Mediation is more often than not a negotiation about money. Of course, non-monetary issues may also be involved. But all too often, back and forth negotiation over money (“positional bargaining”) reaches an impasse. That raises the question, what tools are available to the mediator, the parties and their counsel when negotiations break down?
First, it cannot be overemphasized how important it is for the parties to "set the table" even before they attend the mediation. If the parties agree to exchange briefs, each side will better understand the opposition's position. Of course, each party can also provide the mediator with a "pocket brief" if there is confidential information that a party does not want to share with the other side. A telephone call with the mediator prior to the mediation is also very useful. Obviously, decision makers with settlement authority should attend the mediation.
It might make sense to stage the mediation and invite one side or certain parties to attend the mediation before others arrive. For example, where there is finger pointing between defendants or issues involving insurance coverage, it might be preferable to address those issues first so that when plaintiff arrives, the parties are better prepared to proceed with negotiations.
Are there issues that can be more easily resolved between the parties? Building a bridge to settlement oftentimes means finding areas of agreement and making progress on those issues first. Are there "interest based" solutions where the parties can achieve mutual gain? For example, would obtaining a bid or expert evaluation from a neutral third-party move the ball forward? Can a landlord and tenant agree that the tenant will move-out within a certain time period? If the parties will have future interaction, is there a dispute resolution mechanism the parties can agree upon in the event of future disagreement? In some cases, it might make sense to move away from talking about money and return to that difficult issue later after the parties address other issues.
Are the parties open to exchanging brackets? This is a tool where one side agrees to move to X if the other side will move to Y. More often than not, the parties propose counter brackets along with a statement "but I am not signaling a settlement at the mid-point of my proposed bracket". Of course, that is perfectly fine. The mediator and the parties obtain useful information when the parties exchange proposed brackets. One creative approach entails each side confidentially providing the mediator with what it believes the next few brackets should look like. Bracketing can provide valuable data to the mediator and the parties as they work towards an agreement.
Sometimes the mediator will discuss the consequences to the parties if they fail to reach a settlement. There is litigation expense and risk to be considered. Has counsel provided an estimate of legal fees and costs to the clients? Are litigation deadlines or a trial date creating pressure? The evaluative mediator may cast doubt about the strength of the case in each room. It is important to discuss with the parties that they can achieve self-determination in mediation, and that settlement terms may include remedies that would not be achievable with a judge or a jury.
Oftentimes it is helpful for the mediator to privately caucus with certain participants at the mediation. The mediator may identify certain individuals who are resolution oriented and have creative ideas about how to resolve the case. After all, the parties and their counsel know more about their case than the mediator. Also, it might make sense to bring the parties, counsel, claims representatives or experts together in one configuration or another. Oftentimes, it is productive to have one side make a presentation to the other side. Hearing the opposition's position from the perspective of a fact witness or expert, as opposed to the argument of counsel, can be very impactful.
The mediator should remain attentive for clues from the parties as to where they might be heading or a change in position. Allowing each side to "vent" at an early stage of the mediation is important, not only for the purpose of allowing each side to tell its story, but also so that the mediator can continue to assess the settlement dynamics and evaluate opportunities for settlement.
Sometimes taking a recess will allow cooler heads to prevail. Also, a discussion about potentially adjourning the mediation may incentivize the parties to increase their efforts.
If there is significant progress in the settlement discussions, the mediator might offer to present the parties with a mediator's proposal. This tool is best employed if the mediator believes that the proposal is likely to be accepted by all parties. The mediator's proposal is not an invitation for a counter-offer from any party. An often employed procedure is that unless all parties accept the proposal, the mediator will not disclose how any particular party responded to the proposal.
The parties and the mediator may wish to reach an agreement that the mediator will remain involved in follow-up settlement discussions. Many cases resolve after
the first day of the mediation. If mediating under California law, the parties may wish to consider waiving the automatic termination provision of Evidence Code ?1125(a)(5) which provides that the mediation automatically ends where for 10 calendar days, "there is no communication between the mediator and any of the parties to the mediation relating to the dispute." Under this statute, "the mediator and the parties may shorten or extend this time by agreement."
Not every case can be settled or is ripe for settlement on the first day of mediation. But where appropriate, use of some of the above techniques may prove effective in overcoming obstacles to settlement and achieving a negotiated resolution.