Question 1

Engagement Letter and Overview

Accepted Answer

Ordinarily, a new mediation arrives in my office because of a telephone contact, email or letter from one of the lawyers in a case who has secured the agreement of the others to have me serve as mediator. My procedure is to ask the referring lawyer to forward a caption of the case, assuming it is in litigation, and a full roster of all of the parties and their counsel. Ordinarily I will ask for the identities of any insurance carriers as well. Once conflicts have been cleared or identified, I send a relatively simple engagement letter to counsel acknowledging the request to serve as mediator, and advising them that I am able to serve. If there are any actual or perceived conflicts, I will explain them in the engagement letter to see whether any issues remain.

The engagement letter will advise of my fee arrangement to which I will ask all of the attorneys to agree. My usual practice is to charge a total hourly fee to be divided as the parties agree. Usually that division is pro rata among the number of lawyers involved. The hourly rate covers all work performed, whether in preparation for the mediation, the mediation itself or any necessary follow up. I always advise counsel that if the case does not settle at the mediation session, we can and will continue our efforts, until the case settles or until it is clear that we cannot reach an agreement. I do not charge by the number of parties involved as some ADR providers do.

Generally, especially if I know the lawyers involved and have worked with them before, I do not require retainers or deposits so long as the parties agree that my bills, when submitted, will be payable upon receipt. Recently, I have begun to advise counsel that if they are representing carriers or corporations who prefer to defer bills 60 or 90 days before payment, this practice is unacceptable. It has caused many ADR providers to demand retainers “up front” but at the time of this writing, I am generally resistant to that approach.
Procedurally, my practice is to set up a conference call as soon as the parties return signed copies of my engagement letter. I use the conference call to learn something about the case, and to set the ground rules for the mediation. My primary concern is to learn who will be present at the mediation. It has become evident over the years that it is usually more difficult to settle cases when decision makers are not present in person, and when they are able to hide behind telephone lines. I am also careful during these conference calls to raise issues of outstanding liens or other interests of third parties to the litigation who will not be participating in the mediation. During the conference call we will schedule a date for the mediation if one has not been chosen before the call, and we will also set a date (usually a week to 10 days ahead of the mediation) by which mediation submissions will be provided.

Mediation submissions should consist of a concise memorandum in normal form which sets forth the factual circumstances of the case, any controlling legal issues, a full explanation for the damages sought or defended against, and any history of prior demands and offers of settlement. If there is no negotiating history, at least a demand by the plaintiff should be made. Exhibits such as expert reports, medical records and relevant discovery should be attached as exhibits, where necessary.

I always assure counsel that I will have read everything they send me before the date of the mediation. One of the most common complaints I get concerning the mediation process is that too often, counsel and their clients arrive and the mediator is looking at documents for the first time while everyone watches him or her read the file. That should not and will not happen.

Finally I ask for the agreement of counsel to communicate by telephone, email or (only if necessary) by fax. In the event that actual letters are required, transmission by email is faster, and easier to assure delivery.

Question 2

Initial Conference Call

Accepted Answer

The purpose of the initial conference call is to provide me with enough information about the case so that proper ground rules can be established for the conduct of the mediation. I usually ask each counsel to give me a brief description of his or her view of the case and an analysis of particular legal issues that need to be addressed. This call is a good opportunity to determine what counsel agrees upon and what areas are in dispute. Usually counsel will advise why they are mediating the case. Most often it is voluntary, but sometimes a judge has suggested or ordered the mediation. On other occasions the courts have scheduled a settlement conference before a judge or a judge pro tempore and the parties believe that private mediation will be more productive. Any of these circumstances is something I as a mediator want to learn.

I also want to be advised where the litigation is venued and how far along towards trial the case is. I generally inquire whether the case is ready for mediation or whether further discovery needs to be done. If a certain discovery is essential prior to mediation, we need to be certain it is finished by the date of the mediation, though often the reason to mediate in the first place is to avoid that discovery by settling the case. The last item of business for this conference call is to schedule a date for mediation if one has not already been chosen.

Finally, if decision makers are not going to be present in person, I need assurances that “remote participation” is acceptable to them.

Usually I ask for written submissions a week ahead of the mediation, but if the case has numerous parties or seems complicated, I prefer the submission 10 days or 2 weeks ahead of time. Generally my preference is that the mediation submissions are shared among all parties, with any party reserving the right to submit certain additional items on a confidential basis for my eyes only. If any lawyer in the case wants the entire submission kept confidential, I usually impose that restriction for all. In my experience, however, it often turns out that there is little reason to keep total confidentiality because most of the information has come out in discovery.

Question 3

Follow Up Conference Call

Accepted Answer

Following receipt of mediation submissions, I sometimes conclude that it would be beneficial to discuss issues or concerns raised in them with one or more of the attorneys involved. It could be that something in the written materials needs to be followed up with all counsel so that at the mediation we do not have uncertainty. It could also be that I have noticed something that is unclear which I would prefer to discuss only with one of the lawyers.

At some point along the process I usually get the consent of all counsel to follow things up on an individual basis, and to let them all know that I might be calling all of them, or any of them separately to clarify things. Given that this is a mediation, and I will not be deciding the ultimate outcome, I rarely encounter resistance to this approach. Usually counsel take the position that anything that makes the mediation easier or likely to consume less time is advisable to handle in advance.

If my concerns generated by the written materials can wait until the mediation itself, there is no need for an additional conference call, and I often meet with the attorneys prior to commencement of the mediation in order to address those points. In either instance, this call or brief conference is a good way for me to let counsel know that I have read what they submitted.

Question 4

What To Submit to the Mediator

Accepted Answer

My assumption is that if the lawyers submit material to me, they expect me to read it. In fact, I will have, by the time I receive materials, committed to counsel that I would read everything that is sent. It should go without saying, however, that counsel should not take the lazy way out by just attaching numerous depositions and lengthy medical records without bothering to cull out what is necessary for me to read. Ordinarily, not more than a few pages of deposition testimony is critical, and certainly everyone would agree that 50 pages of laboratory reports from a hospital record are not likely to produce meaningful information to a mediator. It is better practice to pull the relevant pages from records and depositions and attach them as exhibits to a memorandum that explains their significance. Complete copies of the records can be made available at the mediation if other parties want to amplify or parse what has been submitted.

Just as an example, in the typical personal injury case, physicians on both sides will have reviewed extensive medical records and the reports of these experts will summarize past and present treatment and opine on what will be required in the future. Only in the rare case will it be necessary to provide the complete volume of records when they have already been summarized by the experts. Assuming memoranda are shared, the experts will pretty much define the injuries and provide counter arguments to each other.

I do not object to reviewing volumes of records where necessary, but counsel should try to synthesize exhibits to what is necessary for an understanding of the issues to be compromised.

Finally, if negotiations have taken place, I would like to be advised, and if not, plaintiff should at least make a demand so that the defendant(s) have some idea what expectations are. In that regard, making settlement demands prior to mediation that are clearly outside the range of realistic numbers can have a chilling effect on the mediation before it even starts. Some insurance carriers pay little attention to demand numbers, but some become offended to the point where they shut down the process. I might also add that making an outrageous demand can produce client problems for plaintiff’s attorneys. I often hear plaintiffs ask their lawyers “Why are we coming down so much?”

Question 5

The Mediation Session

Accepted Answer

One of the most essential tasks for a mediator is to tailor the mediation session to the specific needs of the case. Mediation is not a pair of socks where one size fits all—or even most. By the time the parties arrive for the mediation, I have learned enough about the dispute to design the “game plan” of choice for conducting the session. I will discuss that plan with counsel before we begin, and modify it or not depending on those discussions. What follows is a general description of my procedures and the variables involved in the choices.

Assuming that the mediation session will be held in my office, I always offer in advance the opportunity for counsel to arrive early for the purpose of meeting either with their clients, or each other if there is a need for that. We have ample space to afford privacy for those purposes, and if nothing else, participants can become familiar with available electronic technology for displays and WiFi connections.

Usually, I meet with the lawyers first, and give them an opportunity to tell me anything in the way of nuance that might not be in their memoranda. This session gives me a chance to ask questions I might have about the materials they have already submitted, or to clear up things about which there might be some confusion.

I try to have a frank discussion with the lawyers about whether or not there is a need for prepared opening statements. There are pros and cons to these openings, because lawyers rarely heed my admonition to leave advocacy at the door to the mediation room. Too much advocacy can harden positions at the time when we are trying to soften them. On the other hand, sometimes clients need to hear their attorney “put on a show” and they will feel they are not getting the representation they deserve if they do not get it.

In the latter regard, it is not unusual to learn that one of the prime reasons for holding the mediation in the first place is that counsel needs help in managing the expectations of a difficult client.

On the other hand, assuming that counsel are able to state their positions in a manner which does not inflame the situation, the opening statements can help frame the areas of agreement and disagreement, and as importantly, can give participants who have not met each other an opportunity to see each other and evaluate what they have to say. For example, an insurance adjuster who is present for the mediation and is expected to write a large check before the day is over can get a look at the plaintiff, and have a conversation that is more valuable than a cold reading of a deposition transcript. Usually I leave the decision of whether or not to conduct opening statements to the lawyers. In the event openings are conducted, I always ask for the participation of the parties themselves, and give everyone in the room a chance to add to what the lawyers have stated.

Whether or not there are to be opening statements, I usually give an introductory statement of my own. I want the parties to know who I am and what my experience is. I define the goal of the mediation to be a compromise settlement of the litigation, and I explain that my role is to facilitate that settlement, not to impose it on anyone. In that regard, I often tell the parties that what I think should be done does not really matter unless they want it to. I am not a judge and I do not get to decide who wins or loses, or how much a case is worth.
Most importantly, most of the mediations I conduct are not mere settlement conferences where lawyers need an additional pair of eyes. I encourage the parties to speak, whether in joint sessions or privately, and I find that the ability to participate to the same degree as counsel invests the parties and keeps them flexible. I also remind the participants that the process is privileged and confidential by statute, and by agreement, and I encourage them to put everything out on the table without fear of their comments coming back to bite them later.

Further, I explain that we will be spending most of the day in separate rooms, and that I will be going back and forth with new demands, new offers, and the like until we arrive at a settlement or conclude that we cannot get the matter settled. Finally, I make it clear during the joint session that I have read all of the materials that have been submitted, and usually by pointing to the pile of memoranda and records, I can convince the parties that I am familiar with the facts and legal analysis of their case.

By the time we adjourn the initial joint session, it should already be apparent whether, if there are multiple defendants, they are aligned with each other or antagonistic. If the latter, we afford separate rooms.

The obvious question once the parties are separated, is where to start. If prior to the mediation no offers have been made to the plaintiff, I would usually start with a discussion with the defendant. If there has been a history of negotiation prior to the mediation, the parties will make it known, and it will not be difficult to determine in whose court the ball is. The initial objective is always to try as quickly as possible to determine the real range of settlement positions and to narrow the dispute as quickly as possible. How to get that done often depends on the personalities of the lawyers involved, their styles, and their familiarity with opposing counsel and with me as a mediator. I find that lawyers who have experience mediating with me will often tell me what will and will not be possible quite early in the game, and will tell me what they can and cannot do, and why. Obviously, some lawyers prefer to keep things very “close to the vest” for a longer period of time, and for reasons of their own take initial positions that I can clearly tell will not persist throughout the day.

The commitment I need to make clear to counsel is that I will only transmit what I know to the other side if I am authorized to reveal it. If counsel are sure that I will honor this commitment, they will reveal more and do so more quickly and if nothing else, I can use the information to shape positions on the other side, assuming they are reasonable.
My job as the mediator is to go back and forth between the parties with increased offers and lowered demands. Sometimes gaps between the parties become narrowed quickly. At other times, things proceed more slowly. If a defendant believes that plaintiff’s opening demand is “outrageous” as I often hear, the opening offer is likely to be equally unreasonable. That is why I caution the parties to give the process the time it deserves so that once flexibility is exhibited, it will be matched by the other party.

While parties always ask my opinion about offers, and what to do next about a new demand, I do try to stay away from an ultimate recommendation on the settlement value. I try to have the parties reach an agreement rather than tell them what I think is the reasonable value of a case. I do my best to point out the strengths and weaknesses of a plaintiff’s case, or the defense to it, including these days, a frank discussion of the enormous cost of taking most cases to trial.

While I do not usually apply pressure to a party to accept an offer or make a higher offer, I will do so in the rare case where I believe that party is making a serious mistake. It is not that uncommon for a lawyer at the mediation to need help from the mediator in lowering client expectations when they are set too high.

The most important comment I can add to this discussion is that the process takes some time to develop, and at least at the beginning, I try to spend as much time as possible communicating with the parties themselves, sometimes even more so than with the lawyers. I believe I need to spend the time to develop credibility with the parties so that towards the end of the process, my suggestions will carry greater weight.

Question 6

Case Settled

Accepted Answer

Assuming the case settles at the mediation session, the parties need to agree on all of the terms, monetary and non-monetary. Release terms, the need for confidentiality, timing of payment, and the need for Court Approval are just a few of the more common items that need to be resolved. In the usual personal injury case, these are not generally the cause of much controversy, but occasionally they get in the way. Before the parties leave the mediation there should be a discussion of all relevant terms for the ending of the matter both inter se and with the Court.

In the simple case, it is my practice to author a wrap up letter containing the details of the agreement, as well as a description of who has agreed to do what in order to perfect the settlement. This letter serves as a term sheet for the agreement itself.

In more complicated cases, especially in commercial matters where much of the performance by parties is executory, and will take place over time, or where people are required to take some sort of action, a more formal end to the mediation session is in order. A term sheet or even a draft of a settlement agreement can be dictated and transcribed, subject to more formal agreements to follow. Even pages of notes can be Initialed to form a term sheet. One of the most bitter and protracted cases I have mediated arose from a prior mediation between the parties where the settlement was not enforced because of the inability to prove there was a meeting of the minds. Counsel should give considerable thought to what documentation of settlement needs to be in place before leaving the mediation. I am not one who believes that lengthy documentation is required in all cases, but counsel should err on the side of caution.

Question 7

Follow Up

Accepted Answer

Once in a while, despite the best efforts of all involved, a mediated case is not resolved at the end of the time allotted. The question then becomes, what happens next? The answer requires analysis of whether my continued involvement will be productive and that analysis, in turn, will be dependent upon the attitude of the parties and their counsel, and of the degree of progress made during the mediation.

Because a case does not settle at the mediation session, does not mean it will not settle eventually.

One scenario is that the parties might need more time to develop information that surfaces unexpectedly at the mediation. If that should occur, the mediation is often considered adjourned until a later time when it can be revisited either with another mediation session or by telephone and email. If the plan is to continue the mediation, an agreement should be made as to what steps are necessary for the next session, and how much time should be allotted for completion of that effort.

Sometimes, the parties get close to settlement and they need time to consider their choices. A plaintiff might ask for some time to “sleep on it” or a defendant might need to go to others in order to get more authority to settle. In that instance, I would ask for an agreement on the time needed for decision, and would offer to remain available to answer any questions or offer any further advice.

Sometimes, progress is made during the mediation but we run out of time and the work remains unfinished. Usually in that circumstance the parties are agreeable to establishing a second date on which to meet, or agree that the balance of the negotiating can be done by telephone and email.

If it is clear that all are in agreement that the case cannot settle during or after the mediation, I will write a wrap up letter reflecting the positions of the parties at the end of the day, and then close and bill my file. Ironically, even a significant percentage of these cases settle eventually, and sometimes with a continuation of the mediation that was not planned. I always offer counsel the ability to ask for my assistance “down the road” if something changes, and tell them that assuming we will not need another meeting, I will offer my assistance without further charge to them.

As a mediator, I believe firmly that follow up is critical if the parties do not settle during a mediation, and I try to be persistent about it.

Question 8

Extra Points

Accepted Answer

The enumerated points below are a series of random thoughts on the mediation process, and are some common tips I regularly pass on to lawyers involved in mediation of disputes:

Always try to have decision makers physically present at the mediation table. Sometimes, of course, this is not possible. Often, insurance adjusters responsible for the file are in different parts of the country, and sometimes the expense of getting them to a mediation is not justified because of the case value. Sometimes the adjuster does not want to make the trip whether or not the case justifies his or her presence. Similarly, a plaintiff might have moved to a geographically inconvenient place, or for example, in a death case, an estate might be administered by a relative far away. But it is remarkable how decision makers can hide so completely behind something as thin as a telephone wire.

On the other hand, where counsel has a good working relationship with the client and has done everything necessary to line up proper authority, mediations can be successful where clients participate by telephone, or even video. The use of Facetime, Skype and similar communications software has made participation from outside the mediation room more productive. On the other hand, nothing is as effective as having the parties present.
Make sure, if there are significant liens, to have lienholder input available well before the mediation occurs. This is especially important in an injury case where medical treatment is ongoing, and/or loss of income is continuing. It is not a good idea to be working on information that is six months old, and counsel do not want to be in a position of having to tell clients that their net recovery is less than what was expected at the time settlement was agreed to. In the event that liens are a significant factor in the settlement, counsel should have someone available at the lienholder to contact by telephone during the mediation process. It is often difficult to know the lienholder’s position in advance, because much of it will be predicated upon the amount of the settlement. In a bad liability case for a plaintiff, the lienholder will be more flexible than otherwise, because pushing the case to trial might result in a defense verdict, and no recovery. In the workmen’s compensation arena, things are a bit different. Pennsylvania law favors workmen’s compensation carriers and often they are unwilling to compromise in the same manner as other lienholders. In complex and high dollar cases, workmen’s compensation carriers often elect to have an attorney present for the mediation so that the lien can be taken into account with certainty.
Under any circumstances, all lienholders should be advised of an agreement to mediate and representatives should be invited to weigh in with counsel on the effect of the lien.
Recognize that it is not the mediator’s job to give legal advice. That said, counsel should expect to be challenged on legal points on matters where positions have already been taken. If I am given a legal memorandum to read in preparation for the mediation, and if I think a party has not properly analyzed an issue, I will have the discussion and let them know my thoughts. If a case will turn on a legal point, I will let both parties know which, in my opinion, is the better analysis.
Certainly the parties will be looking for my advice with regard to venue tendencies, case values, the manner in which cases will proceed to trial, and the likelihood of dispositive motions being granted. I regularly engage with counsel on these points, though usually the lawyers are seeking to confirm their own views on these issues. My advice, though, is not to rest on stereotypes. It is true that many venues are perceived as “conservative” or “liberal” in terms of verdicts, but changing demographics and even turnover of judges are creating new norms. I believe it is safe to say that in this regard, times are changing.
Usually, a settlement achieved at mediation will not be a home run for anybody. Mediation does not afford anyone everything he or she wants, either from a client’s or lawyer’s perspective. My rule is to seek and accept something that is tolerable i.e. what you can live with.
One of the primary advantages of the mediator as a neutral party is that client expectations can be adjusted by an outsider. As a lawyer, if one of your objectives in mediating the case is to guide your client to a more reasonable position, you should communicate that fact to the mediator. It is not uncommon for the lawyers in a case to agree on a potential result more so than will their clients. This is one of those situations where the credibility the mediator builds with the parties themselves is critical.
Lawyers should always be aware of the emotional toll that litigation takes on the clients. The stress is not merely apparent during a proceeding such as a deposition, a trial, or even a session between lawyer and client to answer interrogatories or to review documents. The fact is that open litigation is always a cloud over the lives of the litigants, and some are able to deal with it much better than others. An important reason to resolve a case is to remove that cloud, and counsel should always consider what kind of taste the client has for a fight. As a mediator, I can usually tell quickly whether someone does not want to be involved in a jury trial. In some cases, the fact of resolution is more important to the client than the manner in which it is resolved.
Make certain that the client is aware of the financial costs of litigation from the point of the mediation forward through trial and potential appeal. Often I can sit down with an offer to a plaintiff in a contingent fee case and plot for them how much more than the settlement offer they would need to recover at trial just to break even. As often, I can show a plaintiff that their share of the “last little bit” they are seeking is actually smaller than they had realized. That kind of analysis makes it easier to weigh the risk of a jury trial which might bring a defense verdict, or even a lesser verdict than the amount offered at mediation.
Principle is expensive these days. I do not suggest that anybody put right vs. wrong in the trash can. But the art of compromise is based upon practicality, and the bottom line, or net result is what is important to clients.
Understand the leverage. One of my favorite lessons learned long ago is “A Smith and Wesson beats 4 aces.” It is often the case that both sides of a dispute have strong positions. Eventually, one will be stronger. The most difficult assessment any lawyer has to make is whether the overall leverage points in a case are on his side or his opponent’s. Sometimes these factors are based upon the factual and legal issues in the case. Sometimes they are more practical. For example, in a personal injury case, under-valuing an injury by an insurance company might result in a large verdict against it but the effect on that company will likely not be noticed by anybody. An over-evaluation of an injury by a plaintiff, however, leads to significant risks of going to trial. In short, the carrier is in the business of risk and most plaintiffs are not. So the question becomes which party has the good hand of cards and which party has the gun.

Alternative Dispute Resolution

What is ADR?

ADR Fee Schedule

Experience in ADR

Liability & injury

Professional & business

Insurance & coverage

Construction & real estate

Employment

Other matters

The Mediation Process

Engagement Letter and Overview

Initial Conference Call

Follow Up Conference Call

What To Submit to the Mediator

The Mediation Session

Case Settled

Follow Up

Extra Points

Andrew L. Braunfeld

Attorney, mediator, and arbitrator

Avoiding The Black Hole: The Case For Alternative Dispute Resolution In Place Of Civil Litigation

How to choose a mediator