Anyone who has been involved in the dispute-resolution mechanism knows it can be a laborious and often mysterious process. Somewhat over simplified, here is a good way to remove some of the labor and mystery, and describe how mediation fits into the system: Mediation allows the parties involved in the dispute to sidestep the litigation process, while also getting results. Because of the mediator’s neutrality, the settlement resolution is more likely to be perceived as just. It is a voluntary, non-binding forum in which the parties agree to conduct negotiations using a neutral intermediary who guides the parties through the legal process. The mediator has no decision-making authority. Rather, it is the mediator’s duty to work with the parties to agree on the terms for conflict resolution. Only if they want to do the parties settle.
So what types of cases are likely to settle at mediation? Here are five factors that, if present in the case, suggest it is one which should be mediated:
· The parties recognize they have more to lose than if they don’t settle. There is high risk if they do not settle. This means not only must there be a downside risk, but also the parties and their lawyers must recognize and understand that risk. If a party and/or counsel have their head in the sand or are refusing to acknowledge the loss possibility or probability, then this leads to an unrealistic evaluation of the case and a failure to appreciate the benefits of a negotiated result. It also leads to unrealistic demands or offers and responses to such. Lastly, it means a mediator is not talking or listening to reasonable minds. This state of affairs costs the parties in many respects, including the time and money for a trial that may very well fail to result in a “win” for anyone.
· There has been cooperation among the parties and their counsel during the litigation process. This is key. No doubt a case has a greater potential for settlement when the parties are “firm but fair” with one another. They cooperate without compromising their clients’ rights or position. They exchange what they know is discoverable and they diplomatically but firmly protect what is not. They prepare their client for participation in the litigation process. For example, I try not to intervene at my client’s deposition. He or she is prepared to tell the story, and tell it truthfully. I don’t need to make inappropriate speaking objections or interfere with my opponent’s questioning unless counsel is violating the rules, being rude, harassing my client, or asking questions about irrelevant or privileged matters. Then, rather than arguing on the record and creating useless transcripts, I state my position and deal with this bad behavior appropriately as the rules permit. But, if we are conducting the case within and in accordance with the rules, the prospective of a cooperative discussion about resolution is highly likely.
· The parties have engaged in sufficient discovery and an exchange of information so that you know the facts of the case. You have reached a plateau in the case; each side can look towards the door of trial court and see how the case is likely to play out. Experienced trial lawyers can do this. They “hear” the evidence, they play out the examination of witnesses in their minds, and they anticipate the argument of their opponent. They know how these arguments will sound and how a jury, court, or arbitrator might respond to them. Perhaps the parties have conducted focus groups and obtained some insight into how a jury might decide. It is the ability to anticipate the “end result” that allows a trial lawyer to properly advise his or her client as to the alternatives of resolution by trial.
· The parties have non-lawsuit reasons to settle. There may be non-lawsuit related reasons to settle. The existence of the lawsuit or a “bad” result may trigger losses in business relationships or a negative impact on a business marketing plan. The parties may also have an ongoing business relationship which would be costly to terminate. There are lots of business and personal reasons to settle, and if these are present they will motivate the parties to seek a negotiated result.
· While the liability, damages or collection issues remain, there is no clear barrier to recovery and payment of any judgment by the plaintiff. A lawsuit is a three legged stool: liability, damages and collection. All three have to be present in order for the case to have value from the plaintiff’s perspective. If any of these three legs are missing, the plaintiff has problems and needs to assess what course is the best way to move forward. Indeed, a modest settlement may be in order in such a case. But if there is no clear barrier to the plaintiff and the stool has some strength in all three legs, then the parties should be talking seriously about resolving the lawsuit. There may be a disagreement over the numbers, but that is why mediation is attractive at a timely point in the litigation process – to save the time and expense of trial, and eliminate the risk of a disappointing result.
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