Mediation before Litigation – It works with the right Mediator.
When I first graduated from law school more than thirty years ago, I always viewed the dispute resolution provisions contained in contracts between business partners or businesses with continuing relationships to be a necessary evil to muddle through before the inevitable lawsuit would be filed and a “real” decision would be made. More than thirty years later, I find that many clients still view the dispute resolution provisions contained in their contracts to be a waste of time. After having observed many pre-litigation or pre-arbitration dispute resolution processes I believe that I know exactly why the necessary evil view of dispute resolution provisions is so prevalent.
The primary reason – bad mediation experiences. Bad mediation experiences occur for two reasons. First, bad mediators. Second, lawyers that get in the way of their client’s expressing the true nature of their grievances thereby precluding exploration of solutions that satisfy the grievance but avoid litigation or arbitration.
A good mediator can often navigate around the lawyer who gags their client in search of the fees that can be generated from litigation or arbitration.
A bad mediator – or the wrong mediator for your case – there is no way around that problem. A bad result is practically guaranteed.
Business relationships sour for many reasons. Some are obvious. Some are not. A good mediator teases out the reason for the relationship failure and seeks to find interests of the parties that can provide a mechanism that the various participants in the dispute may not be happy with but are willing to accept in order to avoid the risks and costs inherent in litigation or arbitration.
The simple fact is that if the mediator views the only mechanism for resolution to be money – avenues of potential settlement are never exposed. Money issues should not be the first or only issue discussed in mediation. Especially mediation which occurs as part of a pre-litigation/pre-arbitration dispute resolution process. If it does – bad mediation experiences are bound to occur and frequently do.
Parties in a pre-litigation/pre-arbitration mediation must be given the opportunity to express the true nature of the dispute and their own perception of why the dispute occurred. Only then can positions be separated from interests. Only then can a discussion that may lead to resolution occur.
Every experience lawyer who has practiced as a trial lawyer or an arbitration lawyer have seen clients that are dug in to a position at the beginning of a case who later grow weary of the dispute or wonder why they got themselves into the dispute in the first place. Settlements frequently occur at that point. However, settlements at that stage of a dispute occur after substantial financial and emotional costs are incurred. It is impractical and sometimes impossible to achieve settlements which include anything other than payment from one party to another or both parties simply walking away from the dispute. Neither is very satisfying from a client standpoint.
It is incumbent upon lawyers to encourage and facilitate satisfactory experiences in pre-litigation/pre-arbitration dispute resolution. The best way to facilitate a satisfactory experience – take the opportunity seriously, choose a mediator wisely, and explore options rather than rejecting all options out of hand.
One of the difficulties in this process is the lack of trained, qualified, and experienced mediators. Too often lawyers are left with only mediocre to bad choices. That can be because of the process contained in the contract which encourages disagreement between the parties with respect to selection of a mediator which results in a race to the bottom in terms of mediator’s skill sets. But more often it occurs simply because there is a lack of experience both on the part of lawyer representing a client in that setting and on the part of a mediator whose experience comes from mediations, often court ordered, that occur well into the litigation process. Too few lawyers and fewer mediators are skilled in the process of mediating business disputes in the pre-litigation/pre-arbitration stage of dispute resolution.
A mediator that mediates in the pre-litigation, pre-arbitration setting must be patient. The process will likely take longer. A mediator in that setting must listen more and speak less – facilitate more and evaluate less. Clients and lawyers must be drawn into the process and see that the mediator cares about satisfying their individual interests while at the same time being realistic about what can and cannot be done in light of the issues in dispute and the interests of all parties.
The role of mediator in the pre-litigation/pre-arbitration is really important. At that stage in the process, through sifting and winnowing of positions and interests, the mediator stands in the position to have a positive impact on all parties to the process. That is true whether the matter resolved in mediation or not. If the matter resolves, it is the only stage in the process where both sides to the resolution can actually be satisfied with the result – although neither would probably admit it to anyone other than their lawyer or a close family member. If the matter does not resolve, the lawyers and the parties have the benefit of an outside look at their cases and the parties should come away from a failed mediation knowing what they are getting themselves into and why – thereby making a more informed choice.
Mediation occurs by choice. Mediated resolutions occur when the parties find agreement. Pre-litigation/pre-arbitration mediation works. Now, lawyers and clients, choose the right mediator and get back to work.
