April 22, 2019 Articles

Considerations for an Effective Mediation

The mediation framework, the proper use of experts, and the settlement agreement.

by Ron Williams

Mediation can lead to a settlement, but getting there requires counsel to employ the right techniques, ranging from selecting the correct mediator for the particular dispute to anticipating the measures needed to close out a settlement. Implementing these measures can help clients avoid unnecessary time and expense associated with arbitration or a trial. But mediation must be handled properly, to avoid turning it into a mini-trial, which may not produce a settlement and may lead to an actual trial.

First, counsel should consider the merits of selecting a “retired” judge rather than an experienced, practicing lawyer as a mediator. Most former judges who mediate have more general experience that allows them to explain to clients how courts and juries may look at given issues, evidence, damages, and witnesses. An experienced former judge will know the law and how it is likely to be applied. A judge can also offer observations about discovery costs and trial costs—including legal fees and expert fees—as well as the appellate process and the potential for retrial.

By contrast, an experienced mediator who practices every day and specializes in the relevant field can contribute concrete, practical experience. In fact, that mediator may have represented clients in the same types of claims involved in a given mediation. However, a client may have less respect for a mediator who is not a judge and may be more inclined to push back, threatening the success of the mediation. It is critical to reinforce the experience of the mediator in such a situation. After all, an experienced mediator may have more relevant mediation experience than a judge.

The Mediation Framework

When it comes to the mediation framework, always insist that each party have a representative, with legal authority to bind the client, present for the entire mediation. If an insurance carrier has a role, the adjustor should state what the limits are. If anyone needs to consult someone who is not present during mediation, that person should be available at all times, preferably in person. When an adjustor participates by phone, it is easy for the adjustor to refuse a mediator’s request. If no insurer has involvement, select the client’s representative carefully. A person whose decisions are at issue in the mediation is likely to simply defend or attempt to validate decisions he or she made that gave rise to the litigation, reducing the likelihood of settlement. Consider bringing a businessperson who has sufficient facts and the ability to defend them when questioned by a mediator, but who also can see the value of negotiating a deal without getting emotionally attached and can look ahead to the next project.

Remember to have backup dates in the event the initial mediation date is canceled for any reason. This will avoid a delay.

Start the mediation early in the day with everyone present and committed to staying the entire day as long as communications are productive. Mediation takes stamina and a willingness to block out distractions and stay as long as it takes to get the matter resolved.

When a mediation begins, make sure that you understand the mediator’s process. If the mediator plans a face-to-face and the clients detest each other, it might be a good idea to let the mediator know that may be counterproductive. If the clients do not have that type of animus, the mediator can pose questions at the beginning and obtain a verbal and symbolic commitment that they are dedicated to the process and to trying to resolve the case. If counsel knows how the mediator will proceed and has explained that to the client, the client will be better off.

Make sure the client brings materials to study as well as other work. Often, client representatives get bored during mediation because the mediator spends time with the other side or is otherwise occupied while counsel and clients sit alone. That can lead a client to be impatient. Avoid that impatience by making sure the client has work to do during downtime. All too often people lose patience and either abandon the mediation or simply abandon their position, hoping that they can reverse course later. Make clear to the client that, whatever movement or lack of movement occurs during each individual session, patience is a virtue.

Proper Use of Experts

Depending on the circumstances, counsel may want to employ experts to make presentations to the mediator on theories of liability as well as damages. A good expert can teach the mediator aspects of liability and damages in a way that affords understanding and can be persuasive. Presentations can take the form of demonstrative exhibits, a PowerPoint, or other techniques. Sometimes a mediator may benefit from a site visit with the experts and the parties. If that is the case, raise it with the mediator early, even in advance of the actual mediation. This site visit may simply involve pointing out things that the mediator should see without providing any opinion or argument by either side.

While expensive, using experts with mediators can actually be less costly and more timely than waiting for a battle of experts at trial. The downside is that an insincere party can use the process to obtain free discovery. However, that downside is small because most courts allow depositions either by virtue of rules or upon request.

Sometimes mediations can involve experts facing off on claims, all with an eye toward reaching consensus. Hearing from competing experts on a few claims selected by each side allows both sides to identify the strengths and weaknesses of their respective positions. If there are many claims, focusing on a sample and allowing each side to pick a representative portion of the sample may lead to a greater overall consensus and settlement.

Sharing matters when it comes to written submissions made by parties in advance of a mediation. Only by sharing submissions can both sides know exactly what the mediator is being told and what the respective parties’ positions are. Sometimes, in advance of a mediation, one side or the other may abandon a position. If that is the case, it is better to see it in writing than to prepare for issues that ultimately do not need to be mediated.

Both sides can submit confidential memos if the mediator wants them, but counsel should ask what is its value. Unless the parties object, the mediator can call either side before the mediation or even after the mediation adjourns.

Certain cases lend themselves well to mediation early on in the litigation process. For example, if both sides have the same information on given issues, then the marginalization of future discovery should be apparent. Consequently, both sides can look at the claims and understand that the information is equally available, for better or worse. Then no one can say that they did not try to avoid spending money on fees and costs associated with discovery or the delay associated with a case. Because many claims can involve requests for counsel fees, expert fees, and other costs, counsel should be sensitive to the fact that sometimes those additional claims can drive the litigation and the probability of success in a mediation.

The Settlement Agreement

The final step in enhancing the prospects for a successful mediation involves carefully drafting a proposed settlement agreement in advance of the mediation. In so doing, counsel can go over the settlement agreement with the client and make sure all issues are addressed and that the client is not in any way surprised. A client can also understand the legal ramifications and the rights and remedies afforded by law. Sometimes dialoguing with a client in advance of a mediation about the actual settlement document focuses the client on what is really important and exposes business or legal considerations of which counsel may not have been aware. The sooner counsel fleshes out those issues and their importance, the better off everybody is. Then counsel can flag these issues during the mediation so that there are no surprises. Something as simple as whether or not the parties will give a mutual release must be discussed and decided during the course of the mediation. Otherwise, a mediation that appears successful could blow up “after the fact.”

Occasionally, a fully integrated settlement agreement is impossible because one side or the other needs to gather additional information, such as tax advice or board approval. To that end, if feasible, set forth an enforceable term sheet so that, if necessary, the parties can seek relief through the appropriate decision maker. The term sheet should ideally spell out who will make the decision as to what is enforceable and whether or not such decisions are appealable.

Conclusion

Using these techniques enhances the likelihood of a successful mediation. Further, it allows counsel to demonstrate to the client the reasoned and reasonable approach that is likely to achieve the best result as cost-effectively as possible. Finally, by going over all of these techniques before the mediation occurs, an attorney can ensure that his or her client will be a good partner in the pursuit of a successful mediation.

Ron Williams is a litigator and cochair of Fox Rothschild’s Construction Law Group. Outside of the office, he regularly volunteers his time to serve on arbitration panels for the Chester County Court of Common Pleas.


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