Arbitration & Mediation Practice of  Jerome F. Rock

Mediation Strategy

“Pre-Mediation“

Improving Outcomes in Mediation with Use of          In Person Pre-Hearing Conferences in              Business Court Cases

Each Mediator develops a style or approach that reflects their training, experience, skill and personality. Some mediators are skillful in maintaining a productive joint session, while others prefer to keep the parties sequestered the entire duration.   Some mediators adhere to the facilitative style of mediation; others are comfortable in suggesting terms of settlement in what is referred to as an evaluative approach. Some mediators characterize themselves as generalists while still others offer their subject matter qualifications in fields such as engineering, construction, technology or business, and integrate these skills into their mediation practice.  

I’d like to expand the option of available styles or techniques to include the use of an in person Pre-Hearing conference with each side well in advance of the scheduled Hearing date.  I refer to this as “Pre-Mediation”.  This approach can be useful in any civil case mediation, but I think it is particularly useful in “early case” mediation, and in business court cases where the principals are actively involved in their disputes and insurance coverage is a secondary factor or not involved at all. 

I’ve broken down the discussion to elaborate on some of the key aspects of the Pre-Hearing Conference, and how they benefit the formal Hearing by improving the likelihood for settlement of the case.  These topics are easily molded to the specific controversy and apply well beyond business court type cases. If you begin your task with a Pre-Hearing Conference, whether you are a mediator or as counsel, you will engage and communicate to the great benefit of the mediation process.

The importance of a relationship of trust with the parties.         During the Pre-Hearing Conference, the environment is relaxed but business like.  Even if the mediator has prior experience  with the attorney, it is likely this will be the first time the mediator has met with the principal.  If you have the opportunity, schedule the meeting at the principal’s place of business.  Business people are proud of what they do and what they’ve built. They’ll appreciate the courtesy you show by meeting on their turf.  This session is an important first step in showcasing your role as mediator and explaining the formality and flexibility of the mediation process. You are building a relationship of trust and confidence in your role as mediator; and assuring the principal that you will be diligent in working to arrive at the proper resolution to the dispute.  When you meet again in the formal Hearing, you will have a solid foundation to build on during negotiations.

Executive Briefing on the Dispute.   The Pre-Hearing Conference is the opportunity to get a briefing on the legal theories and positions of the parties.  You can initiate a dialog  with counsel and the principal to clarify key issues, and maybe elicit some candor on which issues or terms are key to achieving a settlement.   As a result of this meeting, I can gauge the status of document exchange and discovery (whether it has been completed, or whether further information exchange is required) and integrate this into my ideas for the formal process ahead. 

The Mediator as Process Leader - Design the Process.   The mediator is educated and trained to support a productive interaction between parties and counsel, to take initiative, exploring the facts, legal issues and relationships between the parties, and suggesting and explaining alternative dispute resolution techniques or processes that best match to the special conditions of the case.  The term Dispute Resolution Advisor has been used to emphasize the consulting role of the mediator in selecting the appropriate ADR process for the matter.   I present a Pre-Hearing Conference AGENDA, in the form of a comprehensive checklist of important issues and strategies that should be considered as part of the design of the mediation process.  This Agenda exposes counsel and the principals to the broad range of ADR options and useful ways to customize the process to best suit the nature of the dispute.   I can explore basic preference of each party to caucus, plenary or joint session, facilitative or evaluative styles of mediation, and I can make sure I will adopt these preferences, or I will get their support to stretch their comfort zone.  This Agenda also explores hybrid approaches, such as Med-Arb, (Arbitration of unresolved issues after completion of Mediation), Summary Jury Trials and Early Neutral Fact-Finding/Evaluation.   If I sense the advantage to have an expert involved in the case, I’ll suggest that the parties jointly select the expert, jointly develop and agree on the scope and assumptions, and share the cost.  The parties would then have the benefit of unbiased, objective information to support the negotiation process in mediation.   In shareholder dispute issues this need for a jointly selected expert is so universal, mediators immediately offer a list of accounting firms conversant with valuation issues as a way of avoiding the inevitable confusion that results from two experts engaging in battle.

There may also be opportunities for me to act in some informal manner as a discovery facilitator, exchanging requests for information, maintaining schedules and resolving pre-hearing issues.  Many times I will encourage that materials (including joint expert reports) be prepared and used FOR MEDIATION PURPOSES ONLY.  In the event settlement is not achieved in mediation, the future litigation strategy is not restricted.   

As a result of this activity during the Pre-Hearing Conference, I feel comfortable with a recommendation on the design or structure of the forthcoming steps, including the details of the formal mediation Hearing.

Demonstrate Mediator’s Role as Problem Solver.  During the Pre-Hearing Conference, I operate in a “problem solving” mode to explore strategies and underlying needs or requirements that aid in conducting the formal Hearing and resolving the case. I also explore interest based factors such as existing or prospective business relations and the chance to resolve disputes that may be outside the scope of the current litigation.  This is also the opportunity for the mediator to demonstrate the value of their special experience or subject matter qualifications by offering insightful and challenging questions and constructive comments or suggestions.   Because the Pre-Hearing conference is conducted in advance of the mediation Hearing, I have the time to suggest options or different strategies or float the trial balloons. The parties have sufficient time to evaluate and react to these suggestions before the hearing.  These new ideas are often key parts of the mediated settlement.

Although settlement will almost always involve the grudging exchange of money, “other issues” can be important factors that facilitate negotiation or reduce barriers to settlement.  The Pre-Hearing conference is the appropriate time to explore these issues. The following factors are illustrative, but certainly not exhaustive:

i) the importance of continuing business relations, or the acceptable path to sever ongoing business relations; negotiating non-competition and non-disclosure disputes

ii) the importance of confidentiality, avoidance of adverse publicity, non disparagement, nondisclosure of settlement;

iii)  recognition of financial hardship, escalating legal transaction costs (litigation fatigue), the time value of money, immediate receipt of money, or extended payment terms;

iv) the importance of limiting the future distraction to ongoing business operations;

v)  future transaction costs, delays, appeals, multiplicity of actions;

vi)  simplicity or complexity of legal theory or facts, ease or difficulty in presenting witnesses, experts, etc.;

vii)  opportunity to exploit or avoid “special factors” such as adverse publicity or egregious conduct that tend to be “multiplying factors” to trial court judgments;

viii)  the importance of principle, value of apology, the need to be heard or for a “day in court”, or to be in control of the outcome;

ix)  reframing the damages from what was lost to what can be done with the settlement;

x)   opportunities to settle and dismiss other litigation matters; or to address issues not a part of the present controversy, or that could not be granted by formal legal process such as settlement and release on other potential or future claims.

Benefits to the Hearing.   My interactions with the parties during the Pre-Hearing Conferences, as well as follow on activity, are conscious efforts to get the parties into a cooperative mindset, and to a limited extent, to act collaboratively.  Whether it’s agreeing to exchange information readily without reservation (For Mediation Purposes Only), or jointly selecting an expert, or discussing options and evaluating trial balloons, the parties have temporarily suspended the sharp edges of trial advocacy. I’ve explored and attempted to exploit the “other issues” and anticipate how these topics can be used to side-step contentious issues, or reframe the discussion.  If the mediation results in a creative solution, the chances are strong the seed was planted during the Pre-Hearing Conference.

Prior to the Hearing, I’ve heard and talked with both sides, seen the legal theories and documents and understand the facts.  I often feel I’m in a unique position to appreciate the extent of  “confirmation bias” that keeps the parties in their intractable positions. This insight is useful during the negotiations and when explained in a convincing way, can reduce the reluctance to accept compromise.

Finally, the Pre-Hearing Conference eliminates the frustration of waiting impatiently in a conference room while the mediator gets an initial briefing by the other side. At the start of the Hearing, the parties are prepared to engage in substantive discussions in a timely and efficient manner. 

For these reasons I’m in a better position to lead the parties to a successful resolution of the litigation, in large part because of the ground work that started with the Pre-Hearing Conference.  Counsel can take the initiative to suggest a Pre-Hearing Conference to any mediator if they  see the anticipated benefits.  The Pre-Hearing Conference may be taking on added importance in situation where the court is initiating “early case” mediation where time lines are collapsed and traditional full discovery may never be required. The lawyer may want to have their client  fully engaged in “real time” during the early phases of mediation so they will be prepared to understand and participate in the process.  As they say, this may be their only day in court.  No better time or more conducive environment to engage the client than the Pre-Hearing Conference.  For your consideration, just one more technique that makes Alternative Dispute Resolution your responsibility.

© Jerome F. Rock 2016.  Published in the Wayne, Oakland and Macomb County Legal News, July 1, 2016

 

Mediation - Off Ramps on the Litigation Super-Highway

I offer the analogy that Mediation should be viewed as an "Off Ramp on the Litigation Super-Highway".  In all fairness, the phrase was first used by my colleague Richard Hurford, former VP for Litigation at Masco Corp., and current partner at Ogletree Deakins.   The outline presented below is largely based on an article published in the State Bar of Michigan ADR Quarterly Journal.

Mediation can be used as a resource to settle a dispute at every stage in the litigation continuum, and can often be used more than once if the parties were not prepared to settle at the earlier session.  The following discussion presents the argument for use of Mediation at the various stages along the Litigation Super-Highway.

1.  Early Case Mediation - The First Off Ramp

Parties and their attorneys often attempt to negotiate a business solution to a dispute prior to litigation, to avoid the cost of preparing the Complaint or Arbitration Demand, and the associated filing fees.  Sometimes, however, these pre-litigation negotiations are not successful, and it becomes necessary to escalate the dispute to demonstrate resolve.  This is the first opportunity to utilize Mediation as a tool to resolve the dispute.  In some cases, the facts are well known and undisputed and further discovery will add little insight to the case.  In other cases, the legal issues are sufficiently balanced so that neither party can realistically anticipate a quick summary disposition of the case. 

The parties are at loggerheads, the the attorneys have not been successful in negotiating a resolution to the conflict.  The parties and their attorneys are ready to ready to accelerate onto the Litigation Super-Highway.  This is an example of the first Off Ramp opportunity.

In some jurisdictions in Michigan, formal Early Case Mediation programs have been instituted that compel an introductory Mediation session shortly after the Complaint and Answer have been filed, and before any discovery has taken place.  The "settlement rate" through the Early Case Mediation phase is reported at 32% !! This includes all matters that were voluntarily dismissed, settled privately, or resolved at the Early Mediation stage. Mediation didn't resolve all these cases, but it is responsible for two important factors.  First, it forced the parties to discuss early settlement; and second, it gave the parties an introduction to the process of Mediation, with the express objective of encouraging the parties to participate in the process to resolve their dispute.

Early Case Mediation can be imposed on the parties by the Court, or the parties can voluntarily enter the process.  Under the right circumstances, the benefits to the parties can be substantial.  Even if the parties are not prepared to complete settlement of the litigation, this may be the opportunity to frame the major issues, identify documents or discovery, and reconvene the Mediation hearing when the parties anticipate having sufficient information to properly assess settlement terms. As a trusted neutral, Mediator can be instrumental in planning the future steps and completing the Mediation hearing, resulting in a satisfactory resolution of the dispute in a cost effective manner. 

Under Court supervision, the Mediator may act in the role of a case administrator to deal with technically complicated cases.  The Mediator will stay involved with the parties and monitor issues that must be addressed before settlement can be achieved.

2.  Mid Case Mediation - The Second Off Ramp

 This Mediation opportunity occurs when the attorneys have marshaled sufficient facts, and have exhausted opportunities for summary disposition.  This is not  an endorsement of "discovery lite" litigation, but it may involve some professional judgment in "right sizing" the litigation effort to the "Business Case".  Experienced attorneys will have been negotiating for settlement at this time.  However, in the event personalities or outside factors interfere with successful negotiation, the attorneys may be wise to suggest Mediation during this Mid Case opportunity.

There are  a number of  advantages to initiating Mediation at this stage:

  • Maintains Litigation Expenses proportionate to the Business Case.
  • Non-economic factors are presented as barriers or opportunities to settlement.
  • Creative options are generated through a collaborative process.
  • Firm Positions can be explored, disclosing the underlying issues and needs of the parties. For example, a party may be demanding money damages, but upon exploration, limiting potential competitive business is the business objective.
  • Emotional issues can be vented in a controlled manner.  The psychological stress to litigants (or the relief of stress) can be used to reach a satisfactory settlement.
  • The parties develop a sense of ownership of the settlement terms. Litigants often feel more satisfied with the judicial process than those situations where attorneys are "strongly recommending" that they accept settlement terms; or where the attorneys and the judge meet in chambers, returning with an edict to the clients.

In Michigan and other jurisdictions where a mandatory "Case Evaluation" system is in place, there are strategies to adopt Mediation before, and after the recommended award of the "Case Evaluation" system.

  • Pre Case Evaluation Advantages
  • Post Case Evaluation Advantages

3.  Late Case Mediation - The Third Off Ramp

When discovery has wound down, and the threat of dispositive motions have faded, the attorneys should be negotiating toward settlement.  Again, personalities or outside factors  may interfere with successful resolution.  The parties are now experienced in the high cost of life on the Litigation Super-Highway.  The likelihood of  a successful resolution through Mediation is enhanced.

4.  Settlement Conference - Judicial Ordered Mediation - The Last Off Ramp

The often quoted statistics of of 97-98% litigation settlement rates makes it unlikely that the parties will still be holding their positions past this stage of the litigation.  During the Settlement Conference, the Judge and the attorneys are involved in conversation, often constrained by time.  The attorneys may have some type of "settlement authority" or their clients may be readily available.  But the clients are outsiders to the Settlement Conference.  Although all parties say they want to settle the case, all elements for a successful resolution are still not present. 

Mediation adopts a new approach that is not top down.  Mediation can spend the time necessary to lead the parties through the necessary steps to achieve settlement. The last Off Ramp before the high speed crash on the Litigation Super-Highway. Some cases just need to be tried.

© Jerome F. Rock 2009.  Published in ADR Quarterly, the Publication of the ADR Section of the State Bar of Michigan. Vol.16, No.4

Subject Matter Qualifications of Mediators

This is particularly an issue in matters that involve a complex commercial matters, design, construction, technology and environmental contamination and remediation.  The standard theory is that Mediators need not be skilled in the subject matter of a case because their training as a facilitator is "generic", and the Mediator's skills will  lead all parties through the same process. 

However, attorneys representing clients in areas involving complex subject matters often relate their personal observation and frustration that facilitators sometimes lacked the basic subject matter background to effectively speak and understand the language, let alone provide a leadership role in clarifying issues and developing creative solutions to resolve the technical disputes.

As an engineer, and a business executive involved in construction and high technology, I focus my ADR practice on just those matters where an understanding of the complex technical issues is important in leading the parties to a settlement. 

Role of the Attorney Advocate in Mediation

I also adopt a slightly different tact from the standard facilitation model with my approach to the role of the attorneys in the dispute or litigation.    As a mediator, I work with counsel to develop an understanding of the obstacles to settlement, and actively suggest options that address the barriers to settlement.  Often, as the Mediator, I can explore avenues that counsel  prefer not to suggest for strategic reasons.

My suggestions are not designed to force concessions by a party and avoid placing the client or counsel in the perceived position of bargaining against themselves.   This approach fosters a creative environment, focusing on solving the problem,  and makes it more likely both parties will adopt a strategy that results in settlement.  

Experience

I have been an active Mediator since 2002 and have completed over 800 mediation sessions.  I am qualified under the following panels:

  • American Arbitration Association, Panel of Neutrals for Mediation.
  • Panel of Civil Mediators, Oakland County Circuit Court and Oakland County Probate Court.
  • Panel of Civil Mediators, Wayne County Circuit Court and Wayne County Probate Court.
  • Panel of Civil Mediators, Washtenaw County Circuit Court.
  • Panel of Civil Early Case Intervention Program, Oakland County Circuit Court.