The defense perspective on mediation.

• Author: Nahrstadt, Bradley C.

WHEN I first started practicing law 23 years ago, there were very few cases that settled through alternative dispute resolution (ADR). Today, it is becoming more and more unusual for a case to not be subjected to some form of ADR. The reasons for this are many, but some of the more important ones include the fact that ADR is less expensive and less time-consuming than litigation; it has simpler procedural and substantive rules than litigation; it tends to be less hostile and emotionally charged than litigation; and it is more flexible in scheduling than litigation. In addition, during a mediation, the parties retain the decision-making power to reach their own resolution, oftentimes utilizing remedies and relief that are not available to the parties in litigation. Based on the foregoing, I think it is safe to say that mediation is here to stay.

What exactly is mediation? Mediation is the process by which a neutral third party (the mediator) attempts, through participation in face-to-face negotiations with the disputing parties, to assist those parties in reaching an agreement that resolves the dispute. An oft-cited survey of general counsel, deputy counsel and chief litigators from 528 of the 1,000 largest corporations in America, the respondents noted that 85% had used mediation in the last 3 years and 84% said they were likely or very likely to use it in the future. This same survey also indicated that 81% of the respondents felt mediation provides a "more satisfactory process" than litigation, 66% said mediation provides "more satisfactory settlements" and 59% said mediation "preserves good relationships." (1)

1. Why Are You Mediating?

   In most mediations, the preferred end result is a full and final settlement of the dispute in question. There are also other equally important objectives that can be obtained through the mediation process that do not include a full settlement of the dispute. One commentator has the following to say about these objectives:

   1. A Partial Settlement of Peripheral Issues

      One reality of litigation is that all claims and all defenses arising out of the same facts and circumstances must be asserted in the same lawsuit. The judicial goal here--to avoid multiplicity of suits--is important to the judicial system and must be met. An unfortunate consequence of the rule, however, is that many lawsuits end up filled with peripheral arguments that really aren't determinative of the central issues between the parties. This tends to expand, rather than narrow, the focus of the trial and drives up the time and cost of an adjudicated resolution. Mediation can serve to eliminate those peripheral disputes by final or interim partial settlement agreements, stipulations to abate certain portions of the trial, or agreements to informally set certain issues aside pending the resolution of the main claims.

   2. A Process to Move Toward Final Settlement

      Many times, despite the best efforts to prepare for every contingency in advance, mediations become stalemated because of insufficient information or lack of agreement on what the facilitated negotiations reveal to be core or pivotal issues of fact or law. Rather than calling impasse and returning to the litigation path, the mediation process can be used to facilitate an agreed "downstream" program defining and scheduling further steps aimed at breaking those logjams and continuing steps toward reconciliation.

   3. A Better Understanding of the Opposition's Case

      Plan to listen to everything said during a mediation. Despite the considerable discovery skills developed by practitioners within the trial bar, it is seldom that the opposition's full story--complete with intended themes, nuances and emphasis is flushed out during discovery. More often than not, discovery will only reluctantly yield what we ask--not what we need to know. More importantly, mediation can provide the critical opportunity to see both sides of the story contrasted against each other. A unique opportunity to hear both sides of the issues presented in their best light side by side which is never available through traditional discovery tools. Finally, with the consent of the party and with the right mediator, a neutral third party's reaction to the issues is also available through mediation. (2)

      It is possible that your client may want to send a message through the mediation--even at the risk of foregoing settlement. Perhaps the client is defending a flagship product and it wants to make a statement through the mediation process--and its negotiation style--that future cases involving this product will be hard-fought. If that is the case, the negotiation strategy will likely entail low, rigid offers. Although the offers will likely not lead to a settlement, your style will convey your client's message and will have met the client's goal. (3)

      Or the client may wish to resolve the entire inventory of cases it has with the plaintiffs counsel. The client may conclude that paying a premium to settle all the cases is in the long-term interests of the company. In that instance, defense counsel's goal would be to parlay the mediation into a discussion of all the cases. To achieve that goal, defense counsel could highlight the value to the plaintiffs counsel of a guaranteed lump sum without extended time and effort on his part litigating the cases. Using that lump sum as an entree can serve the client's interests in another way: It may lower the cost of the per-case settlements. The present value of an up-front check of $500,000 for ten cases may be of more value to a plaintiff s lawyer than $60,000 payments for 10 cases spread over several years. (4)

      Any preparation for mediation should be undertaken with a full understanding of the complete goals that are available through the mediation process.

2. Timing of the Mediation

   Timing of the mediation is important. Sufficient facts must be identified and discovered in order to give the parties an opportunity to analyze the strengths and weaknesses of the liability and damages aspects of the case. At the same time, everyone is interested in trying to resolve the matter before substantial expenses are incurred. Whether to mediate before, during or after depositions, independent medical examinations or expert discovery are all issues that need to be carefully considered.

   Sometimes the parties in a dispute need additional information in order to make an informed decision about settlement and become comfortable in accepting a compromise. Once suit is filed, counsel should be instructed to reach out to opposing counsel and secure an agreement on the fundamental discovery both sides need to enable such an informed decision. (5)

   Developing an agreement to allow for the exchange of documents and the targeted depositions of key fact witnesses in advance of mediation will enable both sides to ascertain what seeing the most relevant documentary and testimonial evidence will really determine prior to filing suit. This gives the parties an opportunity to take stock of their respective claims and defenses before incurring the costs of discovery and proceeding to motions. (6)

3. Selection of the Mediator

   Ralph Waldo Emerson once said, "An institution is the lengthened shadow of one man." So it is with mediations. The process is only as effective as the mediator.

   There are generally three different types of mediators that could be selected to facilitate a mediation: the substantive expert, the former jurist and the prominent neutral. Each will be discussed in turn.

   The substantive expert. When the dispute's subject matter is sufficiently complex or technical in nature, a mediator with substantive expertise will reduce the time and expense of training a mediator during the negotiations. A mediator with subject matter expertise will be better able to evaluate the claims and defenses, and to devise strategies for securing a resolution. (7) The substantive expert will also be able to explain why there are certain strengths or weaknesses in claims or defenses that should be factored into the settlement position. (8)

   The former jurist. Often the successful resolution of a dispute lends itself to the experience and perspective of a former trial court judge. This is particularly true where the dispute involves a layperson as plaintiff against a corporate defendant. The retired judge can look the plaintiff in the eye and say "in all my years as a trial court judge, I never saw anyone win more from a jury than the company has put on the table." This may be of value in closing out the negotiation. (9)

   The prominent neutral. Sometimes there is a respected member of the bar who both sides respect and trust to be fair, and who can provide a reasoned evaluation of the dispute and the range of outcomes in a manner that can effect a compromise. This mediator can be particularly effective in resolving a dispute between parties that have an established relationship and would like to see the issue decided by someone they mutually trust and admire. (10)

   No matter which type of mediator is selected, the selection process should center on several important considerations:

   * What is the mediator's style?

   * Is the mediator someone the plaintiff will listen to?

   * Is the mediator someone who will listen to me?

   * Is the mediator strongly plaintiff oriented?

   * Is the mediator someone who will not hurt the chances of settlement if the case does not settle at the mediation session?

   * Will the mediator work hard during and after the mediation session to get the case settled?

   * Will the mediator "force" the other side to listen? (11)

   Style

   When it comes to mediation styles, there are basically two types: evaluative and facilitative. Evaluative mediation is where the mediator, once provided with the contentions and supporting facts and evidence, provides the parties with an evaluation of that position. The mediator will generally conclude with an evaluation of how the mediator believes a...