A practical guide for clients and attorneys approaching their first mediation

Mediation has become an increasingly popular, if not preferred, method of resolving disputes, offering a more efficient, cost-effective and collaborative alternative to litigation. For clients and attorneys approaching mediation for the first time, the process can feel unfamiliar and even intimidating. With thoughtful preparation and a clear understanding of what to expect, mediation can be an efficient and mutually satisfying choice for resolving all types of disputes.

The purpose and process of mediation

At its core, mediation is a confidential, voluntary structured negotiation facilitated by a neutral third party--the mediator--who helps the parties reach a mutually acceptable resolution. Unlike a judge or arbitrator, mediators do not deliver a decision. Instead, they guide discussions, attempt to stabilize emotional elements, identify common ground and help straighten out misunderstandings.

For clients, it is important to recognize that mediation is not about "winning" in the traditional sense. A "win" in mediation is a mutually acceptable resolution of the dispute--not rendering the other party as the "loser." It is about finding a solution that addresses the interests of all parties involved. In mediation, attorneys play a crucial role in reframing expectations and helping clients focus on resolution rather than victory in the traditional sense.

Getting ready

Preparation by both clients and counsel is a critical factor in successful mediation. Attorneys should have a firm grasp of the facts, legal issues and potential risks of the case. This includes reviewing key documents, evaluating the strengths and weaknesses of the arguments and understanding the opposing party's likely position.

Clients should work closely with their attorneys to gather relevant information and clarify their goals. What outcomes are most important? Where is there flexibility? Having clear priorities helps guide decision-making during negotiations.

Additionally, attorneys should prepare a concise and persuasive mediation brief. This document typically outlines the facts, legal arguments and a proposed resolution. It should be clear, focused and tailored to encourage constructive dialogue rather than escalate the dispute. The parties will decide if the mediation brief will be exchanged or written for the "mediator's eyes only." In some cases, briefs will be exchanged sometimes accompanied by a confidential side letter to the mediator.

Setting realistic expectations

One of the most common challenges in mediation is misaligned expectations. Clients may enter the process with overly optimistic views of their case or unrealistic settlement demands. Attorneys must take time to explain the potential outcomes, including the risks and costs of proceeding to trial or continued/protracted litigation. Indeed, while counsel do not by any means leave their best advocacy "at the door" when mediating, it is important for clients to understand that counsel's arguments in the mediation brief and in the mediation sessions are exercises in advocacy and should not (unless advised otherwise) be regarded as different from the pre-mediation attorney/client-privileged advice and case evaluation previously received. For example, it can be tempting for a client unfamiliar with the negotiation process to see an opening demand in the brief that is higher than counsel's previously provided privileged settlement recommendation. If the client psychologically spends a strategically inflated figure in advance of the negotiations, obtaining consent to settle at a lower figure can be an impediment to resolution at the end of the day.

A helpful approach is to discuss best-case, worst-case and most likely scenarios, and clearly identify, in advance, what is and is not negotiable. This approach allows clients to make informed decisions and reduces the likelihood of disappointment, unmet expectations or stalled progress during mediation.

It is also important to understand that mediation is a process, not a single moment of agreement. Progress may be gradual, with offers and counteroffers exchanged over several rounds and possibly over more than a single session. Patience and flexibility are essential.

The emotional element

Disputes often carry emotional weight, especially in cases involving personal, professional, reputational or financial damage claims. Clients may feel anger, fear of the unknown, frustration or significant stress going into mediation. If not properly managed, these emotions can influence decision-making and negatively impact the progress of negotiations.

Attorneys should help clients anticipate emotional triggers and develop strategies for staying composed and focused upon the acceptable result. This might include taking breaks, focusing on long-term goals, asking questions or allowing the attorney to handle particularly contentious moments. Remember, it's not about winning by defeating.

Encouraging a problem-solving mindset can also be beneficial. Instead of viewing the other party as an adversary, clients can be guided to see them as participants in a shared effort to resolve the dispute.

Understanding the mediation process

While mediation formats can vary, most sessions follow a similar structure. The mediator typically begins with an introduction and explanation of the process. This may be followed by opening statements from each side, either jointly or separately.

The mediator will then move between the parties to explore settlement options and share their own understanding of what the current impediments to resolution are. These private conversations allow for candid communication and help the mediator identify areas of potential agreement. The degree of credibility established with the mediator directly corresponds with the degree of candor provided in these private sessions.

Clients should be prepared for periods of waiting, as the mediator works with each side. Attorneys can use this time to reassess strategy, discuss new information and refine settlement positions. A conscientious mediator will keep each room informed of the efforts underway to avoid anyone feeling left out, minimized or ignored.

Developing the strategy

Effective mediation requires a thoughtful pre-negotiation strategy. Clients should practice their anticipated first conversation with the mediator--e.g., how they feel and what they hope to achieve at the end of the day, avoiding exaggeration and personal attacks.

Attorneys should consider not only their client's initial position, but also how they plan to move toward a resolution, recognizing that the process does not assure a guaranteed result. This includes determining acceptable settlement ranges and identifying possible trade-offs, shared and agreed upon in advance with their clients.

For both counsel and clients, it is critical to be flexible and realistic. Rarely does either side achieve all their desired outcomes. Instead, successful mediation often involves compromise and creative problem-solving, as well as dealing with surprises when a seemingly insurmountable impediment to resolution develops.

Practical considerations

Before the mediation, confirm all logistical details, including the date, time, location and required participants. Confirm that decision-makers are available throughout and authorized to settle the case. Seriously consider the pros and cons of a live versus a virtual session. Finally, consider agreeing (if possible) upon nonmonetary settlement terms in advance to avoid any surprises.

Clients should plan to dedicate sufficient time for the session, as mediations can last several hours or even multiple days. Bringing necessary documents, notes and any relevant materials is critical.

Even though the mediator will go over the ground rules at the beginning of the day, it is wise for counsel and clients to discuss confidentiality in advance. Mediation is typically a confidential process that allows parties to speak openly without fear that their statements will be used against them later in court. Because of this, an apology might be appropriate and constructive.

The end game

If the parties reach a resolution, the terms are usually documented in a written agreement before the session concludes. Attorneys should review this document carefully to verify that the final negotiated draft accurately reflects the agreed-upon terms and protects their client's interests.

Clients should take the time to understand the agreement fully before signing. Once executed, the agreement is typically binding and enforceable.

In cases where a full settlement is not reached, mediation can still be valuable. It may narrow the issues in dispute, improve communication and lay the groundwork for future negotiations.

For first-time participants (both counsel and clients), preparation is the key to success. Understanding the process, setting realistic expectations and approaching negotiations with flexibility and focus maximizes the chances of a mutually acceptable outcome.

Ultimately, mediation is not just about resolving a case; it is also about navigating to a result that allows all parties to move on with their lives and/or businesses, which, in some cases, may involve reconciliation. Achieving this is indeed a mediated "win."

Michael B. Murphy is a JAMS neutral based in California with more than 40 years of experience handling complex insurance and reinsurance matters across domestic and international markets. He can be reached at mmurphy@jamsadr.com.