In the last 20 years, in addition to my litigation practice, I have mediated over 2,000 employment cases. Having mediated this many cases, it is no surprise I have seen the good, the bad and the ugly in mediations. The purpose of this article is to identify those areas that, in my experience, most often prevent a successful mediation1 and to offer tips to avoid them. The article will be divided into two parts. Part I will deal with tips to a successful mediation before beginning the actual mediation, and Part II will discuss tips at the mediation itself.
Before beginning, a definition of mediation is warranted. Mediation is most commonly defined as a voluntary and confidential process whereby a neutral third person called a mediator acts to encourage and facilitate the resolution of a dispute between two or more parties. It is an informal and non-adversarial process with the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement. In mediation, as compared to arbitration or trial, decision-making authority rests with the parties. With that definition in mind, I will put forth in chronological order the common mistakes that can impede a settlement and offer tips for a successful mediation.
1. Choosing the Right Time to Mediate
I am often asked, when is the best time to mediate a case? Is it before suit is filed, once discovery is complete, prior to or after dispositive motions (usually summary judgment motions) or anytime thereafter? As with most lawyer answers, it all depends. There are advantages and disadvantages to whatever time the parties choose to mediate their dispute. The biggest advantage to “early mediation” is that the parties have not expended a significant amount of time, emotional energy or legal expense on the matter. All of these can become major impediments to settlement. The argument most commonly advanced in opposition to early mediation is that the parties do not have all the relevant facts to accurately assess their risk and potential exposure.
It has been said that 85 to 90 percent of all facts can be ascertained by incurring only about 10 percent of the expected legal fees through trial. In my opinion, mediating a case after some initial discovery has been conducted is usually the best time since the parties can better assess their potential risk and exposure, without becoming too heavily invested in the litigation.
There are, however, disputes where a party needs a ruling from the court before it feels it can mediate a case, such as an FLSA exemption issue. In those instances, a case probably should not be mediated until after all dispositive motions have been ruled upon.
2. Choosing the Right Mediator
There are generally three types of mediators: facilitative, evaluative and transformative. A facilitative mediator structures a process to assist the parties in reaching a mutually agreeable solution. A facilitative mediator asks questions rather than giving opinions as to the possible outcomes of a case. In facilitative mediations, the mediator is in charge of the process and the parties are in charge of the outcome. An evaluative mediator assists the parties in reaching resolutions by pointing out the weaknesses of their cases and suggests what a judge or jury could possibly do. They help the parties and attorneys evaluate their legal positions and the cost/benefit analysis of settlement vs. litigation. Finally, a transformative mediator focuses on empowerment of the parties. In transformative mediation, the parties are in charge of both the process and outcome of the mediation.
All three types of mediators have their advantages and disadvantages, depending, in significant part, upon the type of case and the clients involved. The common theme I hear about facilitative and transformative mediators (those who are often referred to as “messengers”) is that the parties are more in control of the process. The negative comments that I most often hear regarding these two types of mediators is that the mediations take too long and often do not result in settlement.
In contrast, the evaluative mediator (often referred to as the “head-banger”) is often praised for getting a difficult case settled, but criticized for not allowing the parties to control both the process and outcome.
My advice is that if you have a difficult case, with difficult parties and attorneys, you should hire an experienced mediator who is well-versed in the legal issues involved and uses the evaluative approach. By choosing this type of mediator, it seems less time is involved in “educating” the mediator, the parties “get down to business” sooner and the mediator does not lose control over the process. In my experience, using this combination gives you the best chance of settlement.
Finally, I would encourage you to ask the mediator that you are considering selecting which style best describes him or her. I know I have turned down many mediations where I thought my style (evaluative) was not the best fit for either the clients or attorneys involved. I know I am glad I did and am sure they feel the same way.
3. Know Your Case
It never ceases to amaze me how often a party or their attorney comes to mediation knowing very little about their case. It seems all too often that a party or their attorney learns more about the case from opposing counsel at mediation than they did anywhere else.
In order to properly evaluate a case in hopes of reaching a resolution at mediation, the attorney and their client need to have, at a minimum, some basic understanding of the underlying facts, the legal issues involved, the potential exposure and possible defenses to the claims. When such information is lacking, I too often hear, “we are not in a position today to resolve the case.” There is simply no substitute for preparedness. From my observations, the side that is better prepared usually ends up with the more favorable settlement.
4. Be Flexible at Mediation
When any party enters the mediation process with the mindset, “I must win,” I seldom see a successful mediation. Mediation is not about winning or losing, but rather about resolving a dispute. While I encourage attorneys and clients to come to mediation with “reasonable expectations,” I also encourage them to be flexible depending on what they hear, see and learn throughout the mediation process. In evaluating risks, the parties need to come to mediation with open minds that those risks may increase and sometimes even decrease during the mediation process. Entering a mediation with the thought “this is all that I am willing to give or take to resolve the dispute,” is not giving the mediation process the best chance to succeed.
5. Send the Right Corporate Representative
Most rules governing mediations require the attending parties to have “full settlement authority.” Sending the corporate representative with full settlement authority, however, does not necessarily mean you are sending the right corporate representative. Most of the mediations I conduct involve employment disputes (discrimination, harassment, wage and hour, retaliation, whistle-blower, etc.). That means the corporate representatives are generally from the legal, human resources or risk management departments.
Sending a corporate representative from one of the above departments has advantages and disadvantages. For example, I would suggest that sending any individual with a personal investment in the employment action at issue (i.e., the alleged harasser or the person making the alleged discriminatory action) is usually a mistake. While there are times when sending a representative with a personal investment is best or necessary, more often than not, I see that person trying to justify and defend their actions instead of resolving the dispute.
In the perfect world, having someone from both the “business side” and legal/risk management side is advisable. By having both attend the mediation, they can be discussing the case with each other while the mediator is caucusing with the other side and come to a consensus of what offers or demands should be made.
One final thought on this matter. If possible, always send a corporate representative who has final decision-making authority rather than just full settlement authority.2 It is disruptive to the mediation process if the corporate representative (who has full settlement authority) always has to call the “boss” to see if they should or even want to settle. When the boss is not present at the mediation, he or she generally has no idea how the negotiating process went and are always asking why the person on the other line (their corporate representative) is “now asking me for more money to settle.”
Hopefully, by following these tips prior to the mediation, your mediation experience will be as successful as possible.