This article originally appeared in the Oregon State Bar Bulletin (June 1999)
Effective representation of clients in mediation requires the same level of preparation, diligence and assertiveness as is required in presenting a jury trial. The outcome of a mediation session depends, to a large degree, on the performance of counsel. Having served as mediator of probably over a thousand civil cases of all kinds, I have concluded that what lawyers do can make a big difference in the outcome. The following are the ten biggest mistakes that I have seen.
Failing to communicate willingness and ability to try the case.
While it may sound strange coming from a mediator, I believe that too many cases are settled. Of course, in the vast majority of instances, the parties on both sides are better off settling then taking their chances before a judge, jury or arbitrator. On the other hand, the key to achieving a reasonable settlement for a client is to make clear that counsel is ready, willing and able to try the case. Unfortunately, some lawyers have the reputation that they will settle any case, on the courthouse steps if necessary. Opponents know this, and act accordingly, even in mediation.
I am not suggesting “table pounding” and premature threats to walk out of the mediation. Rather, lawyers should cultivate a reputation for being willing to go to trial when necessary. Such a reputation cannot be credibly created during the course of the mediation of a single case, but rather requires diligent preparation and effective presentation of adversary proceedings over the course of a career.
Lawyers and parties should participate meaningfully in the mediator’s effort to explore weaknesses as well as strengths of a case. On the other hand, after full exploration of a case and careful consideration of the settlement positions of the other side, there are indeed cases in which it is appropriate to walk out of mediation.
Making aggressive “opening statements.”
Most lawyer-mediators in business or personal injury cases conduct a short opening meeting with all sides present. After explaining the mediation process and confidentiality, most mediators invite comments from each side. The trend is away from using this opportunity to present aggressive or inflammatory statements of the case.
It is often best to say nothing or perhaps to state that while one’s client feels strongly about the correctness of his or her position, the client is here to bargain in good faith, or words to the effect. Leave it to the neutral mediator, in private caucus, to discuss problems with the opponent about its case. The message is often more effective and clear when delivered through this means. On the other hand, of course, be prepared for similar treatment by the mediator during private caucus with ones own client.
Mediating without necessary parties.
There are often parties that should be represented at a mediation, who may not be formally named in a lawsuit. For example, if there is an insurance coverage dispute, it may make sense to have the liability insurer present at the mediation of a casualty case, in addition to insurance defense counsel. As another example, the chances of achieving a settlement are increased if potential guarantors or indemnitors in a business case participate in the mediation.
Sometimes formal joinder of the additional party into the litigation is necessary to get its attention and participation, but often informal contact with counsel is sufficient.
Mediating with persons with insufficient authority.
One of the biggest frustrations for lawyers, parties and mediators is to spend long hours in achieving agreement in principle, only to learn for the first time that the proposed settlement needs to be presented to a company officer or committee for approval and ratification. The mediation process is most effective when the mediator has the opportunity to talk, face-to-face, with the decision-maker for each party. In cases involving larger corporations or government entities, it is often impossible to have the decision maker present, but opposing counsel should inquire ahead of time so as to know the limitations imposed on the process.
Even when the decision-maker is present, it is rare for such person to have unlimited authority. Experienced mediators will encourage the representative to seek additional authority, if appropriate, particularly where the additional authority will settle the case.
Mediating too early or too late in the case.
Every case is different, and it is difficult to state hard and fast rules as to when mediation should be considered. It sometimes makes sense to attempt immediate mediation of exigent problems, particularly where the parties have an ongoing relationship that they desire to protect. On the other hand, some level of preparation, investigation and discovery is often necessary to enable counsel to render a reasonable evaluation of a client’s position. Sometimes mediation on the eve of trial is appropriate, but often lawyers do their clients a disservice, financially and emotionally, by waiting that long.
Setting aside insufficient time for the mediation.
For the mediation process to work, clients need time to “vent” and possibly to change opinions and positions that have been held for a long time. Sometimes, there will appear to be little or no progress for several hours, but many such cases result in satisfactory settlement if all sides continue to work hard until the mediator concludes that the parties are truly at impasse.
Experience also suggests that what is most effective is a give and take negotiation process, with offers and counter offers going back and forth, rather than announcing and adhering to a firm, initial position. This is not to say that parties should not make large movements (it is often very effective, and sometimes necessary, to do so), but only that the process can take some time to be successful.
The mediation process is often arduous and emotional for the parties, but most often results in viable and effective settlements. The process is difficult, but trial is usually immensely harder emotionally and financially for the client. Most (but not all) clients want prompt closure on reasonable terms, rather than full “victory” in court or arbitration. An experienced mediator will advise all sides when further efforts seem fruitless. Remember, the mediator may have information on a confidential basis from the other side suggesting more flexibility than the “official” position that the mediator is authorized to communicate.
Failing to adequately prepare the case.
It is a rare mediation that requires the same amount of preparation as a jury trial, but counsel should not underestimate the work necessary to do the job right. It may not be appropriate to look under every rock, but the lawyer in mediation should know what rocks are out there. A mediation is nothing other than an accelerated, facilitated negotiation. As in all negotiations, knowledge is power.
The mediator will be spending much of his or her time exploring with counsel and client potential weaknesses in the case. While it is foolish not to listen carefully to what the mediator has to say, counsel should not hesitate to point out when the mediator may be wrong. More importantly, a key to achieving a good result in mediation is to help the mediator in conducting the same process with the opponent. There is no substitute for presenting to the mediator a view of the facts that can be supported by admissible evidence and a reasonable evaluation of trial outcomes, based on applicable legal authority, arising from those facts.
Good mediators will “smoke out” bluffing and generalities.
Failing to adequately prepare the client.
Experienced litigators never take their clients to deposition or trial without thorough preparation. The same should go for mediation.
The client should understand ahead of time the general nature of the process, including the rules of privilege and confidentiality in mediation, and in the non-binding nature of the process. Even more importantly, the client should have the benefit before the mediation of his or her lawyer’s evaluation of the case, and potential pitfalls and weaknesses. With such prior preparation, there is no need for counsel to “grand-stand” in front of the client during a private caucus. There are few civil cases with 90 percent chances of success, and it is not productive to take up the time of the client and mediator in expressing that level of confidence about the outcome.
A client’s level of trust in his or her lawyer can be irreparably damaged if the client learns for the first time, at mediation, that there is risk of summary judgment or that anticipated attorneys’ fees and costs will be substantial. The mediator will be asking about these issues, and it is devastating to a client to hear about them for the first time at the mediation session.
Clients appreciate aggressiveness and diligence on their behalf, but also respect honesty and candor from their lawyers.
Revealing a “bottom line” to the mediator.
Its is generally best not to reveal a client’s “bottom-line” to the mediator, even in confidence. For one thing, a settlement position should be flexible, based upon new insights and new information gained during the mediation process. Also, while the mediator will respect the confidential nature of such information, counsel can expect the mediator to argue it against the client in private caucus. It is generally better to let the mediator and opponent try to infer where ones client may be going, based upon the course of negotiations.
Most mediators prefer not to be granted discretionary authority on behalf of a party because of concern that the mediator may lose neutrality by making bargaining decisions on behalf of one side or the other.
Failing to understand the status of a pending settlement.
When and if agreement in principle is reached, it is important to pin down whether or not the settlement is blinding and effective. It is often (not always) desirable to leave the mediation session with a binding settlement. While it is the job of the mediator to facilitate possible settlement, the goal is not settlement at all costs. If one or both sides still have doubts or uncertainty, or there are further details to be worked out, there is nothing wrong with leaving the matter open, subject to mutual acceptance of final document provisions. What is troublesome, however, is if counsel leaves the client with a wrong impression concerning whether or not a binding deal has been reached.
The mediation agreements used by some mediators provide that any agreement in principle reached at the mediation will be non-binding unless and until reduced to a writing signed by all the parties. It is important for counsel to be familiar with the terms of the mediation agreement in use. With such a provision, if a party desires a binding deal before leaving the mediation, there are several approaches. It is often convenient and effective for the mediator to prepare a “binding term sheet,” which summarizes the terms agreed-upon. The term sheet further recites that counsel will prepare formal settlement documents, and that meanwhile the term sheet, when signed by all parties, reflects a binding and effective agreement. It is helpful, under this approach, to recite in the term sheet that the mediator shall serve as a binding arbitrator, after a summary telephone hearing, concerning any irreconcilable differences in the final contract language.
In simple cases, a final and binding settlement agreement can be prepared and signed at the mediation. Even in complex cases, if all the details are worked out, counsel and the parties may prefer to spend even several hours in preparing a final settlement agreement.