You are a new lawyer and involved in your first litigation. You have researched your client’s case and are convinced that the case has real merit. At the first case management conference you will have laid out to the Court the main issues in the case, planned discovery, probable motions.
The Court then assigns you a trial date a couple of years (or more) off and then asks whether the matter is suitable for alternative dispute resolution before a settlement judge or a mediator. Do you want to spend thousands (or hundreds of thousands) of dollars, have your client “raked over the coals,” and then have a judge or jury tell you whether you win or lose? Or, would you like to go to mediation and see whether there can be a better, alternative resolution.
In most cases, mediation is worth a shot. Even if the matter does not settle, you will learn more about your case, your opponent’s case, and, most important, what your client really wants to achieve. So, it’s off to mediation – Now what?
Everyone is usually nervous and, usually, some will be angry.
Particularly when you are new, and when you are about to engage in a new activity, you will be nervous. The best antidote is to prepare and focus on the goal of mediation -- to resolve a dispute by mutual agreement, not mortal combat. A mediator’s role is to help the parties fashion a deal – not to decide right from wrong. It is your job to focus on a solution, not bashing your opposing counsel or party. Remember, the mediation is confidential.
Best Alternative to a Negotiated Agreement (BATNA)
It might sound somewhat counter-intuitive, but you and your client first need to understand clearly your “walk away” position – your BATNA: What happens if you do not reach an agreement? How much will your client have to spend in dollars, time, opportunity costs and, perhaps most importantly, emotional energy, to get a dispute resolved, if you do not get an agreement? Your BATNA will be one of your most critical metrics to determining whether a negotiated deal should be agreed to.
At the same time, you need to determine the BATNA for the opposing party. Just as you will measure a deal by your BATNA, you need to convince the other side that their BATNA will be far worse that whatever deal you offer them. Remember, this is a negotiation: Both parties must agree. If you do not get an agreement, you are back to court, arbitration or administrative proceeding to have a third party decide your dispute for both of you.
Generally, you should follow the guidance of the mediator, as that is the mediator’s job and expertise. In my experience, it is becoming a more common practice to only have a brief joint meeting to lay the “ground rules” for mediation, and separate meetings with “shuttle diplomacy” is the norm. However, especially if you have sophisticated clients, do not hesitate to question the mediator (in a separate session) as to the advisability of joint discussions, or having the attorneys be part of the “shuttle diplomacy.”
In a separate meeting, a mediator will often challenge the assumptions of counsel on the strengths/weaknesses of their case. Be prepared to defend your settlement position from the standpoint of why it is in the interests of the opposing party should accept it.
Understand the parties’ interests.
While the merits of a case are always important and affect the assessment of your BATNA, you must determine your client’s interests in the dispute and, similarly, what are the real interests of your opponent. Those interest may not be the same as the relief sought in the lawsuit.
First, you need to focus on your client’s own interests. What does your client really want, or need, from resolution of the dispute? You need to realistically set the client expectations: What can you reasonably expect in settlement, and how does that compare to your BATNA. Do NOT ask your client for a bottom-line dollar number! While you will need to develop an opening offer/ask that might include dollars, you need to understand all of the client’s interests, including how the dispute is affecting the client’s business or life. What things are of value to your client that might be obtained by settlement – including things that a court could not give, but your opponent might, e.g., enhanced business opportunities?
Second, you need to assess the interests of the opposing party. Use the mediation to confirm or find out those interests. Ask, what does your opponent want, and then listen. Are there things your client can offer that are of great value to an opponent but entail only a negligible, or at least tolerable, cost by your client, and vice versa. These may be things that a court could never order.
Develop alternatives to meet the interests of your client AND the opposing party.
Remember, a mediation is rarely, if ever, a zero-sum game that is all about money. Your client needs to be focused on what they will get/give in settlement, and not get hung up on whether the opposing party is getting more than they deserve. You want to meet your client’s interests acceptably, and the opposing party’s interests tolerably. This is bartering, not battering.
Relationships are important – between counsel and clients.
Be hard on the facts, and soft on the people. Rarely does anger and shouting move the parties to a negotiated settlement. Focus on being civil, and helping your client control their emotions. It’s fine, and in the right circumstances important, to be firm and earnest, but anger usually impedes movement.
If there are factual disputes that are so critical to resolution that the parties believe need to be resolved, consider joint fact-finding as a part of mediation. Consider getting a qualified, trustworthy consultant to investigate the disputed facts and render a report that could serve as the basis for providing a basis for both sides to reach an agreement. Again, you are not looking for “truth” with a capital “T”: You want a common understanding of the important facts and risks so that each party can determine if s settlement is in their interest.
When do you walk?
Most people who have been involved in dispute resolution sense the there are “windows” of opportunity to reaching a settlement. There may have to be a “dance” among the parties and counsel that may be as much a cultural dance as a rational one. Frequently, the parties have to engage is some form of implicit rituals to feel that they have stated their case, have been listened to, and have enough trust and investment in the to accept an alternative resolution.
Remember, a case settles when both sides believe that the proposed settlement will meet their interests better than the alternatives (i.e., their individual BATNA). There may a need more than one session for clients and counsel to reach that point – partly to reflect and partly to reassess the disputed facts and outcomes.
You may consider asking the mediator for a recommendation. Most mediators will be reluctant to do so unless convinced of a real impasse. The mediator’s role is to try to get the parties to come to a mutual agreement, not to advocate for what the mediator thinks is a fair solution.
What If There Is A Deal?
Finally, what if you come to an agreement? In most cases, be prepared to document the agreement right then. If the parties have not already done so, they must consider how the deal points will be enforced. You do not want to be litigating over the settlement: You want an efficient and effective enforcement mechanism to ensure compliance by all parties.
If the deal is complicated, at the very least document the important deal points in writing and have it signed by all sides – lawyers and clients. Following the mediation, one counsel should have clear responsibility and a prompt time frame to reduce the agreement to final form and to provide it to opposing counsel.
After all of the above, you should either have an agreement that is better than walking away, or you will walk away with your client knowing why you are spending all of the time, money and effort to have a judge decide. Your client will either have a deal or will know exactly why they are involved in a litigation process that everyone hates: It is sometimes the “best alternative to a negotiated settlement.”
Steven McDonald was head of the Environmental Group at Luce, Forward, Hamilton & Scripps. He had his negotiation “epiphany” at Harvard’s Program on Negotiation where he studied resolution of major public policy disputes. Mr. McDonald mediates complex business and environmental disputes and is affiliated with the Land Use and Environmental Mediation Group (http://www.environmentalmediators.com/).