By Paul F. Monicatti –
Most disputes will settle as a result of mediation when all parties voluntarily participate in good faith, share the same objective of settlement, consider different points of view with an open mind, and are willing to compromise after considering the alternatives. Touted success rates range from 75% to 80% collectively for all disputes of every type, with some fluctuation depending on the particular type of dispute. Thus, many mediation participants enter into mediation with high expectations. Obviously, though, 20% to 25% of them will be disappointed.
Before the finger-pointing starts, and after searching for creative non-monetary options to satisfy previously hidden interests and then attempting various techniques to overcome impasse, all to no avail, there are several ways to salvage an up-to-that-point unsuccessful negotiation. Top mediators persist in exploring all available settlement options so the case doesn’t end up in court. You can capitalize on that tenacious character trait for your clients’ benefit. The ten steps below can be discussed between counsel and the mediator before or after leaving an unresolved mediation that eventually could lead to a later settlement:
- Tell the mediator the reasons why you think the dispute didn’t settle while something else could be done about it with everyone still present.
- Ask for a mediator’s proposal of a suggested monetary solution, which may be a specific sum or a bracket for the parties to consider and may include rationale or a principled basis for the suggested figure.
- Identify key factual, liability, causation, and damage settlement obstacles which might be removed by additional information or focused pretrial discovery.
- Contemplate use of mutually acceptable independent expert(s) to opine on key disputed issues where the parties’ own experts conflict.
- Identify the controlling legal obstacles impeding settlement that might be resolved by subsequent pretrial motion practice, such as motions to compel unproduced discovery, motions in limine on admissibility of contested evidence, or dispositive motions to partially or totally eliminate liability or damages, yet realizing that savvy trial judges could take any of these motions under advisement after briefing and oral argument thus leaving uncertainty to motivate further settlement negotiation.
- Draft a partial settlement agreement signed by the parties specifying which issues have been resolved and which ones remain open.
- Agree to recess and reconvene for another mediation session after sufficient time for: rest, reflection, reconsideration, and any necessary extension of a court-ordered deadline for completion of the mediation; further research, investigation, or focused discovery; review and analysis of any new information learned during the current mediation, and consideration of whether other key player(s) should be added as a participant in the subsequent mediation session
- Explore the use of other ADR methods, such as:
- Case Evaluation. The dispute is submitted to a party-selected (instead of court-selected as in Michigan) panel composed of one neutral alone or with two other partisan evaluators known and respected by the parties for an advisory monetary award following written and oral summations by counsel. This option is especially useful where damage value disparity is wide and liability issues are relatively narrow or essentially uncontested; even if that doesn’t settle the case, it may stimulate further settlement discussion.
- Expert Hearing. The mediator or a different neutral presides over a hearing designed to narrow the liability, causation, and damage issues disputed by the parties’ experts. The disputed and undisputed issues are summarized before the hearing so that the experts focus only on the contested issues and the reasons for their disagreement. The experts meet together with the neutral, counsel, and their decision-making clients for them to answer questions by anyone including the other expert(s). Following the hearing, the neutral will resume mediation in an effort to bridge the discrepancies between the parties.
- Minitrial. Typically used in business disputes involving larger amounts in controversy, this approach usually involves two phases. During the first phase a neutral advisor or mediator and party decision-makers hear the strengths and weaknesses of each other’s case from their attorneys who usually make more elaborate presentations of key evidence, including brief testimony, if necessary, to emphasize the point, unlike in mediation. During the second phase, the decision-makers then meet with or without the neutral, and often without their attorneys, to negotiate or mediate a resolution of their differences.
- Summary Jury Trial. This method involves an abbreviated presentation of key evidence in a more formal courtroom setting to a jury composed of local jurors who then render either an advisory or binding verdict. Attorneys present their evidence by way of oral argument, selective exhibits, and an occasional witness, usually under strict time constraints. After the jury deliberates and renders its verdict, the parties have the opportunity to question them. The SJT’s objective is to give parties who are sharply divided over the merits of their respective positions a prediction of how a real jury might perceive their arguments and theories at a later actual trial to motivate them to reach a settlement. It has been successful in environmental, mass tort, and substantial contract cases.
- Arbitration. Arbitration is a binding process in which contracting or disputing parties choose a neutral arbitrator or a panel of three arbitrators to hear their dispute and to render a final and binding award. The process is similar to, but less formal than, court litigation because in arbitration the parties may craft their own procedures and determine whether any formal rules of evidence will apply. In contrast to court litigation, arbitration is typically characterized by no or limited pretrial discovery, minimal motion practice, relaxed rules of evidence and procedure, a decision in which there may be no detailed opinion or findings of fact and conclusions of law, and a very restricted ability to overturn the result except in limited circumstances. Therefore, arbitration proceedings are designed to be faster and less formal, with more finality, than court cases where trial results may be appealed and possibly overturned.
- If all else fails and a trial in court or binding arbitration seems necessary to end the parties’ dispute, mediation still could lead to: a high-low arrangement (whereby the parties mutually agree to a stipulated minimum and maximum monetary result); bifurcation of trial (e.g., separation of liability and damages into different stages); stipulated facts, liability, damages, exhibits, or applicable law; and any other ways to simplify trial or arbitration.
- When leaving an unsuccessful mediation, don’t lose your composure and burn any bridges by accusations of bad faith, wasting time, or other typical clichés. It’s best to remain civil and professional if possible, keeping the lines of communication open because if the parties stop talking, then settlement progress necessarily stops too. Ongoing communication also may lead to voluntary information exchange and cooperative discovery, if not settlement.
Keep in mind that the life of any dispute is in a constant state of flux due to ongoing investigation and discovery, newly discovered evidence, subsequent trial court rulings, new appellate and statutory law as well as changes in the parties’ interests, influences, finances, needs, concerns, and goals. Each significant change provides an opportunity to revisit settlement. Also consider giving mediation another try after changing the format, attorneys, client representatives, mediator, or anything else about the personalities and attitudes of those involved in the process. Mediation is flexible and can be adapted for a custom-tailored fit to suit the circumstances of a particular dispute and the people it affects.
Paul F. Monicatti is affiliated with Professional Resolution Experts of Michigan, LLC. He’s been an arbitrator since 1983 and a mediator since 1986 in all areas of the law except family law and criminal law. He’s earned the highest ratings possible from Martindale-Hubbell, Best Lawyers in America, Super Lawyer, Leading Lawyers, U.S. News and World Report, Crain’s Detroit Business, and the international Who’s Who Legal: Mediation. A Michigan Lawyers Weekly 2019 Leader in the Law, he’s been named Best Lawyers’ 2024 Troy Area Lawyer of the Year for Arbitration, 2019 Troy Area Lawyer of the Year for Mediation, 2018 Troy Area Lawyer of the Year for Arbitration, and 2011 Detroit Area Lawyer of the Year for ADR. He’s served as a court-appointed mediator, settlement master, arbitrator, facilitator, case evaluator, receiver, expert witness, umpire, and referee. He authored the chapter on Mediation, Arbitration and Other Dispute Resolution Methods in addition to co-authoring the chapter on Settlement, Negotiation, and Alternative Dispute Resolution for ICLE’s Michigan Civil Procedure. He has taught ADR Advocacy Skills in negotiation, mediation, and arbitration at Western Michigan University Cooley Law School. He is a co-founder of ADRoit Dispute Resolution, Strongbridge Negotiation Strategists, and the International Academy of Mediators.
* Member Emeritus