How Effective Mediation Can Solve Your Business Problems

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Mediations and other methods of alternative dispute resolution are commonplace within the business world. If your company will be participating in a mediation, there are things you can do to maximize the benefit of that process, whether the goal is to settle the dispute, become better acquainted with the facts surrounding the dispute or because you have been ordered to participate. Regardless of why you are participating in a mediation, maximize the opportunities afforded to you by the process and consider the following suggestions.

Preparation

A realistic understanding and assessment of the dispute that will be mediated is of utmost importance. Ensure you are familiar with the facts surrounding the dispute, the legal analysis, the range of damages and relief that can be claimed, the burden of proof and possible outcomes in advance of mediation.

Sound pretty basic? It is. But lack of preparation is one of the main reasons mediations fail. When one party is unprepared (which happens more often than you would think) it can have a detrimental impact on both the chances of success at mediation as well as the ability to settle the case in the future. Failure to come to the mediation prepared as you would for an important business meeting, or a court hearing is a mistake. This is not to say you should settle every case. But as we all know, litigation is expensive, time-consuming and takes time away from your business. Creative opportunities and solutions are available in a mediation if the parties are adequately prepared.

When to Mediate

The timing of when to mediate a dispute may have an impact on settlement. Consider an early mediation, and although you will likely have less information on the facts, it will save time and money if the matter can ultimately be resolved before it goes through litigation. Additionally, it can avoid business disruption through document productions and depositions of corporate personnel. If settlement is not reached early in the case, a factual record can be developed, and future settlement negotiations can occur following dispositive rulings in the case or other information which may impact a negotiated resolution. 

Mediator Selection

Putting you as the client in a position to resolve a dispute upon favorable terms when desired is of most importance. Selection of a mediator should not depend on who proposed the mediator, but rather whether that mediator has the skills to relate well to the parties and help the parties achieve an agreed upon settlement. Having a mediator with a background in the particular subject matter to be mediated can be helpful (although it can also be a detriment), but other factors such as diversity of gender, ethnicity, type of experience or personalities can be equally important. You as the client ultimately control who mediates your dispute. Think about the type of mediator that would be helpful as you prepare to participate in a mediation. Be involved in the choice of a mediator by communicating with your counsel. 

Attendance at Mediation

Determine who the ultimate decision maker will be and have that person attend and participate in the mediation if possible. With attendance generally available by Zoom and other virtual platforms, having the correct person actively participate in the mediation and directly hear the information exchanged and discussions with the mediator is often key to reaching a settlement. 

Insurance

When insurance is available or at issue, make sure all involved are aware of the policy amounts, whether there are coverage defenses that have been asserted, whether you as the client have the right to reject a settlement by the insurance company and what ramifications it may have to you as the client well in advance of mediation. When this type of information is being discovered or discussed for the first time at mediation (it is not uncommon), you may have lost an opportunity to resolve the case. Avoid this at all costs. 

Settlement Authority

A realistic evaluation of the merits and risks of the case, again in advance of mediation, is essential. It is not unusual for a corporate representative or adjuster to attend a mediation without being familiar with the facts and issues, and to have an insufficient amount of money to try to resolve the dispute. Sometimes a representative will cover for another person and have not even read the file, or the file does not contain sufficient documentation or needed information. Try to avoid this from happening as it will waste your time and can frustrate all involved. Preparation, involvement, and communications in advance of mediation, the appropriate decision maker in attendance at the mediation, and an open mind can provide you as the company with an ability to control how and if you want to resolve the case.

Impact of an Unsuccessful Mediation

In the event the parties do not settle their dispute, it is not unusual to have one of the parties leave believing the other side did not negotiate in good faith. Of course, deciding not to settle does not equate to lack of good faith in participating in the mediation. However, an abrupt end to settlement discussions may impact future settlement negotiations. Use your mediator as a communication tool with the other party to explain, as appropriate, that the case cannot be settled at the particular stage, that certain depositions are needed, or rulings made on dispositive issues. Leave the door open for a future resolution. 

Kelly Overstreet Johnson is a past president of The Florida Bar and recently transitioned from 40 years as a litigator to a full-time mediator and arbitrator. She is a mediator and arbitrator at Alterity ADR and Overstreet Johnson Mediation. You can book with Kelly by reaching out to info@alterityadr.com.

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