Sep 01, 2014
Mediation: It All Starts with Preparation
Sep 01, 2014
By Phil Diamond
“Before anything else, preparation is the key to success.”
-Alexander Graham Bell
One of the things I love most about being a mediator is that the process never gets boring or routine. Every case is different, with respect to the underlying facts, and with respect to the dynamics arising from the unique personalities of the parties and their lawyers. Having said that, though, there are certain principles that can be applied to all mediations, and which can be used to maximize the potential for resolution in every case, no matter what the underlying claims and issues, and no matter how unique the nature or number of the parties. One of those principles is that preparation – by the mediator, by the parties, and by counsel – is key to success.
Preparation by the mediator.
I believe that, from the moment a mediator is retained to help parties resolve their dispute, the mediator should consider him/herself to be the “captain” of the mediation “team,” with the rest of the team of course being the parties and (if they’re represented), their lawyers. It’s the mediator’s job to make sure that, before the players ever get together in person, everything is in place so that the mediation itself has the greatest chance of success. That job can be performed only by pre-mediation communications with the parties or their lawyers, either separately or in conference calls as may be required. (Remember: unlike the situation with arbitrators, ex parte communications with mediators is not only permitted, it is to be encouraged.) In those pre-mediation communications, the mediator should address at least the following issues.
What is the case about?
The mediator should have a general understanding of what the underlying case is about as early as possible in the process, and before Mediation Briefs are submitted, so that the mediator can put premediation settlement efforts into context.
Who are the decision-makers with full settlement authority, and will they attend the mediation?
If there are any issues in this regard, they need to be resolved – with the agreement of all involved in the process – before the parties get together for mediation.
Are there any personality issues involving any of the parties, or their lawyers, of which the mediator should be aware?
It’s helpful for the mediator to have this information in advance of mediation so that he/she can be prepared to deal with these issues when the parties are together.
Are there any insurance issues that need to be resolved (such as coverage issues, or inter-carrier disputes as to proportionate contributions toward a settlement package)?
If so, sometimes such issues may be appropriate for separate mediation.
If there is insurance for a defendant or crossdefendant, will the appropriate carrier representative attend the mediation in person?
Will that individual have phone access to others within the insurance company should additional settlement authority be needed? While it’s always best to have insurance representatives, with full settlement authority, present at mediation, more and more often insurance carriers (especially out-of-state carriers) take the position that they will attend by telephone. If that’s the case, the mediator should find this out as early as possible and make sure that this is acceptable to everyone else.
Are there other parties who should be involved in the mediation process?
Sometimes, there are parties whose participation may be vital to reaching resolution, but who for one reason or another have not been included in the mediation process. Although the potential for this happening is usually greater where mediation efforts have preceded formal litigation, it can also happen after litigation has been filed. An example that comes to mind is a workrelated injury case in which the workers’ compensation carrier, who had a lien upon plaintiffs’ recovery, had not filed a Complaint in Intervention and had not formally appeared as a party in the matter. Obtaining the compensation carrier’s participation in the mediation process was critical to resolution in that case. The mediator should work with the parties before mediation to make sure that all necessary parties are participating.
Has enough information been developed by both sides (and exchanged in advance of mediation) on which to make settlement decisions?
The cost savings to be achieved by resolving disputes through mediation are maximized before significant money is spent in litigation, which usually means before discovery has been completed. That means that, except in those cases which are mediated on the eve of trial, the “database” of information available to the parties concerning the disputed issues will always be less than 100% complete. That doesn’t mean, however, that such cases can’t be settled. The old saying that “an executive is someone who is paid to make decisions on less than complete information” certainly applies to the mediation process as well. Having said that, however, there may be key pieces of information, or key discovery responses or depositions, without which one side or the other might not be willing to make difficult settlement decisions, for fear that without such information or discovery a meaningful risk analysis can’t be made. The mediator should find out if this is an issue long before the parties get together. Sometimes the mediator can assist the parties in exchanging information informally, and in resolving discovery disputes, so that the mediation is properly “teed up” for resolution. (I remember one business dispute in which the lawyers first wanted the depositions of the plaintiff and defendant before engaging in mediation, but they couldn’t agree as to whose should be taken first. To their credit, instead of going to the time, effort, and expense of filing and arguing a discovery motion, they agreed that I would decide whose deposition would go first, by flipping a coin, and then reporting the outcome of the coin toss to them by phone.)
Are there other impediments to resolution?
The mediator should determine from the parties, in advance of mediation, whether there are other potential impediments to resolution, and armed with this knowledge the mediator can assist the parties in structuring the mediation itself to best deal with such impediments. If, for example, an uninsured defendant is going to be asking the plaintiff to take the defendant’s lack of assets into account in the settlement process, it may be helpful for that party to come to mediation with a financial statement (prepared for mediation purposes, so as to protect its confidentiality) to provide to the plaintiff, at an appropriate time, to back up his or her claimed financial situation.
Have there been any prior settlement efforts?
The mediator should also learn, in advance of mediation, whether there have been any prior settlement efforts, and, if so, what they were and why they have not yet been successful. If offers and demands have been made in the past, it is helpful to determine, for example, whether the parties are willing to start negotiating from those positions at mediation (in which event, the parties have already “bracketed” the settlement range in advance). On the other hand, it is also helpful to know whether a settlement position previously taken by one side or the other, or both, had previously served to polarize the parties, because the position was viewed by the other side as being unreasonable or in bad faith. If that is the case, the mediator should understand what was driving those positions in the past, so that he or she can set the stage for productive discussions going forward. The mediator should also find out whether the case has already been mediated, unsuccessfully, and, if so, the mediator should get counsel’s perspective as to why the case didn’t settle before, and what is different now (or what can be done differently now to get resolution across the finish line).
Would it be helpful to the process to have a site visit before the mediation?
Although a picture is often worth a thousand words, there are some types of disputes (such as construction defect and neighbor disputes) in which a site visit in advance of mediation may be the best way for all involved, including the mediator, to have a sufficient understanding of the issues to be able to properly, and efficiently, address them at mediation.
Preparation by the parties and counsel
Similarly, pre-mediation preparation by the parties and their counsel is also key to the success of the process. I believe that preparation should include the following:
Communicate with the mediator.
As mentioned, there are many issues that should be addressed with the mediator before the parties ever get together. They can be addressed only, however, if counsel are willing and available to communicate with the mediator before the mediation. If the mediator calls or emails you, there is probably a good reason, and it’s important to return any messages as soon as possible. It’s also perfectly appropriate for counsel to initiate contact with the mediator, for example to address a “process” issue (e.g., whether or not there should be a joint session), or to get the mediator’s input as to how to deal with certain issues in the Mediation Brief that counsel is preparing, or to let the mediator know that certain information (such as whether the opposing party could qualify for a loan that would be necessary to buy out the other party’s interest in a disputed piece of real estate) needs to be developed before the parties get together.
Prepare your clients for the process.
With the exception of insurance representatives who participate in mediation and in the litigation process as a matter of routine, for most parties this is a one-time experience. It’s important to take some time with your clients before the parties get together to let them know what to expect, and to develop a strategy as to how to achieve the best outcome. That in turn means developing realistic goals and expectations for resolution, bearing in mind that mediation works best when the parties go into the process understanding that goals and expectations may need to be adjusted as the process unfolds. That also means talking with your clients about how best to conduct themselves in joint session if there is going to be one, particularly if there are already underlying personality issues and conflicts that may be driving the dispute.
Prepare – and exchange – strategic Mediation Briefs.
In my view, well-thought-out Mediation Briefs are key to the success of the process. Through pre-mediation phone conversations you will have already begun to educate the mediator as to what the case is about, and the Mediation Brief is your opportunity to tie it all together and to present, in one package, the basis of why your side should prevail – while at the same time signaling to the other side that you are prepared to negotiate in good faith. The Brief should of course cover the key factual and legal points that support your position, and you should attach legible copies of key documents or photographs. And regardless of how well the lawyers on each side of the dispute know the case, the Brief should be written with the starting assumption being that the reader knows nothing at all about the dispute, so that it is easily understandable by anyone. Remember – not only is this your opportunity to tell your story in a way that a judge or jury will be able to readily understand, it is also your opportunity to signal to the other side that you are taking the matter seriously and that, while you are ready to negotiate, you are also ready to try the case if negotiations should be unsuccessful.
Remember also that your objective is to lay the foundation to persuade the decision-maker on the other side of the case as to the risks of proceeding down the litigation path if the dispute isn’t resolved. That in turn means that your real “audience” is the other side’s decision-maker, and this is your opportunity to communicate your message to that decisionmaker, unfiltered. The Brief should therefore be written in a way that is most calculated to have the desired effect upon the decision-maker on the other side. The factors to consider will vary depending upon the type of dispute and the parties, but one rule that is applicable to most disputes is that the brief should be written in the same manner as if you were reading it to the other side in joint session. This means, for example, that it is best to avoid insults or remarks that are so inflammatory that the opposing decision-maker’s immediate reaction could be to immediately “turn off” to the messenger (you), such that he or she is unable to rationally consider the message. As to length, I would say that in most cases you can achieve your objectives within around 15 pages, plus exhibits. (Consistent with the old saying, “If I had had more time, I would have made it shorter,” longer doesn’t mean better. I once received a “Brief” consisting of almost a bankers-box of materials, the first page of which consisted of the case caption, a 2-line description of the case, and the phrase “see attached.” The “attached” consisted of the Complaint, the Answer, interrogatories and their responses, various motions, and reams of subpoenaed records. This didn’t do much to help the process along.)
And, given that the highest value of well-written Mediation Briefs is to prepare the other side for negotiation, Briefs are of limited value if they aren’t actually exchanged, and exchanged far enough in advance of mediation that: a) the lawyers can provide them to their respective clients well before the mediation itself (which I always ask them to do), and b) if necessary, the respective decision-makers have enough time (especially in the case of insurance carriers that have already set their “reserves”) to reconsider, and perhaps even adjust, their settlement goals before the parties get together. I always ask that the parties exchange, and provide me with, their briefs one week before mediation. In the event that there is some information that one side isn’t yet ready or willing to share with the other side, I ask that I be given that information in a separate, confidential brief or letter.
For all of the reasons mentioned above, preparation is key to the success of any mediation. Only when the mediator, the parties, and counsel have laid the proper foundation to hit the ground running when they get together in person, will the resolution “team” have maximized the chance for resolution.
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.