As part of my job I am often asked to explain legal concepts and processes, today I want to tell you what a mediation is and when you should be looking to mediate your case.
Mediation is a legal process where the parties of a lawsuit meet with a mutually selected neutral person (mediator) who assists them in negotiating a settlement of their case. The role of the mediator is to facilitate negotiations, he does not decide the case and can not force parties to settle.
Typically mediations will take place at the attorney's office who is acting as the mediator. One party and their attorney will be placed in one conference room and the other party and attorney will be placed in a separate conference room. The mediator will then take turns going to each of the rooms discussing the case with the parties/attorneys and delivering offers from one room to the other.
In some cases, a mediator may suggest bringing all the parties and attorneys into one room to start the mediation and have the attorneys do an opening statement regarding the dispute. I do not think this is effective and almost always decline. What I have seen and heard other attorneys tell similar stories, is that the opening statements typically just inflame the parties and you spend the first hour and a half of the mediation trying to get everyone calm enough to negotiate. There may be a place for opening statements in mediation, but I have not seen it yet.
Many times the individual selected as the mediator is an older lawyer with lots of experience in the type of case that the parties are currently litigating. The reason parties tend to select these mediators is so that through the negotiations process the mediator can provide context and opinion from an informed position on the merits of the case and the reasonableness of settlement offers.
The sign of a successful mediation is that everyone leaves a little unhappy. This may seem counter-intuitive, but what I am getting at is that one side likely paid a little more than they wanted to and the other side likely accepted a little less than they wanted to. In this scenario, both are a little unhappy, but both negotiated and compromised on an agreement they could live with and was better than the risk and expense of continuing to a trial. To me, that is the mark of a successful mediation.
When should you mediate your case?
Alright, so now that we know what a mediation is and the role of the mediator let's move on to discussing when you should mediate a case. There is a time that is too early to mediate and a time that is too late to mediate a case. In most cases, both parties will need to spend some money litigating the case to learn all of the relevant facts necessary to know if they can settle the case or if it is one that needs to proceed all the way to a trial. However, there is a point where so much money has been spent and so much time has been invested into the case that the chance of settlement through mediation has likely passed.
So how do you identify that sweet spot where everyone has enough information and skin in the game to mediate the case, but not so much that it has passed the point of settlement? Well, the unfortunate answer is, that it depends on the case and it likely comes down to mostly an experienced judgment call. Here are some things to consider though:
Has written discovery been completed
Have party depositions been taken
Have expert depositions been taken
How far are we from a trial date
How far apart are we in the negotiations
What is the likely success at trial
If I win at a trial what is the likely value of that win
If you have not at least made it through written discovery and party depositions then there is likely not enough information, time, or money in the case for mediation to have a high likelihood of success. Once you have completed written discovery and party depositions you are likely in the sweet spot. Additionally, if you have only done one or two expert depositions then you are probably still within the sweet spot for mediation.
If instead, you have already completed all discovery, party depositions, expert depositions, and non-party witness depositions you are likely beyond the point of mediation. At this point, parties have likely become entrenched in their positions and the likelihood of settlement during mediation drops drastically.
As an additional consideration before requesting a mediation of your case, you should review how far apart you and the other party are, the likelihood of success at a trial, and if successful what your likely recovery would be at a trial. Then consider how much more money and time are required to reach and successfully present your case at trial. You may realize that the additional cost of litigating through a trial when subtracted from your current valuation. This can often provide context on whether settlement is beneficial at this point.
Why do mediations take so long
Mediations are typically an all day event. There is some scientific research as to why mediation almost always takes at least six hours, but it can be explained without it. Put simply, a mediation takes all day because both parties are slowly wearing down the others will power and seeking to reach a compromise.
Ok, fine you talked me into it, here is a touch of the science. Research has directly linked your willpower with the level of sugar in your brain. Sugar is your brain's primary energy source and it uses it at a faster rate than can be replenished while you are awake. Your brain will use more sugar when it is under stress. Mediation is stressful and the constant back and forth negotiating takes a lot of willpower and energy. So what you will notice, is that as the day goes long you will begin to crave a sugary drink or snack. You will almost always see these available at a mediators office.
The Mediator, if he is doing his job right, will try to keep both parties negotiating well into the afternoon, even if it appears there is no settlement in sight. The mediator knows that once he passes that six hour mark (about 2 PM if you started at 8 or 9 AM) that everyone will begin to lose some of that grit and willpower and start moving to a resolution so that they can get done and get home. Not every case will settle, but those that do almost always do so after 2 PM and almost always between 3 PM and 5 PM.