a claimant or defendant, everything sends a message.

Deciding Whether to Mediate

There are certain basic questions in-house counsel should work with their clients to answer before going to mediation.  They are:  (1) Why are we going to mediation?  (2) Is the dispute ripe for mediation?  (3) Do we intend to settle?  (4) Are we attending mediation to send a message? And, if so, (5) What message do we want to send? 

We all know that the main point of mediation is to use informal means to settle a dispute and that going to mediation in the early stages of litigation can be a waste of time.  However, complete resolution of a dispute is not necessarily always the goal for mediation, and mediating early on can have important strategic advantages. 

So long as a party does not have high expectations that they will reach a settlement at mediation, a lot can be gained by going through the mediation process early on.  First, a party can get a better sense of the character of the opponent(s).  Second, a party can discover facts and evidence that they may not have been aware of before.  Third, a party can use the opportunity to educate the other side on the strengths and weaknesses of their case.  Fourth, a party can gain a better understanding of their opponent’s position and appetite for remaining in the fight. 

Mediator Selection

There is not much deviation in the initial steps from one mediation to another.  The first main step the parties must take is to agree to a mediator.  Mediator selection encompasses many factors, including location, hourly rate, travel expenses, subject-matter experience, years of experience, and success rate.  This information can normally be gained from mediator bios and is typically available online.  There are other factors to consider in the selection of a mediator, however, that typically cannot be obtained from online resources.  Information on a mediator’s effectiveness and style can only be gained from speaking with trusted colleagues who have had experience with a mediator in the past, and asking them about their impressions.  Such due diligence in this area can pay off as much as good preparation for the mediation itself.  Being aware of a mediator’s tendencies can make the mediation process more efficient and, in some cases, can give your client a strategic advantage over the other party. 

Pre-Mediation Process

Depending on preferences of the mediator, the next steps before attending mediation involve (1) the exchange of information between the parties, such as claims and supporting documents; (2) the preparation and exchange of mediation statements; and (3) multi-party or individual party calls and/or meetings with the mediator.  During such calls, counsel should discuss with the mediator both the schedule and format for mediation.  Make sure that there is ample time for mediation.  Ask whether the mediator wants presentations or opening statements.  Ask her whether she plans to have an open session format or whether she plans to separate the parties into different rooms. 

Preparation for mediation is critical.  Determine which documents you and your client want to use as evidence in the mediation.  Decide whether or not such documents should be shared with the other party in advance of mediation, shared confidentially with the mediator only, or used solely at mediation.  Keep in mind that presenting information in stages can be an effective means of getting a party off of a particular position, but it can also cut both ways.  If your client is a defendant, be prepared for a plaintiff revealing new information mere days before mediation.  This tactic can put additional psychological pressure on a party, provides little time to prepare, can completely throw a party and its counsel off their strategy, and requires a party and its counsel to alter their analysis of the case.   

In addition to preparing legal arguments and lining up the facts and evidence of your client’s case, you and your client should take the time to evaluate your goal(s).  Be realistic and ask yourselves whether the case will settle or not and what both possibilities will mean for your client.  If your client bears some liability, take the time to explore with them what their number is.  You and your client should also be asking yourselves: Where does the other party(ies) have to settle at?  Where is the cash?  Has the claimant brought in all the right parties?  Are there other sources who are not at the table (insurance carriers or other parties)?  Consider also the possibility that a responsible party may not have the cash to contribute to a global settlement.  Work with your client’s insurance carrier so that you are both on the same page before mediation.   Keep in mind that some additional preparation and education regarding parties not already at the table may be necessary at mediation.

At Mediation

Although it may not seem like the most important consideration for mediation, who and how many people attend mediation on behalf of a party can send a message.  In my experience, the fewer attendees on behalf of a party, the better.  One representative responsible for a project is sufficient, along with a corporate representative who can be in-house counsel and/or another executive, as necessary; outside counsel; and an insurance representative, as necessary.  Other individuals with day-to-day project experience can be on-call or available by phone.  The key is that someone with deep knowledge of the facts and history of the project and someone with authority from whomever such authority must be sought should attend mediation (and this can be the same person).  

The main goal of a mediator is to strike a deal between the parties and he or she is incentivized to do so.  This has its pluses and minuses.  Whether they be your client’s facts or those of the other party, if your mediator is not focused on the facts of the dispute, his or her interest in getting a deal is going to override any thorough understanding of the facts, or getting the best outcome for the parties based on the facts.  A mediation should be an active shaping of the issues, so challenge the mediator and ask questions.  You may need to reassert your client’s position or reiterate certain facts of your client’s case.   

What do you do when a party shows up at mediation and is not committed to the process?  How do you bring them back?  In this case, you and your client can rely on the mediator to describe for them the risks they are taking by not investing in the process, such as continued distraction, time and effort, and potential additional liability.

Realize that parties’ interests and level of risk tolerance can differ drastically in a mediation.  If their facts are bad and potential liability high, they will be quick to offer money to get out.  These same parties may encourage other parties to do likewise. Other parties may be willing to put up money where maybe they should not have to because they have done the calculus and have determined that the effort, distraction, or cost of litigation is too great, and they are willing to pay a premium just to walk.  Others may succumb to the peer pressure.  Still others may dig in their heels as a bluffing strategy. 

Settlement

Remind your client that settlement does not have to happen the day of mediation and that cases often settle in the days or weeks following mediation.  If you picked a mediator who remains engaged and focused on bringing the parties together in a settlement in the days and weeks following mediation, you may just very well settle and not have to meet for a second attempt.  If you reach settlement, memorialize the basic terms in an initial memorandum of understanding before the mediation session ends, including how much has been allocated to each party, dates when payments are due, the scope of releases, and other material terms that are conditions of settlement.

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Beverly M. Tompkins

Vice President, Corporate Counsel, Simpson Gumpertz & Heger Inc., Waltham, MA, Division 11