Mediation Conduct: The Art of Flexibility
Virtually all commercial litigation matters proceed through mediation or some other ADR process. Most courts now include such ADR mandates as part of their standard case management orders. The vast majority of cases resolve at or through mediation. Accordingly, this series of articles reviews the fundamentals of mediation as the process remains so critical for a successful litigation. For less experienced practitioners, practical tips may assist your development. For veteran lawyers, reminders will assist in keeping focus on the vital methods and processes.
Earlier works in this series addressed preparation for mediation sessions. This article dives deeper into conduct and approaches during mediation with an emphasis on the need for flexibility. Future articles will focus on challenges in formulating settlements and ensuring finality through mediation.
Remember that Mediation Is Not Litigation.
A basic reminder of the differences between litigation and mediation will assist your mediation approach. Litigation is an adversarial process by design. Attorneys, most especially litigators, are professionally trained and skilled adversaries. Ethical mandates compel us to zealously advocate within the bounds of the law on behalf of our clients. Rules of civil procedure, court rules, and all litigation processes have been designed around this professional adversity. The goal is to win.
In contrast, mediation is a voluntary process with rules and protections to foster the free sharing of information and concerns in an effort to achieve a mutually agreeable solution. The entire mediation process remains confidential to encourage this candid exchange of information and positions. The goal is to achieve resolution acceptable for all.
Practitioners need to remind themselves of the inherent and fundamental differences between litigation and mediation. I often need to remind lawyers — more so than client representatives — that mediation requires leaving swords and shields at the door. The litigation weapons can be picked up for all remaining battles if the mediation does not succeed. This caution does not mean that lawyers should no longer be advocates in mediation. At certain points in any mediation, advocacy needs to yield to cooperation in order to achieve settlement.
Compromise Is Not a Four Letter Word.
Mediation is a settlement negotiation on steroids. Any negotiation requires both give and take. Inherent in the process is compromise. Both practitioner and client must not merely appreciate, but also embrace the concept of compromise at mediation.
Compromise can be presented and achieved in various forms on a variety of issues: it is not simply lowering demands and increasing offers. For instance, one party may consider issuance of a joint press release essential in settlement. To agree to such a term, the opposing party may insist on new training for all parties’ sales teams. The key remains to think broadly and beyond financial terms for issues on which parties can compromise. With compromise resulting in success in some areas, it can often spill over to the more difficult issues.
At times, lawyers opine that compromise would signal weakness in a position or resolve. Alternatively, participants fear that presentation of a compromised position would set an unacceptable floor or ceiling for future negotiations. Be creative with offers to avoid such concerns. Present conditional or bracketed offers. Use the mediator to “suggest” the next round of offers. If no progress is achieved, the parties can retreat to their last “formal” position. These “conditional compromises” eliminate much of the concern or risk presented by participants.
Message Your Offers.
Each round of negotiations presents an opportunity to send direct and indirect messages to the adversary. The monetary value alone could send the message. Yet, in other instances, a message forwarded with a proposal could be more important than any dollar value. Messages could address timing needs for resolution, financial limitations, internal difficulties one party confronts on settlement, challenges in dealing with third parties such as insurers or indemnitors, etc. Including a message with a proposal better ensures that the adversary will begin to appreciate and more fairly consider the points presented.
There may be issues beyond the confines of litigation which an adversary may not appreciate but present very real concerns for one party. A lawsuit being resolved and concluded during a particular fiscal quarter or year may be significant for one party. A message that there would be less flexibility if the lawsuit continues into next year not so subtly advises that the time for settlement is now. Alternatively, the message could be blunt: “Settlement in this quarter allows us to offer more money than if the case drags on”.
Similarly, a party may need resolution now to be able to fund other, unrelated endeavors or even to simply end the distraction of continued litigation. An appropriate message could signal a willingness to compromise now to achieve finality, but that such a position would be difficult to replicate in the future.
Do Not Be Constrained by Legal Claims.
In court, relief will be limited to available legal remedies. In mediation, no such limitation applies. As a mediator, I often hear from participants that part of a proposal is beyond the legal relief available in court. As such, it will not be given consideration. An example of such routinely requested relief is that the one party contribute toward payment of counsel fees of an adversary where no statute or court rule authorizes such relief. All parties need to be reminded that in mediation, all such requests are fair points in negotiations. Indeed, the same party objecting to payment of counsel fees for an adversary is the party demanding confidentiality of any settlement, as well as indemnities and releases addressing all claims since the beginning of time. All such relief remains unavailable through court while in play in mediation.
Determining the nature of relief in mediation presents one of the greatest opportunities to craft a meaningful settlement. Business relationships can be modified, renewed, or terminated with agreement of the parties. Injunctive type relief which guides future conduct of the parties can be tailored to address needs. The limitation is your own creativity.
If a lawyer is aware that relief beyond the confines of legal claims will be at issue, serious consideration should be given to raising the concepts before the mediation. The adverse party may need different decision makers available to address the requests. The adverse party requires a fair opportunity to value any such proposal. If not raised timely, the ability to include such relief may be thwarted.
Lawyers well know that when they have the facts, pound the facts; when they have the law, pound the law; when they have neither, pound the table. Lawyers in mediation are excellent in seizing on the strengths of their cases. They will anchor positions and offers in that one favorable document, snippet of testimony, expert theory, or precedent. That piece of evidence or case law, to these lawyers, justifies little to no movement in positions by their clients.
For so many of these lawyers, they simply do not know how to move on from this comfort zone and positions of perceived strength. These lawyers must learn to pivot from such critical points to the next phase of negotiations. Absent this pivot, the adversary (and even the mediator) will eventually respond that the point has been carefully considered and valued in any risk calculus. New, different, or additional points will need to be presented if further compromise is desired. Do not become the broken record stuck on the one point, however powerful that point may be perceived.
In pivoting from such a critical point, the proponent should not lose sight of it. The point or argument can be still be referenced for further leverage as part of additional negotiations. However, it must become part of something else, in this case resolution. Use the above-described tools of messaging and compromise to achieve the pivot. “Our statute limitations defense remains clear and, we believe, dispositive. Nonetheless, it benefits us all to place the costs and expense of this case behind us, so we can offer . . .”. The critical point gets reinforced and the participant transitions toward resolution discussions.
These tips and tools are not mutually exclusive. The list is not exhaustive, but rather illustrative of the need to think outside of the litigation box. There is no formula for the timing of use of these techniques. The common element remains flexibility in the mediation participants to address issues as they arise and to respond in a manner which keeps the process moving toward a solution. The mediator should guide the parties in the process and will be using these tools as well. If used properly, these techniques will result in the parties being closer to an acceptable resolution.