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Article from THE RECORDER

Mark F Katz

The Recorder


Setting the Stage for a Successful Mediation

by Mark Katz

As trials and arbitration proceedings become increasingly expensive, it becomes more and more important for lawyers to be able to resolve most legal disputes through mediation. This article outlines various practical steps lawyers can take, before a mediation session, to set the stage for a successful mediation. Lawyers who have mediated cases filed with the U.S. District Court for the Northern District of California are familiar with the court’s required initial call between the mediator and counsel. This type of call, which is equally useful for California state court cases, can be used to help set the stage in several ways, as explained below.


As most experienced litigators know, in order to “bless” a proposed settlement, opposing counsel must review the critical documents necessary to evaluate any proposed settlement. By the time cases get to a mediator, the key documents have generally been exchanged. However, if key documents are still missing, you should mention this to the mediator during the initial call. The mediator will generally be able to help you obtain the missing documents.


Another important issue which can be addressed during the initial call is whether, in line with the favored practice in the Northern District, clients should make a brief opening statement. Some lawyers — especially lawyers representing financial institutions — do not like this approach and prefer to make the statements themselves. But based on my experience as a mediator, having clients provide opening statements generally creates positive momentum, as long as they have been properly advised by their counsel beforehand. Your client will, in almost all cases, be listened to and heard by the opposing party (perhaps for the first time since the beginning of the litigation). This experience generally creates goodwill between the parties and makes the presenter willing to listen to and genuinely hear the other party’s narrative, as well, possibly creating further momentum toward settlement.


While most attorneys follow a traditional mediation process which involves only parties and their counsel, keep in mind that the format can be modified by the parties. In light of this, in the planning call you may want to explore including third parties. If there are some key third-party witnesses, whose depositions have not been taken, you may want to have these witnesses participate in the mediation session, whether in person, by conference call or videoconference. In one mediation I conducted, it became clear that it would be very hard to settle the case prior to the defense attorney’s getting a better understanding of certain facts known solely by a third party. So we arranged a conference call with that individual, who was based in Europe. During this call, certain key facts were explained to defense counsel and then confirmed by documents faxed immediately after the call. While the lawyer was somewhat disappointed by the information received, the call resolved this issue and the case settled on terms quite acceptable to both parties. In another mediation, each party believed that the testimony of an undeposed former colleague would resolve an important factual issue. Each party had, in fact, spoken with the colleague and developed the impression that the testimony would strongly support its case. These differing perceptions had, not surprisingly, led to an impasse in the settlement discussions. So, the parties decided to resolve this issue by having this witness participate by phone. The colleague’s “testimony” differed quite a bit from what each of the parties had previously “heard,” but the call resolved the open factual issue and cleared the path to a mediated settlement.


Even if there has been a court-set deadline for the mediation, you should not simply “go through the motions” if the case will require further discovery before settlement becomes feasible. In these circumstances, courts (and in particular in the Northern District) will generally extend the mediation deadline upon the filing of a stipulation setting a reasonable mediation date in the near future.


Keep your mediation statement brief and focus on your strongest arguments. Include the key documents and the applicable court decisions in the statement, so the mediator can advocate your position in a credible manner. Having your solid brief enables the mediator to start the settlement discussions in the most constructive way — with an examination of the legal merits of the case. This methodical type of approach, pursued by the mediator with each party in separate caucuses, should help everyone come to see (hopefully with a somewhat similar vision) the general range of damages that might be recoverable. Only then should the mediator solicit settlement offers to be exchanged between the parties. This should help keep the competing offers within a reasonable range and thereby increase the likelihood of settlement.


Parties sometimes become overattached to settlement numbers which have little connection with the case. In fact, as indicated above, it is my practice as a mediator to work with both sides to generate a range of probable outcomes only after we have worked together to analyze the merits and uncertainties of the case. This merit-based evaluation of the case and attention to the probable range of damages tends to anchor the negotiations in reality. It tends to pre-empt one side’s taking an extreme position in the form of an outlandish demand, which triggers an equally unreasonable counteroffer, which then generates additional distrust, leading the parties down the slippery road to impasse.


Mediators customarily do not provide feedback to attorneys on their mediation statements before the mediation session. But you may not want to stick with the crowd and follow this custom. In my experience, mediator feedback provided several days before the mediation session can help each party hone its case in a very constructive way. So, during the initial planning call, you may want to arrange for follow-up calls with the mediator prior to the mediation session. During these calls, the mediator can advise you which of your arguments he finds most persuasive and which could use some honing. If the mediator advises you that you have a good argument, but that you have not provided strong legal authority or facts to make it truly compelling, you can consider supplementing your presentation with more support, either at the session or by email beforehand. Normally, the mediator would wait to “hammer” on each of the parties and their counsel in the separate caucuses. This earlier feedback enables each side to dig deeper and develop stronger arguments of the type that might be fully developed by the time the case went to trial. If the parties have made their strongest arguments, then there is more reason for them to see the settlement offer on the table as being as good an offer as they are likely to receive in the case, and then decide whether to take it or to proceed to trial. There is one caveat here: If you decide to ask the mediator to provide feedback in this way, it may be useful to confirm with the mediator that he or she will not provide either party with arguments or cases that it has “missed.” I mention this because, in my view at least, to remain neutral a mediator should limit himself to responding to the theories that counsel has already decided to present at the mediation.


If you have been unable to persuade your client to acknowledge certain weaknesses in your case and you believe that it is precisely your client’s unreasonableness on these points that is impeding the settlement, it may be useful to enlist the mediator’s help on this issue. Many top-notch lawyers find that calling in the mediator in this situation may help “rein in” a client and facilitate a settlement which will, in fact, be quite beneficial to the client (if he can avoid being his own worst enemy.)


Especially if your client has not participated in mediations before, there are several useful steps you can take to prepare your client for the session:
a) Remember to explain the mediation process, including that the mediator is neutral and that the mediator has no power to decide the case, and your and the client’s respective roles during the mediation. A client is always more comfortable if he or she knows what to expect, and in my experience, all of us tend to be able to think more clearly and be more decisive in settling matters when we are informed and comfortable. Also, if you have confidence in your mediator, share this with the client, as it can give very positive momentum to the process.
b) Between the time a case is filed and the time it goes to mediation, a lot of sand has generally shifted. The weeks before the mediation represent an ideal time to provide your client an overview of what has occurred and what lies ahead, including the risks, costs and benefits of proceeding to trial. Part of this discussion will probably touch on what would be a good settlement, based on all you know before the mediation session. I have found that it is useful to discuss a potential settlement range, but I urge you to discourage your client from “locking into” any specific number. What is crucial to a successful mediation is continuing flexibility and the willingness of all clients and counsel to listen carefully to all of the facts and other information being presented at the session, so that you can jointly evaluate, on a rolling basis throughout the session, what type of settlement is possible and whether this settlement will be in your client’s best interests.

Not all mediated cases should settle, because in some cases, one side is preventing settlement by simply being unreasonable. But in about 85 percent to 90 percent of cases, it is possible to achieve a settlement favorable to your client. In order to maximize your chances to settle these cases, it is important to “set the stage” through careful planning well before the mediation session. It takes time for us “human-types” to change our views, even when it is in our best interests to do so.


Reprinted with permission from the April 1, 2011 edition of The Recorder. © Copyright 2011. ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, call 415.490.1054 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .