Mediation
Mediation is a process through which parties can resolve their differences with the assistance of a mediator. ORC 2710.01 - .10 applies to all mediations in Ohio and blankets them with confidentiality. Confidentiality of the process and the communications made is critically important to success.
Whether to Mediate?
a. Prior to 2000, mediations were rare. Settlements occurred based on discussions with opposing counsel, conversations with insurance company representatives or at conferences with Judges. Although the percentage of cases settling has not increased with the advent of mediation, the popularity of mediations as a means to attempt to resolve disputes both pre-suit and post-litigation continues to increase each year.
b. Expense is a factor that should be considered before agreeing to mediation. Depending on the complexity of the case, the cost of a mediator can range from $1,000 to $15,000.
Selection of Mediator
a. Although a mediator is not a judge, selection of a mediator is important. Some mediators may have experience in a particular area of law. Others may not. In our case, we focus on the areas where we have extensive experience in representing clients. As a practical matter, the more experienced and respected the mediator, the more likely the mediation will be successful.
b. Mediators have as many styles as people have personalities. Some mediators may be more user friendly. Others may be more opinionated or curt. Some mediators may offer opinions as to settlement value in the presents of your client that may differ from opinions expressed by lawyers to their clients prior to the mediation. Other mediators may ask to speak privately with the lawyers to discuss whether they want the mediator to express an opinion regarding settlement value in the presence of their clients. Usually, the more experienced mediator will be asked by both parties to give an opinion at some point during the mediation regarding settlement value. The mediator will also be asked to provide opinions regarding what settlement demands or settlement offers should be particularly as the mediation proceeds.
Preparation for Mediation
To help alleviate any anxiety associated with the process, the lawyers involved should explain the concept of mediation and what his/her client should expect at a mediation. Educate the clients regarding what a mediator is and the purpose of a mediation. Let the parties know he/she will be face to face with the mediator at various points of the mediation. Also advise the parties that the mediator will go back and forth between the parties’ respective rooms.
Do’s and Don’ts
The Parties
a. Educating the mediator in advance of the mediation is essential. The more a mediator knows about pertinent facts and issues and the settlement positions of the parties, the more efficient and productive the mediation will be.
b. Education of the mediator occurs with written mediation position statements, other pertinent documents, phone calls, etc. Ex parte does not apply to mediators, but confidentiality does. Lawyers for parties should feel free to call the mediator to substantively discuss the case prior to a mediation.
c. Because every attorney approaches mediation differently, some attorneys are extremely prepared and well-versed in the facts of the case. Others use mediation as a discovery tool. Use the mediator to help you gain information from the other side and protect information you do not want disclosed. Mediators should disclose only those facts which you give them permission to disclose.
d. The mediator should tell each party at the beginning of the mediation that there may be times during the mediation where the mediator will speak to the lawyer separate from the parties. Some parties may be upset that that occurs. However, it is often easier for the mediator to be candid when lawyers are separated from their clients.
e. The mediator communicates settlement demands and offers to and from the respective parties. But, the role of the mediator is much more than a courier. An experienced mediator will offer settlement techniques or strategies to each party in an effort to bridge the gap and bring the parties into agreement.
Mediation Techniques
a. While there are many negotiating styles, there are two very common methods. One is moving “inch by inch” where each party moves very little each time in response to a demand or offer. This is also known as “positional bargaining” and is the method insisted upon by insurance companies. The other is by candid, confidential disclosure to the mediator of each party’s “bottom line” settlement demand or top dollar settlement offer so that the mediator knows where the parties want to end up. Then, the mediator is in a better position to evaluate and figure out how to bridge that gap.
b. Often many hours are wasted by the “inch by inch” negotiation strategy. Some parties or lawyers refuse to disclose bottom line settlement demands or top dollar settlement offers until a mediation has lasted several hours. If the lawyers and their clients are sure that what they disclose to the mediator will remain confidential, the likelihood of obtaining the bottom line settlement demand and top dollar settlement offer sooner is much greater.
c. “Brackets” is a negotiation technique frequently utilized by mediators (or at the request of a party) to communicate what position the parties are willing to take. Since early in a mediation the parties are often very far apart, brackets are typically not utilized until a mediation has lasted a few hours. If the parties have not disclosed to the mediator a bottom line settlement demand or top dollar settlement offer, a bracket may be used to educate the mediator as well as the parties regarding the likelihood of settlement after a lengthy “inch by inch” negotiation.
d. Here is an example of using brackets. One lawyer proposes a bracket of “I’ll go to $200 if you increase your offer to $25”, or [$200 – $25]. The opposing party need not accept the bracket, but, if accepted, then further negotiations may proceed only within the bracketed numbers, or between $200 and $25. However, before the bracket is accepted, the lawyer for the party should focus on the midpoint between the bracketed numbers. In this hypothetical, the midpoint is $112.50. Most mediators and lawyers pay a lot of attention to midpoints. By accepting the bracket, the party is not agreeing to settle the case for $112.50, but the party is definitely sending a signal that the midpoint is or very close to being acceptable.
e. The opposing party may reject the proposed bracket and submit a counter bracket such as “I’ll increase my offer to $20 if you decrease your demand to $150” or [$150 - $20]. If the counter bracket is accepted, that party sends the signal that the case may be settled for $85 (that bracket midpoint). Before any bracket is accepted, a mediator should always clarify who makes the first demand/offer within the bracketed numbers.
f. If there are a series of proposed brackets but none are accepted, the mediator and lawyers for the parties have learned important information about the top and bottom dollars and the midpoints of the various brackets. The bracket strategy can then be continued with different figures. For example, one might propose a new bracket with the bottom figure being the midpoint of one of the rejected brackets and the top figure the midpoint of another bracket. In that scenario, if the new bracket is accepted, the case will likely settle.
g. Settlement of any case is driven by risk management for each party. There is no guarantee of winning. There is also no guarantee of receiving more money than received by settlement at the mediation. A jury may return a verdict higher than the last settlement offer or the amount to be paid through mediation. And, then, whoever wins will likely appeal and the parties may get to do it all over again.
h. A skilled mediator helps the parties to evaluate the risks and benefits of their case in the context of the “big picture” of what they want their lives to look like if no settlement is reached. Through mediation, the parties can create their future. Otherwise, a judge or jury will do it for them.
i. A mediator may believe that a case can settle even if it does not settle by the end of mediation. The parties may run out of time. Emotions may be too high. Negotiations may have taken too long to develop. Nevertheless, the mediator may believe the case still have a chance to settle. A verbal or written mediator’s proposal can be utilized to try to bridge the gap when it looks like there is no other way to resolve the case. The mediator picks a dollar figure which the mediator believes is a reasonable number for settlement purposes. The mediator may also have a feel for the maximum amount each party may be willing to move or stretch despite stated unwillingness to do so based on confidential communication with one or both lawyers.
j. A mediator proposal at the mediation is more likely if the mediator senses that the case can settle if the mediator simply suggests settlement at some figure between the last offer and demand.
k. A written mediator proposal post mediation is more detailed and typically done after the mediation concludes. It provides the lawyers for the parties with an opportunity to say yes or no to the mediator’s proposed settlement figure. If both parties say yes within the time frame suggested by the mediator, the case is settled. If there is no agreement between the parties to the mediator’s written settlement proposal, then there is no settlement.
l. One needs to be a fairly experienced mediator to have a feel as to whether a verbal or written mediator proposal during or after a mediation will be successful. There’s also no prohibition to continuing to make phone calls to the lawyers after a mediation to try to settle the case.
m. Once settlement is reached, the mediator may prepare a “term sheet” memorializing the key aspects of the agreement. All parties/lawyers sign this document, which is enforceable in court.