Preparing for Mediation in Commercial Litigation: A Guide for New Attorneys
By Eric Gillett
Business litigation is expensive and risky. Much of it may not be covered by insurance. The life of a business may be contingent on a successful result. Reputations in the business community or the public eye may be on the line. As many of my commercial clients has told me over the years, “it’s all about the brand.” It is no surprise then that mediation has become a cornerstone of dispute resolution in commercial litigation, providing a less adversarial, more collaborative approach to settling disputes. As attorneys, preparing effectively for mediation can be the decisive factor in achieving a favorable outcome for your clients. This guide aims to equip you with a plan to strategically navigate the mediation process.
Understanding Mediation:
A Different Mindset
Mediation differs significantly from litigation, both in methods used and goals. Normally, it is a confidential process facilitated by a neutral third-party mediator. Unlike litigation where each party is motivated to play a zero-sum game where one side wins and the other side loses, mediation provides more opportunity to fashion a result where both sides walk away with a win. To reach that end, both parties should be motivated to engage in discussions that identify their respective interests and explore potential solutions. Understanding this shift from a litigation mindset to a collaborative approach is fundamental. Embracing the idea of problem-solving rather than fighting broadens the choices available and increases the opportunity for a solution.
To get there, however, requires preparation. And like anything worth having, it also requires hard work. Here are a few things to consider:
1. Know Your Case Inside and Out
A deep understanding of the case details is essential. Review all the evidence, documents, and depositions meticulously, focusing on the following:
A. Key Facts: Identify the essential facts that support your client’s position and those that could be used against it.
B. Legal Framework: Understand the legal issues at play, including relevant statutes and case law, and consider how the other side will view those same laws.
C. Factual Gaps: Identify any shortcomings in your case that could be exploited during mediation. Addressing these proactively can bolster your negotiating position by demonstrating to the other side how well prepared you are.
Preparation also involves a thorough grasp of “the story” behind the case. A compelling narrative not only helps to convey your client’s position effectively, but it may actually allow the other side to feel how strong your position is and why, if left in the hands of a jury, how likely a jury will be to want to see it your way.
2. Define Your Objectives and Outcomes
Before entering mediation, clearly define your objectives. What does your client hope to achieve? This should encompass both financial aspects and non-monetary aims such as:
- Maintaining a business relationship;
- Preserving their reputation in the public eye or the business community;
- Ensuring confidentiality; and
- Avoiding the costs and uncertainty of litigation
Discuss these objectives with your client, ensuring they align with the client’s expectations and values. Additionally, anticipate the desired outcomes of the opposing party. Understanding their goals can provide leverage in negotiations.
In addition, your mediator should be able to speak to the other side and learn from them how they view the case, what there objectives may be, and what are potential solutions. While all that information may not be communicated to you because they have asked the mediator to keep some information confidential, it will nonetheless be factored into the mediator’s thinking and overall strategy to help both parties solve the problem and settle the case.
3. Develop Your Mediation Strategy
A well-thought-out mediation strategy is paramount. This involves at least the following:
A. Identifying Interests: Beyond the stated positions of both parties, delve into the underlying interests. Understanding motivations can reveal creative solutions that address the core of the dispute.
B. Creating a BATNA (Best Alternative to a Negotiated Agreement): A strong BATNA gives you leverage during negotiations. Assess your client’s alternatives if mediation fails, which can inform your strategy and negotiation tactics. Importantly, it will also let you know when you have reached your limit and may need to terminate the mediation, at least temporarily.
C. Preparing for Different Scenarios: Anticipate various paths the mediation could take. Be prepared with responses and adjustments to your strategy based on how discussions unfold. Like litigation, mediation is a dynamic process filled with onramps and offramps. Often, you cannot see far ahead or if you do, you must be prepared to watch the road changing in front of you. Flexibility is key.
4. Prepare Your Client
An informed and prepared client is vital for effective mediation. Take the time to educate your client. Explain the mediation process, its purpose, and what to expect during the mediation. Discuss the benefits and potential drawbacks candidly so that expectations are met.
Next, discuss various strategies with your client. Empower them to contribute their thoughts and perspectives on desired outcomes and possible compromises. Plan who is the best person to deliver various information to the mediator, or in some circumstances, directly to the other side.
In a recent commercial litigation mediation, the defendant’s attorney requested and was granted the opportunity to speak directly with the plaintiff and their lawyers. He spent time explaining why his client was not responsible for the loss suffered by the other side, how another party in another room bore the responsibility and how, if the other side would find a way to release his client, he could help the plaintiff prevail. While that strategy did not work immediately, it was good food for thought and eventually allowed those two parties to resolve the case and support plaintiff’s claims against the other party.
5. Prepare Your Presentation
Your mediation brief to the mediator and the other side should be concise and impactful. While exhibits might be helpful, they should be used sparingly. Focus on crafting an opening statement. An effective opening statement establishes your client’s position and sets the tone for the mediation. Aim for clarity, empathy, and persuasion. Acknowledge the opposing party’s stance while highlighting the strengths of your case.
If appropriate, consider using visual aids or exhibits to illustrate key points. Simplifying complex information can enhance understanding and retention during discussions.
Prepare realistic and flexible proposals for resolution. Think creatively about potential settlements, including non-monetary options that may satisfy both parties, such as structured payment plans or collaborative projects in the future that have the potential to more than offset the cost of the current matter.
6. Hone Your Emotional Intelligence
Mediation often carries emotional undertones that can affect negotiations. Often, these emotional undertones sabotage what will otherwise be a good result for both sides. But because someone feels disrespected, not heard, or not trusted, the mediation fails. Because of those possibilities, work on building rapport: Establishing a positive relationship with opposing counsel as well as the mediator will allow a cooperative environment. Small talk, active listening, and showing respect can go a long way to open a door to a new solution.
Achieving a successful mediation outcome is not a product of luck; it’s the result of diligent preparation, clear communication, and a collaborative mindset. By meticulously preparing for mediation, you can not only advocate effectively for your clients but also promote resolutions that serve as a foundation for future relationships. Embrace the mediation journey as an opportunity to foster understanding and consensus in an increasingly complex commercial landscape.
Eric Gillett is a founding member and managing partner at Preg, O’Donnell & Gillett. Follow him on LinkedIn at https://www.linkedin.com/in/eric-gillett. He is licensed in Washington, Oregon, and Alaska. He has tried dozens of cases to verdict and mediated hundreds more. A navigator of resolutions, he is a commercial mediator and can be contacted through his legal assistant, Jasmine Reddy, at 206.287.1775 or jreddy@pregodonnell.com. You can also reach him through his website at www.gillettmediation.com and his email at egillett@pregodonnell.com or eric@gillettmediation.com Mediations are available both in person and via Zoom.
