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Ten Mistakes Lawyers Make in Mediation
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Ten Mistakes Lawyers Make in Mediation
By David K. Taylor
This article is a listing of the most horrible, “bang your head against the door” mistakes lawyers, both in-house and outside counsel, make before, during and after mediation.
1. NOT NAILING DOWN THE DEAL AT THE MEDIATION
You get a deal done after an exhausting day when your client is still upset. The mediator announces the deal. I have had parties pack up and walk out with this comment: “We will take a shot at a draft settlement agreement and send it to the other side this week.” No! Now, not later! Especially in emotionally charged mediations where both sides are very unhappy, clients can change their minds. Second guessing can occur. The failure to write down even the basic terms can also increase the likelihood of later disputes, good faith or not, about key clauses (e.g., indemnification, scope of the release, who is released, confidentiality, non-disparagement). Take the time and start working on a fully executed settlement agreement while everyone is still at the mediation. If that is not possible, at least draft a limited term sheet that lays out the basic parameters of the deal and is conditioned on counsel working together to get to a more formal settlement agreement.
2. DON’T MAKE A FAILED MEDIATION A FAILURE
Not all disputes get to a global settlement. However, if your mediation “fails,” don’t throw your documents into your briefcase and complain that the other side did not act in good faith. Evaluate carefully what you learned. You have just spent an entire day reviewing and discussing the pros and cons of your case and the positions of the other side. Are there are any nonglobal agreements that can be reached that will lead to a better chance at a later settlement and/or save legal fees? Can there be discovery, formal or informal, on the key issues? What about partial settlement of some of the disputed issues? Think before you walk out the door.
3. NOT IDENTIFYING KEY ISSUES IN ADVANCE
A long day of mediation can be scuttled with last minute issues that should have been identified early in the day. If money will change hands, when and how? What about those indemnification, non-disparagement or confidentiality clauses? Last minute pleas of financial instability? Withdrawal of a social media post? Allowing such issues to fester until late in the mediation can be a deal breaker. A good mediator and counsel will have thought through these issues well before the day of mediation.
4. NOT LISTENING TO THE MEDIATOR
Lawyers and their clients frequently fail to listen to what the mediator has to say. What’s the temperature in the other room? Is the client in that room listening to her lawyer and the mediator? Is it really all about money? What are the stumbling blocks to a true global resolution? The only way to vet those issues is to listen and communicate with the mediator. You can learn a lot more about the strengths and weaknesses of your case that way. You can walk out, even if no deal is done, armed with information that may help with your case. All the great mediation advocacy in a caucus room is useless without shutting up and listening sometimes.
5. NOT LETTING THE CLIENT AND MEDIATOR TALK
Most mediators want to communicate directly with the decision maker, not the attorney. Jettison your ego! Direct conversations with the client are immensely helpful for the mediator to determine the key factors to get to a deal. Often non-legal factors that wouldn’t get into court determine if a deal can be done. A mediator must establish a position of trust and confidence with the key client decision makers. That cannot happen when the lawyer does all the talking.
6. FAILING TO BE INTELLECTUALLY HONEST WITH THE MEDIATOR
All mediators know there is a game to be played if a settlement is to be reached. Clients are paying their lawyers to be tough, to bat down arguments. However, that is often incompatible with meaningful settlement discussions, which require a realistic assessment of the issues. Mediators expect tough representation, but don’t insult the mediator’s intelligence and knowledge about the subject matter of the dispute and the law. Mediators want candid discussion of the case. Good lawyers want straight talk from the mediator, even in front of their client. 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, face-to-face, that all the great lawyering in the world cannot change the facts or the law. Your job is to see if there is a way to reach your client’s goal of getting the case resolved efficiently.
7. NOT DOING YOUR HOMEWORK
You must know your case thoroughly to represent a client properly in mediation. 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 had better identify in advance the key factors that will impact settlement. This homework must include a frank evaluation of future legal fees and costs. Use the draft mediation statement as a guide, even if you carve off some parts before you send it to the mediator. Does the company really want its key employees spending hundreds of hours with the lawyers or trying to sort through project documents (and dealing with e-discovery production)?
8. FAILING TO PREPARE THE CLIENT, NOT HAVING A PLAN
How experienced is your client representative? She must have the authority to settle but must fully understand the dispute and the issues. If this is a “bet the business” case, counsel must spend time in person, not via email or calls, to explain the process and manage the client’s expectations. The concept of “settlement” means no one is happy. The goal of any mediation is not to win, but to resolve the dispute. Have a plan, but anticipate the need for flexibility in case something new is revealed, such as the client 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 us.”
9. NOT HAVING A PRE-MEDIATION CALL WITH THE OTHER LAWYER AND THE MEDIATOR
You have a mediator and 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 and opposing counsel. Talk through the issues that can derail a mediation. It can infuriate mediators when, in the middle of a mediation, they hear one side use the excuse that it does not have some information or document, and the other side claim that it does not have immediate access to such information or documents. If insurance is involved, will the insurance adjuster (where the money will be coming from) be present or available by phone three time zones away?
10. MEDIATING TOO EARLY OR TOO LATE
There are no firm rules as to when mediation should be considered. If the parties have a history 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 alternative dispute resolution (ADR) clause requires mediation prior to litigation/arbitration. The issue is always whether the parties/counsel have enough information about the dispute to make good business decisions about settlement. Early mediation is more likely to work if there is a good working relationship between the lawyers who, with an experienced mediator, can help manage the process to get an acceptable settlement early in the dispute.
What about mediations just prior to trial? Will the parties agree to postpone a trial and stop the preparation process for a late mediation? There are practical issues 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 probably believe that the request is a stall tactic. With virtually every commercial case going to non-binding mediation, whether by agreement or court order, mediation advocacy is vital. Keep the preceding list in mind in order to avoid some common and very serious missteps in the mediation process.
David Taylor is a partner with Bradley Arant and chairs the construction group in Bradley’s Nashville, Tennessee office. He speaks and writes to legal and business groups on construction and dispute resolution issues, and he serves as an arbitrator/mediator. dtaylor@bradley.com
