June 2011 Addendum

Mediation
Mediation: From a Fist Fight to a Settlement
By John Hall

Recently, I had the privilege to serve as the mediator in a case which neither side believed could be settled. Despite months of settlement negotiations between two highly competent attorneys, no significant progress had been made.

The court finally ordered mediation and the two very hostile parties (both corporate executives) were forced to try to mediate their differences "face to face." Their attorneys informed me in advance that it would be a waste of time. One later told me, "I thought it was more likely to end up in a fist fight than a settlement." After six hours of mediation, the parties agreed to an amicable resolution of their heated and expensive two-year dispute.

While this result might seem extraordinary, in mediation it is quite common. One might ask what can happen in a mediation that can reverse two years of heated animosity and enable a lawsuit to settle amicably when two lawyers trying to settle the case could not.

Mediation helps dissipate acrimony
Mediation, with a skilled mediator, can dramatically change the atmosphere and help dissipate the acrimony that exists between the parties. A negotiation, even between mild-mannered litigators, usually has elements that work strongly against the possibility of a settlement. Some of these are:

1. Negotiating attorneys are naturally in an adversarial relationship. Built into that relationship is a certain degree of suspicion, a natural reluctance to discuss the case openly and candidly with the other side and a tendency to "negotiate-to-win," not to work to find a common, or even middle, ground.

2. The actual parties rarely participate. They usually are not even in the room. Therefore, they are not given the opportunity speak their position and feelings about their case.

3. Perhaps even more significant is the fact that the actual parties are not given the opportunity to hear the "other side of the story" from the other party. As disputes that are in litigation move toward a final conclusion at trial, the parties, and sometimes their lawyers, naturally begin, or continue, to consider only their side of the dispute. They begin to put their "game-face" on.

They are preparing for a trial. They increasingly consider only their version of the case and their position is not typically one that includes open-mindedness. The tendency is for one, or both, parties to "dig in" and consider their adversary someone with whom they cannot openly discuss their case or show the perceived weakness of seriously wanting to explore compromise.

4. In order to please their clients, the attorneys typically have to remain tough and hold strong to their positions which is often a serious impediment to fruitful negotiations. It is very difficult for them to even put out a serious "feeler" of a compromise. To do so would risk the perception of seeming weak or being out-negotiated by the attorney for the other side. In some instances, they could also be risking the possibility of criticism from their own client.

Mediation, on the other hand, can foster an atmosphere, from its inception, that is set up to promote compromise and settlement. This particular mediation created from its beginning an environment that was safe for both parties to be open and relatively honest. As the mediation progressed, essential components to compromise and settlement began to develop. These included feelings of which the parties may, or may not, have even been aware. They included such factors as teamwork, trust in the mediator, some mutual understanding and discussions about the reality that, as with most cases, their case had strengths and weaknesses.

The parties, as many parties do in mediation, came to the belief that they had the ability to take some risks in a fair, safe and confidential environment. Perhaps most importantly, they eventually came to the awareness that this emotional, expensive and time-consuming dispute could be resolved that day.

Successful mediation relies on a number of factors
While there are many things that combine to create a successful mediation, I believe it is the combination of a number of factors that can be present in mediation that lead to success. These can set in motion an atmosphere so strongly geared toward finding a resolution that it is easy to understand how over 80 percent of mediations are successful.

Among the most critical factors that work toward resolution are:

• Convening: This is the simple act of both parties joining together in the same place with the implicit purpose of trying to resolve their case. This can lead to a feeling of teamwork, which is sometimes so subtle that parties are unaware that it exists.

• Opening Session: As mediation formally begins, both parties have the opportunity to tell the other side the strengths of their case. This may be the first time that a party has actually heard or seriously had to consider that there was another side to their version of the case. Doubt is a powerful tool. Potentially even more powerful is, when possible, one or both parties expressing sorrow, remorse or compassion, in person, to his or her adversary. An apology can shift the entire dynamics of a case, and save the contrite party a lot of money in settlement.

• The neutrality of the mediator: If the mediator, through his neutrality and demonstration of empathy to both parties, can gain the trust of the parties, the chances of a settlement are greatly increased. In fact, trust is the most valuable tool that a mediator has. Without it, it is very difficult for him to constructively work with the parties.

• Caucus: After the opening session, the parties are often separated into different rooms. This presents the opportunity for open and confidential discussions between individual parties and the mediator. It is in caucus that a mediator establishes his neutrality and gains trust. Then he can utilize and build upon these valuable tools as he listens, empathizes, asks questions and plays "devil's advocate." It is in caucus that seeds of doubt and risk are planted. Caucus is not only helpful in encouraging a more honest discussion of the realistic merits of a party's case, but also can lead to a party's disclosing to the mediator additional possible options for settlement. If he accomplishes this, he may then more credibly ask probing questions which can reveal possible weaknesses or uncertainties in a party's case. It is in caucus that seeds of doubt and risk are planted. Doubt naturally leads to thoughts of risk. Once a party begins to consider the risks of his case, the mediator has a significant opportunity to suggest, perhaps for the first time, the possibility of compromise.

• Confidentiality: The mediator, especially one who is gaining the trust of the parties, can use confidentiality, another key tool of all mediations, to accomplish many things that may be bringing parties in conflict with one another. Often there are issues of which a party's attorney may not be aware. Because communications in mediation are confidential, many times parties will discuss their case more openly with the mediator.

The mediator, who has gained the trust of a party, can ask difficult questions that can serve as reality checks. This can lead parties to consider key weaknesses of their case. Doubt leads to the powerful acknowledgment that there are risks waiting down the road at trial. The acceptance of risk leads a party to look for compromise.

The use of confidential communications can also help a party test a settlement offer or make a move toward compromise, with the other side, without appearing to be weak. Since it is the mediator who delivers the offer, the offering party can feel safer or more comfortable in making it. That fact alone can and does encourage offers that may never have been explored during negotiations between the adversarial attorneys.

• Flexibility: Another invaluable component to mediation is flexibility, as this mediation demonstrated.

No need for pugil sticks
All of the above helped to turn a fist fight into an amicable settlement. How did it happen?

1. As mediator, I used the flexibility of mediation and decided, before we even began the mediation, that we would have no opening session. In fact, the two parties never saw each other for the entire six hours. As a result, already highly charged emotions between the parties never even began to flare.

2. The mere convening of mediation, (bringing together both parties), which was ordered by the trial judge, began to build momentum toward a settlement. The longer we worked on resolving the case, the more the parties seemed committed to settling the case.

3. As mediator, I was able to gain the trust of both parties and their attorneys which helped keep the mediation going. This enabled me to spend significant time with both parties which allowed me to show empathy, better understand their interests, assess their positions and build on the trust that I already had. As a result, I was able to effectively play the "devil's advocate" with both parties and, eventually, begin negotiations.

After several hours, all of these things enabled me to continue negotiations which, after time, substantially narrowed the monetary gap between the parties. The difference between them was eventually small enough that I could begin to shift their focus to the fact that with a little more effort, this case (that I had learned both sides were ready to end) could be over "today." Additionally, I pointed out that if they were unable to compromise a little more and this wound up going to trial, it was going to cost both parties more attorneys' fees, more expenses, more time and more stress than they really were willing to spend. However, there was an underlying problem of which no one was aware.

4. In a final caucus, the flexibility of mediation helped uncover an unknown obstacle to settlement. The defendant had cash flow problems. His company could not afford to fully pay a settlement. After confidential discussions, it was decided that he could only pay a settlement if divided into four installment payments. He was too proud to tell the plaintiff but, in the end, he did not mind letting the mediator do it.

And, thus, when party-to-party negotiations did not work, mediation did. There was not any single aspect of mediation that turned an emotion charged "fist fight" into a settlement. Mediation, when correctly conducted, can establish an atmosphere highly conducive to settlement. The confidentiality and neutrality of the mediator led to trust. This enabled the parties to feel safe to talk, disclose information and discuss their concerns. Once they did, mediation led to negotiation, negotiation to compromise and, finally, a resolution of this long, heated and expensive dispute. Not a punch was thrown!

As one of the attorneys later said:
"[The mediator's] calm, reasonable demeanor and grasp of the issues important to each side helped him gain the trust of the parties and eventually negotiate a settlement that was fair to both sides."

Ten Ways to Out-Prepare Your Opponent in Mediation
Mediations are not about passing offers back and forth. There is much to be gained whether the case settles or not. For that reason, a savvy lawyer can reap many benefits for his client by taking the time to be fully prepared for mediation before it begins. While certain things about preparation are obvious, others may not be. To fully prepare for mediation one should usually:

1. Look for leverage, something over which you have control but that your opponent does not want. Look for their problems or concerns. This could be embarrassing facts, frightening exposure or risks that they may have if the case does not settle, a situation where the time or expense of a trial are not acceptable to your opponent or a plaintiff that appears terrified of going through a trial.

2. Consider giving something back. Can you concede anything to the other side that might demonstrate goodwill or help to establish your credibility?

3. Educate the mediator in advance. Before the day of mediation, the mediator can be alerted to certain emotional, factual or legal issues that you may, or may not, want him to bring up or emphasize. Make your communication with the mediator work for you.

4. Know your case, (its strengths and weaknesses) and make sure that your client does too. This includes being able to prove or disprove damage claims, with documents, if possible. Be prepared to point out any significant undisputed facts. Assess your risks, as well as your opponent.

5. Prepare your opponent. Make sure that your opponent knows, in advance, the strengths of your case. This is especially true of documentary evidence that strengthens your case. Consider sending a persuasive demand letter. Over 80 percent of cases settle before trial. Think seriously before holding back anything. A corporate defendant or adjuster often decides the limits of their authority many days before the mediation. At the very least, share your best evidence with the mediator.

6. Develop a negotiation plan. Evaluate your case within a range of dollars. Consider what you want, but focus on the limit to your negotiation range. Think about where you are going to "open" and how you are going to negotiate to get to your settlement "range." How you negotiate sends signals. Do not insult your opponent with a demand or an offer.

7. Support your evaluation with documents and admissible facts. If possible, be prepared to present some research of jury verdicts in comparable or similar cases.

8. Have your client prepared for the process, the other side's arguments and the stress of mediation. Tell your client that mediation is not a win or lose process.

9. Analyze your alternatives to settlement. Don't wait until the "last offer" to start to think about the cost of not settling the case. You and your client need to give this serious consideration before mediation.

10. Consider how you can use the mediation to gather information and determine strategy if the case does not settle.

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Mediation Mediation: From a Fist Fight to a Settlement By John Hall Recently, I had the privilege to serve as the mediator in a case which neither side believed could be settled. Despite months of settlement negotiations between two highly competent attorneys, no significant progress had been made. The court finally ordered mediation and the two very hostile parties (both corporate executives) were forced to try to mediate their differences "face to face." Their attorneys informed me in advance that it would be a waste of time. One later told me, "I thought it was more likely to end up in a fist fight than a settlement." After six hours of mediation, the parties agreed to an amicable resolution of their heated and expensive two-year dispute. While this result might seem extraordinary, in mediation it is quite common. One might ask what can happen in a mediation that can reverse two years of heated animosity and enable a lawsuit to settle amicably when two lawyers trying to settle the case could not. *Mediation helps dissipate acrimony* Mediation, with a skilled mediator, can dramatically change the atmosphere and help dissipate the acrimony that exists between the parties. A negotiation, even between mild-mannered litigators, usually has elements that work strongly against the possibility of a settlement. Some of these are: 1. Negotiating attorneys are naturally in an adversarial relationship. Built into that relationship is a certain degree of suspicion, a natural reluctance to discuss the case openly and candidly with the other side and a tendency to "negotiate-to-win," not to work to find a common, or even middle, ground. 2. The actual parties rarely participate. They usually are not even in the room. Therefore, they are not given the opportunity speak their position and feelings about their case. 3. Perhaps even more significant is the fact that the actual parties are not given the opportunity to hear the "other side of the story" from the other party. As disputes that are in litigation move toward a final conclusion at trial, the parties, and sometimes their lawyers, naturally begin, or continue, to consider only their side of the dispute. They begin to put their "game-face" on. They are preparing for a trial. They increasingly consider only their version of the case and their position is not typically one that includes open-mindedness. The tendency is for one, or both, parties to "dig in" and consider their adversary someone with whom they cannot openly discuss their case or show the perceived weakness of seriously wanting to explore compromise. 4. In order to please their clients, the attorneys typically have to remain tough and hold strong to their positions which is often a serious impediment to fruitful negotiations. It is very difficult for them to even put out a serious "feeler" of a compromise. To do so would risk the perception of seeming weak or being out-negotiated by the attorney for the other side. In some instances, they could also be risking the possibility of criticism from their own client. Mediation, on the other hand, can foster an atmosphere, from its inception, that is set up to promote compromise and settlement. This particular mediation created from its beginning an environment that was safe for both parties to be open and relatively honest. As the mediation progressed, essential components to compromise and settlement began to develop. These included feelings of which the parties may, or may not, have even been aware. They included such factors as teamwork, trust in the mediator, some mutual understanding and discussions about the reality that, as with most cases, their case had strengths and weaknesses. The parties, as many parties do in mediation, came to the belief that they had the ability to take some risks in a fair, safe and confidential environment. Perhaps most importantly, they eventually came to the awareness that this emotional, expensive and time-consuming dispute could be resolved that day. *Successful mediation relies on a number of factors* While there are many things that combine to create a successful mediation, I believe it is the combination of a number of factors that can be present in mediation that lead to success. These can set in motion an atmosphere so strongly geared toward finding a resolution that it is easy to understand how over 80 percent of mediations are successful. Among the most critical factors that work toward resolution are: • Convening: This is the simple act of both parties joining together in the same place with the implicit purpose of trying to resolve their case. This can lead to a feeling of teamwork, which is sometimes so subtle that parties are unaware that it exists. • Opening Session: As mediation formally begins, both parties have the opportunity to tell the other side the strengths of their case. This may be the first time that a party has actually heard or seriously had to consider that there was another side to their version of the case. Doubt is a powerful tool. Potentially even more powerful is, when possible, one or both parties expressing sorrow, remorse or compassion, in person, to his or her adversary. An apology can shift the entire dynamics of a case, and save the contrite party a lot of money in settlement. • The neutrality of the mediator: If the mediator, through his neutrality and demonstration of empathy to both parties, can gain the trust of the parties, the chances of a settlement are greatly increased. In fact, trust is the most valuable tool that a mediator has. Without it, it is very difficult for him to constructively work with the parties. • Caucus: After the opening session, the parties are often separated into different rooms. This presents the opportunity for open and confidential discussions between individual parties and the mediator. It is in caucus that a mediator establishes his neutrality and gains trust. Then he can utilize and build upon these valuable tools as he listens, empathizes, asks questions and plays "devil's advocate." It is in caucus that seeds of doubt and risk are planted. Caucus is not only helpful in encouraging a more honest discussion of the realistic merits of a party's case, but also can lead to a party's disclosing to the mediator additional possible options for settlement. If he accomplishes this, he may then more credibly ask probing questions which can reveal possible weaknesses or uncertainties in a party's case. It is in caucus that seeds of doubt and risk are planted. Doubt naturally leads to thoughts of risk. Once a party begins to consider the risks of his case, the mediator has a significant opportunity to suggest, perhaps for the first time, the possibility of compromise. • Confidentiality: The mediator, especially one who is gaining the trust of the parties, can use confidentiality, another key tool of all mediations, to accomplish many things that may be bringing parties in conflict with one another. Often there are issues of which a party's attorney may not be aware. Because communications in mediation are confidential, many times parties will discuss their case more openly with the mediator. The mediator, who has gained the trust of a party, can ask difficult questions that can serve as reality checks. This can lead parties to consider key weaknesses of their case. Doubt leads to the powerful acknowledgment that there are risks waiting down the road at trial. The acceptance of risk leads a party to look for compromise. The use of confidential communications can also help a party test a settlement offer or make a move toward compromise, with the other side, without appearing to be weak. Since it is the mediator who delivers the offer, the offering party can feel safer or more comfortable in making it. That fact alone can and does encourage offers that may never have been explored during negotiations between the adversarial attorneys. • Flexibility: Another invaluable component to mediation is flexibility, as this mediation demonstrated. *No need for pugil sticks* All of the above helped to turn a fist fight into an amicable settlement. How did it happen? 1. As mediator, I used the flexibility of mediation and decided, before we even began the mediation, that we would have no opening session. In fact, the two parties never saw each other for the entire six hours. As a result, already highly charged emotions between the parties never even began to flare. 2. The mere convening of mediation, (bringing together both parties), which was ordered by the trial judge, began to build momentum toward a settlement. The longer we worked on resolving the case, the more the parties seemed committed to settling the case. 3. As mediator, I was able to gain the trust of both parties and their attorneys which helped keep the mediation going. This enabled me to spend significant time with both parties which allowed me to show empathy, better understand their interests, assess their positions and build on the trust that I already had. As a result, I was able to effectively play the "devil's advocate" with both parties and, eventually, begin negotiations. After several hours, all of these things enabled me to continue negotiations which, after time, substantially narrowed the monetary gap between the parties. The difference between them was eventually small enough that I could begin to shift their focus to the fact that with a little more effort, this case (that I had learned both sides were ready to end) could be over "today." Additionally, I pointed out that if they were unable to compromise a little more and this wound up going to trial, it was going to cost both parties more attorneys' fees, more expenses, more time and more stress than they really were willing to spend. However, there was an underlying problem of which no one was aware. 4. In a final caucus, the flexibility of mediation helped uncover an unknown obstacle to settlement. The defendant had cash flow problems. His company could not afford to fully pay a settlement. After confidential discussions, it was decided that he could only pay a settlement if divided into four installment payments. He was too proud to tell the plaintiff but, in the end, he did not mind letting the mediator do it. And, thus, when party-to-party negotiations did not work, mediation did. There was not any single aspect of mediation that turned an emotion charged "fist fight" into a settlement. Mediation, when correctly conducted, can establish an atmosphere highly conducive to settlement. The confidentiality and neutrality of the mediator led to trust. This enabled the parties to feel safe to talk, disclose information and discuss their concerns. Once they did, mediation led to negotiation, negotiation to compromise and, finally, a resolution of this long, heated and expensive dispute. Not a punch was thrown! As one of the attorneys later said: "[The mediator's] calm, reasonable demeanor and grasp of the issues important to each side helped him gain the trust of the parties and eventually negotiate a settlement that was fair to both sides." Ten Ways to Out-Prepare Your Opponent in Mediation Mediations are not about passing offers back and forth. There is much to be gained whether the case settles or not. For that reason, a savvy lawyer can reap many benefits for his client by taking the time to be fully prepared for mediation before it begins. While certain things about preparation are obvious, others may not be. To fully prepare for mediation one should usually: 1. Look for leverage, something over which you have control but that your opponent does not want. Look for their problems or concerns. This could be embarrassing facts, frightening exposure or risks that they may have if the case does not settle, a situation where the time or expense of a trial are not acceptable to your opponent or a plaintiff that appears terrified of going through a trial. 2. Consider giving something back. Can you concede anything to the other side that might demonstrate goodwill or help to establish your credibility? 3. Educate the mediator in advance. Before the day of mediation, the mediator can be alerted to certain emotional, factual or legal issues that you may, or may not, want him to bring up or emphasize. Make your communication with the mediator work for you. 4. Know your case, (its strengths and weaknesses) and make sure that your client does too. This includes being able to prove or disprove damage claims, with documents, if possible. Be prepared to point out any significant undisputed facts. Assess your risks, as well as your opponent. 5. Prepare your opponent. Make sure that your opponent knows, in advance, the strengths of your case. This is especially true of documentary evidence that strengthens your case. Consider sending a persuasive demand letter. Over 80 percent of cases settle before trial. Think seriously before holding back anything. A corporate defendant or adjuster often decides the limits of their authority many days before the mediation. At the very least, share your best evidence with the mediator. 6. Develop a negotiation plan. Evaluate your case within a range of dollars. Consider what you want, but focus on the limit to your negotiation range. Think about where you are going to "open" and how you are going to negotiate to get to your settlement "range." How you negotiate sends signals. Do not insult your opponent with a demand or an offer. 7. Support your evaluation with documents and admissible facts. If possible, be prepared to present some research of jury verdicts in comparable or similar cases. 8. Have your client prepared for the process, the other side's arguments and the stress of mediation. Tell your client that mediation is not a win or lose process. 9. Analyze your alternatives to settlement. Don't wait until the "last offer" to start to think about the cost of not settling the case. You and your client need to give this serious consideration before mediation. 10. Consider how you can use the mediation to gather information and determine strategy if the case does not settle. « Previous \| Home \| Next »
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