Mediation is a standard part of all litigation today. Whether the court orders it or the parties agree to it, almost all cases will come before a mediator at some point.
As a risk manager, mediation is one of the few ways in which you may be able to exercise meaningful control over a litigated claim and directly “manage” your risk. Preparing for the mediation will enhance your ability to achieve an outcome you and your company will deem successful or at least acceptable. The following eight tips can help improve your chance of success at mediation:
1. Prepare and discuss your objectives with your lawyer. The first task, while obvious, is sometimes overlooked: Prepare for the mediation. That begins with a thorough discussion with your lawyer about your objectives. It is critical to discuss the weaknesses in your position and whether you want a jury to decide your fate. Also, analyze whether your strengths are as strong as you think. Make sure you explore all of these topics before you arrive for the mediation to avoid being blindsided with evidence or theories that are new to you. If you prepare well, the odds that you can resolve the case on terms you can live with will improve.
2. Introduce the mediator to your position with a detailed letter. Next, make sure your lawyer prepares a detailed letter to the mediator, sometimes called a “position statement” or a “mediation brief.” This will orient the mediator to the case, the issues in controversy, the evidence and your position. It should illustrate that your company has a thorough knowledge of the case and applicable law and that you have a legitimate position. Providing a copy of your position statement to your opponent can often be helpful as well. If the statement is well written and your position is well supported, sharing the position statement with your opponent in advance may help soften them up before the mediation. If nothing else, it should prevent them from arriving at the mediator’s door with a false impression of how far they can push you during negotiations.
3. Explain any weaknesses to the mediator. You may want to acknowledge some of the weaknesses in your position statement to the mediator. If you do, explain how you intend to compensate for those weaknesses or why they are not fatal to your position. If they are fatal and you have little or no defense, alert the mediator that your goal is to simply strike the best bargain you can and put the case to rest. Of course, if you are going to discuss these matters with the mediator, you should not put them in a position statement you share with your opponent. Your lawyer can either provide the mediator with a second, confidential position statement, or simply not share your position statement with opposing counsel at all.
4. Be patient. Once you arrive at the mediation, be patient—it will likely be a tedious day. Keep in mind that the starting offer or demand does not dictate where negotiations will end up. Mediations have their own patterns. Typically, you arrive thinking you can get the case settled right away. You are usually discouraged right off the bat by your opponent’s position. After an hour or so, there may be a glimmer of hope, and then you will feel you are getting nowhere. Later, you may find some encouragement, and those hopes will again be dashed. If you are lucky, the parties will finally get serious right before someone has to leave to catch a plane, and you will reach an agreement where neither side is happy, but both sides are willing to sign off. The mediator will tell you this is the sign of a fair resolution.
5. Accept the mediator’s help. Let the mediator know what you are trying to achieve, then let them help you. The mediator can also help if you are having trouble with your client (or your lawyer). Perhaps you can suggest to the mediator that they might speak privately with you and then act as the “good cop” or “bad cop” as the situation dictates.
6. Focus on your endgame. While going through the mediation process, keep your endgame in mind and do not be discouraged by your opponent’s position. Make your settlement offers or demands based on your goals, not your opponent’s demands. While it may be tempting to make a tit-for-tat offer, it is generally better to have the mediator relay to your opponent that your offers are based on your realistic evaluation of the case and you are avoiding reactionary offers based on the other side’s unreasonable position.
7. Ensure a decision-maker is present. All parties should have a decision-maker with actual settlement authority present at the mediation. Failure to have the decision-maker present will, at best, slow down the process and, at worst, prevent resolution. If you have to report up the chain for additional authority, you should make sure your supervisor is prepared for the mediation as well, as their pre-mediation preparation will help you succeed. If you are the decision-maker, you should maintain a position consistent with your side’s liability and damages exposure.
8. Be willing to suspend mediation and come back another day. Your position must be consistent with the reasonableness of putting the case in the hands of a jury to decide. Jury trials are risky affairs. Mediation can be a beneficial process and can resolve most civil litigation. You will increase your chance of a successful mediation by preparing ahead of time and staying levelheaded throughout the process. Keep your goals in mind and listen to the mediator if they think your goals need readjusting. Sometimes you can make that adjustment during the mediation, or you may need to suspend the mediation and regroup. You can always come back and mediate another day, after you have a chance to digest new information or perspectives revealed during the process.