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FEATURE ARTICLE
The Mediation Bookends How to Better Ensure Mediation Success By Michael J. Geiger Legal practitioners dedicate substantial resource and effort to prepare for mediation. Mediation submissions and presentations necessarily focus on facts, theories of liability or defense, positions of strengths and weaknesses, damages and exposures, and benefits of resolution. Attorneys, especially litigators as advocates, comfortably address these matters as they have countless times in adversarial settings such as litigation or arbitration. The vetting of such issues will be critical in any mediation. However, equal and oft-times greater attention should be focused on two other elements before the mediation commences to provide for a better opportunity for resolution. Addressing the 1) mediation process and 2) scope or form of potential resolution agreement, on the front end, could save substantial efforts while better focusing the parties during the process. Once these “Mediation Bookends” are appreciated or even agreed upon, the actual mediation runs less of a risk of being diverted from its fundamental purpose. The Mediation perception The role and impact of mediation continues to expand. For example, companies now routinely utilize mediation in their efforts to address employee conflict situations. Mediation processes have been incorporated in school systems to assist with issues between and among students and faculty. However, the primary use of mediation as a conflict resolution tool remains in the legal arena. Many legal practitioners appreciate mediation as an opportunity to “test” a case in a forum with limited downside. The neutral mediator provides insight and feedback on theories and presentations. Through reality testing and other tools, a skilled mediator will educate the practitioner and client concerning relative strengths and weaknesses in positions as well as present issues perhaps not previously fully evaluated. Quite often and particularly in family law practice, attorneys use mediation to educate their own clients to keep in check a client’s expectations. Depending on the mediation style, the mediator could suggest or encourage consideration of possible resolution scenarios. The mediator should guide the participants in analyzing risks, cost-benefit factors and consequences of lost settlement opportunities. In mediation, the legal practitioners and participants typically expect this type of evaluation with, or through, the mediator. This perception of mediation by lawyers and parties should not remain so narrowly focused. With attention to the “mediation bookends,” a mediation becomes an enhanced full-resolution opportunity. Bookend I: The mediation process The form and process of mediation is only limited by the creativity of the mediator, lawyers and participants. The procedures and process for each mediation should be specifically tailored to each case. In order to assist in setting the process, the mediator will need at least some background information, typically provided through legal representatives. With preliminary knowledge, a mediation procedure can be set, mindful of legal disputes, cost constraints, time constraints, egos, personalities, and other external factors. A well developed mediation process anticipates impediments and addresses them before they become obstacles. Regardless of the procedures ultimately adopted, certain factors should be considered. 1. Define the problems / issues Surprisingly, many mediation participants fail to meaningfully address the question of “What is being mediated?” before arriving at the first mediation session. Even after developing detailed, well reasoned and well presented mediation submissions, numerous parties never confer prior to the mediation to seek to agree on the issues in dispute. While it may appear fundamental, experience demonstrates that this basic step is quite often overlooked. The parties, whether among themselves or through the mediator, should agree upon that being mediated. If possible, reduce the issues in dispute to writing in the form of “Questions Presented” or “Issues to Be Mediated”. The participants need to be specific. A generally stated question may prove of little assistance: Issue: Was Party X negligent? In contrast, a specific and even detailed presentation can frame a contested matter: Issue: By leaving the office area on his sales call and entering the manufacturing floor of Party Y’s factory, did Party X leave the class of business invitee? With this approach, the participants can hone presentations on key disputes. This type of analysis not only compels the participants to appreciate that in dispute, it also can serve to demonstrate those issues on which there is no disagreement. 2. Determine external constraints The potential list of external constraints could cover a wide area of topics. Regardless, if they will or might impact the mediation, they should be understood up front in order either to address them or properly set expectations. Examples of external factors include litigation deadlines established in case management orders (e.g., trial date, discovery cut off schedules); time constraints impacting substantive rights (e.g., statute of limitations); financial constraints; and time constraints impacting participants’ availability. Additional external factors could encompass pragmatic concerns wholly unrelated to the merits such as the need to time resolution to coordinate with a corporate fiscal year or to optimally time regulatory disclosures (e.g., SEC filings). 3. Identify who should participate As a pre-mediation issue, the parties should understand who will participate. Expectations may be adjusted once it is clear who will actively participate. In some instances, clear signals can be sent simply with persons of certain authority level attending (e.g., product manager versus general counsel). Avoid surprises at the mediation. Everyone should know in advance who is attending. In the event one participant believes that the designated client representative for the other participant may not be appropriate, explore that issue before the mediation. In light of the history of the underlying dispute, there may exist personality conflicts that would prohibit progress. The perceived magnitude of loss may justify one participant expecting that excess or umbrella insurer representatives be present while the other party views exposure as modest. At a minimum, understand who will participate. In sum, establishing who will or should participate essentially becomes an exercise in setting expectations. The better the issue can be managed before the mediation, the greater likelihood of progress. 4. Define the meeting structure Something as simple as establishing the mediation location could prove important, at least psychologically, for the participants. No party desires to feel disadvantaged because the mediation is taking place on the opponent’s “home court.” While a cavalier response may be that one conference room is as good as the next conference room, avoid artificial hurdles when possible. If the location becomes an issue, use the mediator to secure a neutral site. Of course, costs may increase slightly with this issue. In addition to location, it is vital to determine the method of participation. Participation by telephone or video connection rarely results in successful mediations. Absent extenuating circumstances, all parties should participate in person. The resolution authority levels should also be appreciated, if possible, prior to the mediation. One party attending with intent to “listen carefully to all proposals and suggestions” is quite different from attending with “full and complete settlement authority.” Specific settlement authority, of course, need not be disclosed. However, message can and should be given to alert the adversary of the level of seriousness of purpose. The participants should avoid having the CEO mediate with Skippy from the mail room. 5. Identify the process steps In many instances, the mediation process steps may prove as important as the substance of matters discussed. If the mediator understands issues such as personality disputes, potential intimidation factors, or other factors, a process may be set to defuse issues or address concerns before they impact progress. In some instances, a client’s expectations may be set at an improper level and the mediator could assist that client’s counsel in better managing expectations. There exists no prohibition to suggest to the mediator that group discussions be avoided or that the mediator meet individually with some participant on discrete issues as a preliminary matter. The participants need to set a dynamic in motion that can lead to a productive discussion and evaluation of the key issues. Any process suggestions that further that goal should be presented. This listing is not intended to be exhaustive. It is designed to encourage thought and analysis of the process and procedure. Unlike litigation where the rules of engagement are relatively established, mediation presents flexibility in its form. This form can be modified to meet specific needs or goals. One challenge for legal practitioners is to focus on process elements as they are typically paid little attention in litigation, arbitration or other adversarial proceedings. Bookend II: Form of settlement Prior to the mediation, effort should be placed in developing not merely resolution scenarios, but also the form of settlement. Admittedly, for some types of cases, the settlement documents should not be contentious (e.g., personal injury, simple property damage). For other matters, the form of settlement itself could drive the entire resolution. Attention to such issues up front can only assist the process. For example, in environmental insurance recovery actions, the scope of release could prove as important as the financial contribution. Insurers will seek complete policy buy backs. Short of that concession, insurers will demand full environmental releases or site releases. Unless such concepts are fully defined, the parties ensure only one thing: future dispute. Assuming the insured is willing to provide a full site release in this example, it must still be clarified if the release encompasses off-site as well as on-site conditions; does the release cover potential personal injury toxic tort claims as well as property damage to the environment; will the release extend to potential diminution in property value claims and natural resource damages. The insured and insurers may not only view the scope of a “full-site release” in dramatically different fashion, they each would place different financial value on settlement including or excluding such identified risks. Under such circumstances, which present complex past claims and potential future entanglements, it is useful to work backwards. Either before the mediation or at the beginning of mediation, seek to resolve the scope and magnitude of any potential release and/or indemnity. Be specific to allow the parties certainty to value both the current resolution opportunity and evaluate future relationships or risks. Not surprisingly, if the parties reach agreement on the scope of release and indemnity, agreement on a settlement value becomes a simpler exercise. Conclusions For lawyers, challenges presented in mediation include addressing a client’s needs in an unfamiliar process. Much of a lawyer’s training involves learning the quite often rigid processes and procedures associated with adversarial proceedings such as litigation. This article seeks to focus attention on some of those less familiar processes associated with mediation and encourages an expanded legal analysis to incorporate the consequences of processes. Mediation’s role will continue to expand as 1) more courts learn that their dockets may be reduced with “forced” mediation, and 2) the economics of mediation continue to present more favorably than litigation. Accordingly, lawyers engaged in mediation should more fully understand the process and, more importantly, how they may impact the mediation outcome with attention on the mediation bookends.
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