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Saturday, February 24, 2024

If these 6 Factors Aren’t Right, Mediation Can Be a Waste of Time

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I know, I know – all litigators are supposed to be proponents of mediation at all times, in all weather conditions, and irrespective of any other factors.

But then, we wouldn’t be doing our job properly.

Let’s take a look at mediation, when it works, and when it doesn’t.

As much as the politically correct universe of negotiation would have you believe that every mediation is an opportunity to exercise your creativity and get a “win/win” solution where everybody can hold hands and dance together down the street, the reality is that many mediations are, in fact, just a mathematical exercise.

Accept it – Some Mediation Is Wasting Time and Money

Let’s start with this proposition – a lot of factors need to be right in order for a mediation (or any other form of negotiation) to be successful.

What’s successful? Well, in the context of a negotiated outcome I guess we’re looking for a solution where nobody wants to cry that much, and everyone can live with the result and go down to the pub and tell their mates that they had “a win”.

Without the right factors (some of which we’re about to look at) aligning (or, at least, being considered) you might find yourself wasting a lot of your time, and (worse) your client’s money by rushing into a mediation when it wasn’t properly set up in the first place.

Issue 1 – The Right Timing

Do you know why matters settle on Court steps?  It’s not because (usually) the lawyers haven’t been trying – it’s because clients, at the start of matters, are full of ego, bravado, pride, and principle.

It’s for that reason that having a mediation at the outset of a dispute is not always a good idea – the consequences of the matter not resolving are not necessarily “real” for the client yet.

It’s like telling your children that eating too much junk food will mean they get fat – sure, it’s true, but to them it’s ages away and parents could be wrong anyway and why should they care?

There are any number of theories on the right timing for a mediation, but my view is look for these factors:

  • you genuinely believe that both your client AND the other party (it takes two to tango, remember?) are properly aware of the real likely costs of proceeding, and have a good understanding of the risks and benefits of their cases;
  • realistic estimates have been given to get to trial
  • you have a proper understanding of your case, and your opponent’s case

Let’s drill down on a few of these.

Issue 2 – The Real Cost

Mediated outcomes are, by and large, often about money.  Of course in worlds like family law there can be much more at stake, but generally money is the driving force.

So a real and tangible factor when mediating is that your client is (painfully) aware of the real cost of going to trial.  That means you have to tell them.  Properly.

Don’t fluff around, or be optimistic – tell them what this could really cost, and make sure they understand what adverse costs orders look like.

If you have barristers – get their estimates too.

If you have experts – get their estimates.

If your client runs a business – make sure they calculate how much being in a Court room for a week is going to cost their business, and then multiply that by 2 or 3 to factor in for the time they are going to spend giving you instructions in preparation.

This isn’t a game – going to Court costs a tonne of money, and it’s your job to ensure your client properly understands it.

That way, when an offer of X hits the table in your mediation, it’s real – not fairy land.

Issue 3 – Understanding the Case

Really this is code for your ability to advise your client on their prospects.

After all, an offer of $25 and a packet of chewing gum might be bad if you’re likely to get a $1m judgment, but it sure as anything looks better than a likely loss and a $250,000 adverse costs order.

It’s pretty hard to mediate without knowing your case very well, and the other side’s case very well.

Just to avoid any doubt – knowing your case doesn’t mean you need to tell every single little thing to the other side during mediation, it means you can advise your client properly.

In  many commercial matters, understanding the case will be after pleadings, disclosure (discovery) and expert evidence has been exchanged.  That is often a good time to mediate, although if experts are going to be expensive then I can see the benefit in trying to mediate before that if you know their cost.

Issue 4 – Do you Really Need to Mediate?

As much as the politically correct universe of negotiation would have you believe that every mediation is an opportunity to exercise your creativity and get a “win/win” solution where everybody can hold hands and dance together down the street, the reality is that many mediations are, in fact, just a mathematical exercise.

I’ll offer you $100.  You’ll accept $50.  I’ll offer $90.  You’ll accept $60.  We’ll end up at $75.  Deal done. You would be amazed how often something resembling this happens.

Bearing in mind that preparing for and attending a mediation is quite expensive (more than many people think) consider not mediating but engaging in some other types of dispute resolution – perhaps with sophisticated parties an informal conference would do the trick?  Perhaps correspondence would work?  Don’t just leap into mediation because it’s sexy – it could also be unnecessary.

That all said, I accept that sometimes having people “in the room” can be a catalyst for discussions that might not otherwise take place.

Issue 5 – the Right Mediator

Not all mediators are created equal.  They are, after all, humans (yep – that’s a joke).

Some are more experienced, some less.

Some are brash, and some are restrained.

Some will try and lean on you to get a deal, and others will just sit idly by and watch the parties die of old age before a settlement is reached.

Importantly – some will be persuasive to your client, and the other side’s client, and to their counsel (or yours) – and others won’t.

So – don’t just pick someone in the right price bracket – pick the right person – after all, you know your client and you know the other parties – get the personality, seniority/experience, and persuasiveness level right and you’re on the right track.

Issue 6 – The Right Lawyer

Just because you know the most about your matter doesn’t make you the best person to go to a mediation.

Sometimes – ignorance is a great tool.  Other times, a detailed knowledge is essential.

Again – don’t forget the humanity issue.  If the other lawyer is going to get caught up in an ego battle because of how the matter has gone so far, then perhaps you might want to try avoid that?  Of course – you might not, as it could work to your advantage.

The point is – think about it, don’t assume.

What’s the Conclusion Then?

Mediations can absolutely be a colossal waste of time if you do them wrong.  If you rush in, if your client is not prepared, if you are under-informed, if the parties are still in chest-beating mode too much, or if you pick the wrong mediator – all of these issues can impact adversely on a successful mediation occurring.

Done right, with the right people, at the right time – they are still an important part of the lawyer’s ability to resolve disputes.

Happy Lawyering!

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  1. I just come about this blog today and I am already in love. Some articles are not worthy of reading especially when they are too long, but I am feeling this is even too short as j don’t want it to end.

    I am a fresh graduate and been asking myself if going into Law School in Nigeria is the real step I should take. Now, I am getting my answer and I am feeling like lawyering already.

    Please, keep inking law……

    Lemme go the next article..

    Thanks Chris.

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