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


when is the right time to mediate

The time to mediate is as early in the conflict as possible, but only when the conditions for a negotiated solution are present. Earlier in the litigation process, there are more substantial transaction costs of litigation that can be avoided by settlement and less likelihood of the seriously “bad blood” that litigation can fuel.  Of course, mediating before there is even a case can almost eliminate legal expense, so pre-suit is the ideal time to mediate if the conditions are right.  Business lawyers should explore this option in the first discussion with a litigation attorney, especially if the relationship between the parties has not broken down.

In litigated situations, whether mediation is timely depends on a number of variables. There are no good rules of thumb. People in conflict and especially those who are posturing for expected negotiation someday usually successfully conceal from their adversaries the extent to which they are willing to negotiate. This is why court intervention and orders to mediate result in the settlement of so many cases. The lawyers make the mistake of believing that their clients are as aggressive as they say they are, and that their opposing counsel are as resistant to settlement on terms other than unconditional surrender as they say they are.

are all the necessary players engaged?
  • If a party wants or needs something from a settlement that is outside the control of the parties, cooperation or participation from a third party may be a precondition to settlement.

 

  • If the dispute is not yet important enough to one participant to give full attention, mediation may have to await that party being interested enough to participate.

 

is there enough information to make intelligent decisions?
  • Some facts are not known by both sides because they have not happened yet (medical treatment, employment changes, product success, governmental regulatory decisions, etc.).

 

  • Complete information is not needed to make a settlement decision. Different lawyers and clients have different comfort levels with uncertainty.

 

  • There are tools within a mediated process for obtaining information. The parties or mediator can conduct mini-depositions of key witnesses before the opening session, and a list of documents to be produced on both sides can be developed within the mediation process. Completion of certain discovery may be made a precondition to mediation.

 

  • There may be a simple dispositive legal issue that significantly affects the outcome in litigation. On the other hand, so long as the outcome of that issue is uncertain (at least until the appeal stage), it can actually represent a reason to mediate to avoid risk of this “winner-take-all” situation.

 

  • One or both parties may be dismissive of the other side’s legal position because the adverse party has not conveyed enough information to cause the other side to take the risk of loss seriously.

 

are the parties motivated to negotiate?
  • Defendants sometimes believe that a potential plaintiff will not sue, so there may be no room to negotiate until the plaintiff and counsel have made the commitment to litigation.

 

  • Plaintiffs sometimes have recent emotional pain from the events that is so raw that they are emotionally unprepared to settle or have unreasonable expectations or demands.

 

  • Either party may expect that the other side will ultimately give in to its demands, although this almost never actually happens in litigation.

 

  • The imminence of the risk may make a difference. Nothing concentrates a party’s mind on settlement like an impending trial date or summary judgment decision.

 

  • The magnitude of the perceived risk may make a difference, in either direction. A risk that is too small can lead one side to expect no benefit in negotiation. A risk that is too great may scare a party away from negotiating because of expectations that the price will be unacceptable.

 

bottom line:

Whether a case is ready for mediation is not a function of what stage the case is in. It depends on whether the parties and their counsel are willing to keep an open mind about the dispute, are committed to bringing the dispute to an end and prepared to invest time and effort in so doing.

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