Mediations often fail because counsel have not taken the time to fully inform their clients on the process and goals of mediation, particularly the proper tone needed for an effective session. Yet, setting the proper tone with the parties before mediation can significantly increase the likelihood of a successful resolution. What does “setting the proper tone” mean?
First, emotions must be kept in check. Even in the construction disputes I mediate, parties generally want to express how wronged they feel and how badly they believe they were treated by the other side. They sometimes even accuse the other side of outright fraudulent conduct. If that feeling is expressed by counsel or a party at the beginning of a mediation, it will surely polarize the proceedings and make it much more difficult, if not downright impossible, to settle. I have heard counsel tell me they believe their client needs to make that kind of statement to the other side as a catharsis. That “getting it off of their chest will make them feel better.” This may be true, but mediation is not the time for catharsis, it is the time for rationality and a business-like approach, which are much more conducive to compromise. If counsel feels a client needs to “get it off their chest,” I tell them that is what I am there for; they can scream, yell, and raise their voice to me about how outraged and wronged they feel as much as they want in our private caucus sessions. I can convey that message to the other side in a much more even-handed tone, if I convey it at all, without causing the negative reaction that is sure to follow if expressed directly by the party or counsel.
What else does “setting the proper tone” mean? Realism. Lawyers preparing their clients for mediation should do a hard cost/benefit analysis with their clients, well before the mediation begins, to put them in the proper monetary range necessary for settlement. Too often, I find lawyers do not want to have that uncomfortable discussion with their clients. They may have been charging the client a lot of money in legal fees, costs have been mounting, and now they have to tell the client their case may not be as good as the client thinks and that the client should be prepared to accept less money than they might have otherwise expected to receive given the time and cost invested in the matter. That is an uncomfortable discussion, but one that should take place well before, not during, the mediation. When it takes place at the mediation, the client often lashes out at the lawyer and feels the whole process is skewed against them. Settlement then becomes nearly impossible. To help avoid this, it is my practice to call counsel prior to the mediation, if possible, and have a frank discussion with them about whether they have prepared their clients properly for mediation. I also ask if there are any barriers to settlement. It could very well be there is someone who has yet to be deposed and settlement is really not going to be possible until that deposition is concluded. As the mediator, I want to know that before we go into the mediation so we can decide whether to postpone proceeding until that event occurs. And if insurance is involved, I want to ensure that counsel has prepared the adjuster for a sensible settlement range.
Finally, I want counsel to set the tone for mediation by explaining the Rule of Reciprocity to their client. If someone makes a low ball initial settlement offer, they can expect very little movement in a counteroffer from the other side. That is the Rule of Reciprocity. On the other hand, if a party is willing to come to the mediation and make a substantially discounted initial offer from their claimed damages, it sets a tone for a significantly higher counteroffer than what might otherwise be expected. And, if the claiming party makes a substantially discounted initial offer and the other side fails to make a correspondingly equivalent counteroffer, nothing is lost. The Rule of Reciprocity kicks in, and the second offer by the claiming party will be much less generous, and the work required to settle will be predictably more arduous than it should be.
Setting the proper tone and properly preparing clients for mediation can assist the mediator in achieving a settlement. It isn’t always easy to do, but counsel should try their best to do it.
