The best way to achieve a good settlement is to prepare for trial

I have written several columns lately on mediation and how counsel are not doing a good job for their clients. It occurred to me that I should also address some of my concerns to those in HR, who are often the representative of the employer at mediation. So, how can you do mediation better?

We know that the vast majority of disputes settle without a trial. Of the claims filed in civil court, less than two per cent make it to trial; and that does not even account for all of the disputes that are resolved before litigation is started. In many cases, the parties and their lawyers can reach an agreement amongst themselves. If they can’t, then mediation is your best opportunity to do so. However, there is a big difference between going to mediation and winning at mediation.

Preparation is key

There is an old adage that the best way to achieve peace is to prepare for war. The same principle applies to litigation: The best way to achieve a (good) settlement is to prepare for trial.

Unfortunately, many employers and their lawyers do not take the time to properly prepare for mediation, and simply go through the motions. It is a mistake to simply copy your pleading into a mediation brief, show up on the day of mediation and see what happens.

What you should be doing as the representative of your company is work with your lawyer to prepare the case properly: 

1. Review the case in detail
2. Consider what the (real) issues are.
3. Gather all relevant documents.
4. Identify and contact witnesses.
5. Assess all of the evidence.
6. Identify the strengths and weaknesses of your case.

To properly assess your case and identify your weak points, play devil’s advocate and pretend you are on the other side — how would you argue the case?

Once you have done all this, you can start to assess the value of the claim and develop realistic expectations (see below).

Have realistic expectations

This is what I tell my clients, and the parties at mediation when I am the mediator: The only reason to settle is if it beats the alternative.

In the famous text on negotiation, Getting to Yes, the authors refer to the need to know your BATNA: the Best Alternative to a Negotiated Agreement. In the context of most mediations, that is continuing through the litigation process and ultimately going through a trial. Just as it is critical that you assess your case critically, this should also be thoroughly assessed, so what will this mean with respect to:

• legal fees
• ancillary costs (such as the time  your people will spend preparing and attending at meetings, examinations, motions, and hearings)
• the likely result of trial (consider best case, worst case, and most likely result)
• uncertainty of litigation
• stress and internal political pressures
• public relations concerns
• human resources concerns
• any other relevant factors.

There may be other factors, such as an impending sale of the company, or the fact that the plaintiff has many friends or relatives in the workplace.

If you have properly considered the strengths and weaknesses of the case, and the BATNA, and discussed the issues above with the powers that be in your organization, you will be far better equipped when you arrive at mediation.

Don’t box yourself into a corner

Being well prepared is important, but please do not show up at mediation having already decided on your “absolute max.” Part of the value of mediation, particularly with a subject matter expert, is that the mediator will provide you with an objective view of the case. This is likely the first time that a neutral third party will provide you with their comments on the strengths and weaknesses of your case and give you some insight as to how a judge might see it. It may align with your previous views, or you may realize that there is more risk and potential exposure than you anticipated.

A lot of time is wasted at mediation when one or both parties arrive with wildly unrealistic expectations. If you have already assured your CFO that you will not spend more than $10,000, and the mediator believes the case should settle in the $50,000 range, you have put yourself in a difficult position or compromised the likelihood of settlement. You should come in with a good understanding of your case and then listen to your mediator as they guide you through the process.

Help your mediator to help you

 It is amazing how often I review the briefs in advance and believe that I have a good understanding of the issues, only to arrive and find out that I am mediating an entirely different case. If just cause for dismissal is a legitimate issue, then make sure that is readily apparent. On the other hand, if there is no real basis for alleging cause, do not muddy the waters and hide the important points. Remember that all your mediator will know about the case before the hearing is what they read in the briefs. Making it easy for them to understand your view of the case and putting your position forward concisely and compellingly will put you in a stronger position from the outset.

Effectively, your mediator will be negotiating both sides of the case. When I go into the other room, I will be putting forward your position in the strongest way that I can. If you spoon-feed the information to me in a compelling and logical way, I can take that information and make your case strongly. Ultimately, that will help you to achieve the best results. So keep the brief short and clear, avoid boilerplate language and legalese, only reference the real issues, and clearly identify the important facts and documents and their relevance. Put all the key information front and centre in your brief; don’t make your mediator work to figure out basic facts like the individual’s compensation package or age.

Of course, your lawyer should be guiding you through this process.

Don’t cut out the decision-maker

Ideally, the individual attending on behalf of the company should have authority to settle. Otherwise, the time may be wasted. If for some reason that is not possible, they should be part of the conversation.

On several occasions, I have been told that the people in the room will call the decision-maker and update them. When I ask to be part of the discussion, it is made clear that they do not want me to. That defeats the purpose of mediation. As those of you who have gone through mediation before will know, it is a process. While you may ultimately settle for $100,000, the reality is that if the mediator were to recommend that amount at the outset, both parties would reject it.

There is a process that has to be followed which allows the parties time to discuss the case, assess the strengths and weaknesses, understand the other side’s position, and critically assess the merits of settlement versus continuing with litigation. To simply call someone in a remote location and say “The mediator says we’ll have to pay $100,000 to settle” is unlikely to get their buy-in, since they will not have the benefit of the hours of discussion that have preceded it. They will not understand the situation and are likely to make an uninformed decision, which now puts everyone in the room in a very difficult situation and may signal the end of the mediation.

I can, and have, salvaged this situation. However, it unnecessarily lengthens the mediation hearing. It is far more effective to have the decision-maker be present throughout, ideally in person but at the very least by phone or, even better, video.