SETTLEMENT CONFERENCE OR PRIVATE MEDIATION
The rules and procedures of our civil justice system are intended to encourage the settlement of lawsuits. Under the Arizona Rules of Civil Procedure, unless the judge finds good cause to do otherwise, the judge will order the parties to participate in a court-sponsored settlement conference. Alternatively, if all of the parties agree, they can participate in private mediation. The two proceedings are very similar to each other.
DIFFERENCES BETWEEN COURT-SPONSORED SETTLEMENT CONFERENCES AND PRIVATE MEDIATIONS
The primary difference between a court-sponsored settlement conference and a private mediation is the identity of the person who presides over these proceedings. A court-sponsored settlement conference is presided over by a judge pro tem. Generally, the judge pro tem is a local attorney who is not affiliated with the case, and who has volunteered to help the court run settlement conferences. The judge pro tem that presides over the settlement conference is randomly selected by the court from its pool of volunteers. In private mediation, the parties hire someone to serve as the mediator that is agreeable to all of the parties. In private mediation, the mediator is usually an experienced attorney or retired judge who has a reputation for successfully finding a way to bring parties together to get cases settled.
Court-sponsored settlement conferences and private mediations each have their advantages and disadvantages. With court-sponsored settlement conferences, the advantage is that the parties do not have to pay the judge pro tem for his or her time. The disadvantage is that the parties do not get to choose their judge pro tem, and there is a strong possibility that their case could get assigned to an ineffective judge pro tem. In private mediation, the advantages and disadvantages are reversed. The disadvantage is that the parties will have to pay the mediator for his or her time, and this is an expense that is likely to be in the range of $1,000.00 to $5,000.00 per party. But the advantage is that the parties know from the outset, either through the lawyers’ past experience with the mediator or through the mediator’s reputation, that their mediation will be presided over by an effective mediator who will probably give the case its best chance to settle.
TIMING OF THE SETTLEMENT CONFERENCE OR MEDIATION
Other than the differences I described above, everything else about the court-sponsored settlement conferences and private mediations is virtually the same. Because of that, in the interest of simplicity, I will, going forward, refer to both of these proceedings collectively as mediation.
Lawyers usually do not attempt to mediate cases until they feel that the parties are in a position that they are prepared to start seriously exploring settlement because mediating a case requires a significant investment of time and money. So the key question is: When do the parties feel that they are prepared to start seriously exploring settlement? That question can only be answered on a case-by-case basis, but generally speaking, parties are ready to seriously explore settlement if and when they feel they have a good understanding of what the evidence in the case would look like if the case were to proceed to trial.
Since expert witnesses are one of the most costly aspects of personal injury litigation, it is important to consider when the mediation should occur in relation to expert witness discovery. Expert witnesses are more important in some cases than others. In cases where it does not appear that expert witnesses will play a large role, then the mediation should be conducted before the parties have to incur the expenses associated with retaining experts. Conversely, in cases where it seems expert witnesses will play a more decisive role, the mediation should probably not be conducted until a sufficient amount of expert discovery has been conducted.
WHAT TO EXPECT IN A SETTLEMENT CONFERENCE OR MEDIATION
The word “mediation” intimidates most clients because it is a legal-sounding word, and it sounds like, and is often mentioned in conjunction with, “arbitration,” which is a formal legal procedure, and which certainly can be intimidating. But there really is no reason to be intimidated by mediation. It is an informal low-pressure proceeding at which the client is not expected to answer questions for the other side or engage in any kind of public speaking.
The root of the word “mediation” is “medium,” which means to be “in the middle” or “in-between,” and that is exactly where the mediator positions himself or herself — in between the parties. The mediator’s middle positioning is physical, not just metaphorical. At a mediation, the parties are separated from each other, and they do not generally see each other or communicate directly with each other. The communications are delivered and received through the mediator. At a mediation, the parties generally gather in the same building, but they are physically separated from each other. Each side goes to its own assigned conference room, and the mediator walks back and forth between the parties’ conference rooms, taking turns talking to the parties. From the middle, the mediator is in the best position to broker a settlement between the parties.
Mediators generally use the following tactics to try to bring about settlement.
- Listening. Parties don’t generally listen to mediators unless they are satisfied that the mediator has listened to them first. Mediators need to be good active listeners.
- Understanding. Mediators have to go beyond listening. They need to demonstrate to the parties that they understand the case. The mediator may not agree with one or more of the parties — in fact, disagreement is to be expected — but the mediator needs to understand the parties’ positions well enough that he or she can advocate those positions. Mediating a case with a mediator who doesn’t get it would probably be a complete waste of time.
- Educating. Most professional mediators have impressive credentials and a wealth of experience handling cases similar to the case at issue. One of the greatest benefits of mediation is that the parties have an opportunity to be educated by a neutral expert as to what to expect in the case going forward. The mediator may educate the parties as to some of the following issues:
- How long will it take to get to trial?
- Procedurally, what will happen before this case gets to trial?
- How much will it cost to get to trial?
- As the case progresses through trial, how difficult will it be to deal with the mental and emotional strain?
- What are the benefits of trial?
- What are the risks of trial?
- What are the most likely outcomes at trial?
- What are the risks of a possible appeal after trial?
- Advising. Mediators don’t generally give parties direct advice; however, they often advise parties indirectly. For example, I don’t think I’ve ever had a mediator tell my client “I highly recommend that you accept this offer.” But there have been many times that I’ve heard mediators tell my clients “this is about as good an offer as I’ve ever seen for this type of case.” I’m not sure if I’ve ever had a mediator avoid This is often beneficial not just for the parties, but also for the parties’ lawyers because the lawyers can benefit tremendously from insights that can come from a fresh pair of eyes. By the time a case is mediated, the lawyers have probably been working on it for more than a year. When you get that close to something, there is a risk that you get to a point where you cannot see the proverbial forest because you are so focussed on the proverbial trees. A mediator’s perspective can be a helpful safeguard against that hazard.
- Brokering. There is usually a fair amount of dickering that occurs at a mediation. The mediator goes back and forth between the parties delivering offers and counteroffers. After the first round of negotiations, the parties are usually far apart from each other, and settlement may seem impossible. But a good mediator will push and pull and cajole the parties out of their extreme positions, and into a range where the case could realistically settle. Mediators will often advise parties in making their offers or counteroffers. For instance, a mediator might tell one of the parties, “I think you need to make at least a $100,000 move on your next offer, or else the other side is going to terminate these negotiations.”
Sometimes I sense that mediators are not engaging with the parties as much as I think they should. Rather than engaging, I sense that they are simply carrying offers and counteroffers back and forth between the parties. This has never seemed to me like a particularly brilliant usage of a mediator’s generally considerable talents. In other words, you would not normally pay somebody $400 per hour just to carry messages back and forth from one room to another, but that is what you may end up doing if your mediator fails to aggressively engage the parties in his or her attempt to broker a deal.
Back and forth offers are the most common bargaining tactics, but there are some other clever bargaining tactics that mediators sometimes employ to try to quickly get the parties into the same proverbial ballpark or to reach a final settlement, including bracketing, and a mediator’s proposal.
A bargaining bracket is where the parties agree to negotiate within certain defined parameters (i.e., brackets). Any party can propose a bracket. For example, the defendant might propose to the plaintiff: “We will go up to ‘X’ if you will come down to ‘Y’.” If the plaintiff accepts the proposal, then the parties can continue to negotiate between ‘X’ and ‘Y’. If the plaintiff rejects the bracket proposal, then the parties can continue to negotiate outside of the parameters of the rejected bracket.
At the end of a mediation session, if the parties have not yet reached a settlement, then sometimes mediators will make a mediator’s proposal. A mediator’s proposal is a settlement proposal that the mediator proposes to both parties. There are basically two rules for a mediator’s proposal. First, the case will be settled if, and only if, both parties accept the proposal. Second, the mediator will only reveal the opposing party’s response to the mediator’s proposal to a party that has already accepted the mediator’s proposal. The clever upshot of the rules is that there is only one way to find out whether your opposing party has accepted or rejected the mediator’s proposal, and that is to first accept the mediator’s proposal yourself. This is helpful because parties generally do not want their opponents to know their top/bottom dollar unless they can get a deal done.
At a mediation, nobody is forced to settle. If a settlement is not reached then the case simply continues onward towards trial. If the mediation is unsuccessful, then the parties can mediate the case again later if they choose. And it is important to remember that the parties can settle the case anytime they choose — cases get settled outside of mediation all the time.
The philosophies, strategies, and tactics I’ve outlined above are the principles that guide our actions at Cluff Injury Lawyers. I’ve outlined them pedagogically to help anyone who wants to better understand these principles or improve their skills in utilizing them.
Author: Brigham Cluff