“Did the case settle?” is usually the first question I get asked after a day of mediation. Lawyers have an inclination to assume that a mediation—whether the mediation of a securities class action, a merger, divorce, or other matter—is merely a one-day event. In reality, mediation is a multifaceted process that, when done right, starts when the parties schedule the mediation and concludes when a settlement is reached.
The Mediator’s Mindset
As a mediator, I first want to understand how and why the parties have decided to mediate their dispute, as their motivations will have a significant impact on settlement dynamics. Whether the controlling contract requires it, the local rules mandate it, or a judge with exceptionally good judgment calls for it, there are a multitude of reasons why people might schedule a mediation. Of course, the parties may also voluntarily seek to mediate their dispute. Parties frequently start the mediation process before embarking on expensive discovery or before a dispositive motion is decided to explore whether there is a better alternative—namely settlement.
While some mediators might view a mediation as a one day event, commencing in the morning and ending by sundown, the more inclusive view is that the mediation process begins with the first phone call after the parties have scheduled the mediation. The setting of the mediation date, the choice of location, and the design of a process provide numerous opportunities to set the tone and start to work with the parties to better understand their issues and the roots of the dynamic in the parties’ dispute. In other words, when the phone rings, the real work begins.
Shortly after the parties schedule a mediation, a good mediator should reach out to the parties in an email that outlines key items for them to think about and discuss. This email also serves as an agenda for the pre-mediation conference call. Parties to a mediation should consider topics such as:
- who should attend the mediation (the mediator should ensure that decision makers with authority are at the mediation);
- an appropriate schedule for mediation brief submissions and a description of the most effective method for drafting such briefs;
- assessment of the parties’ comprehension of one another’s damage analysis;
- non-economic aspects of a potential settlement, such as confidentiality and release provisions; and
- additional details ensuring that the actual mediation session proceeds productively.
When the parties have carefully reviewed the mediator’s suggestions, they typically are ready to discuss these and other topics on the pre-mediation call. The goal of the mediator on a pre-mediation call is both to prepare the parties and to start to identify the roots of their dispute and the value the parties ascribe to it, and to build a process around those issues.
Once the mediator has conducted a pre-mediation call and started to identify the key issues the parties to the mediation should be exploring in advance of the mediation, a mediator may schedule follow-up calls on an ex-parte basis to provide the mediator with the opportunity to ask questions and to allow the mediating parties to engage in a more candid dialogue. These ex-parte calls are most helpful if they occur after the mediator has read the mediation briefs submitted by the parties, which enables the mediator comprehensively to discuss the dispute and to gain valuable insight into personality dynamics that might come into play during the mediation.
From a mediator’s perspective, the most helpful briefs are those that are extremely focused and concentrate on the key issues that will be at the core of the discussion at the mediation. What is not helpful, and a waste of paper, is receiving every court submission and other document related to the case. Focused submissions allow the mediator to truly understand the value-drivers in the case and to ask pertinent follow-up questions to the parties.
Sometimes, settlements are reached at an initial mediation session; however, the first day of mediation is often simply one (very important) step in a process. At this opening mediation session, the parties can participate both in joint sessions and in private caucuses with the mediator. The initial joint mediation session is especially valuable for several reasons, particularly that parties have the opportunity to obtain information they were not privy to prior to the session, and to hear it directly from the other side, rather than filtered by counsel.
Decision makers are in attendance and focused on the case, and the parties can work toward developing and refining a process blueprint for moving toward settlement. Frequently, after learning new information or identifying legal analysis that would be helpful in adjusting expectations, parties seek additional time to consider that information or consult with advisors as they strive to reach settlement. It is therefore not uncommon that parties will agree to continue the mediation process, either by phone or by meeting for subsequent mediation sessions.
Subsequent Sessions and Steps in the Process
If a settlement does not occur on the first day of mediation, the mediator should discuss with the parties the most advantageous ways of facilitating the process to reach the goal, constantly looking for ways to make progress and move the parties past whatever impasse is impeding negotiations.
Helpful approaches include promoting additional information exchanges, ex-parte conference calls with the mediators after the parties have had the opportunity to digest what has happened at the mediation, or perhaps the contributions of additional people (such as a neutral expert to provide feedback on key issues, or others from the company of a party to the dispute who were not originally part of the mediation but might be integral to the ultimate decision).
If progress has stalled because of a disagreement on the potential outcome of a pending motion, the mediator may discuss postponement of the process until that ruling is made. Throughout the process, an effective mediator is constantly looking for and exploring process points that might drive a settlement, while she simultaneously strives to keep the parties engaged.
Once a settlement has been reached, whether at the initial mediation session or thereafter, the next challenge for the mediator is to explore how best to document the deal. Memorializing an agreement, especially after a difficult negotiation can help “lock in” a deal and avoid the potential for second thoughts.
A mediator should discuss with the parties if a “writing” by way of a memorandum of understanding, or simply a few signatures on a piece of paper with the key terms, should occur immediately, or if the parties are comfortable with a “hand shake” and subsequently turning to formal settlement documentation. If an immediate memorialization is not necessary, good practice is for the mediator to remain available to the parties throughout the settlement documentation process to make sure the process is smooth and efficacious.
The Mediator’s Role
Ultimately, counsel plays a significant role in the effectiveness of a mediation. Keep in mind that a mediator parachutes into every case, each with its own unique history and dynamic. Due to those unique qualities of each matter, an effective mediator needs to tailor the process and the methodology of a mediation to the specifics of that dispute and the needs of the parties seeking mediation.
A mediator can’t, however, simply hammer home every settlement. For the mediator to best structure the mediation so that all efforts keep moving toward resolution, she relies not only on counsel’s knowledge about the case, but more importantly their collaboration and candid communication. Only then can a mediator help parties achieve the common goal of settlement.