Resolution at mediation can be a challenge for anyone in the industry, but it can be especially difficult for young professionals during their initial mediation sessions as they learn which techniques are successful and which ones lead to impasses.
One hurdle that newer professionals often encounter in mediation is the anticipation of a “number-swapping” event and are sometimes surprised by the degree of technique and agility required for success, including best practice steps to take prior to the mediation date. Fortunately, there are five key strategies that can position a mediation for success. If learned from tenured colleagues and applied early in a career, these tactics can expedite the learning curve, setting up new professionals for success, which can build upon itself.
To illustrate these points, let’s explore a conversation not uncommon in our industry between a tenured professional and a newer colleague that demonstrates how a casual conversation can be used for impactful knowledge-sharing.
Zoe: Hi Brian and Millie. I’m so excited for my first mediation tomorrow, I cannot wait to just settle the case. It should be exciting and easy.
Brian: Wait, Zoe. Mediations are exciting, but let’s not get too carried away about just settling, as it may not be that easy.
Millie: Yes, Brian is right, you want to go into mediation with a plan. There are many reasons to mediate. Of course, you want to settle the case, but sometimes the most fruitful mediations don’t end in an immediate resolution.
Brian: Having a plan is very important. Have you received a pre-mediation report from counsel and had a call with them to discuss your plan? You may want to review your company’s guidelines to see whether your supervisor will need to be on the call with counsel, too.
Zoe: I received a pre-mediation report and have a call set up with counsel today. What kind of plan should I discuss with counsel?
Brian: You should discuss your initial offer with counsel and why you plan to make it in this range. For example, if there is a lien, you may want to talk about how that plays into your initial offer. You will want to figure out how much money the plaintiff could walk away with from the mediation after the liens and attorney’s fees are subtracted, because this is the amount that will usually drive the negotiations.
Millie: You should also talk about the liability and damage arguments you want to discuss with the other side and the mediator. Sometimes the mediator asks for opening statements from both sides; other times the mediator just breaks each party into separate rooms.
Brian: If your arguments aren’t gaining traction with the mediator, sometimes it’s helpful to discuss with counsel who will play “bad cop” if the mediation is an appropriate setting for that tactic. The “good cop’s” position then resonates as more reasonable by comparison.
Discussing Authority, Reserves, and Resolution
Zoe: OK, I see what you mean about having a strategy. I can tell counsel what my top authority is because they’re on my side, right?
Millie: You don’t want to give counsel your full authority at the beginning of the mediation, and perhaps not at all. If you do, it may pressure you to negotiate higher and your ceiling becomes a floor.
Zoe: If I cannot tell counsel my top number, I can tell the mediator the reserve on the file, right? That will help get the case settled, won’t it?
Brian: Most of the time, you don’t want the mediator to know your full authority, either. It can result in an inflated settlement.
Zoe: What do I do if the plaintiff’s demand remains inflated and we are not at all close to settling? Can I end the mediation and go to lunch?
Brian: Often, you should continue negotiating. You will likely close the gap and you will be closer to a potential resolution. You may be able to find out what the plaintiff’s bottom line number is.
Millie: Maybe there is a reason that the plaintiff is looking for a settlement in a certain range. Perhaps, there is a non-monetary way to achieve that goal.
Zoe: What happens if the plaintiff’s demand remains very high and it looks like settlement cannot be achieved? What’s the point of mediation if I don’t settle the case?
Millie: You might learn something about the plaintiff’s case, such as potential witness testimony or theories of liability. This can help you plan for trial, should you not be able to resolve the case otherwise.
Brian: In addition, you are sending a clear message to the plaintiff on where you value the case and why. The plaintiff has now heard your defenses and heard a third party’s perspective on their case.
The Use of Brackets in Negotiations
Zoe: Someone mentioned brackets—what does that mean?
Millie: Brackets are a negotiating tactic that can often be helpful in narrowing down the settlement range.
Brian: When negotiating with brackets, one side will propose a low end and a high end. For instance, the plaintiff may say, “I’ll come down to $500,000 if the defendant comes up to $250,000.” Defense counsel could respond by saying, “The defendant will come to $150,000 if the plaintiff comes to $400,000.”
Millie: It’s a way of testing certain settlement ranges without making an official offer.
Brian: However, be aware that the other side may make assumptions that you are willing to offer the low end of the bracket.
Millie: Also, the other side may presume that you will settle in the middle of the agreed-upon range. If that is not something you are comfortable with, you can either decline the proposed bracket, or you can make clear to the mediator that you are not indicating you will ever agree to the middle of the range.
Mediator’s Proposal
Millie: Another thing you can do if it doesn’t look like the case will settle is request a mediator’s proposal. This is when the mediator proposes a number to all parties as a “take it or leave it” number. No party knows another party’s response unless all parties accept the proposal. Often, the mediator’s proposal will remain open for several days to give each party time to evaluate the proposal.
Zoe: Wow, thanks, this was really helpful. I feel ready for my first mediation.
For any level of experience, but especially for newer litigation and claims professionals, these techniques can set up many cases for success. The momentum can be continued with future cases through ongoing application and incorporation of additional strategies developed during one’s learning curve. For now, Zoe is off to a successful mediation, and we anticipate the same for litigation professionals of any tenure who utilize these strategies.