Mediators will tell you that parties often don't prepare properly for mediation. Holding Redlich partner and mediator, Toby Boys, gives the low-down on proper prepping.Â
Mediations held at an early stage can be difficult to settle, despite the fact that legal costs are lower and therefore less likely to be a road-block to settlement. Opinions may differ as to why that is the case. Perhaps it is because the parties donâ€™t have sufficient information to make an informed decision or maybe the parties have not suffered enough â€œpainâ€, both in terms of costs and time spent, to know the true value of a settled outcome.
But most mediators will also tell you that they consistently observe that parties do not properly prepare for the mediation. The result is that often mediations will fail where they might have otherwise settled or a party will end up with a worse settlement than might otherwise have been achieved if they had they done their homework beforehand.
So, what should lawyers and their clients do to prepare for mediation? The list could be very long, but here there are four key points to consider.
Know the facts, the case and the costs: Lawyers and their clients should learn as much as they can about the matter before they attend. Clearly information may be limited for mediations that are held at a very early stage, but the matters that should be considered are the background facts which gave rise to the dispute, the key issues in dispute, the underlying legal issues (in particular, the arguments that may be raised by the other side), the commercial and financial considerations and the personalities of the people involved in the dispute. Work out what the legal and commercial costs have been so far, and what they are likely to be if the matter does not settle.
Procedural matters: Parties should consider procedural matters, such as where will the mediation be held, who should attend (a small, efficient team of the key decision-makers is best) and that one or more attendees have full authority to settle. If authority is limited, then that should be made known to the mediator well before the mediation day. Consider what documents the mediator should read to understand the key issues in dispute. It is also important to prepare a draft settlement agreement or any other documents that may need to be signed on the day to resolve the dispute.
Prepare to negotiate: The mediation will inevitably involve each party being asked to compromise on their starting position. Parties should, therefore, prepare themselves for negotiation. The people who will attend the mediation should discuss matters such as who will give the opening statement and what each person will (or will not) say. Many clients will want to say something and they will be encouraged by the mediator do so. In that case, lawyers should help their clients to prepare what they intend to say. Each party should also consider the possible options for settlement, including the settlement sums and terms of payment that might be discussed.
Parties may be assisted by making a list of the outcomes they would ideally achieve, and then rank each of the items on the list according to their importance. You should also prepare a list of the outcomes that you think the other side may wish to achieve and consider whether any of those items can be conceded, hopefully in exchange for something that your client may want. You should help your client to consider their â€œbottom lineâ€ â€“ at what point will they walk away from the mediation without a settlement? Consider the questions of â€œwhat might happen if we donâ€™t settleâ€ and â€œwhat might be the cost of not settlingâ€? Help your client by testing their assumptions and wishes, because you can be sure that the mediator will do so.
Pre-mediation contact with the mediator: Each party should take time to contact the mediator before the mediation day and discuss the underlying commercial, legal and personal issues involved. The mediator may have obtained permission to tell you something about the other sideâ€™s motivations and underlying key issues and this information may help your team to prepare to negotiate on those points.
By taking the time before the mediation day, each party is likely to find that they are better prepared, more able to negotiate and get better results from the mediation.
Toby Boys is aÂ partner, Accredited Specialist â€“ Commercial Litigation, and National Accredited Mediator at Holding Redlich.Â
Like this story? Read more: