Sep 01, 2015
Mediation: Acts Two and Three of the Three-Act Play
Sep 01, 2015
By Phil Diamond
One year ago, my article “Mediation: It All Starts with Preparation” appeared in The Marin Lawyer. (Here’s a link to that article.) I started by mentioning that one of the things I love most about being a mediator is that the process never gets boring or routine. Every case is different, both with respect to the underlying facts, and with respect to the dynamics arising from the unique personalities of the parties and their lawyers. As I mentioned before, though, and despite the fact that each case is different, there are certain principles that can be said to apply to all mediations, and which can be used to maximize the potential for resolution. The rest of the earlier article was devoted to what can be viewed as Act One of a three-act play: Preparation (by the mediator and the parties).
I would now like to pick up where I left off, and share my thoughts about some of the things that work – and don’t work – in Acts Two and Three: the mediation itself, and the closing.
Act Two: The Mediation
Timing is everything.
There are two aspects to timing in mediation: when the mediation is held, and the amount of time that is set aside for it. As to when the time is right for mediation, the short answer is anytime – as long as enough information has been exchanged so that all parties have a sufficient comfort level on which to make difficult settlement decisions. That doesn’t mean, however, that mediation can be effective only after all discovery has been completed and all dispositive motions have been ruled upon. In my earlier article, I discussed the value that a mediator can, and should, bring to the process by assisting the parties – well before the in-person mediation is held – in identifying key pieces of information or documents that have not yet been exchanged but which are viewed by one or both sides as critical in assessing settlement options. It bears repeating that it’s the mediator’s job to assist the parties in the informal exchange of that information prior to mediation – a process that can save the parties thousands of dollars in litigation expenses that would otherwise be spent on discovery.
And as to how much time should be set aside for the in-person mediation, I always ask all participants to block their calendars for the entire day – and to be flexible, if possible, about going past business hours if necessary. There is no way to predict how long it will take to get to settlement (and to completion of the closing – more about that below), or to a point where one or both sides decide to terminate the process. While I believe it’s the mediator’s job to keep things moving along as efficiently and productively as possible, it can also sometimes be counterproductive to push parties toward settlement before they’re ready to get there. Along that line, whenever I’m asked to schedule a “half-day mediation,” I always ask for a commitment from both sides that, if we reach the half-day point and it appears to both sides that we’re making reasonable progress, they will stay as long as both sides agree that reasonable progress is being made.
Getting rid of the butterflies.
It’s human nature for all of us to be “on guard” when we’re in anxiety-provoking situations. When that happens, we may have a difficult time thinking with our “rational” brains.” (Remember the first time you were called on in law school to stand and explain, in front of the entire room, the holding in Hadley v. Baxendale or some other classic case??) It’s important for a mediator to always try to put him- or herself in the place of the mediation participants – particularly the non-lawyer decision-makers who have never been through the process before and are already “on guard” because they’re involved in a lawsuit. That’s why I always start every mediation in separate sessions with the parties. It’s an opportunity for me to get to know the lawyers and the decision-makers, and perhaps even more importantly it’s an opportunity for the decision-makers to get to know me, and to get as comfortable with the process as possible, as soon as possible. Studies have shown for many years that one of the keys to success in mediation is the parties’ trust in the mediator, and building that trust should begin the moment the parties arrive. That way, the foundation is laid for decision-makers to be able to make rational, rather than emotional, decisions as the negotiation process unfolds.
The initial separate meeting also gives me an opportunity to help the parties prepare for a joint session (more on that below), including getting agreement on how to conduct oneself in joint session, and by identifying personality issues, as well as significant substantive issues that should be discussed, or perhaps avoided, when the parties are together.
Identifying and prioritizing objectives.
Participants should prepare for mediation by giving serious thought to what they want to achieve, and why they want to achieve it – i.e., their mediation objectives. Depending upon the type of case, it can be useful, in the initial separate meetings with the parties, to discuss those objectives – and to prioritize them, since settlement always means compromise, which in turn means that, in most cases, not all objectives can be achieved. For example, in a trust dispute among siblings, mediation objectives might include: 1) getting as much money as possible; 2) retribution for perceived past misdeeds by the sibling or unequal treatment by deceased parents; 3) putting an end to the financial and emotional drain of litigation; and 4) reconciliation and repair of a broken family. I find that, in most cases, participants will without any coaching from me place “putting an end to the financial and emotional drain of litigation” at the top of the list. It can be helpful at appropriate times throughout the mediation process – especially when one side or the other seems to be “stuck” – to remind them of the priorities they listed at the beginning.
Making the most of your time together.
We now come to the topic of the joint session. I’ll start by mentioning that over the last few years I’ve noticed that lawyers have become increasingly reluctant to agree to having a substantive joint session, beyond just a perfunctory meet and greet. A typical reason I hear for this position is that the lawyer has had bad experiences in the past, with joint sessions serving only to further polarize the parties. My response? Having mediated hundreds of disputes over the last 11 years, I believe that there is almost always something to be gained by the parties’ being able to air out their differences in a safe, controlled setting, and that the bad experiences that lawyers may have had with joint sessions in the past is most likely attributable to joint sessions that were not properly prepared for, both pre-mediation and in initial separate sessions before bringing the parties together. Having said that, however, mediation of course is a voluntary process, and a joint session will be held only if both sides agree to it.
If a joint session is held, it’s the mediator’s job to keep it moving forward as efficiently and professionally as possible. Here are some thoughts as to how to best use that time together:
Set expectations high.
I find that few things are as helpful to the mediation process as a sense of optimism that the dispute will be resolved. I do my best to instill that sense of optimism from the very start, in the initial separate meetings, and I reinforce it at the beginning of the joint session. I usually find that the parties are more than willing to join in that sense of optimism, and that often it becomes a self-fulfilling prophecy: the case settles because the parties expect it to settle. It’s the mediator’s job to bring enough patience, persistence, and the occasional sense of humor to the process to keep the parties moving forward toward their common goal.
Don’t avoid the elephant in the room.
The parties are in mediation because they’re in a lawsuit. This is the time for them, through their lawyers (if they’re represented), as well as through their own direct input, to have their “day in court” – with the expectation that this will be their only “day in court” because the case will never go on to trial. Properly prepared and managed, the joint discussion of issues usually helps to prepare the parties to better assess not only their risk if settlement isn’t achieved, but also the needs and interests of the other side. The key is to make sure that all participants communicate with each other in a way that will be truly “heard” by the other side – which means professionally, without insults or confrontation, and without interruption.
Identify alternative approaches to resolution.
In those cases that aren’t just about money, it can be helpful for the parties to jointly identify alternative approaches to resolution, without necessarily committing (at least not in joint session) to their preferences. For example, a neighbor dispute I recently mediated involved a strip of land between two homes belonging to Neighbor A that had been used for years by Neighbor B as the only way to get to the rear of his property. When Neighbor A started to build a fence in that strip in order to provide privacy and security for his backyard, Neighbor B sued him, claiming easement rights over the strip. In advance of mediation (again – preparation is everything), I asked the parties to identify the feasibility and costs of alternative approaches to resolving the problem (such as moving the proposed fence, building new stairs along Neighbor B’s property on either the side next to Neighbor or on the opposite side, or a lot line adjustment). In joint session we listed all of those alternatives, as well as a few others the parties had come up with, and in follow-up separate caucuses I had both sides separately list the alternatives in their order of preference. I then brought the parties back into joint session, where they shared their respective orders of preference with each other. Some preferences overlapped and some didn’t, but the process narrowed the scope of discussion and helped the parties focus on creative, collaborative resolution – which ultimately led to settlement.
Each mediation brings new players and issues together, and while it’s important for the mediator to give the participants a structure within which to reach resolution, it’s just as important for the mediator and the participants to be flexible in the process. Sometimes it can be helpful for the mediator to talk with the lawyers alone (after letting the parties know that they are in no way being excluded from the process, and that their lawyers will report back to them on the substance of those conversations). Sometimes (as in the example above) it can be helpful for the participants to come back together in joint session after having spent time in separate caucuses following the initial joint session. The value that the mediator brings to the process is in knowing when it’s time to try something different.
Act Three: The Closing
Leave enough room for dessert.
The best part of my mediation day is the point when I get to tell both sides, “Folks, we’re there – we have a deal.” But that isn’t the end of the process – it’s just the end of the Second Act. The Third Act – memorializing the deal in a binding, written agreement – still remains to be played out, and this should never be left for later. This means that all participants must have carved out enough time in their schedules to see the process through to the end, while all are still together. (This can be a problem where, for example, participants have flown in from out of town and have a plane to catch; this should be dealt with in pre-mediation conferences with counsel.)
The Settlement Agreement: don’t leave home without it.
Upon reaching settlement, I bring the lawyers together to prepare the Settlement Agreement. I always bring a bare-bones form, with blank spaces for deal points and signature lines for all parties, both in hard copy and on my laptop. If the settlement is simple enough, the lawyers and parties can simply fill in the blanks and sign the form. In more complex matters, I pull up the form on my laptop, and have the lawyers dictate to me what they want the agreement to say (with me acting solely as “scrivener”). As we do this, often there will be deal points that hadn’t yet been considered and discussed, and which become further issues to work through. I then work through those issues with the participants as we’re developing the final form of the Settlement Agreement until all deal points have been discussed and agreed upon, and the final form of the Agreement has been developed.
It’s far easier to do this while the parties are all still together. (NOTE: In order for the Settlement Agreement to be enforceable by motion, it must say that it is “binding, enforceable, and admissible.” Otherwise, there is a potential that an objecting party could successfully argue that it is protected by mediation confidentiality and cannot be used for any purpose. See Evidence Code § 1123.) The final step is to print the final Agreement (I use my portable printer), get all signatures, make and distribute copies to everyone, and then congratulate everyone on their collective job well done.
Just as there is a certain “magic” to the theater, so too there is a certain “magic” to the mediation process. When properly prepared and managed, the results can be wonderful, and all players can share in the glow of a great performance when the final curtain comes down and the parties go home with a deal.
Phil Diamond is a mediator and arbitrator in all areas of civil litigation, and is the founder of Diamond Dispute Resolution. He is a graduate of UC Berkeley School of Law (Boalt Hall). With offices in San Rafael, Phil handles matters throughout the state of California. He may be reached at 415-492-4500, or by email. Phil is also a real estate lawyer and has been Of Counsel to Lerman Law Partners, LLP.