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Introduction.
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Most real estate/construction disputes can be resolved through
use of a dynamic ADR tool: Mediation. Mediation involves skillful
third party intervention by a "Mediator" to help parties resolve
disputes.
Through a series of efficient, and well timed joint and individual
caucus meetings with parties, the mediator facilitates settlement,
where the parties previously had little concept as to whether,
or how, settlement could take place. Successful intervention of
the Mediator, in most instances, is the result of hard work, preparation,
anticipation, and astute process management by counsel and Mediator.
Experience with Mediation process suggests that parties need
to avoid certain pitfalls which could frustrate the effectiveness
of Mediation:
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A. Lack of Preparation
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Mediations fail where the parties don't engage in collaborative
and intensive preparation. Parties need to timely provide the
Mediator with sufficient information and insights to facilitate
the process. This involves written briefing, but can likewise
take the form of preliminary in person presentations, whereby
the relevant factual and legal background is succinctly outlined,
as well as the underlying party interests and concerns.
This includes the "interpersonal background" of the dispute and
the evolving relationships of party representatives and their
counsel. "Bad blood" and egos frequently can derail otherwise
orderly movement toward settlement.
The parties need to manage the relevant facts of a dispute, as
well as the personalities of the participants, so the Mediation
can successfully move forward.
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B. Failure to Select an Appropriate Mediator
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The personality, style and persistence of the Mediator often
overrides the merits of a case. Parties must investigate the training,
expertise, reputation and track record of the Mediator candidates.
Parties should carefully evaluate the recommendations of the others
who have had experience with proposed Mediators.
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C. Failure to Properly Analyze Your Damages
and Transactional Costs
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Mediators focus heavily on damages, and to push the parties to
carefully explain and justify their claimed damage. Over inflated
or exaggerated damage allegations will be quickly spotlighted,
if not ridiculed, by Mediators. Parties must persuasively articulate
their damage claims.
Mediators will also focus on "opportunity costs" of proceeding
through trial. This is frequently done to encourage settlements.
Parties should carefully evaluate and verify their estimate of
transactional (trial) costs and the risks of trial. An earmark
of prepared parties is their ability to address Mediator concentration
on transactional costs.
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D. Parties Fail to Properly Assess the Weaknesses
and Strengths of the Case
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An effective Mediator will exploit the weaknesses of a case to
encourage settlement. The ability to properly assess your case
and compare such with the strengths and weaknesses of your opponent's
case will help you confront and channel Mediator's efforts.
Well prepared parties "arm" the Mediator with the tools necessary
to place the other's side case in perspective. The party who successfully
enables the Mediator to "beat up" the other side (in caucus) as
to its factual and logical inconsistencies, over inflated liability
positions, unproven legal theories and difficult to prove damages,
will have an advantage.
Mediation is a process where the better prepared party enables
the Mediator to move the less prepared party toward a more favorable
evaluation of the case for the prepared party.
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E. Failure to have Properly Authorized and
Prepared Representatives Present
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It is a mistake for counsel to not have properly prepared decisionmakers
present. The result can be a failure of the mediation, a waste
of time, money and effort, and a lost opportunity to achieve a
settlement. An effective Mediator will take steps to assure that
authorized decision makers are present for all parties.
With a properly prepared team, different perspectives as to the
terms of any proposed settlement can be utilized. Having different
personalities present may help balance the discussions, so that
there is more of an opportunity for party representatives to "connect"
and facilitate resolution. Well informed and well spoken experts
and staff members can be major contributors to the success of
a Mediation.
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F. Failure to Use Appropriate Presentation
Skills
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Mediations are not a forum for extended legal argumentation.
Rather, the process should facilitate "bottomline" decisionmakers
in reaching a pragmatic resolution. Details of the party positions
should be summarized with effective graphics that capture the
essence of the issues, and forcefully communicate with the other
side and the Mediator.
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G. Parties Fail to "Work" the Mediator
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Don't tell the Mediator your "bottomline" at the beginning. Parties
should always keep in mind what their bottomline will be. Bottomlines
have a tendency to change during the course of the Mediation.
A sound Mediator is adept at pushing the settlement limits set
by the parties. Parties must approach their work with the Mediator
with this understanding in mind.
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H. Mediator Fails to Make the Process Work
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Mediators need to efficiently impart an effective flow of information,
recent case law, insurance coverage analysis and additional key
facts or documents that help encourage thought by the parties
during the Mediation process. Mediators give parties "homework
assignments" during each caucus session in order to encourage
creative analysis and reflection as to settlement options and
rationale, leading toward resolution.
The dividing line between "positive" manipulation and outright
misrepresentation by the Mediator is sometime vague. The "art
form" of the Mediation process often revolves around the ability
of the Mediator to stretch the bounds of strict legal convention
while maintaining ethical balance in the process. "Good Mediators"
consistently navigate these challenging waters and settle cases.
Mediator must constantly keep the process moving and match the
underlying interests of the parties with the relevant factual
background, and the available resources. The Mediator always needs
to be actively engaged in "getting to know" the decision makers
of the parties so that the maximum opportunity for settlement
can be realized.
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I. Parties And Mediator Fail to Timely Followup
on Settlement Opportunities
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Counsel and the Mediator should persistently pursue settlement,
through inevitable impasses which develop during the Mediation
process. A "good Mediator" must know when to facilitate the parties'
natural movement toward settlement, as well as when to state a
well timed evaluation of the case to help the parties make key,
timely decisions. A misplaced or poorly timed evaluation will
be counter productive for concluding a settlement. Well timed
exercise of judgment and finesse are at a premium.
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J. Parties Fail to Find "Honorable Resolutions"
for Their Opponent, and Fail to Make Sound Business Decisions
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Parties should never let emotional and irrelevant interpersonal
issues stand in the way of a rationale settlement. Emotional and
divisive interpersonal issues should be identified and parties
seek to facilitate a "peace with honor and dignity" for the other
side.
While "win/win" settlements are desirable, the realities of most
mediated solutions results in one party obtaining more "benefits"
than the other. The Mediator's mission is to help identify and
facilitate the best "business resolution" for the parties, despite
the fact that they may be "giving up" more than they originally
intended. The Mediator must keep the parties open to resolutions
which are less than what they had hoped for, but better than a
litigated resolution of the dispute.
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Conclusion
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Mediation requires work and careful preparation. It also requires
a long hard look at "reality," as well as a willingness by the
parties to make hard decisions.
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| DISCLAIMER:
This discussion is general in nature and is not intended to and does not create
a lawyer/client relationship. This discussion should in no way be relied upon
or construed as legal advice, particularly since most legal outcomes are highly
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