TABLE OF CONTENTS
TABLE OF CONTENTS
DECIDING WHEN TO MEDIATE
CHOOSING THE MEDIATOR
HOW LONG SHOULD IT TAKE?
THE POSITION PAPER
CUSTOMIZING THE PROCESS
THE USE AND ABUSE OF THE JOINT SESSION
THE “BOTTOM LINE”
PERSISTING TO CLOSURE
In 2006 the American Bar Association Section of Dispute Resolution formed the “Task Force on Improving Mediation Quality.” The Task Force was charged with conducting an investigation to identify the factors that define high quality mediation practice.
The Task Force decided to focus on private mediation of civil cases, other than domestic, community or family law disputes, and that it would make an extensive effort to learn about how the users of mediation felt about quality.
During 2007 they conducted twelve focus groups in various cities around the
In early 2008, following the end of their investigation, the Task Force issued its report. They stated that the following four essentials had been consistently identified as most important to a quality process: (a) preparation for mediation by the mediator, parties and counsel; (b) case-by-case customization of the mediation process; (c) analytical assistance from the mediator; and (d) persistence by the mediator.
These four essentials represent tasks that fall most heavily upon the mediator’s shoulders, but that also require cooperation and support from counsel. This paper, which is intended to be a guide for counsel, discusses the four essential tasks and how they should be performed during the various stages of a typical mediation.
· Preparation by counsel includes deciding to mediate, choosing the mediator, participating in pre-mediation conferences, scheduling enough time, preparing the client, the mediator and the opposition and writing the position paper. The mediator must prepare by consulting and strategizing with counsel in advance.
· Customization of the mediation process is a collaborative effort on the part of counsel and the mediator whereby they agree on the method or methods that are most likely to be effective.
· Analytical assistance is the responsibility of the mediator, who helps the parties to work through the issues in the case and who strategizes with them regarding solutions.
· Persistence is primarily the responsibility of the mediator, but it also requires the support of all other participants. The mediator must have skill, patience, optimism, and a determination to succeed.
This paper also discusses the related concept of mediation strategy. The foregoing tasks should always be undertaken strategically, keeping in mind two goals: to provide a high quality process and to end the litigation in a way that satisfies the needs of the clients.
DECIDING WHEN TO MEDIATE
The first strategic step in any case is to decide when to mediate. In a perfect world parties would mediate and settle right after their legal disputes arose. In the real world they usually litigate first and settle later. Being in litigation, and knowing that mediation is the most effective vehicle for the settlement of civil litigation, counsel and their clients must make a timing decision.
What will be the opportune time to settle? On the courthouse steps? Leverage is created when the other side is faced with an imminent trial. Parties want to avoid the uncertainty of the courtroom, and as they approach the moment of truth they tend to become more flexible. But does the client really want to wait? Answering these questions requires strategizing with the client and understanding his or her needs and interests. Several factors must be weighed, including the probability of success at trial, the client’s ability to tolerate risk and uncertainty over time, and the expense, delay, and stress of litigation. Pragmatic considerations, such as the need for discovery and the ability to get the other side to the table, must also be taken into account.
· How Much Discovery is Enough? Without adequate discovery it is difficult to evaluate the worth of a case or to demonstrate its merits adequately to the other side. Information obtained through discovery may be needed as leverage in the negotiation, and depositions or partial depositions of key witnesses may be required. Going to mediation can make sense, however, after sufficient discovery has been done so that the parties each understand the other’s case and have a reasonably good idea of how supportable their respective positions are.
The early use of requests for admissions (RFAs) can be an inexpensive way to establish facts and thereby induce the other side to settle. Parties who fail to respond adequately to such requests do so at their peril. Code of Civil Procedure §2033.420 provides that “if a party fails to admit…the truth of any matter when requested to do so…and if the party requesting the admission thereafter proves…the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including attorney’s fees.” RFAs can be used to procure admissions of a broad scope of information, including complex facts, matters of opinion, application of law to facts, and even ultimate issues in the case.
Remember that the mediation itself also provides an opportunity to give and receive information. Position papers, opening statements, documents, and even witness statements are all vehicles that can be used by each side to educate the other. Videos and PowerPoint presentations can be presented either at the mediation, or preferably in advance, to educate the mediator and to persuade the opposition.
· “Too Far Apart.” Lawyers are sometimes reluctant to mediate because of a perception that the parties are “too far apart.” Or, “It would be a waste of time because the other side is so unreasonable.” Often these perceptions are inaccurate. Or, if they are correct, then they are the very reasons why mediation is indicated. If the two sides were already close enough to settle, they would probably do it on their own. It is because they are polarized that they need the intervention of a mediator.
Stories abound of cases that were thought to be hopeless but that still settled at mediation. Here is a lawyer’s comment that I once read: "The parties had been in litigation with each other for years. All prior attempts at mediation had failed. In light of this unfortunate situation, I held little hope that mediation would work. I have rarely been so happy to have been so wrong."
Ninety-five percent of all civil cases in the major counties of
· Talk to Opposing Counsel. If you are wondering whether it is the right time to mediate, the best way to find out might be to talk to your opposing counsel. Find out if he or she feels that the case is ready to settle, and if not, then why not. If you would prefer, you can also ask your proposed mediator to talk with the opposition to see if they would be willing to mediate.
· The Fast Track to Mediation. Some plaintiffs’ counsel will pursue a strategy that is calculated to lead to early mediation. Financial or other personal considerations of the client may sometimes be the reason for this approach. Plaintiffs may be more inclined to settle early, even for a reduced amount, than to wait months or years to seek a larger, though uncertain, recovery. In these situations the lawyer will first need to investigate the facts carefully, accelerate discovery and put pressure on the defense to evaluate the claim. Early depositions, demand letters with supporting evidence, and requests for admissions are some of the techniques that can be used to get to an early mediation.
CHOOSING THE MEDIATOR
The most important decision to be made when preparing for mediation is the choice of the mediator. Potential mediators are usually evaluated according to one or more of the following factors.
· Subject Matter Expertise. Lawyers often start by looking for a mediator who has expertise in the type of case at hand. While this factor may be important, it is by no means the most important. Knowledge of a particular field of law does not make a person the right mediator. Excellent mediation skills are the paramount consideration.
· Mediator’s Fee. Although the mediator’s daily or hourly rate should be considered, this factor also seems to receive undue emphasis. The fact that the mediator commands one of the highest rates in the community does not necessarily mean that he or she is right for your case or even that the rate is justified. There may be other mediators who could handle your case just as well, if not better, for a lower rate.
On the other hand, a high rate is not necessarily a reason to reject a proposed mediator. Bear in mind that, unless you are representing your client for a contingent fee, most of the expense of mediation is made up of attorneys’ fees. The hours spent in preparing the client, developing a negotiating strategy, writing the position paper, and appearing at the mediation can easily cost the client many thousands of dollars. A party’s share of the mediation fee, especially in a multi-party case, will pale in comparison. Choosing a mediator because his or her fee is $100 per hour less than someone else’s is unwise unless the neutral who is chosen has the qualifications that you should be looking for.
· Effectiveness. Good mediators will have a reputation for a high degree of effectiveness. Parties do not hire mediators to deliver a process, but rather to produce a result. Assuming that all of the prerequisites have been met, including settlement authority, preparedness, sufficient time, and willingness to compromise, the case should almost always settle. It is up to the mediator to make sure that those prerequisites are satisfied and, once they are, to take the lead in putting the settlement together.
To insure a high quality process, you should also ascertain how the proposed mediator measures up in terms of preparation, customization, analysis, and persistence. Does the mediator hold pre-mediation conferences? Is the mediator prepared to customize the process, or does he or she insist on following the same format every time? Will the mediator be a resource that you can use in analyzing issues, assessing litigation risk and evaluating settlement options? And will the mediator persist until the case is resolved, no matter how difficult it may be?
· Skill Set. The mediator must be able to perform all of the functions identified by the Task Force, and to do so strategically. He or she must have the necessary tools to move parties away from extreme positions, avoid impasse, get them into settlement range and bring them to closure. The mediator must be able to sense which tools to use in a particular case, as well as the right time and way to pull a particular tool out of the box.
· Style. It is often said that there are three kinds of mediators: facilitative, directive, and evaluative. In actuality, however, a mediator may employ more than one style, and often in the same case.
Facilitators promote communication between the parties in order to help them reach agreement. Parties need to understand each other’s interests and positions, and the mediator must decide how the parties can best communicate that information to each other. Should it be done directly, or should it be done through the mediator as the intermediary? Or should the communication be partly direct and partly indirect?
Parties also need the mediator to help them formulate settlement proposals, to convey them back and forth and to guide them to closure. This critical part of the process requires a mediator who can deliver messages along with the numbers and keep the ball going back and forth until the case is resolved.
Directive mediators make recommendations or suggestions to the parties about how to settle. Some mediators may be more forceful than others in trying to direct parties what to do, but all good mediators respect the rights of parties to make their own decisions.
Evaluators will develop an opinion of what a case is worth or of the merits of positions. Evaluation is a useful tool, and parties are usually interested in knowing what the mediator’s evaluation may be. Mediators should be prepared to “weigh in” on the case, especially when asked.
The best mediators use an approach that draws upon all of these styles as needed, but they are primarily involved in facilitating communication. Direction and evaluation are of little use unless the mediator can promote understanding, manage a negotiation, and keep it going until the case is settled.
· Neutrality and Trustworthiness. A mediator must adhere to high ethical standards and never favor the interest of one party over another. However, no ethical rule precludes the use of a mediator who knows or has dealt with one or more of the participants. In fact, many lawyers believe that the best mediator to use is the one that the other side wants because the process is more likely to succeed if the adversary already trusts the mediator. A party’s use of the same mediator in prior cases is not a reason for disqualification.
The mediator should work with counsel in advance to establish a collaborative relationship and to learn out the nature of the dispute, including any obstacles that might impede settlement. Pre-mediation conferences are usually held by telephone, or sometimes in face-to-face meetings. Joint conferences can be used to discuss procedural matters and the nature of the case, but it is also important for the mediator to confer separately with the various attorneys so that they can be candid with each other.
The main items that should be covered in these conferences include:
· The nature and status of the case, including any previous settlement negotiations or ideas for settlement.
· Making sure that individuals with full settlement authority will be
present or otherwise available.
· Setting aside adequate time to complete the mediation.
· Setting a date for the exchange of position papers.
· The need for effective preparation, as will be discussed in Section V.
· The needs, interests, and objectives of the parties.
· How the process will be conducted, including the appropriate use of joint sessions and caucuses and any customization that may be needed.
· The manner in which the settlement agreement is to be prepared, as will be discussed in Part XIII.
· Any other information that counsel may want to share privately with the mediator, such as personalities, client control problems, emotional issues and potential obstacles to settlement.
HOW LONG SHOULD IT TAKE?
One day I received calls from two lawyers who wanted me to mediate their cases. One said, “We want you to set aside the entire day for this case because we really want to settle.” The other one said, “This is a very simple case, it shouldn’t take more than a couple of hours, and we should know pretty quickly whether it is going to settle or not.”
The first caller was optimistic about settlement. He also realized that a successful mediation can often take a full day and that it is unwise to set arbitrary time limits. The second caller exhibited the opposite attitude. His message essentially was: “We’re sure that we’re right and we will mediate for a couple of hours to see if you can get the other side to agree. But after that, if we don’t like what we’re hearing then we will just leave.”
The “couple of hours” approach is usually not realistic. Maybe the situation is not as “simple” as you think. Lawyers tend to forget that what is simple to them is often not so simple to the clients. While I have had many cases that did settle in a half day, I have also had many that lasted well into the evening. Since I never know how long a case will take, I always like to start in the morning and to set aside the full day.
Participants should prepare to spend whatever time it takes to settle, even if the situation starts to look hopeless. How much is enough? Who can say whether the mediation is really finished? That is one of the reasons why you hire a mediator.
In addition to the tasks discussed in Sections I through III, getting ready for mediation involves preparation of your client, yourself, the mediator, and the opposition.
· Preparing the Client. Before going to mediation you should prepare your client carefully. Rather than just spending a few minutes on the telephone, I suggest that you meet with the client and go over at least the following matters.
§ How the mediation will be conducted, including the roles of the various participants; and confirming that the client, or client representative, will have the necessary authority to settle the case.
§ That a mediation is an assisted negotiation. It is not like a trial, and the mediator will not decide who is right or wrong.
§ The goal is not to win over the mediator; the goal is to persuade the other side.
§ People are more willing to compromise with opponents who are reasonable and courteous. It helps to agree with the opponents when they are right.
§ If the client will be speaking during the joint session, the content of his or her remarks. It is important to avoid exaggeration, mistakes, and personal attacks.
§ The negotiating strategy, including the need to have an open mind rather than a bottom-line approach.
§ Realistic alternatives to a negotiated settlement, including the litigation budget if the fee arrangement is other than contingent, the likelihood of success or failure, and the net financial result to be expected if the case does not settle.
§ The need to be patient and to stay until the case is resolved.
· Preparing Yourself. It is a good practice to remind yourself of the similarities and the differences between trial advocacy and mediation advocacy. In both forums, you must bring with you all of the ammunition that you can muster. Having a good command of both the facts and the law will help you to demonstrate the strengths of your case and to cope with its weaknesses.
When going to mediation, however, remember that you will be involved in a negotiation. The goal is get the other side to understand your positions, respect your point of view, and agree to a solution that your client can accept. You must remember the difference between a conference room and a courtroom.
Analyze your theories of the case and evaluate your strengths and weaknesses. Try to put yourself in the other side’s position and imagine how they will view their case and your case. Make a realistic assessment of the probabilities of success on both sides. Do not focus just on the liability issues; think carefully about the measure, calculation, and amount of damages.
Request, and if necessary seek the mediator’s assistance in obtaining, any information that you or your client may need in order to prepare for the negotiation.
· Preparing the Mediator. Although the position paper is the primary vehicle for preparing the mediator, it is not the only tool that is available to you. Mediation is not like arbitration, and you should feel free to write, email or call the mediator at any time. The more that the mediator knows about your case in advance, the better will be your chances for both a good result and a good process. You should also take advantage of the pre-mediation conference to educate the mediator about the issues, the strengths and weaknesses of your case, and how you intend to present it at the mediation.
· Preparing the Opposition. If you will be negotiating with an insurance carrier or other institutional party who must complete an internal evaluation in advance of the mediation, be sure to provide them with all of the information that they will need. Some plaintiffs’ counsel believe in sending the insurance carrier as much information as possible in advance, including videos, PowerPoints, and other demonstrative evidence. This strategy of laying all the cards on the table is meant to maximize the settlement authority that will be put on the case. Saving the presentation for the mediation may mean a missed opportunity.
THE POSITION PAPER
In most cases the primary tool for preparing the opposition will be your position paper. There are a few simple rules to follow when drafting it.
· Remember Your Audience. Most position papers are written like legal briefs that are addressed to the mediator as if he or she were sitting as a judge. Your real audience, however, is the opposition. The mediator is not the person who has the power to give you what you want.
Remember also that the purpose of mediation is to end the dispute. Ironically, some position papers appear to be written as if the purpose were to prolong the dispute. Expressing outrage, name-calling or accusing people of lying is counter-productive. It will move the parties even further from an agreement than they already are.
· Support Your Statements. The mediator will be interested in learning about the background of the case, the issues and the areas of agreement and disagreement. The opposition will be looking to see how strong your case is. Supporting evidence, and not just arguments, should be provided. Concentrate on the facts because the facts are always the most important ingredient of a successful case. It is not necessary to write a lengthy legal brief.
· Discuss Damages. Most position papers are devoted primarily to discussing issues pertaining to liability. Damages are at least as important, if not more so. The probable amount of recovery is the key reference point in assessing litigation risk and in estimating settlement value.
· Express Your Interest in Settling the Case. When you read the other side’s position paper you will probably find numerous statements with which you disagree. Reading them is apt to be discouraging. But, if you also find a statement that they are interested in settling you will start to feel better. So follow the golden rule and put such a statement in your own paper.
· Exchange Position Papers. Participants in mediation must be willing to exchange information. Nevertheless, some attorneys will refuse to provide a copy of their position paper to the other side. This refusal demonstrates a lack of understanding of the entire process. When confronted with this problem I typically ask counsel if there is anything in their paper that they do not wish to share with the other side. Usually the answer is “no,” whereupon they agree to provide a copy to opposing counsel.
If you do have confidential information that you do not want to disclose in your position paper, then discuss it with the mediator by telephone or send the mediator a separate confidential letter.
CUSTOMIZING THE PROCESS
Although the Task Force referred to customization as one of the essentials to a quality process, it is a concept that may be surprising to many people. Most mediators and attorneys have become accustomed to using a “one size fits all” approach rather than making adjustments from case to case. The fact is, however, that times are changing.
You should always talk with the mediator ahead of time about the process. The mediator should make an initial assessment of the dispute, suggest the appropriate methods to be used, and seek approval of those methods from counsel. Each attorney will have his or her own negotiating strategy, but all counsel should be on the same page with the mediator regarding the process.
· Choosing the Method. Depending upon the nature of the conflict the mediator will need to choose one or more of three different methods: competitive, cooperative, or transformative.
In many cases the choice is easy to make. If the dispute is just about money, such as failure to pay a bill, the mediator’s task will be to facilitate a competitive negotiation. The result will be a distributive bargain (the “zero sum exchange”), with no new value created. Bear in mind, however, that disputes which appear on the surface to be about money alone may really be about something else as well, and that they may require more than a purely competitive approach.
Disputes that arise from a pre-existing relationship are good examples of those that are about more than money. Thus, employment disputes often require that the mediator suggest either an apology or at least that the employee be given an opportunity to voice his concerns directly to the employer. Other considerations might be ways to help the employee make a transition to a new job. In such cases, the nature of the mediation will be both competitive and cooperative. The competitive aspect will involve the payment of any money that is to change hands, while the cooperative aspect will entail creating additional value through the apology, by giving the claimant a substitute for a day in court, or by other means.
Business disputes, such as disagreements among partners or between companies that have an ongoing relationship, are often classic examples of cases that call for the cooperative method. The case can frequently be settled by restructuring the relationship or by striking a deal that meets the business needs of both sides.
Cases that involve a family, neighborhood or other personal relationship that has broken down are examples of situations that may call for the transformative approach. Cases such as these can be among the most challenging to settle because the destruction of the relationship has become the obstacle to resolving the conflict. In these disputes the mediator first works to help the parties restore their trust in one another and then to create an agreement that ends the conflict and allows them to get on with their lives.
Having agreed upon one or more methods, the mediator and counsel will need to customize the process so that it will be consistent with their strategy. In the purely competitive situation, the typical model which uses a joint session followed by separate caucuses may work quite well. If the method is either wholly or partly cooperative, however, and especially if it is transformative, a more creative approach will be required.
· Customizing the Caucus Model. Customization will generally involve working with the caucus model of mediation so that it fits the needs of the case. The effective use of joint sessions and caucuses is discussed in Sections VIII and IX, but suffice it to say that there is no “right way” to use the caucus model, except for the way that works in the case at hand.
In business cases that call for a cooperative approach, the mediator will be presented with the question of how best to facilitate the negotiation. Who will do most of the talking, the principals or the lawyers? What setting will be the most comfortable? If the principals alone become the real players, will the mediator play an active role or not?
When the transformative approach is indicated, it is important to allow the principals to interact. They will need to talk in order to rebuild their relationship, and if the mediator insists on keeping them apart for the whole day, the mediation may result in nothing more than frustration.
· Departures from the Caucus Model. In some situations, customization may actually involve a departure from the caucus model so that the mediation is conducted entirely, or at least primarily, in a plenary session. All participants remain in the same room for as long as possible and mediate under agreed ground rules. Anyone may call for a break at any time, whether it be to confer with counsel or for some other reason.
Business cases and family disputes are good examples of these situations. Cases where the parties are not represented by counsel also seem to lend themselves to this approach because the parties do not have an expectation of being kept in separate rooms.
· The Need for Flexibility. Flexibility allows for changes in format, style or technique in the event that developments occur during the mediation that were not expected. If, for example, one of the parties decides during the mediation to abandon a competitive attitude in favor of a cooperative approach, the process will probably need to be modified in order to allow for direct dialogue.
The mediator may need to improvise in response to the behavior of the parties or the information that they present. It is impossible to anticipate everything that the principals may say or do, and the mediator must always be ready to make adjustments.
THE USE AND ABUSE OF THE JOINT SESSION
Traditionally, mediations of litigated cases do begin with a joint session in which the mediator invites both sides to explain their case. The mediator moderates the discussion to insure that each person has an opportunity to speak without interruption. Time may also be provided for rebuttals or to pose questions to the other side.
Recently we have seen a preference on the part of many lawyers to change the model so that the joint session is either abbreviated or eliminated. The reasons for this preference appear to be twofold: a desire to save time by avoiding restatement of positions; and unpleasant experiences with joint sessions that have not been properly managed.
Admittedly, there may be sound reasons for avoiding a joint session in some cases. If there is a high level of animosity or tension, it may be unwise to start with all participants in the same room. The joint session may have to be omitted or at least put off until later in the day. Omitting it should not be done routinely, however, because it provides important opportunities.
· Make an Effective Opening Statement. The joint session is your opportunity to make an opening statement, in which you can accomplish several things.
· Speak directly, but politely, to the other side.
· Address your remarks to the opposing party and not just to counsel. Prior to the mediation all communications will probably have gone through the filter of opposing counsel, who may put his or her own spin on them. Hearing directly from you should be more effective.
· Talk in a realistic way about what a fact finder is likely to conclude from the evidence, not about what “really happened.” You may not change the other side’s mind, but you may be able to get them thinking about how a trial would play out.
· Acknowledge any weaknesses in your case rather than waiting for the other side to bring them up. Explain how you plan to deal with them if the case has to be tried.
· Give an effective reply, especially if you represent the plaintiff. You can use this time to summarize the arguments made by the other side, showing that you listened carefully to what they had to say, stating where you agree, but pointing out where you disagree.
· If your client presents well, and especially if he or she has not previously been deposed, the joint session will be a good opportunity to let the client speak.
Engage in Direct Dialogue. The joint session presents an excellent opportunity for parties to talk across the table and to see what their disputes really are all about. Parties usually seem quite sure that they know what the facts are, but facts are almost always in dispute. A direct exchange of opposing views will allow everyone to focus on the differences. By contrast, having the mediator shuttle between caucuses in an attempt to explain differing versions of the facts is far less effective and wastes valuable time. So long as all of the participants are interested in having a civilized conversation, a dialogue about the facts can be a very productive exercise.
· Deal With Emotional Obstacles. A person who has had a strong emotional reaction to what has happened to them comes to the mediation wanting to be heard by the other side. The joint session can be the best means to that end, and for most parties it will be as close as they get to a day in court.
If you are on the other side of the case, you may not be anxious to hear the other party complaining or blowing off steam. Still, until the emotional obstacle has been removed, any progress toward an agreement will be difficult at best. Though it may test your patience, you should probably sit and listen politely.
· Apologize. The value of an apology, as discussed in Section VII, should never be overlooked. It may not settle the case by itself, but it can go a long way. An apology is not an admission of fault and should not be viewed as a sign of weakness. It is just an expression of empathy for what the injured party is feeling. Apologies must be sincere and not self-serving, and they are best given in person rather than through the mediator. A joint session, or else a special caucus, is the right setting for an apology.
· Set the Tone. The attorneys’ statements in the joint session can set the tone for a productive mediation. They should be powerful, but low-keyed. You want to project an air of quiet confidence rather than a sense of righteousness. As in the position paper, the emphasis should be primarily on facts, rather than on legal theories or accusations.
Above all else, you must express your willingness to settle. Agreements are much easier to reach when the other side can see that you have the right attitude and that you are willing to take their point of view into account.
· Present More Information. Joint sessions can be used more than once during the course of the mediation and for more than one purpose. The mediator may discover information in caucus that needs to be given to the other side, and that can best be communicated by reconvening all participants.
· Make an Agreement. Sometimes parties can actually negotiate their agreement across the table. These cases usually involve business disputes in which the parties are sophisticated negotiators, accustomed to dealing directly instead of going through an intermediary. The principals rather than the lawyers will often take the lead. When the parties are not represented by counsel, it is not unusual at all to see a case settled in joint session.
· An Important Caveat: Avoid Abuses. You must avoid threats, offensive remarks, and rude behavior. The use of words such as “lie,” “cheat,” “defraud,” and “malicious prosecution” is counterproductive. When you are tempted to use the joint session as an opportunity to intimidate the other side or to put them in their place, ask yourself again: Who is your audience? Will these tactics make them more inclined to see things your way? Or will they just harden their resistance? There is a line between “venting” and being abusive toward the other side. Expect the mediator to intervene if that line is crossed.
Although caucuses usually occur after an opening joint session, it is a good practice for the mediator to caucus briefly with each side in advance. These meetings give the mediator an opportunity to be introduced to the clients and to talk with them about the process. If, as a result of one or more of these meetings, a decision is made to delay or omit the joint session, then the mediation can begin with an initial round of party caucuses.
Some mediators believe that there is too much reliance on caucusing. A small minority even takes the view that the best way to mediate is not to caucus at all. In practice, caucuses are almost always used in the mediation of lawsuits because they serve a number of good purposes.
· Establishing Rapport. Before a mediator can expect to make progress toward resolving a dispute, he or she must first establish a working relationship with all participants. It is especially important to build rapport with the clients, and not just with the attorneys. Their interests are at stake and they are being asked to place their trust in someone whom they are usually meeting for the first time. The privacy of a caucus provides the proper setting for the mediator and the clients to get to know one another.
· Empathizing. An effective mediator will be conscious of the need to address any emotional obstacles before starting the negotiation process. While this step in the mediation can, as noted, be initiated in a joint session, it must be covered in the first caucus as well. Parties who bring strong emotional reactions to mediation will inevitably need to share them privately with a neutral party. Listening to concerns, empathizing, and validating are activities that are almost always required of the mediator, and skipping them can easily result in a failed mediation.
· Additional Fact Gathering. The initial caucus is also used to gather additional information that has not been covered in joint session. Usually the attorneys will have done most of the talking in joint session, and the caucus gives the clients the opportunity to take their turn. The caucus also allows them to open up and talk about matters that they may prefer to discuss privately.
· Discussing Confidential Information. Parties often give information to the mediator in caucus that they either do not wish to share with the other side or that they prefer to withhold until a later time. The parties should get a clear understanding from the mediator about his or her policy with regard to receiving confidential information. My policy, which I state at the outset, is to assume that nothing is to be kept from the other side unless I am specifically asked to do so. I am expected to act as a conduit of information and I should be free to do that unless instructed otherwise.
· Understanding Parties’ Objectives. Mediators can learn in caucus what a party is really trying to accomplish in the mediation. For example, is the former employee really more interested in a chance to be heard than in the money? Are the two business partners who are at odds with each other really intent on going their separate ways, or would they rather come to an understanding that allows their business to continue? How much value does a party place on just getting the dispute over with?
· Analytical Assistance. The Task Force reported that analytical assistance from the mediator was identified as one of the four essentials to a quality process. Mediators are called upon to analyze legal issues, give evaluations, discuss strengths and weaknesses of positions, and suggest how to negotiate and settle.
Analytical assistance can be very helpful in assessing the risks of litigation. Parties tend to underestimate risk and mediators can be of great value by assisting counsel in explaining it. For example, if the dispute arises from a contract that provides for attorneys fees to be recovered by the prevailing party, litigants will usually have underestimated the amount of money that is at stake.
Risk analysis and devil’s advocacy are two of the most important things that a mediator does, and they typically continue throughout the caucusing process until the mediation has been completed. Mediators will often ask probing questions about possible problems at trial and other downsides of litigation in order to help parties understand and evaluate their options.
· Smoking Guns. Occasionally you may have a “smoking gun” that you are reluctant to reveal. You want to retain the advantage of surprise at trial if the case does not settle. This situation always presents a dilemma. Do you use the information in the mediation to get a better deal, or do you keep it hidden? There are strategic ways of using a smoking gun in mediation and you should consult with the mediator about the advisability of doing so. If the mediator can give you sufficient comfort that the case is going to settle, and that the smoking gun can be used to gain more leverage in the negotiation, then the better course of action will probably be to reveal it.
A mediator will sometimes use caucuses with selected participants. Common examples include meetings of counsel only or of the parties only. Such meetings will usually, but not always, include the mediator.
· Attorney Caucuses. The mediator may ask for a caucus between the attorneys out of the presence of the clients. Attorneys may need to get away from their clients for a few minutes in order to speak candidly about where they feel that the negotiation should go. Clients are usually open to a mediator’s suggestion of an attorney caucus. They tend to feel that it takes some of the pressure off of them and that direct dialogue between the lawyers may settle the case.
If the mediator participates, he or she can make a suggestion for settlement in a comfortable setting for the attorneys, who can then take the suggestion back to their clients for discussion in private.
An attorney may even have a “bombshell” that he or she wants to present to opposing counsel without confronting the adverse party directly. While such situations may be unusual they are a good example of the creative use of caucusing in order to get information from one person to another without creating consternation or provoking a heated denial.
· Parties Only. Although it happens less frequently, the mediator may ask for permission to sit down with the clients out of the presence of the attorneys. If, for example, the dispute is between neighbors or other persons who will have an ongoing relationship after the mediation, it can make sense to take attention away from the legalities by excusing the lawyers and focusing the conversation on ways to repair the broken relationship.
The mediator may even decide to have the clients meet by themselves, with no one else being present. These meetings are especially useful in resolving estate and business disputes. Family members who are at odds over the distribution of an estate may just need to “have it out” before they can come to an agreement. In a business setting where the clients are deal makers, it is sometimes best to leave them alone and just let them work out the problem.
· Experts’ Meetings. In complex litigation, such as multi-party construction defect cases, meetings among the experts retained by the parties will usually take place in advance of the first mediation session. The purpose of these meetings is for the experts to compare notes and to see if they can reach consensus on ways to remedy defects. The mediator typically attends the meeting in order to serve as both a moderator and as a reporter, who can present the results of the meeting to the parties and their counsel.
The negotiation phase of the mediation usually starts with the second round of caucuses. The mediator and the negotiators are now faced with the challenge of getting the ball in play and keeping it moving until the game is over.
· Starting at the Extremes. “Our brief itemizes all of our damages, and that is our opening demand. We are not going to bid against ourselves.”
“They want how much? I think we’re just wasting our time here. Their case isn't worth anything close to that. Tell them we will offer nuisance value.”
“You mean that is all they intend to offer? I don’t think they want to settle.”
These are the kind of words that mediators often hear in caucuses. For whatever reason, parties will often start with extreme numbers. Lawyers never want the client to think that they started out by asking for too little or offering too much.
· Getting Real. Mediators sometimes feel obliged to communicate extreme opening numbers even when they know that it will be unproductive and just an expression of frustration. However, a good mediator will urge the parties to start with numbers that bear a rational relationship to what the case is worth. An outrageously high demand or low offer will probably have to be followed at some point by a large concession, for no particular reason except to be able to settle. The party who is forced to do that may lose credibility and end up giving the advantage to the other side. Before throwing out a number that falls within or near the “insult zone” it is worth considering how the other side is likely to react and whether they will simply retaliate.
· The Rule of Reason. Every number that is given to the mediator to take into the other room should be supported by a good reason. In the case of the opening demand, the rationale could be as simple as saying that in consideration of settling the case at the mediation the plaintiff is willing to accept a discount off the number that represents full recovery. Or counsel might say that he or she realizes that in order to achieve full recovery it is usually necessary to try the case, which entails risk, expense and delay. These are merely facts of life that any good lawyer should be able to acknowledge without appearing weak.
As negotiations progress, a good strategy is to provide a rationale for each move that you make. You might tie it to a specific issue on which you are willing to concede some risk. In so doing, you challenge the other side to reciprocate and to come up with good reasons for their own numbers.
· Making a “Big Move.” Most attorneys are reluctant to make a big move, or at least to make it early in the mediation. Rushing the process or cutting to the chase too soon is never a good idea. A big move can telegraph weakness, lack of confidence, or a tacit admission that the previous number was not serious. Until the mediator can assure you that the other side is in a cooperative frame of mind and that the move will be rewarded, it may be wise to wait.
Some attorneys, often on the defense, are actually anxious to make a big move. Their strategy is to send a message through the mediator that they have made a good faith and reasoned evaluation of the worth of the case and are sincerely interested in settling. They plan to reinforce their message by making subsequent moves that are much smaller, thereby signaling that they are running out of room. The big move from the opposition should be recognized as an attempt to take control of the negotiation.
Mediators can help the parties to decide on what the range is and can carefully guide them into it. They can suggest numbers or they can ask each side for their thoughts. They can also ask each side to tell the mediator confidentially what their best numbers are so that the mediator can then report to both sides whether they are reasonably close.
Clients are often fixated on what the bottom line should be. This approach is understandable, but should nevertheless be discouraged. A demand number, a target (or “wish”) number, and a walkway number can all be discussed with clients, but with the caveat that one or more of these numbers may need to change during the course of the mediation.
· A Learning Experience. The process of mediation is a negotiation, but it is also a learning experience. Information will come from the other side that may affect the evaluation of the case. The mediator may give opinions on the relative strengths and weaknesses of positions. All of this information will have to be taken into account in order to arrive at a realistic evaluation.
· Determining Value. The true value of any lawsuit is determined in a manner that is similar to the valuation of an asset that is up for sale. Fair value is determined by what a willing seller will accept and what a willing buyer will pay. In like manner, the value of a lawsuit can only be determined through negotiation. The number that the plaintiff is willing to accept and that the defendant is willing to pay at mediation is what the case is really worth, at least on that particular day.
· Staying Focused. Parties are well-advised to focus on the strengths and weaknesses of their case, the costs of litigation, and the risks that they are assuming if the case does not settle. Mediators should discourage parties from giving them a “bottom line” because this number, once spoken out loud, may be difficult to retract. Instead they can ask parties for a “best number,” with the understanding that this number may be subject to revision depending upon how the mediation unfolds.
When a bottom line is stated, it is like drawing a line in the sand. Ostensibly the line is fixed, but sands have a way of shifting. Good mediators understand that, despite what parties may say, their bottom line is really just a reminder of the need for the persistence that is required in order to settle cases.
PERSISTING TO CLOSURE
When the negotiators have moved into settlement range, and if they have gotten past the notion of a bottom line, closure should become easier to achieve. Momentum may start to build and parties may become emotionally invested in reaching an agreement. Parties may start talking less about the facts of the case and their theories of liability and more about what it will take to settle. This change in the nature of the conversation can be a hopeful sign for the mediator.
Still, it is at this stage that the element of persistence to which the Task Force referred becomes all-important. Good negotiators know that is important not to rush the process or to offer to “split the difference” too soon. They will probably not reveal their true best number until they are confident that it will settle the case. A good deal of hard bargaining may remain to be done, and there is always the danger that an impasse may result. The challenge is to prevent the impasse from developing, or it does develop, then to find a way to overcome it.
· Avoiding Impasse. At some point the mediator may bring you a number from the other side with the message that that they have gone as far as they are willing to go. These statements need not be taken at face value. Often the message is just a tactic or perhaps an expression of frustration. The mediator should be able to interpret what a negotiator is actually saying and to tell you whether a stated position implies flexibility to move further if you continue to move. Impasses can often be avoided by testing the other side’s number with a counteroffer.
A number of other techniques can also be used. For example, if you represent the defendant you can give the mediator an offer that she is authorized to convey if the plaintiff reduces his demand by a certain amount. You might also ask the mediator to test the waters by presenting a new number, either as a “what if” number or as if it were the mediator’s suggestion.
Other ways of avoiding impasse may simply be for the mediator to keep reminding both sides of the wisdom of settling, reminding the parties of the progress that has already been made, and noting that almost all cases do settle sooner or later. Strategic caucuses, such as mentioned in Part IX, can also be used to keep the process going or to break through resistance.
· Breaking Impasse. If the negotiation does finally stall then persistence requires that the mediator reach into his or her toolbox. Most impasses are more apparent than real and there are a number of tools that can be used to break them. Sometimes the mere mention of one or more of these techniques as a last resort may be enough to restart the negotiation if the parties find them to be undesirable.
The mediator might suggest a high-low arbitration using the last offer and demand as the parameters for the arbitrator’s award. The arbitrator should not be told the numbers. If the award is outside either of the limits, then it is modified to equal the closer limit. Another approach might be a baseball arbitration, in which the arbitrator is limited to selecting one or the other of the parties’ positions, thereby forcing the parties to be as realistic as possible.
If the case does not allow for attorney’s fees to be awarded to the prevailing party, the mediator might test the parties resolve by asking them if they are willing to make such an agreement and take the case to trial.
One way of breaking impasse that can be very effective is the double blind proposal, which is usually called the “mediators’ proposal.” The mediator, after first obtaining agreement to the procedure, formulates a proposal to settle, reduces it to writing, and gives it to each side. The proposal can be made either at the mediation or thereafter. The parties are asked to respond confidentially in writing within a brief period by saying either yes or no. If both parties say yes, the mediator announces that the case has settled. Otherwise, the mediator reports that the case has not settled, but without revealing whether either party said yes. This technique protects the parties from revealing their intentions without achieving a settlement. In the event that the case does not settle the mediator may still have the opportunity, if the parties authorize it, to let them know how far apart they are and to explore what might still be done to settle.
· Following Up. Sometimes just a brief adjournment of the mediation will be enough to break an impasse. An adjournment may be needed simply because the defense has to obtain more settlement authority. Or one or more parties may just need some time to think about their options.
Cases that still have not settled can often still be resolved if the mediator follows up by telephone. The mediator and the attorneys should always remain in contact, though it may take a period of weeks or even months, until the case either settles or goes to trial.
· Finalizing Agreement. When the case is eventually resolved, persistence requires that the agreement be memorialized before the end of the mediation. Regardless of how late the hour, parties should never leave without signing an agreement.
Preparation of the settlement agreement is the responsibility of counsel and not that of the mediator. The best way to do it is to come prepared with a draft agreement on a laptop computer or an electronic memory device. The more usual procedure, which can be problematic, is the preparation of a memorandum of understanding that is to be followed a few days later by the preparation of a formal agreement. The preparation of two documents rather than one is wasteful of time. It can also lead to disagreements when one side drafts the formal agreement and the other side wants to negotiate, or worse yet to renegotiate, terms.
There is a common saying among mediators that the mediator is responsible for the process, and that the parties are responsible for the result. This saying is not entirely correct. The mediator is primarily responsible for the process, but mediation is a collaborative in nature and the mediator cannot provide a high quality process without the cooperation of counsel. Likewise, the parties are primarily responsible for the result because they make the decisions, but the mediator must use his or her best efforts to see that there will actually be a result.
Although the Task Force has reported what the users of mediation expect, it is not enough simply to know that we must prepare, customize, analyze and persist. We must know how to do those things strategically. With thoughtful planning and skillful execution we will achieve our two goals: a quality process and a mutually satisfactory result.
© Michael P. Carbone 2009
The author is a dispute resolution specialist who handles virtually all kinds of civil disputes, but primarily in the areas of construction contracts, construction defects, real estate, business, employment, and estate and trust matters. The thoughts presented in this paper are based primarily on his experience in mediating hundreds of cases, but he is also indebted to numerous friends and colleagues, including attorneys and mediation trainers as well as fellow members of The Mediation Society who have generously shared their own ideas over the past ten years.
 The Report can be found at http://www.abanet.org/dch/committee.cfm?com=DR020600.
 In some cases the decision to mediate has already been made in advance. Many disputes arise from contracts that require mediation before going to court and that penalize parties who refuse to mediate. Typically the party who refuses forfeits any right to recover attorneys’ fees under a prevailing party clause in the contract if he or she wins the case. If the case is in court, and whether or not it arises from a contract, many courts in
 Mediation has sometimes been derided as “free discovery” by plaintiffs’ attorneys who see the defense as lacking intent to negotiate in good faith and who just want to “kick the tires.” This problem can be avoided if parties agree to have a fair exchange of information beforehand or if they agree on a discovery plan, either in advance of the mediation or else at an initial session. In some cases, providing information that is essential to settlement in the form of free discovery may actually be the best way of getting the other side to the table. Remember that they want to settle just as you do.
 See Freeman, “Cost of Proof Sanctions: The New Attorney’s Fees“ Vol. 18, No. 1 ABTL Report, regarding the use of requests for admission and thoughts on how to respond to such requests.
 All “writings,” as defined in
 For a thorough discussion of techniques for successful early mediation, see Garretson and Kornblum, Negotiating and Settling Tort Cases (AAJ Press 2008).
 As part of the mediation, these conferences and meetings are confidential.
 See Krivis, Improvisational Negotiation: A Mediator’s Stories of Conflict About Love, Money, Anger—and the Strategies that Resolved Them, (Jossey-Bass, 2006) (hereinafter referred to as “Krivis”) pg. 16.
 See Kornblum, “The Lawyer’s Role in Preparing the Mediator: Part I” Vol. 4, No. 1, Bar Association of San Francisco Bulletin, pg. 9.
 For whatever reason, the submission of “confidential briefs” to the mediator seems to be customary in
 Position papers, like all other communications in mediation, are protected from disclosure and admissibility into evidence by Cal. Evid. Code §1119. §1119 provides for an evidentiary exclusion based on public policy, and not just a privilege. It cannot be waived except in the manner provided by §1122 and thus there is no reason to avoid the distribution of copies to other persons. It is also worth noting that §1152 is not applicable to mediation and that reference to that section should not be made.
 See Krivis at pg. 65 where the author analogizes a mediator’s response to the behavior of the participants to improvisation by a jazz musician.
 Some mediators follow the opposite policy and will not reveal any information received in caucus unless authorized to do. Whatever the mediator’s policy may be, the mediator should explain it to the parties in advance.
 Even when each side is paying its own attorneys fees it is wise to be sure that the client is fully aware of the litigation budget, which is often underestimated.
 Retired Judge Darrel W. Lewis analyzes the smoking gun problem thusly: “Reconsider the wisdom of the hidden “bomb” you are reserving for trial. This is a mediator's dilemma. The case won't settle and one side explains that they will not make a better offer because they have some secret evidence that they intend to spring on the opposition at trial. Obviously, the mediator can only reveal as much of this information as the party explicitly authorizes. However, such information should be disclosed to the mediator because he/she may: (1) know that the other side is already aware of the evidence, (2) help you evaluate the true impact of the evidence, (3) with your consent, disclose all or part of the evidence or simply the fact that there is some hidden evidence that he/she cannot disclose, (4) without disclosing the secret, determine if the other side is aware of the evidence, or what their explanation or reaction to it might be. Ultimately, you should give serious thought to disclosing the information. Pretrial discovery does serve a purpose. It can save you from being surprised by your surprise. Surprise evidence in trial will have one of five results: (1) it will devastate your opponent and make you a hero, (2) the other side will have a perfectly good explanation for it and you will have gone to trial on a case you could have settled, (3) the evidence will turn out to be unreliable or erroneous and will adversely affect the credibility of you and your client, (4) the other side will also have some secret evidence in rebuttal to yours that will cause yours to fizzle or even backfire or, (5) the judge will rule the evidence inadmissible. Remember, result #1 is only one of five possible results. You must ask yourself: “Is it worth the gamble?” http://www.mediatorjudge.com/pg6.cfm.
 In Krivis, at pg. 247-254, the author presents an example from an actual case of a plaintiff’s attorney being given the opportunity to meet with the defendant and the mediator, out of the presence of the plaintiff and defense attorney, in order to be told about damaging evidence that his client had kept from him and that was fatal to the case.
 In some cases the attorneys and/or the parties may also be present, but it is my preference to let them take a “time out” so that the experts can feel free to speak their minds and not be distracted by advocates who may not be able to resist the impulse to argue their positions.
 When the mediator does convey an extreme opening number, the mediator will probably also explain the need for patience and to remain at the table until the parties can get into a realistic settlement range.