• mediation speeds up resolution
    saves money, and satisfies clients.


business litigation mediation

Business to business mediation requires, first and foremost, good business sense. There may be a host of different interests at stake on either side of the case. The interests are invariably assymetrical, not mirror images of each other. A commercial mediator needs first and foremost to discern what the interests are and to assess how important each is to the party. This requires someone who is genuinely interested in understanding each client’s business, how it works and the business philosophy of the principals at the table. The mediator should be able to understand as well the corporate culture of each party. I found in legal practice that it was impossible to be effective in representing a client in a business case without understanding the client’s business and industry. This exposed me to a number of different industries and business models.

As with all civil case mediations, knowledge of the applicable law is an important element of what the mediator should bring to the table. It pays to take a close look at the legal contentions of the parties and to drill down on the authorities they cite, which can reveal where there are vulnerabilities to summary judgment or limitations on recoverable damages, among other things.

But there is much more to helping parties in commercial litigation to reach an agreement. Before the mediation, the mediator should have the written positions of the parties on the merits of the case and those positions, ideally, will be exchanged between counsel of record so that everyone knows what they are up against. It is surprising how often, when this is not done, one side does not really “get” the other side’s view of the case until the mediation session is well underway. This deprives the attorney on that side of the time that may be needed to moderate the client’s position. But in particular situations, people may have good reasons not to exchange statements, and that is their choice.

In addition to the information on the case itself, the mediator should seek, on a confidential basis, side information about the dispute that can have a significant impact on how the process should go. This includes things like the relationship of each lawyer to her or his client, the current status of the case, the assigned judge and what each side’s experience of the judge has been, the relationship between the opposing attorneys, the negotiation history of the case, personality issues that each attorney discerns, and the history of the two companies and principals on each side have with one another. It’s always useful to find out from each attorney what the settlement obstacles that have become apparent are. All of those things should inform the mediator’s design suggestions and management of the process.

The opening session airs the viewpoints of each side. While some attorneys believe this to be an unimportant and potentially counterproductive part of the process, so long as emotions do not get out of hand, it serves to provide a good perspective for the clients.

The real work toward settlement is usually done in private “caucus” with each side, with the mediator moving from one room to the other, carrying offers and counter-offers back and forth. There is generally a discussion of additional information favorable to one side or the other as well as analysis of both the merits of the case and of the negotiating options.

The parties may employ any number of negotiating tactics and it is not the mediator’s job to sit in judgment of the approach either takes. Mediation can encompass anything from hard-knuckle bargaining to collaborative problem-solving, and the choice is up to the parties. Unethical behavior, however, is something a mediator does need to address directly. Misrepresentations about specific facts are not acceptable and must be called out or even reported. On the other hand, argument of extreme positions or dissembling about negotiating posture are regarded by the Rules of Professional Conduct as being perfectly acceptable negotiating behavior. As mediator, I will step in where there is unethical conduct or where I am concerned that a negotiating approach may prevent an agreement that would be possible otherwise.

The mediation may begin with parties at extreme positions — which is not the best way to start off. This happens when the parties are skeptical of coming to agreement as they believe that they do not share a range of reasonableness about the settlement. It’s the mediator’s job to step in and help people get the negotiating started. There are a number of tools available to help in this process, including the use of decision trees, and my “kabuki” approach to bracketing, in which the parties, not the mediator, negotiate to define an acceptable range within which they will bargain. Separate discussions with selected groups of people, usually attorneys but sometimes clients or a resumed joint session, can be helpful as well.

During the bargaining phase of a competitive negotiation, the mediator’s main function is to keep the process moving productively for as long as it can move people towards an agreement. It’s common that the negotiation bogs down at some point and people become discouraged. Usually from experience, sometimes based on specific information that has been imparted, I may have a conviction that the case is one that will settle. If so, I will continue to encourage the parties to continue negotiations. If negotiations cease to be productive, there are a number of methods of moving the mediation to settlement.

Occasionally, this is the point in the process where a huge problem that has not been on the table before emerges. Such problems are much easier to deal with if they are disclosed confidentially by counsel before the mediation starts, or at least in the early caucuses of the mediation. But when they do appear late in the process, the mediator must remain calm and focused on overcoming the obstacle. This is what the parties, who will be in a state of high emotion when this occurs, are paying the mediator to do. Late-blooming problems are likely to produce much in the way of hard feelings, and may delay the process to another day, but rarely do they need to prevent an agreement from being reached.

Regardless of the hour, once agreement is reached, the parties must record their agreement in as much detail as possible while they are together. The document produced at the close of the mediation should be as definitive as the circumstances allow because otherwise, there is a significant risk of additional issues emerging as serious enough to warrant another mediation session or preventing the deal from being finalized.

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