The popularity of mediation, the use of an independent third-party neutral to assist in the settlement of a dispute, has grown tremendously over the last 20 years.
For those of you who have participated in a commercial mediation that was not successful in settling the dispute, the experience can be a frustrating one. Having acted as a mediator in hundreds of disputes, I have come to the conclusion that you can do a number of things, as a participant in the mediation process, to increase the likelihood that your commercial mediation will be successful.
But even before you begin the process, one of the most important decisions you must initially make is who will act as your mediator. I learned when representing parties to mediations that a good mediator can make all the difference. Each mediator will have his or her own mediation style. A mediation style that gently coaxes the parties toward a mutual resolution of the dispute can be just as effective as a mediation style that is more direct and evaluative. It is important for you to determine whether the mediator you eventually choose has been successful in the past. Speak with his or her references as well as anyone else who may have used him or her as a mediator. Your mediator must be willing and able through the force of personality to control the process and move the parties to a settlement. You may have only one opportunity to mediate your case, so make sure the mediator you choose is experienced, capable and effective.
Having chosen the right mediator for your dispute, your chances of successfully resolving your dispute are immeasurably enhanced if you keep the following points in mind.
What mediator doesn’t want the participants to the mediation to be prepared historically (know the facts), mentally (ready to cogently articulate them) and psychologically (willing to settle the dispute on a principled basis)? But this simple, if not oversimplified, admonition is surprisingly lost on many.
To “be prepared” means more than steeling yourself to the possibility of having to sit in a room all day with a lawyer who is charging you by the hour. It means understanding the arguments of the other side in advance of the mediation in sufficient detail to respond intelligently, if not persuasively, to them. Oftentimes, a mediation will fail because one of the parties was not fully apprised of the position of the other party or was not familiar with documents presented by the other party during the mediation.
To prevent this from happening, some type of document exchange among the parties is necessary to allow everyone involved in the process to understand everyone else’s position so that there are no surprises at the mediation. Surprises cause delay and may even convince one of the parties that it is useless to mediate.
In addition to a document exchange, it is important that each side submit a position paper setting forth any and all of its affirmative claims and any defenses. Exchange of these position papers is important not only to advise the parties of what is at issue but also to fully educate the mediator.
Knowledge is power; use it to your benefit.
DON’T LET YOUR MONEY GET MAD
Mediations fail when emotions take over. Emotions have a tendency to take over when the individuals who represent your company at the mediation are the same individuals involved in the day-to-day activities that gave rise to the dispute.
Make sure that an executive who was not involved with the day-to-day events that gave rise to the dispute is the primary representative of your company at the mediation. Also make sure that the executive from the other side is an individual who was not involved in the events that gave rise to the dispute. Transcending the emotional elevates the tone of the negotiations and increases the likelihood of a resolution.
DON’T BE OVERLY CONFRONTATIONAL
If you start out with the proposition that the parties have decided to mediate a dispute because they feel there is a common purpose in trying to settle the dispute, then both parties should work off that commonality from the start. I’ve heard lawyers in opening remarks call the other side everything from liars to criminals.
Confronting the other side in this manner while in joint session is neither helpful nor does it have the desired effect. First of all, your mediator should immediately cut off such ad hominem attacks. Secondly, the normal reaction of your adversary to these tactics will be to get up and walk out of the room. You may remember Sean Connery, as the tough Irish cop in The Untouchables, telling Eliot Ness, “They bring a knife, you bring a gun; they send one of our guys to the hospital, you send two of his to the morgue. That’s the Chicago way.” Now that’s one way to settle disputes, but it is not the recipe for a successful mediation.
BE A GOOD LISTENER
At the beginning of the mediation when the parties have an opportunity to present their positions in a joint session, listen to your adversary’s presentation and try to understand his point of view. Do not interrupt the other side, even if the other side has digressed to the point of nonsense.
“Venting,” the articulation of all your frustrations, can be a very positive step in successfully mediating a case if done in private. It allows you to engage in a cathartic experience. If you need to vent, however, do not do it in a joint session. If the other side vents in joint session, allow the other party to get all of his or her suspicions, complaints or frustrations on the table. Invariably, the person who was venting in joint session will later regret what he or she said and act differently thereafter. You would be surprised how much you learn when you really listen to what someone else is saying.
RESTATE THE ISSUES IF NECESSARY
Sometimes the answers to issues as formulated by the other party are not helpful to your position. To the extent that you can restate the issues in an honest manner, do so. Do so only, however, if the reformulation has some merit and can be articulated in a convincing manner.
TALK ABOUT THINGS THAT WENT RIGHT
Oftentimes, the focus in the mediation is solely on what went wrong. When the claim is that your company is the party that caused things to go wrong, talk about all the things that went right. And if you didn’t do anything right, you should have settled the case long ago and moved on to the next project.
NEVER FORGET THERE’S ALWAYS ANOTHER ANSWER
When the settlement negotiations begin to break down because of strong disagreement as to what one party will accept and the other party will offer to settle the dispute, come up with an alternative settlement scenario. Your mediator should also be able to provide you with a different perspective and alternatives to what’s already on the table. Think of ways of offering money without offering money. Think of something else you will accept other than money in order to settle the case. Be inventive.
BE SENSITIVE TO CULTURAL DIFFERENCES
When you’re negotiating with people from other countries or cultures, invariably the way they negotiate is quite different from the way we negotiate. There may be a greater sensitivity to being direct, and saying things more indirectly may be the best way to make your point.
Several years ago I represented an American contractor that was negotiating a joint venture agreement with a Japanese counterpart. When we initially met the Japanese, we exchanged business cards. When the Japanese sat down at the negotiating table, they put each of our business cards in front of them on the conference table directly across from where each of us was sitting. Seeing this, we did the same thing. Unfortunately, in the middle of what turned out to be a somewhat difficult negotiation, the president of my client absentmindedly picked up the business card of the president of the Japanese company and began to pick his teeth with it. This was an unpardonable sin. Needless to say, the negotiation did not go well.
THE LAST HURRAH
When negotiations have come to a standstill, sometimes the best way to favorably settle a case is to convey to the other side that you are capable of walking away without a settlement. The problem is, of course, you can really only use this once, because if you use it more than once, no one is going to believe you. The danger is, of course, that the other side may call your bluff. But if you really are near or at your pain maximum, this tack can be very stimulating for a mediation.
TRUST YOUR MEDIATOR
You have chosen a good mediator, now use his or her talents. When you are candid and frank with your mediator in private session, you’ll help him or her figure out how best to approach the other side. Educate your mediator as to the strengths of your case and don’t mislead him.
Marion Barry, the former mayor of Washington, D.C., once said that “[t]here are two kinds of truths – the real truth and the made-up truth.” Don’t tell your mediator made-up truths, because when they are revealed to be untrue, your mediator will lose all confidence in you and your settlement position.
Remember, your mediator can be your most effective advocate in convincing the other side it is overreacting, being unfair or relying on facts that simply will never get into evidence. Don’t lose his or her trust.