Advanced Mediation

by John L. Watkins

Does the Mediator Matter?

Most civil litigators have probably participated in a mediation where the mediator was just awful, but the case settled. Because mediation provides a venue and an opportunity to settle, motivated litigants and talented counsel will often find a way to settle even when the mediator adds nothing to the process. Nevertheless, the settlement goes in the mediator's personal "win" column. The fact that even marginal mediators can produce results raises the question of whether the mediator really matters.

In answering that question, experienced litigators can probably point to a case in which a talented mediator helped resolve a case that was "unsettleable." Such cases tend to be resolved by mediators with a combination of creativity, tenacity, and what might be termed "gravitas." Of course, a little luck doesn't hurt, either! These examples answer the question: Yes, the mediator very much matters, particularly in more difficult cases.

It is important to match the background and skill set of the mediator to the particular case. Frankly, it is usually not difficult to find a good mediator with background and experience in personal injury or death cases, as many lawyers have experience in those areas. Further, the resolution in such cases most often involves agreeing on one issue: the amount of the settlement.

When one moves into the field of commercial disputes, however, the number of potentially good mediators shrinks substantially. If a commercial matter involves many parties with many "moving parts," the list of persons who have dealt with such matters shrinks again. If a matter involves trade secrets, business torts, or false advertising, the list shrinks again. For insurance coverage disputes, the list also shrinks, and the difficulty of finding an acceptable mediator becomes difficult because many candidates have a history of representing only policyholders or only insurers, and thus may not be acceptable to both parties.

Yes, the mediator can very much matter. In mediation, the parties have the opportunity to pick someone who has a background and experience that may help resolve the case. It makes sense to invest some time to try to get a mediator well suited for the task.

Do Mediation Styles Matter?

Much has been written about styles of mediation. Perhaps the two most common styles are "facilitative" and "evaluative." In the most general sense, a facilitative mediator serves as a host and attempts to stimulate negotiations between the parties without offering a view of the dispute. An evaluative mediator, on the other hand, is willing to offer views and feedback on the parties' positions.

I approach this issue from the perspective of having represented parties in commercial litigation for many years. Good lawyers can and do assist their clients in settling cases without mediation. My view is thus that a purely facilitative mediator does not bring much to the table in a commercial matter, as the lawyers would probably discuss settlement anyway. Based on conversations I have had with other commercial litigation attorneys across the country, this view seems to be widely shared. Lawyers often derisively refer to mediators who are only "note carriers," meaning that all they do is carry notes of settlement offers between the parties during the mediation.

Although I prefer an evaluative approach, that does not mean a heavy handed approach. A good mediator must be a good listener. A good mediator needs to have a thorough grasp of the facts and always needs to be open to hearing additional information and making sure that the parties are fully informed. If a mediator expresses a strong view of a case to either side very early in the mediation, the mediator will not be viewed as neutral, and the party on the short end may elect not to participate further.

Often, the best approach to "reality testing" is for the mediator to ask questions. Asking questions has the concomitant benefit of gathering information. If a party's damages case seems weak, a mediator might ask, initially: "I am not sure I fully understand your position on damages. Can you explain it to me in more detail?" The answer may prove that the damages case is stronger than initially thought, and the information (with the permission of the plaintiff) can be shared with the defendant. If the answer suggests, however, that the damages case is a little weak, a further question might be asked, "What do you expect the other side will argue against your damages case?"

During the caucus in the other room, a similar dialogue takes place. That dialogue might begin with a question like this: "I understand that you do not think the other side has proven their damages. Do you think they have been damaged in any amount?" After that information is gathered, a further question might be, "Even though you think the damages are weak, do you think a jury might conclude they have some damages?" At the end of the day, hopefully the parties will be in a range where the case can settle.

Does the Timing of Mediation Matter?

One of the great things about mediation is that a case can be mediated at any time, from before a matter is in litigation to any time during the litigation process. The United States Court of Appeals for the Eleventh Circuit even has a program for mediation of cases that are on appeal. Although an appeal in the federal court system is almost certainly not the optimal time for mediation, even that program counts many successes.

In many instances, the timing of mediation reflects a tension between limiting litigation costs (best served by an early mediation) and having all the information on the table necessary to evaluate the case (often best served by mediating after the completion of discovery). However, this is not always the case. If the parties are in an on-going business relationship, for example, they may already have equal access to all of the relevant information, and that would favor an early mediation.

In theory, the optimal time for mediation will be as soon as both parties have enough information to make a thorough and reasoned evaluation of their case and the likely outcome. This time will vary from case to case, but it does not always require that discovery be completed and every last bit of information gathered.

In some instances, such as where confidentiality and speed are desired, the parties may consider exchanging information outside of the court-supervised discovery process. In such circumstances, mediation can be used to establish a process for information exchange and then for the resolution of the case. The parties may agree to mediate over a number of sessions. The first session can be devoted to defining the information that each side needs to assess the merits and to establish a timetable for exchanging information. During interim sessions, the mediator can assist the process in making sure that the exchange is moving forward, and that any disputes about the information exchange are resolved. Once the information has been exchanged, the final session or sessions are devoted to a traditional meditation focused on settlement.

Mediation for International Companies

When I spoke at an international legal conference in Heidelberg, Germany, in May 2003, many of the international participants were unfamiliar with mediation. To the international participants, "alternative dispute resolution" meant primarily international arbitration. International arbitration under the auspices of organizations such as the International Chamber of Commerce is a long-established mechanism for resolving disputes. However, international arbitration, tends to be an expensive, lengthy process. Since 2003, mediation is still in its infancy in Europe, but it is gradually gathering recognition and support in countries outside the U.S..

International companies doing business in the U.S. will almost surely want to consider mediation as a mechanism for resolving disputes that might arise while doing business in the U.S. As a general matter, the U.S. legal system is quite different than the civil law system used throughout Continental Europe. In Europe, broad discovery rights are not granted and the jury system is practically unknown. Particularly to Europeans, the civil law system is seen as far more predictable and rational than the U.S. system.

For these reasons, mediation should be an attractive option for European companies. European companies should consider utilizing multi-tiered dispute resolution provisions in their contracts which may require that, in the event of a dispute between the contracting parties, they must first mediate, and then resolve any remaining dispute through arbitration. Such an approach may be more acceptable to international companies than proceeding in the U.S. court system. Of course, many U.S. companies favor such an approach as well. For additional views on this issue, you may wish to read John's interview in Metropolitan Corporate Counsel.

E-Discovery and Mediation

In December 2006, through some facially minor changes to the Federal Rules of Civil Procedure, “e-discovery” became the hot topic in civil litigation. “E-discovery” refers to mandated procedures applicable in federal lawsuits to consider and, if necessary, provide for the production of electronically stored information (“ESI”) during the discovery process. These procedures may require the production of emails, word processing documents, spreadsheets and other data maintained in an electronic form, and may require production of the information in an electronic form.

For months before and after the adoption of the e-discovery rules, and counting today, lawyers have been inundated with invitations from consultants offering their services to cope with e-discovery issues. In any event, e-discovery is here, and lawyers and their clients will have to follow the rules. Initial experience suggests that e-discovery has increased the cost of litigation.

There is no way for businesses to avoid potential e-discovery issues. However, the burden may be lessened by taking even greater advantage of mediation, particularly before a federal court lawsuit is filed, or shortly thereafter. Parties may even choose to use mediation to establish an information exchange process that will allow the production, on a confidential basis, of the information they need to attempt to negotiate a settlement, but in a way that is mutually acceptable and within the control of the parties. In mediation, the parties can determine - for the purposes of the mediation - whether e-discovery is necessary, or whether a more traditional exchange of information will suffice.

Now more than ever, businesses may want to consider a multi-tiered dispute resolution process in their contracts. Such provisions require that disputes first be submitted to mediation, and, if mediation is unsuccessful, then to arbitration. The parties may wish to stipulate that e-discovery will not be part of the information exchange process in mediation.

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