David K. Taylor | Bradley Arant Boult Cummings | October 10, 2019

This post is a continuation of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make before, during and after mediations in which I was the mediator. As stated in previous posts, it takes more than throwing together a mediation statement at the last second and showing up at the mediation. Doing it right requires the same kind of due diligence and work that goes into preparing for a key deposition or even trial. Great “mediation” lawyering is essential and is the best way to get to an acceptable deal.

Number 5: Not Letting the Client and Mediator Talk

Most mediators want to hear and talk directly with the client – not the attorney – since she is ultimately going to make the decision at the end of day. Counsel, you have to jettison your ego. Do not try to cut off this vital communication. Your client may need to get something off his chest, and he finally has someone other than his lawyer at whom to vent. Mediators are paid to take it, and these direct conversations with the client are is immensely helpful for the mediator to determine the key factors to getting to a deal. Remember these are settlement discussions, and “what happens in mediation…stays in mediation.” The mediator needs to know the temperatures in all caucus rooms and many times “non-legal” factors that are not available in court determine if a deal can be done.

Many years ago, I resolved an age discrimination claim by talking directly to the client. She just wanted to move to another city to be near her grandchildren but had no money to do so. The final deal included a year’s prepaid rent and a used car. The lawyers were not happy, but they are not a mediator’s client: the client is the Deal.

A mediator must establish a position of trust and confidence (and frankly likability) with the key client decision makers so that, when it is time to “fish or cut bait,” the clients will listen to what the Mediator has to say. That cannot happen when the lawyer does all of the talking, and the client just sits there mute like a house plant. Good mediators will not let that happen, even if that means hauling the lawyer out of the caucus room and having a stern discussion.

This post is a continuation of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make before, during and after mediations in which I was the mediator. As stated in previous posts, it takes more than throwing together a mediation statement at the last second and showing up at the mediation. Doing it right requires the same kind of due diligence and work that goes into preparing for a key deposition or even trial. Great “mediation” lawyering is essential and is the best way to get to an acceptable deal.

Number 6: Failing to Be Intellectually Honest with the Mediator

Let’s get real. All mediators know that there is a game to be played if a settlement is to be reached.  They understand there are client representatives in the caucus rooms who are paying their lawyers by the hour (normally) and expect their lawyers to be tough, hard-nosed bulldogs fighting (especially if there is bad blood between the parties) to bat down any arguments. However, that is often incompatible with meaningful settlement discussions which require, both for lawyers and clients, a realistic assessment of the dispute. Mediators understand that there is a fine line to be balanced by the mediator and the lawyers.

Mediators expect good, tough representation, but do not insult the mediator’s intelligence and knowledge about the subject matter of the dispute and the law. Beyond the initial presentation of your client’s position (in which you can certainly be a zealous advocate), mediators want frank and candid discussion of the strengths and weaknesses of the case.  What are the best and worst case scenarios? What will be the future litigation expenses and legal fees? That can sometimes mean pulling the lawyers out of the room to have those frank discussions. Good lawyers want that from the mediator, even in front of their client. Because no matter how many times a lawyer may have told a client about the weaknesses in a case, there is something about having an experienced mediator explain to the client, face to face, the same thing and that all of the great lawyering in the world (of course) cannot change a set of facts or the law. Your job as counsel is not to show the mediator how smart you are and how you are going to kick the other side’s backside in court, but to see if there is a way to reach your client’s goal of getting the case resolved as efficiently as possible. Rare is the client who will willingly spend unlimited legal fees, allow the company’s key workers to spend hundreds of hours in discovery and depositions, and put his business into the hands of a third party, whether it’s a judge, arbitrator or jury. Sometimes it is not just about the money…but most of the time it is about the money.

Number 7: Not Doing Your Homework

You have to know your case in and out to represent a client properly in a mediation. How else can you effectively manage your client and also discuss the issues with the mediator? You are counting on the mediator to make sure the other side understands and appreciates your positions. You may not be able to look under every single rock that can derail a mediation (or even know how many rocks are out there), but you better have identified in advance the key factors that will impact settlement. This homework must include a frank evaluation of future legal fees and costs. I have on more than one occasion as a mediator angered lawyers by challenging their low ball evaluation of legal costs and expenses in front of their client.

The mediator will also expect that you have done your homework. If you have not, you (and your client) will lose credibility with the mediator if she brings up those rocks in front of you and your client for the very first time. You will also lose face with your client if he turns to you and says “what was that all about” when the mediator leaves your room. When it comes time to close the deal, it is vital that the client still has full faith and confidence in your advice.

To help you think through those rocks, use your draft mediation statement as a guide, even if you carve off some parts before you send it to the mediator. It is also very important to send any draft and final statement to your client. This also helps prepare the client. If you get something from the other side, send that to your client (you may need to send it to your client Team, even those who are not coming to the mediation). Having the client read the other side’s arguments in black and white always helps prepare the client to make the difficult business decisions about settlement. The client’s homework should include an evaluation of not just legal fees and costs, but the time and effort from key employees that will be necessary if the dispute is not settled. This is especially vital if the client has never been through a complicated commercial dispute before. Does the client really want its key employees spending hundreds of hours with the lawyers, or trying to sort through project documents (and deal with e-discovery production)?

That homework should also include calling the mediator in advance of the mediation. Recall this is not binding arbitration, but structured settlement discussions. Let the mediator know confidentially about the rocks on both sides. That can include your candid assessment of the other side’s lawyers, and even issues with your own client representative. Every mediator appreciates and covets that type of advance information which can help him hit the ground running when the mediation begins.

Number 8: Failing to Prepare the Client and Not Having a Plan

How experienced is your client representative? If she’s an in-house counsel who has attended scores of mediations, there may not be a need for much preparation, other than to make sure she has the authority to settle and understands the dispute and the issues. But if the client has limited experience, and this is a “bet the business” case, counsel MUST spend time (and that means in person, not via email or calls) to explain the process and to try to manage the client’s expectations. I have had clients think that mediation was a trial and were furious at their counsel for not “trying” the case during the mediation. The definition of “settlement”: No one is happy. The real world applies. I have yet to walk into the room of a party after a few sessions and the client say, “I now realize I was wrong; here’s a check; you are the greatest mediator in the world.”

The goal of any mediation is not to “win” but to resolve the dispute. What can your client “live with?” Talk with the client before the mediation about all possible outcomes, which can include losing at trial (even though you are, of course, the best lawyer in the world). Have a plan going into a mediation, but anticipate the need for some flexibility in case something new is revealed by the opposition or the client, such as telling the lawyer at the mediation (it’s happened more than once), “By the way, I forgot to tell you that I fired our primary fact witness last week for theft, and she hates our guts.”

Be realistic about the consequences of not getting a deal, especially future legal fees, expenses and the impact on your client’s business (including how much time the client’s key employees are going to have to spend on the case). It is amazing how many times I ask a party/counsel what their best and worse case scenarios are, including estimated legal fees/expenses. I often get a blank look. I then have to estimate legal fees and expenses through trial, and no matter what the counsel’s hourly rate is, the final number can put a client on the floor.

To be clear, great mediation advocacy is not the most important element in getting a deal done; pre-mediation planning is equally important.

No. 9: Not Having a Pre-mediation Call With the Other Lawyer and the Mediator

So, you have done your research and feel comfortable about the jointly selected mediator. You have an agreed date for mediation. Do you then just send in the confidential mediation statement and show up on the date? No.

Set up a call with the mediator (many good mediators insist) and opposing counsel and talk through the many issues that can derail a mediation. Consider the following, all of which you could address in a pre-mediation counsel conference call with the mediator.

Do you need information or documents from the other side? It can infuriate mediators when, in the middle of a mediation, they hear one side use an excuse that it does not have some information (or a document) necessary to make a decision and the other side does not have immediate access to such documents.

Do you agree to exchange all or some parts of the mediation statement? Discuss with opposing counsel what you plan to do and what you expect from the opposition.

It is also crucial to know who will attend. If the party representatives hate each other or you know that the other representative is not the decision-maker and may be covering himself because he screwed up the deal, a pre-mediation call can be essential. If insurance is involved, will the insurance adjuster (where the money will be coming from) be present? It is a bad way to start off a mediation when the lawyer shows up without the insured (who may not care because he’s not paying for the defense) or without the adjuster (who has 235 other cases) but whom the lawyer promises will be “available by phone” on the West Coast (but then disappears late in the afternoon when that side needs some additional authority to get the deal done).

The lesson is that the more you learn from a pre-mediation call with the mediator and counsel, the more time and attention you can devote to the real factual and legal issues in dispute during the actual mediation.

To be clear, great mediation advocacy is not the most important element in getting a deal done, but it can be a major factor.

No. 10: Mediating Too Early or Too Late

Every dispute is different.  There are no firm rules as to when mediation should be considered. If the parties have a history, are in an ongoing relationship, will deal with each other in the future; and the legal fees/expenses will be substantial, it may make sense to try to set up an “early” mediation, even prior to the filing of a lawsuit. Sometimes the contract’s ADR clause requires mediation prior to litigation/arbitration. While those clauses can be waived, the issue is always whether the parties/counsel have enough information about the dispute to make good business decisions about settlement. Many times I have heard counsel say “I will be able to get an expert to support our claim,” which is not very persuasive to the other side when it is an expert-driven dispute. Sometimes there is a real concern that “final” offers made in an early mediation become sticking points for future settlement discussions. Early mediations can sometimes cause more problems, and make the parties madder at each other, especially with ego-driven clients (and yes, lawyers!). I have found that an early mediation is more likely to work is if there is a good working relationship between the lawyers who, working with an experienced mediator, can help manage the entire process (and their clients) to try to get an acceptable settlement early in the dispute.

What about “late” mediations just prior to trial? Will the parties agree to postpone a trial and stop the preparation process for a late mediation (of course, the Judge has to approve as well)? There are practical issues involved, such as finding a capable mediator at the last second and setting aside a full day (or longer) for mediation with trial counsel who have been furiously prepping for trial and who probably believe that the request is a stall tactic. My general experience is that since both sides know every inch of the other side’s case immediately prior to trial, if there is to be a last minute settlement, including during a trial, that can best accomplished between the parties/counsel without a mediator’s involvement.

So, the preferred timing for mediation is most likely sometime between early and late: a time when the parties know enough about the dispute to make well reasoned settlement decisions but not so late that the entire investment necessary for trial has already been made.

Kenneth Gibbs and Lexi Myer | JAMS | July 17, 2019

In the context of mediation, if there is one word that counsel and mediators dread the most, it is “impasse.” Consider the following scenario: In one room, there is a contractor making allegations of delay, disruption and/or acceleration based on differing site conditions, changed character of a project or constructive changes. In separate rooms, there are a public entity owner and an insurance carrier for a design professional earnestly contending that while the contractor experienced increased costs, such costs were due to an underbid or self-inflicted inefficiencies. Moreover, the carrier for the design professional is asserting that there is no breach of the standard of care. The parties are millions of dollars apart and are convinced of the righteousness of their respective positions.

Often in this scenario, counsel for the public entity and/or the insurance carrier are put in a position of having to report to a third-party government agency, legislative body or internal “chain of command.” Counsel typically arrive at mediation with a range of settlement authority, based on an initial review of the case.

As the mediation progresses, counsel for the public entity or insurer may recognize that the contractor’s arguments have more merit than they originally calculated and that there are greater litigation risks than Mediation of Complex Construction Disputes: Breaking an Impasse they previously evaluated. Conversely, counsel and principals for the contractor may get a “wake-up call” at the mediation that certain of their positions have less merit than they thought. However, without more solid evidence or support, counsel may be hesitant or unable to effectuate a change in the settlement position of the parties that they represent.

Engineering and construction disputes handled by GEC neutrals commonly have complex factual and legal issues that often require experts in scheduling, estimating and financial analysis to resolve them. As a result, these cases usually require in-depth and extensive discovery to prepare for arbitration or trial. At the mediation stage, which hopefully occurs before substantial cost is incurred, the evidence may not be fully developed or presented in a way that allows counsel for the public entity or insurance carrier to persuade decision-makers that increased settlement authority is warranted. Therefore, even if there is a recognition that settlement talks should continue, in practicality, without a further assessment of the merits of the case, the mediation often fails and can be resumed only after expensive discovery has taken place.

This need not always be the outcome. We have developed a method of alternative dispute resolution that allows parties to vet their cases and assists in the ability to alter settlement authority during the mediation process. We call this technique mediation-evaluation.

Mediation-evaluation is not early neutral evaluation as you may recognize it from federal court. The goal is not to identify and clarify the central issues for trial or to assist with discovery and motion planning or with an informal exchange of key information. Nor is it similar to a dispute review board, which is a panel appointed to recommend resolution of disputes while the project is still ongoing. Additionally, it is not a neutral analysis, which provides one side with an advisory opinion on strategy, answering the question of whether it should proceed to trial or consider settlement. Finally, it is not a mediator’s proposal, in which a mediator makes a settlement recommendation based only upon the limited facts discussed during the mediation and the offers that have been made.

Instead, mediation-evaluation is a hybrid technique that combines the concepts of neutral analysis and a mediator’s proposal. It is specifically designed to break an impasse during the course of a mediation. In other words, the mediator-evaluator will at once mediate, hear and analyze the facts of the case, and provide an informed nonbinding evaluation and settlement recommendation.

We use the process when the parties have reached an impasse in a traditional mediation. We, together with counsel, determine what issues must be opined on in an attempt to reach a resolution. We then assume the role of an evaluator, to become more familiar with the issues that are acting as impediments to settlement. In order to do so, we invite the parties to make presentations, a “mini-trial” of sorts. However, this mini-trial is informal. The rules of evidence are not followed, and the proceeding can be designed by counsel. Counsel may wish to make PowerPoint presentations and demonstrative exhibits, have lay witnesses discuss what they experienced at the project or have expert witnesses give narratives—whatever is necessary for each side to fully express the essence of their case in one day. Following the one-day presentations, we usually reserve a day for rebuttal presentations. At any point, we may choose to “hot-tub” the experts or pose specific questions to counsel or lay witnesses.

Mediation-evaluation can take many forms, depending on the protocols set by the parties. The authors have used mediation-evaluation as follows: (1) Both sides made presentations of the evidence and requested that the mediator-evaluator provide a written analysis and settlement recommendation; (2) both sides made presentations of the evidence and requested an oral confidential settlement recommendation be made separately to the parties; 3) both sides made presentations of the evidence, immediately resumed mediation, negotiated a settlement based on the settlement recommendation and then used the mediator-evaluator’s written analysis to obtain approval for the negotiated settlement; and 4) both sides used the process to resolve particular issues that caused a divide in the settlement valuation, allowing the parties to come together and resolve the case. Like mediation itself, “one size does not fit all,” and there is no one way to perform mediation-evaluations. The process should be flexible and adaptable to the parties’ settlement goals and needs. In short, mediation-evaluation is a tool that allows the parties to obtain a nonbinding independent assessment of the case in a mediation setting. The neutral’s evaluation and ultimate settlement recommendation are more informed than a mediator’s proposal because the neutral has heard a robust presentation of the evidence. A written analysis of this evidence, coupled with a settlement recommendation, can be extremely effective in cases where the parties are far apart in monetary and/or ideological terms, because the parties can rely on a quasi-judicial opinion. Further, mediation-evaluation is helpful in situations involving public entities or insurers, where third-party or upper management approval of a settlement is needed and must be based upon strong evidentiary support.

We believe using mediation-evaluation provides the parties with cost-effective dispute resolution. By using this technique, the parties can plan one single presentation of the evidence as opposed to participating in multiple mediation sessions or engaging a separate neutral to perform a neutral analysis. Mediation-evaluation can also be used early in the litigation process, saving the parties both time and money.

In the context of the complex world of GEC disputes, where so much information is required to make an informed settlement recommendation, mediation-evaluation provides parties with a way to find independent and well-versed support for that recommendation. Most important, the mediation-evaluation process helps the parties to break an impasse and reach a resolution.

David K. Taylor | BuildSmart | July 3, 2019

This post is a continuation of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make before, during and after mediations in which I was the mediator. As stated in previous posts, it takes more than throwing together a mediation statement at the last second and showing up at the mediation. Doing it right requires the same kind of due diligence and work that goes into preparing for a key deposition or even trial. Great “mediation” lawyering is essential and is the best way to get to an acceptable deal.

Number 8: Failing to Prepare the Client and Not Having a Plan

How experienced is your client representative? If she’s an in-house counsel who has attended scores of mediations, there may not be a need for much preparation, other than to make sure she has the authority to settle and understands the dispute and the issues. But if the client has limited experience, and this is a “bet the business” case, counsel MUST spend time (and that means in person, not via email or calls) to explain the process and to try to manage the client’s expectations. I have had clients think that mediation was a trial and were furious at their counsel for not “trying” the case during the mediation. The definition of “settlement”: No one is happy. The real world applies. I have yet to walk into the room of a party after a few sessions and the client say, “I now realize I was wrong; here’s a check; you are the greatest mediator in the world.”

The goal of any mediation is not to “win” but to resolve the dispute. What can your client “live with?” Talk with the client before the mediation about all possible outcomes, which can include losing at trial (even though you are, of course, the best lawyer in the world). Have a plan going into a mediation, but anticipate the need for some flexibility in case something new is revealed by the opposition or the client, such as telling the lawyer at the mediation (it’s happened more than once), “By the way, I forgot to tell you that I fired our primary fact witness last week for theft, and she hates our guts.”

Be realistic about the consequences of not getting a deal, especially future legal fees, expenses and the impact on your client’s business (including how much time the client’s key employees are going to have to spend on the case). It is amazing how many times I ask a party/counsel what their best and worse case scenarios are, including estimated legal fees/expenses. I often get a blank look. I then have to estimate legal fees and expenses through trial, and no matter what the counsel’s hourly rate is, the final number can put a client on the floor.

To be clear, great mediation advocacy is not the most important element in getting a deal done; pre-mediation planning is equally important.

Read numbers 9 and 10 on the list.