By: Jeffrey M. Kraft
Having had a bumper crop of mediations during the first quarter of this year, I have been reminded of the importance of educating clients regarding what to expect from mediation. Although many people have a general concept of what a trial looks like from its portrayal in popular culture, most people have little to no concept of what to expect from a mediation unless they have experienced one before. While it is understandable that mediations do not get much screen time (they would make for terrible television), parties in civil litigation are far more likely to resolve their dispute through mediation than through trial. To better prepare these parties, I have attempted to lay out here a thumbnail description of mediation followed by five key expectations a party should have going into mediation.
What is Mediation?
Mediation is a form of settlement negotiation assisted by a mediator, an attorney selected by the parties who acts as a neutral third-party to facilitate negotiation. After agreeing to mediate and selecting a mediator, the parties will schedule a time and location for the mediation, which can be either in-person or virtual. The parties usually will submit written statements to the mediator in advance of mediation to educate the mediator about the case and the parties’ respective positions. These written statements generally are not shared with the other parties, but some parties may agree to do so to better educate each other about their respective positions.
At mediation, the parties usually will start by meeting together with the mediator to give an introduction. The parties’ attorneys may also give brief statements at this time. The parties and their counsel generally are then divided into separate rooms, and the mediator will begin going back and forth between the parties’ rooms to communicate and discuss offers and counteroffers between the parties. If the parties are able to agree, the core terms of the agreement with be reduced to writing and signed by the parties and/or their counsel at mediation. The parties usually will incorporate these core terms into a more complete, formal settlement agreement to execute following mediation. If the parties do not reach an agreement, they continue litigating their case where they left off before mediation. All discussions that occurred during mediation remain confidential regardless of the mediation’s outcome, and the parties are not bound by any statement or representation made during mediation other than any agreement they reach.
Five Key Expectations for Mediation
1.Be Prepared to Make a Deal, Not to Win.
A mediation is not a trial or an arbitration; there is no judge, jury, or arbitrator who will hear evidence and rule in favor of one side. Although a good mediator will discuss the strengths and weaknesses of the cases with each party in the context of making and considering offers, the mediator cannot force any party to agree to any terms. Ultimately, the parties will reach an agreement only if they all voluntarily agree to, and I have yet to see a mediation where one side suddenly realized they were in the wrong and surrendered unconditionally.
Accordingly, parties should not go into mediation expecting to win their case or make the other side admit their wrongdoing. Rather, they should treat mediation as a business negotiation in which the parties weigh the costs and benefits of the alleged claims, damages, and the prospect of continuing litigation to determine if they can reach terms and mutually agree to put the dispute behind them.
2.Be Prepared to Be Disappointed.
During the introduction to mediation, almost every mediator will reference the saying that “a good compromise is one that leaves all parties disappointed.” They all say this because an agreement reached through mediation is just that: a compromise. To reach that agreement, the parties almost certainly will have to give more, or get less, than they believe they deserve. This can be quite unsatisfying for parties who believe in the strength of their position in litigation, and they may feel that by agreeing to give more or get less, they are conceding to some degree that they are wrong or the other side is right. However, parties need to understand that this compromise is not about assigning blame or admitting wrong; it is purely a business decision to take a known result now and forego the risk of a worse result should litigation proceed.
3.Be Prepared to Get Creative.
Where the parties want to make a deal but cannot find a dollar amount that works, they may need to get creative in finding other ways to contribute value to the deal. Are there non-monetary assets available to exchange? Can a party provide a service or commitment that would have value to another? Can the structure of payments or allocations of costs be adjusted to make them more bearable? To reach an agreement, the parties may need to be willing to consider potential terms that go beyond writing a check.
4.Be Prepared to Walk Away.
Not every mediation will result in a settlement agreement. However, an “unsuccessful” mediation can still be valuable and in no way precludes the possibility of subsequent settlement discussions or even a second mediation. The discussions and exchange of information at mediation can help narrow the issues in the case and streamline subsequent litigation and settlement discussions. Accordingly, parties at mediation need to be willing to walk away and continue litigating if they cannot reach an agreement at that time.
5.Be Prepared to Be Bored.
The main reason mediations would make for terrible television is all the down time. Mediations can be a real grind, particularly in cases with many parties or complex issues, and they can easily last several hours. A large portion of that time will be taken up simply waiting for the mediator to return from communicating and discussing the latest offer with the other parties. Accordingly, parties would be prudent to prepare for mediation like they would for air travel. Go to bed early the night before. Know where you’re going and aim to arrive early. Dress comfortably (and warm enough in case the room is cold). Bring something easily portable to pass the time. If that something operates with a battery, bring the charger. Bring snacks (some mediators have food and drinks available and/or will break for meals, but some don’t). Don’t schedule anything important immediately afterwards in case mediation runs long. As with air travel, these preparations will not make the experience fun, but they will help make a long and stressful day a little more bearable.
If you have questions about mediation, please contact your DSV attorney or Jeffrey M. Kraft at firstname.lastname@example.org.
***The information contained on this website is for informational purposes and is not intended as formal legal advice and cannot be relied upon as such. No attorney client relationship is established or intended as a result of the information contained on this website.***