By Dan Brookhart
Chapter in Pennsylvania Bar Institute materials for Over the Top Settlements seminar – November 2013
If carefully planned and well executed, mediation can play an instrumental role in achieving a good settlement for your case. Counsel should employ the same level of intentionality to the entire mediation process as he or she would to discovery and trial. Often mediation is the first opportunity for the attorney to rise above the fog of pre-trial discovery, motions, etc. and to view the case in the overall.
In order to achieve optimal results in mediation, it may be helpful to consider the different aspects of the mediation process: (1) pre-mediation activity, (2) the mediation conference and (3) negotiation and their role in the road to resolution. What follows is a look at each of these aspects together with some suggestions on how to best utilize these three events in the life of a mediation to enhance the potential for a favorable resolution.
Written memoranda submitted prior to the mediation have long been a staple of pre-mediation activity. The submission is the primary means by which the mediator will learn about the case and help form the basis for developing an approach that will increase the potential for settlement. The written submissions take many forms, but there are some elements which greatly assist the mediator and set the stage for resolution on favorable terms.
- Include all relevant information. Help the mediator by providing a balanced and neutral background of the facts as well as the litigation status of the case. Outline the theories of liability and defenses being raised. Identify the salient issues (both factual and legal).
- Include relevant documents, exhibits and reports necessary for a thorough understanding of the case. Take a moment and think about what the mediator needs to know and make sure to provide the good, bad and ugly documents in the case. You can be sure the opposing party will do so!
- Provide your assessment of liability and damages. If the submissions are confidential, it is very helpful for the mediator to understand what issues in the case are worrisome to the attorney. This may seem counterintuitive to advocacy, but it establishes credibility which is crucial. No case is problem free. Mediation provides a safe environment to discuss the warts of the case and provides the setting for “reality testing”.
- Provide settlement status. It is important to know the history of settlement negotiations. If there have been no negotiations, it is helpful to understand why the parties have decided to engage in mediation.
Pre-Mediation Telephone Conference
A telephone conference with each attorney that occurs after receipt of the mediation submission can serve as a valuable tool in achieving a favorable settlement. Although very helpful, the written submission is limited in fully conveying the posture of the parties as well as the process best suited for achieving settlement. The following objectives should be covered in the telephone conference.
- Fill in the Blanks – The telephone conference allows the mediator and attorney to confirm the key issues in the case as well as address any questions arising from the written submission. It also provides an opportunity to ensure the presence (or at least availability) of all key decision makers and interested parties at the mediation.
- Ascertain Posture of Parties – It is of immeasurable help for the mediator to understand the interests, motives and objectives of the parties prior to walking into the conference room on the day of mediation. The attorney who takes the time to discuss these important points will enhance the possibility of settlement for their client. Discussing questions such as why the parties decided on mediation and why the attorney believes mediation will be helpful in resolving the case are very informative for the neutral, which helps to achieve the best result.
- Understand Dynamics – The telephone conference can also serve to advise the mediator of the temperaments of the participants as well as any pertinent dynamics. Any relational dynamics or difficulties between the parties, counsel, etc., that could scuttle settlement are important to understand prior to the actual mediation. A mediator wants to avoid any unsuspected minefields during the mediation. For instance, if a joint session would be counterproductive to achieving settlement, the pre-mediation telephone call is the opportunity to find that out. Counsel’s help in this regard will pay dividends.
- Potential Obstacles – Counsel should inform the mediator privately of any potential obstacles to settlement. For example, unrealistic client expectations, a large lien, etc should be discussed as it will help the mediator design the most appropriate approach to achieve the best resolution. The time for the mediator to find out about settlement obstacles is not on the day of mediation.
An opening statement given by counsel for each party can be helpful for several reasons. Properly presented, the opening allows the opposing party to see (perhaps for the first time) the merits of your position and the potential risks of going forward. Conversely, it permits your client to see the validity of the opposing position in a safe environment.
However, understated advocacy should be the polestar in an opening statement. Chest thumping and over-the top arguments only serve to reinforce the adversarial relationship that exists between the parties. Mediation is about lowering not raising the adversarial meter. A well-reasoned, articulate summary of the strengths of your case, which also acknowledges possible weaknesses, will persuade better than oratorical bluster and thus yield you a much better result.
(Please see the attached article, The Promise and Peril of a Joint Session in Mediation, for a more thorough discussion on Joint Sessions.)
The private caucus between the mediator and each individual party and counsel is where much of the spade work of moving toward settlement is undertaken. In order to make the most of the caucus and set the stage for favorable settlement, consider the following.
- Use the mediator as another set of eyes on the case. If the mediator is well prepared, a neutral, third party view of the dispute can be helpful. In caucus, the mediator can reinforce the strengths and weaknesses of the case as well as point out factors affecting outcome that have not yet been considered.
- Use the caucus as an opportunity to “test drive” the case. Explore possible outcomes, evaluate strengths and weaknesses of the case in a safe, structured and confidential environment.
- Acknowledge troubling aspects of your case. Don’t be afraid to discuss what gives you heartburn about your case. Private caucus is not the time to wear your advocate hat. Use the mediator as your confidential confessor. An advocate who can engage in reflective thinking and see the other side will often achieve better settlement results because they have established credibility with the opposing party and mediator.
- Be well prepared. While it may seem an obvious point, careful, deliberate preparation is sometimes overlooked. Being exceptionally well prepared on all aspects of your case will have an impact on the opposing party and mediator and will increase settlement value.
There are countless primers on negotiation strategy. Likewise, there are numerous schools of thought on the subject of negotiation. There will be no attempt to tackle that subject here. However, there are some aspects of negotiating in mediation which are helpful in achieving a good result.
- Try to avoid the extreme range. Parties have a tendency to set the “ceiling” or “floor” at the extreme range (or sometimes beyond). In fact, participants in mediation have come to expect it. There is value in starting at a more “reasonable” settlement number. It conveys the message that counsel is well prepared, has considered the merits and weaknesses of the case and has given great thought to settlement value.
- Engage in principled bargaining. Negotiations are more effective if parties provide a foundation or rationale for each settlement number conveyed to the opposing party. To be able to justify each offer and demand with a sound basis causes you to be taken seriously by the other side. Moreover, principled bargaining arms the mediator with facts and arguments when that settlement number is conveyed.
- Allow the mediator to be a negotiation coach. Use the mediator in negotiations to assist you in responding to offers rather than operate as a mere vessel to the other side. The mediator should be able to help you in arriving at a number that will achieve a result. A good mediator is constantly looking for verbal and nonverbal cues that may pave the way to settlement. Take advantage of that opportunity.
- Be patient and fight through impasse. Use the mediator to overcome seeming impasse between the parties. The mediator should have a tool box of settlement/negotiation techniques that can get the parties to the desired result. When impasse inevitably strikes, be creative, look for out of the box ideas, revisit key issues, etc. Insist on a mediator who will not give up.
In summary, preparation, flexibility and credibility are key to achieving settlement at mediation. These attributes are rooted in the pre-mediation activity and bloom during the actual mediation. And they ultimately pay dividends in the negotiations by enhancing the prospects for a favorable result.