Author: John DiBlasi

• Do give consideration in advance as to what confidential information will be revealed to the mediator in the breakout session.
• Do not attempt to rush the mediator into giving an evaluation of the merits of the case.
• Do give the mediator ample opportunity to speak to both sides.
• Do not become mired in arguments as to why you will succeed at trial.
• Do focus on settlement proposals and possible compromise.
• Do not forget the ultimate goal is to settle the case.
• Do be patient and understand that the negotiation takes time and moves slowly.
• Do not become frustrated if a resolution is not reached quickly and don’t abandon the process.
• Do remember that the best day to settle the case is today.
• Do not become too greedy – pigs get fed, hogs get slaughtered.

Breakout sessions are the first opportunity after the joint session in the mediation process for the attorneys to privately discuss their positions with the mediator. Oftentimes information that was held back during the joint session for tactical reasons will be revealed to the mediator in the breakout sessions. At the same time, much of what was already said during the joint session will be repeated in an attempt to influence the mediator’s evaluation of the case. This is a necessary evil of the mediation process based upon the fear that the mediator does not fully comprehend the party’s position. The parties need to know that they have been heard by the mediator before he reaches a conclusion as to his evaluation of the case and possible settlement options. They need to know that he has really understood what their positions are. The worst thing a mediator can do isjump to a conclusion with respect to the evaluation of a case. Further, it is to both parties’ benefit to give the mediator the time to speak with both sides privately, several times, as it will assist him/her in reaching a more reasoned view of the settlement possibilities and the parties’ respective positions. This slowing of the process also lends itself to the parties becoming more accepting of the recommendations of the mediator.

Often the parties in the breakout session become mired in their arguments as to why they would prevail if the matter is not settled and goes to trial. They forget about the ultimate goal which is to settle the case. While it is necessary to ensure that the mediator understands their positions the parties should, in advance of the mediation, prepare their initial settlement proposals and convey those to the mediator. It is best not to wait until the breakout session to start crafting a settlement proposal. Instead, focus on settlement solutions and do not re-hash the merits of the case.

The mediator must engender confidence in the process by slowing it down and taking time. Attorneys may want to shorten the process if a solution is not forthcoming quickly enough. Again it is important and beneficial to both sides to feel that they have been heard, and to consider what the risks are in continuing the litigation from the neutral’s perspective. Give the mediator ample time to work the process. Negotiations leading to a shifting of a party’s position and acceptance of a compromise takes time.

In many most mediations, it may appear, at the outset, that settlement is an impossibility. It is a mistake to become discouraged by the initial settlement offers. The most difficult cases will settle if adequate time is taken.

Under the best of circumstances, mediation may not result in the resolution of a litigated dispute. This may be as a result of factors which are not under the control of the parties. However, mediations are often negatively affected by basic mistakes involving factors that are within the parties’ control. While many of the following points may seem simple, I have seen even experienced attorneys make these mistakes.

1. Failure to submit a brief prior to the mediation.

This is an excellent opportunity to inform both the mediator and your adversary of your position. It will save time at the mediation and facilitate negotiations.

2. No discussions with your adversary have taken place prior to the mediation.

Some preliminary discussion with your adversary regarding the parameters of the negotiations should take place beforehand. This may often encompass preliminary settlement demands and/or offers which will give some shape to the mediation and avoid surprise.

3. A demand or offer that has been made prior to the mediation is changed.

This can doom a mediation from the outset. Parties cannot negotiate against a moving target. It is simply bad faith to make a settlement demand or offer prior to the time of the mediation and change it on the day thereof. This obviously breeds distrust and poisons the negotiation process.

4. The client is not present at the mediation.

Often the party with the authority to settle the case does not appear at the mediation. This can create a lack of trust with respect to the ability of counsel to negotiate with authority to settle the case and thereby impede the negotiation process.

5. The client has not been properly prepared for the mediation process.

What is common knowledge to the attorneys with respect to the mediation process is usually alien to the client. Clients may not fully understand the negotiating process. The client can become easily frustrated by the back and forth negotiations and become less willing to compromise.

6. The parties refuse to speak to each other face-to-face.

Many times, due to animosity that has arisen out of the litigation process, counsel and/or their clients do not wish to speak to one another face-to-face. This is a mistake as the opportunity toexplain one’s position is an integral part of the mediation process.

7. A party refuses to respond to a demand or offer.

The mediation process is usually one of give-and-take. Even if you feel that the offer or demand is “insulting,” it is important that some response be given albeit in the form of a nominal compromise. A refusal to negotiate at all may end the process.

8. After a settlement has been reached, a party seeks to impose new conditions that have never been discussed.

This will almost certainly cause a failure of the process. It is simply not good faith to withhold conditions that are a part of the settlement until an agreement with respect to its major terms has been reached.

9. Counsel agrees to a settlement without the client’s understanding or consent.

The client should be completely engaged in the process at all times and made aware of all the negotiations. Counsel must be sure that they have their client’s consent before they agree to asettlement.

10. The parties refuse the opportunity to reconvene in the event of an impasse.

Many times it appears that there is absolutely no way a case may be settled. It is all too common that, out of frustration, the parties’ reject the mediator’s invitation to re-convene for a joint session. This additional meeting frequently results in the impasse being overcome.

Ultimately the “basics” (as they say in baseball) can make or break the player or the game.

• Prepare the client for the mediation much in the way you prepare them for trial.
• Consider how you will manage their expectations.
• Give them a realistic analysis of the strengths and weaknesses of their case in advance. Discuss the mediation process in detail.
• Explain the mediator’s background and role.
• Do not rush the process.
• Make sure your client has an opportunity to be heard.
• Discuss the objective factors that support accepting a settlement.
• Have your client sign the settlement agreement.
• Discuss the progress made if the case does not settle.

All clients are emotionally invested in their case. The process of slowly gaining an objective understanding of the strengths and weaknesses of their case will lead to a compromise and ultimately to a settlement.

The process of gaining the client’s acceptance of a compromise begins with the preparation for the mediation. The preparation of the client for the mediation should be similar to the process that one would engage in for trial. Doing a run through of what will be asked of the client if the case goes to trial, makes the entire process much more realistic for them with respect to the risks. The preparation process should include a detailed explanation of how the mediation will be conducted.

Counsel should consider how they will manage their client’s expectations during the negotiation process. The weaknesses of their case and the risks of trial should be explained to the client early on in the process. Further, the client should be advised that the ADR process is not a win lose proposition in the event that the case does not settle.

In all likelihood, you will want the mediator to speak to your client about the merits of the case. The experience and the background of the mediator should be explained to the client prior to the mediation session. You cannot expect the client to seriously consider the recommendations of the mediator if he knows nothing about the neutral’s background. To like accord, the mediator’s role should be explained in detail. It should be made clear that the mediator is not there to decide the case, but to assist the parties in the negotiations and to discuss the risk/reward aspect of each party’s case.

In advance of the mediation, a decision must be made as to whether the client will be present at the joint session. Do not assume that they will be. The practice varies from state to state. If counsel wishes that the client be present, it can be a precondition to the mediation itself. Prepare the client for what they may hear at the joint presentation and if the client has a strong reaction, consider whether they should attend.

During the breakout sessions, the mediator will have an opportunity to speak to the client and develop a better understanding of the case and the client’s position. Careful consideration should be given to the issues you want discussed. If an evaluation is sought, it should be explained to the client in advance that the mediator is going to discuss the risks versus the benefits of continuing with the litigation.

In obtaining the acceptance of risk and compromise by your client, the process must proceed prudently. Both counsel and the mediator, in discussing a settlement with the client, should do so in a manner that is clear and presents the objective factors that mitigate towards the client accepting a settlement. Make sure the client has an opportunity to be heard.

If a settlement agreement is reached, it should always be reduced to writing and signed by the client. When the case does not settle, counsel, with the help of the mediator, can review what has been accomplished and the next steps that will be taken in attempting to reach settlement post mediation.

In summary, gradual acceptance leads to compromise and, ultimately, settlement.

Many cases that come to mediation involve novel questions of law. Invariably, there will be a dispute as to the proper law applicable to the case and the interpretation of appellate decisions that impact upon same. It is common for parties in the context of their pre-mediation brief to cite case law with a summarization of the issues and the ruling of the court along with the formal citation. It is useful for the parties to cite the case law in the context of their brief. However, their interpretation of same is all too often misleading as the view proffered represents the attempt to advance a specific position. The better practice that will enhance your credibility with the mediator, which is to your advantage, is to make a balanced presentation. It is therefore extremely helpful to provide copies of the key cases to the mediator. The opportunity for the mediator to read the decisions and make his own determination with respect to the facts of the case, issues presented, applicability, and the court’s decision and rationale, leads to a better understanding by the neutral of the case law. Again, the goal is to assist the mediator in coming to a well-informed evaluation which ultimately will be to your benefit. In the same way that the narrative in the brief should be balanced, if there is opposing authority, those cases should be submitted and also be distinguished in the brief.

Attorneys, in an attempt to influence the mediator’s view of a case, may often refer to jury verdicts on claims asserted in similar cases. Of greater significance are appellate court decisions which address the issue of what causes of action are sustainable and what an appropriate award would be.

At some point during the mediation, one or both of the parties typically will ask the mediator for an evaluation of the case in terms of the strengths and weaknesses as they relate to a potential verdict after trial. Quite often, parties seek such an evaluation immediately after the joint session has been held. Even assuming the mediator has been properly educated on the facts and issues in the case prior to the time of the session, there is nothing like sitting face-to-face to be able to ask questions in private session. This will give life to the submissions, allow the mediator to develop a far better understanding of your case and give you an opportunity to advocate your position. It is therefore not useful for counsel to request an opinion prematurely at the outset of the mediation. The better practice is to give the mediator an opportunity to speak privately with the parties so as to gain a better understanding of their position, even if this takes several rounds with each side to render an opinion.

Volume is a great teacher. Nothing could have fully prepared me for the bench even though I tried many cases in private practice and spent a great deal of time in the courthouse. The sheer number of cases and the decisions that had to be made in a day dwarfed any type of previous experience. Much in the same way the sheer number of commercial cases that an active neutral mediates over the years dwarfs the number of cases an attorney could ever mediate in private practice. Volume allows you to see patterns that one would never otherwise be exposed to and creates the ability for the introspective neutral to refine his craft and achieve a successful result. While ultimately one would define a successful result as a settlement, I believe that any mediation that brings the parties significantly closer and narrows the issues in dispute or in fact, leads to the conclusion that the case must be tried, is invaluable. Sitting as a Commercial Division judge given the volume of cases on one’s calendar leaves little time for effectively attempting to negotiate a creative resolution in all but the most pressing cases. The beauty of mediating a commercial case is not only the ability of the parties to come together and exchange views, but also for the mediator to assist the parties in crafting creative solutions that are rarely found in the courthouse setting.

Environmental Issues Resolved

When I was a Justice of the Supreme Court overseeing all land use cases in my jurisdiction, I was confronted with a case of epic proportions. One of the largest commercial developments in the history of the venue had been opened in violation of specific environmental conditions imposed by the state. The development was critical to the economic development, if not survival, of a major city due to the sales tax it was expected to generate and the jobs it would create. The Mayor, in what was a political decision, opened the development in contravention of the law which spurred the adjoining communities so affected by the environmental impact to move by Order to Show Cause to close the development. As a Judge, I was now confronted with the prospect of shutting down a project that employed hundreds of people and would generate untold millions in sales tax.

Of the many environmental requirements, the most hotly contested issue was the opening of a secondary access road which would alleviate horrific traffic congestion, create a danger to the public and devalue properties in the surrounding communities. Unfortunately, the State of New York had not completed the required studies for the installation of traffic control devices to allow the opening. I had to put my creative hat on, and directed the mayors of all of the affected municipalities and the County Executive to appear before me to mediate an interim settlement. This would allow the development to remain open for the time being and still be able to address the most immediate environmental concerns.

Sometimes, the obvious solution can be a simple one discovered by a creative neutral (in this case a Supreme Court Justice) that can see beyond the animosity of the parties. Quite simply, I suggested that the city open the secondary access road during business hours and pay the adjoining community for the services of police officers to provide traffic control until the State could complete its process to install permanent traffic control devices which involved a complex system of lights. Development opened, jobs saved and the negative environmental impact avoided. The battle over related issues would continue at a later date. This an extraordinary situation where I, as a Judge stepped into the fray itself to avoid a disaster. I did this on other occasions, as often as I could. However, one person could not possibly solve all of the disputes contained on a court’s calendar that at any given time consisted of some 600 cases. This experience taught me the beauty of the mediated settlement and the importance of thinking out of the box in a creative fashion.

Taking this experience with me, and applying it in my position as a full-time neutral, I am able to resolve cases that seem to have no rational chance of being settled. The following are some examples of where a little creativity by the neutral can achieve a positive outcome:

High/Low Approach Worked

There was a hotly contested complex motion for summary judgment containing close issues of law. The decision was decided in favor of the plaintiff denying the motion to dismiss, but both sides were concerned about the cost of a very lengthy trial without having the legal issue decided by an appellate court. The trial judge was not inclined to grant a stay for the purposes of an interlocutory appeal and there was a valid concern that the intermediate appellate court would follow suit. With the assistance of the mediator, the parties were able to agree to a high/low on the case. In other words, if the plaintiff succeeded on the appeal they would get the higher of the two sums. If unsuccessful, the plaintiff would get the lower amount. The parties submitted the agreement in writing to the trial court. Knowing that the case would now be resolved without a trial, the application for a stay for the purposes of appeal was granted. Ultimately, the appeal was decided in the defendant’s favor but both sides were pleased with the outcome because they had some certainty as to a result and both saved extraordinary trial costs.

Multiple Claims vs. Bankrupt Corporate Entity

Another matter involved approximately fifty commercial claims against a corporate entity that was insolvent. Fortunately, the company had insurance to cover the losses that were sustained. Unfortunately, while that coverage was in the millions, it was not sufficient to cover the sum total of all the claims. The insurance company had wisely decided to deposit the money into court and let the supervising judge deal with the claims process. I was the agreed upon neutral for the some fifty matters that were pending in the courts.

After several unsuccessful mediations, a meeting was held with the law firms representing claims that had been grouped together. I made the suggestion that, as opposed to a mediation, which would not prove fruitful, the parties should agree to an expedited arbitration process. The way the process would work is that both sides would enter into an agreement where parties acknowledged that they would not be able to recover all their damages. Instead, they would agree to accept an amount based upon the number of parties who opted into the agreement to arbitrate and the arbitrator’s determination of relative value.

Approximately forty-five of the fifty parties opted into the agreement as their claims had been mired in endless litigation for five years. The concern among the parties was that court approval was required to pay out the monies. That was allayed by two factors. First, as long as the settlements were reasonable, there was no bar to exhausting the insurance proceeds even if some claimants were left without any funds to collect a judgment from. The arbitration award recommended by a neutral who was a former Commercial Division Justice, gave the court confidence in approving the settlements. Further, all parties were given the option to opt in and warned of the potential that their failure to do so might result in the proceeds being exhausted before their claim was heard in court. I set a strict schedule and within six months 45 mini- arbitrations were held in a streamlined process in person, by submission upon agreement and out of state and internationally by Skype. The decisions were submitted to the court as scheduled. After five years of delay, 45 parties were very happy to recover part of their loss within six months.

Interpretation of Commission Agreement

Finally, oftentimes a mediator can be creative and provide what may be an obvious insight that will foster a settlement that would not have been considered by the parties. In a recent mediated dispute over a multi-million dollar commission between a broker and his former employer that involved securing naming rights, the parties were mired in an acrimonious dispute over the amount of the commission due the broker, and whether the commission agreement was in effect at the time of the signing of the agreement. There were also issues involving the interpretation of the agreement’s terms. The naming rights were being purchased by a third party for an amount exceeding forty million dollars. At the time of the mediation, the suit had not yet been filed. It was suggested to the parties that the filing of the suit would generate unwanted publicity and potentially expose the party purchasing the naming rights, to opt out of the contract to which there still was a limited, but valid right. In that event, neither party would be enjoying the benefits of the prospective deal. Viewing things in this new light, cooler heads prevailed and the matter was settled without filing a case in court.

These are just a few of the many examples I can recount that speak volumes about the benefits of mediation in commercial cases. I am convinced that most commercial cases would benefit from parties sitting down face-to-face with an impartial third party to see if they can work out their differences. There is so much to gain when a little creativity is applied and, so little to be lost, when compared to full blown litigation.

The submission of a well-crafted brief prior to the mediation is an excellent opportunity to give the mediator a real preview of your position in advance. It can be used to educate, persuade, and create a roadmap for settlement negotiations. It is to your benefit to submit same as it will save time at the mediation and create an excellent starting point for the mediator to learn about the facts and issues of law in the case. It will also aid the mediator, at least preliminarily to develop an initial evaluation of the strengths and weaknesses on both sides. The brief can be an important kick start to the negotiation process. For all of these reasons, the briefs should be exchanged with opposing counsel prior to the mediation.

It is this last point that merits discussion. Is it to your advantage to exchange the brief? In the opinion of the author, you are always better served by doing so. It is common to receive briefs with the cautionary words “Confidential – For Your Eyes Only.” It almost seems that the mediator has entered the world of James Bond and has become a member of her Majesty’s Secret Service. In the majority of cases, there is no need for this, particularly in cases where the parties have completed discovery and/or dispositive motions have been submitted or decided. What often occurs is that the entirety of the contents in the so-called “confidential” mediation brief is discussed openly in the joint session, thereby negating any reason for not exchanging it. In the situation where one side exchanges the brief and the other side does not, feelings of distrust and antagonism arise on the part of the party who did exchange. This is not of benefit to the process and starts things off on the wrong foot at the outset of the mediation.

The reason often put forth by counsel for not exchanging the briefs is usually due to tactical reasons pertaining to information that they do not wish to disclose to their adversary. If counsel possesses information of such significance, it would not be wise to put it in writing under any circumstances. Exchange your brief and convey this information to the mediator privately in the first breakout session with the caveat that it not be divulged to opposing counsel. The ironic aspect of this type of situation is that if this information is of such strategic importance and it cannot be used by the mediator in the course of the negotiations, of what use is it any way? The one scenario where it may be useful is where it is being conveyed to the mediator with the idea that, at some critical juncture, it may be used to overcome the resistance of the other side to compromise. Also, sometimes the parties will seek the opinion of the neutral with respect to the relative merits of withholding or disclosing this information.

Ultimately, most often it is to your benefit to exchange your mediation brief with your adversary. In order to reach a settlement of any case, you are going to have to convey information to your adversary to allow him to justify changing his position and making compromises that would not otherwise be made.

During the course of the private breakout sessions with the parties, the mediator is able to engage in a more candid discussion with counsel with respect to their case and their belief as to its strengths/weaknesses, and how they will likely address the opposing party’s case at the time of trial. It also gives the parties the opportunity to disclose information which is being withheld. Quite often the pre-mediation briefs do not contain key arguments or evidence that an attorney believes strengthens or potentially weakens their case. Often critical evidence or legal/factual arguments are withheld for a tactical advantage and are not referenced in the mediation brief or at the joint session. If this is the case, counsel must make clear that the mediator is not to disclose this information. The private session gives you the opportunity to engage in a dialogue with the mediator and answer questions that have arisen from the submission of the briefs and the joint session. A benefit to this dialog is that the mediator may often have insights which the parties have not considered. Mediators will withhold same and refrain from posing questions in the joint session that may adversely affect a party’s position.

The opportunity to speak with the client, whether an individual or corporate representative in private session is an excellent opportunity to favorably influence the mediator in giving an evaluation. In a case where the client is an individual, particularly if the client makes a good appearance, this process may be more informative than all of the briefs and the discussions had by counsel. It gives the mediator a significant opportunity to gain some insight as to the type of witness the client will make. This meeting also allows the mediator to gauge the willingness of the client to compromise, the emotional investment of the litigant in the case, and an assessment of the client’s understanding of the mediation process and the issues attendant thereto, which all may in some way affect the mediator’s evaluation.

The point of the foregoing is not to rush the mediator into giving a premature evaluation of the case before he has developed a complete understanding, to the extent possible, of all of the factors affecting same. It is a rare case where counsel for the parties will agree in whole with the evaluation given by the neutral. As a mediator it is important to stress to the parties that the evaluation is given with due respect to the fact that their view of the case may differ significantly. This is particularly important if counsel chooses to have the client present when the evaluation is given. This is the point in the mediation where diplomacy on the part of the mediator becomes paramount. It is important, whether counsel likes or dislikes the opinion of the mediator, that the opinion be given due consideration. The mediator must be careful not to give the impression that he is taking sides, and the evaluation should be delivered in as neutral and respectful manner as possible. A good mediator will provide counsel an evaluation which specifically cites objective factors supporting same. Counsel should engage in a meaningful discussion with the mediator on the points where they agree as well as disagree.

Finally, asking for the mediator to give an opinion in the presence of all parties is usually a mistake. While on occasion due to the peculiar facts of the case all of the parties may elicit an opinion while in group session, as a general rule this is not effective, and can lead to difficulties in settling the case.