The purpose of this article is not to sing the praises of mediation, but to provide practical tips for litigators on how to prepare for and improve the odds of a successful and rewarding mediation experience—drawing on the author’s background both as advocate and mediator in well over 1000 business, technology, employment, construction, and other complex and large-dollar disputes.
Many litigators do not appreciate the subtleties and full range of the mediation process. They view it as a competition for the heart and mind of the mediator, thinking if they can persuade the mediator through effective advocacy, the mediator will in turn prevail on the other side to throw in the towel.
But mediation is not a contest. It is a facilitated negotiation. Although some evaluation of the merits is certainly part of the process, there is a lot more to it. The object is to get the other side to enter an agreement, not vanquish them. Changing roles from litigation advocate to lead negotiator in a mediation does not come naturally to everyone, and litigators need to adjust their attitude before embarking upon a mediation.
It is also important for the lawyer representing a client in mediation to have comfort with the process. If the lawyer is tense or guarded, this will be picked up by others and could poison the atmosphere for a successful negotiation. Some litigators may feel unease on the open playing field of mediation where, unlike litigation, there are no procedural rules. Such apprehension can also be fueled by a fear of giving up control. The paradox, of course, is that in mediation, the parties and their lawyers have ultimate control because no one can force a party to settle, whereas in litigation, ultimate control of the outcome is given to the judge or jury. The key to gaining confidence is understanding and mastering the various aspects and nuances of the mediation process.
Mediation can be a rewarding experience for the lawyer because it provides the opportunity to work closely with clients toward what is likely to be a positive outcome.
It is important to select the right mediator for your case. Ideally you want someone with process skills and familiarity with the subject matter of the dispute. If one has to choose between mediation skills and subject matter expertise, mediation skills are more important. An inexperienced or inept mediator, no matter how well versed in the applicable law or technical aspects of the dispute, can easily miss the opportunity for a settlement. Check references carefully and make sure you and your client know the mediator's experience and style.
If the mediator represents him or herself as having specialized subject matter expertise, be sure to know which side of the aisle that expertise is derived from. Be wary of self-proclaimed “experts” who may be more interested in showing off their expertise than facilitating negotiations.
A mediator who is too quick to be evaluative can hinder settlement opportunities by polarizing the parties or losing credibility with one side by favoring the other. A strong-arm mediator whose only equipment is a hammer may occasionally force a settlement, but experience tells that using a range of tools is more likely to produce a settlement. A mediator who sees his or her role as just a go-between or carrier of messages between the parties can also be ineffectual.
A good mediator will know when it is best to be a patient listener and when it is important to provide guidance and direction. The mediator should have a well-managed ego, without a need to control the entire process, and he or she will know when to stand back and let the process take its course. People skills are important, as are stamina and ability to listen patiently, and do whatever is needed to close the deal.
Mediation statements set forth the parties’ positions as to relevant facts, the legal issues, and the merits of their claims and defenses. Key documents—such as the operative agreement, relevant correspondence, and expert reports—are often attached as exhibits. Statements normally are presented both to the mediator and to the other side. Confidential matters can be communicated to the mediator in a private side letter, provided both parties understand they have the opportunity to do so.
Inexperienced lawyers sometimes decide to give their mediation statement only to the mediator, for fear of giving the other side some tactical advantage. They forget the objective of the process is to convince the other side, not the mediator. Not sharing one’s mediation statement is wasteful, because it requires the mediator to spend time conveying basic information that needs to be understood by the other side if there is to be a settlement.
There is no set form for a mediation statement. Some lawyers use a legal memorandum style with headings, while others use a letter format. Avoid inflammatory rhetoric and do not use the statement to communicate a new settlement proposal or to draw lines in the sand.
Preparing for a mediation session is different from preparing for court. You must of course be ready to present the merits of your client’s position, but that is where the similarity ends. Because mediation is a negotiation, the focus should be on how you and your client will negotiate. Negotiating skill and technique, about which much has been written, is an important subject that goes beyond the scope of this article. A few practical comments offered here may be helpful.
Part of the art of negotiation is to understand the motivations of the opposing side. Ask yourself how you would analyze the merits of the case if you were counsel for the other party. Is the dispute just about money? Or is there an emotional component or personality issue? Try to discern the fundamental interests of the other side (“needs”) as opposed to their positions (“wants”). In trying to identify needs, consider what information or documents opposing counsel will reasonably need to evaluate the case and provide it. Openness in voluntarily providing information that is available in discovery anyway can build bridges of confidence, improving the chances for an agreement.
Think about what your opening position will be in the bargaining that will take place. What is a sensible offer that is not so overreaching that it will drive the other side away from the table, but will also leave you some maneuvering room? Think about a range of likely outcomes that you and your client would be comfortable with. Avoid putting your position in stone by pegging an absolute “bottom line.” Instead, be prepared to adjust your risk analysis and settlement position based on what you and your client may learn in the mediation. Brainstorm possible settlement outcomes that involve more than just an exchange of money.
Take time to prepare your client. As lawyers we often forget that for many clients the legal process is the psychological equivalent of going into the operating room. The better your client knows what to expect, the more comfortable he or she will be. For inexperienced clients, explain step by step what to expect at the mediation. Explain the usual steps in the process, e.g., joint sessions and private caucuses. Talk about the mediator’s particular style. Discuss what should or should not be revealed in private caucuses. Explain who is likely to be present at the mediation, and what the appropriate behavior should be. Should your client shake hands with the opposing party when you enter the conference room? Prepare the client for the possibility the mediator may ask the client questions. Coach your client to be patient and not in a rush to get to the bottom line. Explain there will be long stretches of time between private caucuses. The more your client knows about what to expect, the more comfortable he or she will be with the experience.
Consider the psychological dynamics of the dispute. Almost every dispute has an emotional component, something that lawyers are typically not trained for. Psychological or personality issues are often a factor in disputes. Be prepared for some catharsis on both sides. Venting is a natural part of the process. A good mediator, as well as a good negotiator, will not be intimidated by this emotional component and will be prepared to navigate through it.
Every mediation will have a distinct emotional texture. Most mediations start out with some posturing by each side. Over the course of the day, a good mediator will manage the process in a way that eventually shifts to a more collaborative mode with the parties working toward agreement instead of arguing positions. There will be a turning point, not always apparent in the moment, when the dynamic has shifted and one can sense the parties are genuinely moving toward an agreement. This may result from something as simple as an apology, gracious acknowledgement of responsibility, a humorous moment, or even a tantrum that clears the air. Good lawyers and mediators will know how to navigate such pivotal moments and use them to the advantage of the process.
Coordinate your negotiating strategy with your client and make sure you are both on the same page. Decide how to allocate your respective roles. Manage your client’s expectations about the start of negotiations and the likely outcome. Anticipate that negotiations will start with the other side opening at what will surely seem like an extreme position. When monetary settlement proposals are communicated, it is better to present them in the context of some empirical fact, calculation, or analysis, rather than just as a raw number. If you are representing a company, think about who the client representative should be at the mediation. Should you bring the executive who is being accused of mishandling the project or is it wiser to bring the CFO who can focus on the economics? A well-prepared and articulate client, who actively participates in the mediation, can be more effective in communicating the right message to the other side than you the hired gun.
Although the trend among many lawyers has been to dispense with opening statements, remember the goal is to motivate the client on the other side to enter an agreement. The opening statement is an opportunity for the lawyer to give the client on the other side a preview of how the case may play at trial, and at the same time open doors to the possibility of a negotiated agreement. But do not start the mediation with a bombastic speech that will completely alienate the other side. At the end of the day, you hope to be able to shake hands with the other side on a deal.
Most mediations involve private sessions between the mediator and each side. This is the opportunity for parties to collaborate with the mediator on strategies for resolving the case, for the mediator to understand what the parties’ expectations and needs are and for the parties to “bare their souls” with the mediator about their concerns and expectations. Make absolutely sure you and your client have a clear understanding with the mediator as to what the ground rules are regarding the confidentiality that applies to these private sessions. It is unreasonable to expect that everything discussed with the mediator in private caucus will be kept confidential from the other side. Most experienced mediators will indicate they will respect all confidential matters, but the burden will be on the parties to flag that which must be kept confidential from the other side. A good practice is to review carefully with the mediator at the end of each caucus what the mediator is authorized to communicate to the other side.
Some mediators are eager to ascertain the parties’ “bottom line” early in the game. Others prefer never to ask for a bottom line because it can corrupt the mediator’s neutrality if provided only by one side, or simply because parties never really disclose their true “bottom line.”
Most parties at some point will want to know what the mediator thinks of their case or what a fair settlement should be. Some input from the mediator along these lines can be helpful at the appropriate time if communicated privately. But be cautious about asking the mediator to make a proposal or pushing for a mediator’s proposal too early in the process. This is an impasse-breaking technique favored by some mediators whereby the mediator privately communicates a settlement proposal to each side. If accepted by both sides, then it becomes the settlement. But there are risks. If the mediator’s proposal is off the mark, it can make settlement more difficult because the position of the party that accepted the proposal will likely become more entrenched. Although useful for breaking a deadlock when the parties are not very far apart, it can have the opposite effect if done prematurely.
Think ahead of time about what terms you will require in a settlement agreement, such as a confidentiality agreement, and communicate any special provisions privately to the mediator early in the mediation. Anticipate issues that could come up in drafting a settlement agreement, such as the scope of the release, the tax treatment of a settlement payment, surviving warranties, non-disparagement agreements, etc. If alerted early to such requirements, the mediator can prepare the other side and avoid potential deal killers that can arise when documenting the settlement.
You should not leave a mediation session in which a settlement has been reached without documenting the essential terms of the deal in language that confirms a binding settlement agreement is intended and stating it is admissible to prove its terms notwithstanding any mediation confidentiality statutes or mediation confidentiality agreement. Usually, it is adequate to hand-write an enforceable, signed settlement memorandum listing the essential terms of a binding settlement, but stating that it will be superseded by a more formal document which the parties agree to negotiate in good faith in a manner not inconsistent with the essential terms. Most mediators prefer not to get involved in the process of drafting settlement agreements for the parties.
Occasionally companies or governmental bodies will require a board approval for the settlement, which makes it difficult to sign a fully binding agreement at the conclusion of the mediation. Usually, it is enough for the client representative to agree in writing that although the settlement is contingent upon board approval, the representative commits to recommend that the settlement be approved by the board. It is highly unlikely a board will not follow the recommendation of their appointed negotiating representative.
