Take Mediation Seriously - And Succeed

Friday, October 1, 2004 - 01:00

Harold Himmelman


The most serious drawback to successful mediation is the participants' failure to understand how to get the most out of it. Too frequently, parties needlessly handicap themselves and squander the opportunity to succeed. This article addresses how best to approach three critical barriers confronted in many mediations: (1) the parties' failure to prepare themselves and the neutral adequately for the actual mediation sessions; (2) the inability or refusal of one or both parties accurately to assess the merits of the case; and (3) the failure of the parties to involve the right principals, those with real authority to reach a final settlement.

Since in the final analysis mediation is always voluntary - no one can force a party to settle anything if it chooses not to - there is much to be gained and very little to lose by understanding how to overcome these barriers to identifying the best possible settlement package before deciding whether to walk away and continue to litigate. Successfully jumping the hurdles discussed here will greatly strengthen the odds that the parties will gain the benefit of mediation's principle advantage - having control of a process allowing for win-win rather than win-lose or lose-lose results - compared to the continued risks and costs of adversarial outcomes imposed by judges, jurors, and arbitrators over whom the parties ultimately have no control.

Prepare The Case

From the moment a mediator is selected, and working closely with him or her, the parties should structure a process that will afford them and the mediator the opportunity to learn the key factual, legal, damages, and equitable issues, and to undertake the crucial process of identifying all possible avenues for settlement.

Preparation need not be overly time-consuming nor unduly burdensome, but it should be thoughtful and rigorous. Where a case is reasonably far along, perhaps with motions practice and discovery well-developed, the parties can provide the mediator with key pleadings, rulings, and depositions, if available. They might also exchange succinct written mediation presentations. In the absence of a record, an exchanged submission, with guidelines for content provided by the neutral, along with some key documents, are usually helpful. In almost all cases, confidential submissions for the eyes of the mediator only are particularly useful. The mediator will likely ask for as candid an assessment as possible of critical issues, weaknesses, worries, and settlement options. Since the confidential submission will not be shared with the other side, it affords each party an excellent opportunity to educate the mediator, take him or her into its confidence, and begin the essential reckoning with the likely outcomes of the dispute and the best non-litigation alternatives.

Through this type of preparation, the parties and the mediator early on can work together to identify and sharpen the critical issues that will drive settlement. The structure of a settlement, whether involving money, other values, or both, invariably depends upon where the merits lie, never on merely what a party wants. Advance preparation allows the parties to come to mediation with their eyes wide open. It also allows the mediator to get to know the parties, have meaningful preliminary private discussions with counsel and possibly the parties themselves, and help the parties develop constructive strategies for handling the mediation sessions.

Accurately Assess The Case

A party must analyze not only the strengths but the weaknesses of its own position, as well as of its opponent's case, to achieve the best outcome. Frequently, with significant issues of fact and law in dispute, parties remain preoccupied with their strengths and the other side's weaknesses. They enter mediation by resolutely assuring themselves and the mediator that they will prevail if the case goes to trial. Since both parties cannot be correct, the mediator will usually spend considerable time helping the parties to adjust their perceptions. But if one party thinks it is involved in a $10 million case and the other a $10,000 case, they cannot both be right; one or each is wrong. Thus the mediator will work with the parties to assess what the realistic outcomes likely are, paving the way for a more thorough assessment of settlement possibilities.

The advocate in mediation must recognize that he or she has three audiences: the other side's principals, their lawyers, and the mediator. In presenting the client's position, whether in premediation submissions, joint sessions during the mediation, or private caucuses with the mediator, the advocate must decide how to address the key issues. Too frequently, parties decide to bluster, focusing on the client's strengths and the opponent's weaknesses. While this is an understandable part of the ritual at the outset of a mediation, it becomes counterproductive in the extreme if it persists to the point where the party ignores adverse facts or legal precedents, or what any damages or equitable award would likely be assuming liability can be established. In maintaining an unrealistic posture, the party loses sight of the essence of the mediation opportunity, namely, a time to do some soul-searching about the case and actively search for common ground.

Blustering about the merits is unlikely to sway the other side, and surely will not impress the mediator. A skilled mediator will probe and usually fairly quickly uncover unrealistic positions and problematic facts or law. The critical issues will readily become apparent. Good mediation advocates assist the mediator in evaluating the case, and help educate the various party representatives along the way. Abandoning the bluster assures that the parties are freer to examine all the interests that could be added to the settlement mix.

In the event that the parties are unable sufficiently to narrow their differences on the merits, most mediators will promote a more thorough evaluation. After perhaps some joint efforts at refining the issues, the neutral will typically continue privately with each party. He or she will typically start slowly to probe the merits by asking questions. Then the mediator will ask more pointed questions, and eventually may play devil's advocate. Ultimately, once the neutral feels he or she has the parties' confidence, he or she may express objectively his or her own views. The pace at which all this happens, of course, depends upon the nature of the dispute, the skills of the mediator, and the receptivity of the parties. But since the mediator is neutral, parties usually welcome his or her thoughts.

The effective advocate in this situation best advantages his or her client by working with the mediator to assess honestly his or her client's case and to focus on the real settlement options under the circumstances. This gains the mediator's respect, helps him or her address the party's real vulnerabilities and interests, and enables the mediator more effectively to bring to the party new perspectives and opportunities.

Bring The Right Party Representatives To The Table

The failure of parties to bring the right people to the table is the single biggest drawback to the successful resolution of many disputes. Experience teaches that the higher the level of leadership involvement, the greater the odds of settlement. This is true for a number of reasons, but among them is that such officials usually are more objective than those who may have been more intimately involved in the case, are able to take a broader view of what is in the best interests of the client, and typically have more authority to make definitive decisions about various settlement options. If key people are not present, and get mediation details on the run by phone, or worse not at all, a great deal is lost in the translation.

The mediation process allows the parties to consider from the outset who should participate. Parties are well-advised to take full advantage of this opportunity to be sure the right people are at the table, and the mediator should be an active participant in that process. Though there are challenges in getting the right corporate participants, there are normally not as many inherent limitations as there are in getting higher-level government officials to participate. Nonetheless, a neutral who works diligently with government attorneys in charge of a case can often develop appropriate approaches that will assure the involvement of top officials in the right way and at the right time.

Two case examples help illustrate the importance of having the right participants. The first involved an intellectual property dispute. One of the parties refused to have a top executive participate in the mediation, sending instead a subordinate who assured the mediator that he had full settlement authority. A resolution emerged that the party representative confided was far better than any his company thought possible. He phoned his boss, who promptly vetoed the deal. The boss had a different agenda. Having not participated in the mediation, he could not realistically appreciate the key issues in the case nor how much the parties had accomplished in finding common ground.

The second case involved claims of breach of an international supply contract. Prior to the mediation, the claimant advised the mediator that it was essential that respondent's representative be someone other than its Vice President who had negotiated the contract, because there was bad blood between him and claimant's representatives. The mediator persuaded the respondent to bring its Senior Vice President in addition to the Vice President, and required in return that the claimant bring a similar higher official. At the mediation, the two senior representatives set a conciliatory tone. A thoughtful joint session was held, with tough issues identified. During private caucuses with the mediator, the respondent Senior VP told his team that the litigation course they were on was bad for business, would harm the company with other potential customers, and was unacceptably costly. Listening carefully to the parties' presentations, he expressed skepticism about his company's position on the merits. He told his people they needed to settle. They did, on mutually advantageous monetary and potential future business terms. There are many similar examples of success with federal and state governments when they include top officials in the process as necessary.

When parties are seriously interested in settling a dispute, they can usually succeed. It is often simply a matter of preparing diligently, working closely with the mediator, assessing honestly the strengths and weaknesses, assuring the participation of officials at the highest levels necessary to do the deal, and remaining focused on developing appropriate ideas for resolution. Following these few simple rules can save the extraordinary time and costs of extended litigation, avoid the uncertain risks of having third parties determine your fate, and accomplish a winning settlement that enables a client to do what he or she should be doing: living his or her life, running his or her business, and living for the future instead of the past.

Harold Himmelman is a Senior Mediator and Arbitrator with JAMS and Senior Counsel to the Washington, D.C. law firm of Beveridge & Diamond, PC. He can be reached at (202) 789-6012 or hhimmelman@bdlaw.com. For more information about JAMS, visit www.jamsadr.com.

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