Mediation – Finding a Way To Resolve Disputes For the Client
Mediation is an important part of a thorough Alternative Dispute Resolution strategy. Unlike arbitration or a court trial, mediation is non-binding upon the parties. Most judges, before a case is tried, will require the parties to go to mediation early or late in the discovery process. If one party or the other requests mediation, judges will normally not refuse this to do so. Through the process, the attorneys and their clients can determine whether a settlement is possible, taking this step in many instances before the parties launch into major discovery, depositions, trial preparations and trial.
There is usually no reason to wait until the courthouse steps to settle, after all the discovery has been completed. Once the money has been spent, it is lost in any last-minute settlement, and neither side usually obtains their attorney’s fees and expenses as part of such a settlement. Thus the process allows for an unbiased opinion with a result of either a successful mediation settlement or a clearer understanding on the part of all parties of how the legal issues and facts may be viewed by the trier of fact.
In certain cases, negotiation works without having to involve a third party or wait for his/her availability to mediate and so forth. In other cases, however, negotiations work best if there is an independent third party present who is experienced in the law and the construction industry and who can lead the parties to a settlement. Some parties wish to have a forum for letting out their frustrations, for arguing their cases, and an unbiased person who is at least willing to listen, give them feedback on their position, feedback regarding the other side’s position, and a possible range of settlement.
The mediator is retained for a fee, and the parties should be willing to devote a full day to the process if required. The parties are each represented by counsel. Sometimes an opening session occurs. At other times, the parties never see one another, and the mediator moves between the parties and seeks a common ground for settlement.
Some attorneys argue that they need discovery, sometimes massive discovery before they can go to mediation or have meaningful settlement discussions. This may be correct, for example, if a party has little documentation, does not know what cards the other side has in its hand, does not understand the other side’s defenses or position from the pleadings, or who potential witnesses may be. Additionally, a party may have legal defenses which should be raised by motion and the issue decided before mediation or discovery takes place. However, if each side has a good idea regarding the issues, and the parties just need to sit down argue their points, a mediator can be a good sounding board.
During his many years serving the construction industry, Mr. Walstad has become attuned and developed an instinct for identifying the right time for settlement negotiations between the parties. He has successfully settled a great number of cases, with significant savings to clients by encouraging mediation in many cases when it appeared unlikely the parties could come to an agreement.
The six basic requirements for any successful mediation are:
- A willingness of both sides to seek a settlement.
- Choosing a good, experienced mediator, who is interested in the case, willing to consider the positions of the parties, listen to their input and offer feedback to them. Sometimes a mediator is asked to make a "mediator’s opinion," that is his/her assessment of why the case should be settled and on what terms. That assessment is usually only given if both parties ask that it be made. It is non-binding and can be helpful to the process of settlement.
- The mediation should be at a neutral location, not in the offices of any of the parties or their counsel, and the offices should have sufficient break-out rooms so as to allow separation of the parties and will facilitate the shuffle diplomacy of the mediator. Sometimes mediator’s like to use their offices, but can lead to distractions for the mediator.
- Obtaining a commitment that the principals of the parties will attend the mediation. Otherwise they do not have the benefit of discussions with the mediator, gaining insight into the other side’s position, and the absentee principals may lose the benefit of private strategy discussions apart from the mediator.
- A commitment on the part of the mediator and the parties to be available for one whole day if required and, if necessary, into the evening. Many a mediation failure has been traced back to one party or the other, or the mediator, having a schedule conflict which results in a premature termination of the mediation. You may never have the parties in this atmosphere again. Seize the opportunity and continue the process if at all possible. If your mediator is inexperienced, uninvolved or preoccupied, consider sending the mediator home and continue negotiations between the parties.
- Lastly, if settlement terms are reached, keep the parties together while those terms are written by the attorneys, agreed upon and all parties have signed a settlement document. A signed mediation agreement is binding. The mediator will also sign, witnessing that the agreement was reached. BEWARE of putting off the finalization of the agreement until a later point; many a mediation has ultimately failed as parties change their minds once they leave the premises! If you need the signature of an officer or party who is not present, send the agreement to them by fax and have them fax back a signature. Don’t accept an excuse for delaying the finalization of the deal.
Our partners within WLG have substantial experience representing parties in the mediation process. Mr. Walstad, in particular, has served as a mediator of intricate, complex construction disputes. In cases with several parties, WLG has often utilized more than one mediator to ensure the positions of all parties were fully considered and discussed.