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Sep
19

Why Mediators Should Never Say "Never"

"Never give in, never give in, never, never, never, never….” Winston Churchill. Quoted in Churchill and Orwell, the Fight for Freedom by Thomas E. Ricks, Penguin Press 2017

If the parties to a dispute are not ready to settle, no technique, no approach, no amount of skill or artistry employed by a mediator will bring them together. Conversely, if the parties desire a resolution it will happen notwithstanding misjudgments, blunders or missteps by the mediator. Knowing party intent in advance might just save time and money[1]. Regrettably, a party’s commitment to the settlement process in any given dispute is not always evident or even discernable[2].

What’s behind an unwillingness to settle? Parties may lack sufficient information on which to base a realistic assessment of risk and exposure. Mediation can, but does not always, provide the kind of information on which decision makers generally rely. Information supplied by the other side may not be trusted or be so wrapped in “spin” as to warrant rejection and disbelief. In such cases, the parties are unwilling to settle until they have had some amount of discovery or an opportunity to “test” a theory or claim.

On other occasions, a party is not ready to engage seriously until the other side has been forced to answer for its conduct – although mediation may help that party realize such is unlikely to happen. Similarly, a party may require some form of acknowledgment of wrong or unfairness.

In still other cases, the defense may insist on a dispositive motion decision before it is ready to put real money on the table. More often, parties wish to settle but are unready to bargain productively because they have dramatically different – and sometimes unrealistic – opinions about the value of the claim or potency of the defense.

Accordingly, readiness to settle is often a matter of timing. Have the parties had an opportunity to take the discovery they need? Are important motions pending or decided? Have expenses been mounting up to where settlement has become a more attractive option? Every mediator has seen cases where the parties retain their services immediately after a key witness has been deposed, or they are preparing for oral argument on a dispositive motion and decide the time has come to manage risk, or following decision on an important legal or evidentiary matter and a trial on the merits is looming on the horizon. This paper encourages mediators and litigators to consider returning to mediation because the dynamics of the dispute may have shifted and settlement has become possible.

Just because mediation didn’t result in resolution at the table doesn’t mean the dispute can’t or won’t be settled. No more than1.2% of cases are going to trial today. Failure to reach agreement on the scheduled mediation date may well mean simply that the timing wasn’t right. Mediators, therefore, should not give up just because settlement was beyond reach on a given day. Instead, mediators should be ready and available to return to the mediation process at any time, either at the request of the parties or on their own initiative. There is little or no harm in returning to the table – literally or figuratively – at later stages in the litigation process. Perhaps a few telephone calls will suffice. If a case doesn’t resolve, good practice suggests the mediator ask if the parties would be open to a call in 30, 60 or 90 days. No one ever refuses the offer. Litigators on their own should be ready to bring the mediator back into the negotiation any time they believe further negotiations might prove productive.

Never saying “never” is especially apt in this era where early mediation has become increasingly popular. More and more parties are opting to engage in mediation before filing suit. Judges increasingly encourage early mediation to resolve legal disputes on their docket. This is the norm in our business courts. Early mediation does work. Most business court cases do settle. Participant surveys suggest satisfaction with both process and outcome. Early settlement reduces transaction costs, eliminates business disruption and distraction, and salves the stresses and strains of an often-invasive litigation process. Even when the conflict does not resolve at an early stage the issues may be narrowed, the sails trimmed, a better understanding reached, and an appreciation of what it might take to achieve resolution gained.

Awareness of the benefits of early resolution, however, doesn’t necessarily translate into readiness on the date set for mediation. Perhaps passions need more time to cool – on one or both sides. Distrust and suspicion may require parties to take discovery from key witnesses before they are ready to accept opposing counsel’s representations of what those witnesses have to say. Sometimes parties are too deeply dug in and escalated to hear what the other side is saying. People may need time to digest or process what they learned. Mediation provides a golden opportunity for the exchange of information – but that information exchange will be useless unless and until the parties are ready to recognize the potential impact and risk to their desired litigation outcome. When cases do not resolve, mediators should not give up. Yogi Berra’s famous aphorism, “It ain’t over till it’s over,” is particularly instructive.

A case in point: Months ago, I mediated a difficult and highly escalated employment dispute where strong feelings existed on both sides. Neither party was prepared to concede that the other side’s very different version of what happened was plausible – or equally likely to persuade a jury. Both sides were represented by experienced, able counsel. The dispute did not settle. Summary disposition was thereafter argued and denied, as were defense motions in limine. Months later I called the lawyers to check in and test whether attitudes toward settlement had changed. The parties remained far apart. The defense was not deterred by denial of its motions; plaintiff and counsel felt vindicated.

Later still, with a trial date looming and trial preparation proceeding apace, one of the lawyers contacted me to ask if I would get back involved. I did. The discussions and exchanges from the earlier mediation process were still fairly fresh in everyone’s mind. We didn’t need to spend a lot of time covering that ground again. Our 11th hour negotiations focused instead on the risk that the views of a jury, choosing between two competing and plausible versions of events, could not be predicted with any degree of certainty. During trial preparation, plaintiff’s risk assessment grew more realistic; while defendant’s confidence in the “righteousness” of its decision to terminate was tempered by the looming prospect of explaining its rationale to a jury. To paraphrase Samuel Johnson, nothing concentrates the mind like the immediate prospect of being hanged!

I had given up on this case. I had already followed up once some 60 days after mediation to no avail. I had closed the file and sent it to storage. It was out of my mind. It was truly the 11th hour. Could the parties have picked up the phone and negotiated a similar agreement on their own? Perhaps, but neither side was ready to “blink” while closing in on their impending trial date. Bringing the mediator back was the right call. Churchill nailed it. Never, never, never give up.

[1] A “middle” category of dispute exists, of course: where the talent, techniques and approach of a good mediator reduce impediments, cause a realistic assessment of risk, help parties better appreciate potential financial and non-economic costs and guide the parties to understanding, resolution and closure.

[2] Party agreement to mediation is not always evidence of an intent to settle. A party may be seeking early discovery, a better understanding of what’s at stake or an opportunity to send a message.


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