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"Keep this to Yourself; I'm saving it for Trial!"
Categories: Practice Tips
One essential element of the mediation process is trust in the mediator. I’m referring in particular to the kind of trust which gives parties and counsel comfort they can share sensitive information with the mediator in the expectation it will not be revealed to the other side without permission. A mediator who violates this trust is unlikely to get work again, as news of a breach would spread like wild fire.
The kind of information parties wish to keep confidential varies. Some common examples include negative, personal feelings about the other side, problems verifying key information, a list of issues causing them anxiety, their underlying needs and interests, “bottom lines” and settlement authority, of course, and more. Their motivation for sharing this information with the mediator is usually obvious, as are the reasons they prefer not to share with opposing parties and counsel.
Not always. Sometimes the reasons for concealing it from the other side are impenetrable. For example, counsel may rationalize an offer or counter-offer with information they intend to keep under wraps. “Look,” they might say, “this case isn’t worth $150,000 because we can show plaintiff repeatedly lied on his employment application. This is a ‘he said/she said’ case. Plaintiff has credibility problems and won’t be believed.” Without question, it’s the kind of information which impacts risk assessment and valuation. Not disclosing it, however, can lead to consternation. Plaintiff’s counsel will not understand a smaller than anticipated response if it is not adequately explained. Progress in reaching agreement is likely to falter if not cease altogether. “Why can’t I share it?” I ask. “Because I’m saving it for trial,” comes the reply.
I wonder what trial that is. On July 22, I published “The Vanishing American Trial” on my Blog page. Lawyers are not trying many cases today. Across the country and in Michigan less than 1.5% of all cases actually go to trial. I spoke to an experienced commercial litigator recently. In 20 years of practice he has tried 4 civil suits and 4 arbitrations. Cases aren’t going to trial any more. As a result, lawyers who save their best ammunition for trial are missing an opportunity to maximize their leverage in reaching a settlement at the mediation table.
Don’t get me wrong. If the party wants something kept confidential, my lips are sealed. I will not breach my promise of confidentiality under any circumstances. What I will do is ask counsel to reconsider. If they say no, I work with what I have.
Why should a litigator reconsider the decision to protect sensitive information from disclosure?
First, counsel may be reluctant to share information because he or she expects to surprise the other side. In my experience, there are few surprises – certainly not as many as these litigators believe. Therefore, I ask: “What makes you think they don’t know about this already or won’t learn of it fairly quickly? How do you know they’re not worried that sooner or later your side is going to find out about this?” If the other side is made aware of the damaging evidence – and opposing counsel’s knowledge of it, a productive “wood shed” moment in the other caucus room just might result.
Second, counsel may seek to gain an advantage by “springing” the undisclosed evidence on a party when least expected by that party’s counsel. “I don’t want them thinking up a good explanation in cahoots with their lawyer.” I get that. There may well be a significant advantage if the parties are mediating prior to the taking of depositions. However, if the litigation is pending in federal court, they may lose the right to use the evidence if not produced in mandatory disclosures. On the other hand, if the evidence is solid and can’t be changed after the fact – such as a falsified employment history on a job application – there is nothing the other side can do to change that fact. Or explain it away. Every strategic decision in litigation requires a cost-benefit analysis. It seems to me that the benefits of disclosure at the right time at the mediation table far outweigh the cost – especially when the chances of a trial are slim and none.
And really, isn’t that the point? What are the chances this case will go to trial? Statistically, only a tiny minority of all the thousands of cases filed each year result in a trial. “What is there about this case that leads you to believe it will be an exception?” Today, litigation is the alternative dispute resolution process. It is a rare case indeed where trial is inevitable. 80 – 90% of all cases settle at the mediation table. Disclosing the information at mediation, therefore, is more likely to save time, money, emotional distress, effort and disruption. The moment could not be more propitious. Everyone is at the table looking for resolution. Everybody hopes to better understand and manage his or her risk. Good litigators are flexible. When they learn something new, they are prepared to move. “If counsel is not aware of this evidence, it has not been factored into their bottom line. Will it have an impact on valuation once the information is out? Isn’t it to your advantage to use the evidence as leverage now while everyone is here in settlement mode?”
In the falsified employment application example, the parties started out in very different ballparks. Their ballparks may have been in two different cities! And what if plaintiff actually has an explanation? Might that not change the employers risk assessment at least slightly? Perhaps both sides will find themselves in the same ballpark once plaintiff’s counsel learns her client was less than honest when applying for the position. When both parties are in the same ballpark, trial is not inevitable, settlement is.