Mediation is more likely to be successful when parties take time beforehand to identify the benefits of a negotiated resolution. This goes beyond a generic understanding of the value of mediation vis-à-vis the cost and risks of litigation. To be sure, that understanding is important, particularly for clients without prior mediation experience. But it doesn’t go far enough.
Identifying the benefits of a negotiated resolution requires client discussions that focus on case-specific and client-specific reasons for settling litigation (or potential litigation). Have those discussions before mediation. And whenever possible, start those discussions 1-2 weeks in advance of your mediation date. Most clients will benefit from time to consider what you’ve discussed, get answers to any follow-up questions, and come to terms with the idea that a negotiated resolution makes sense. Some clients will need time to have their own discussions with family members, business associates, or others who may be impacted by a decision to settle.
Start by talking through the case-specific reasons why it makes sense for your client(s) to settle their dispute and avoid further litigation. You should cover topics that include:
- Litigation timeline: Discuss with your client(s) an estimated timeline for litigating their dispute to conclusion, including an appeal. Note the difficulty in estimating a timeline, as well as factors outside your control that might impact that estimate. Clients should have a general sense of how long it might take to litigate their dispute. Most clients without prior litigation experience will be surprised to learn they could be in litigation for years and may well have to re-litigate their case on appeal. These factors can be a game-changer for clients unwilling to endure the prolonged uncertainty, cost, and mental toll of extended litigation.
- Litigation budget: Clients should have some sense of the fees/costs to litigate their dispute to conclusion, including a possible appeal. Here, too, note factors beyond your control that may impact an estimate. Many clients, including those who vow to spend whatever it takes to litigate, don’t have a realistic sense of what their litigation expenses might be.
- Litigation risks: There’s no such thing as a perfect case, and clients should understand the risks of litigating their dispute before they go to mediation. Mediations are too often derailed when clients feel blind-sided by litigation risk discussions and/or refuse to acknowledge litigation risks. Talk with your client(s) about potential weaknesses in their case and the variety of factors that might impact a litigation outcome. Better yet, talk through worst-case scenario(s): What would it mean, in very practical terms, if your client does not prevail in litigation? What would an adverse judgment look like?
Talk next about client-specific factors that impact the decision to settle. Together with case-specific factors, they help create a picture, in very real terms, of why a negotiated resolution likely makes sense. Almost inevitably, these discussions will alert you to new issues that did not arise in previous client conversations.
While client-specific factors will vary, you should cover at least the following:
- Impact of an Adverse Judgment: Having reviewed what an adverse judgment may look like, discuss how that would impact your client. For example: Is your client able to satisfy a money judgment? What assets would be vulnerable to collection efforts? Can your client obtain an appeal bond? Does the existence of an adverse judgment impact your client’s professional license(s)? Does it impair the ability of your client, or your client’s business, to obtain credit? If a judgment would impose requirements or restrictions on your client’s ability to do business, what would be the immediate and long-term impact? Would an adverse judgment put intellectual property at risk? Make an insurance coverage dispute more likely than a negotiated resolution with carrier involvement? Impact your client’s obligations to third parties? Impact your client’s family members, business associates, or others? How else might an adverse judgment impact your client?
- Client Views of Settlement: In your pre-mediation discussions, watch for clues about how your client views the prospect of settlement. Is there a business reason why your client does not want to settle a certain type of disputes? Does your client believe settling is an admission of wrongdoing? Does your client worry about the impact of settling on business relationships or business reputation? Does your client need the consent of business partners who may be impacted by a decision to settle. Does your client have disagreements with a spouse or other family members about whether to settle? The list of possibilities is endless. Some issues will be relatively simple to resolve in advance of mediation. Others may be stickier, requiring time for your client to work through. Your role begins with client conversations to identify and discuss those issues that might impede a negotiated resolution. In some instances, you may weigh whether to more actively assist your client in resolving issues with third parties. The goal is to identify and (where possible) clear away obstacles to settlement before you go to mediation.
Taking all of these factors into account will better position your client to identify the benefits of a negotiated resolution. Put simply, your client should be able to answer the question, “Why does it make sense to settle this dispute?” With the answer in mind, your client ois better equipped to negotiate an acceptable resolution at mediation.