Lesson IV – Refrain From Making Numerical Evaluations Until The Parties Are “Almost There.”

As you recall from earlier posts, our Mediation Road Warrior participates in well over 100 mediations per year. He sees the good and the bad (hopefully the bad only once) and has agreed to speak to me about what makes a good mediator. We’ve already spoken about opening statements, apologies, and the “bottom line.” Today we will discuss the mediator’s evaluation of the parties’ positions.

Mr. Smith prefers mediators who use an evaluative method and provide opinions on the value of the particular case. In personal injury matters such as he handles, most of the special damages are certain – medical expenses, lost wages, etc. Since non-economic damages such as pain and suffering are left to “the enlightened conscience of an impartial jury,” Mr. Smith has to rely on his local counsel and the mediator for intelligence on the tendencies of local juries. He finds it helpful when an experienced mediator can give an informed opinion on recent jury verdict in similar matters or suggest that the county is conservative and returns defense verdicts on borderline cases.

While Mr. Smith believes that such counsel from the mediator can be useful, he suggests that the mediator refrain from providing such an evaluation until the parties are at least two-thirds of the way towards settlement, or until a party asks. Much like the mediator that asks for the bottom line, the mediator that provides his own evaluation of damages too early on appears to be pushing the parties towards a specific number. Many mediators are loathe to provide a personal opinion, but Mr. Smith does not think there is anything wrong with stating, “Well, I’ve been practicing in this county for X years and in my experience, juries tend to give awards in the range of Y to Z.”

Most of the feedback I’ve received suggests that lawyers want a mediator who will provide some evaluation of the case. In that case its key to know when to provide that evaluation.

Lesson III – Never Ask a Party Their Bottom Line.

As you recall from earlier posts, our Mediation Road Warrior participates in well over 100 mediations per year. He sees the good and the bad (hopefully the bad only once) and agreed to speak to me about what makes a good mediator. We’ve already spoken about opening statements and apologies, and today we will discuss the “bottom line.”

One thing he has seen several mediators do with which he strongly disagrees is ask a party their bottom line. In his experience, a mediator that asks for the parties’ bottom line will push the discussions toward that number faster than Mr. Smith would like, rather than allow negotiations to proceed in the natural fashion. Since he often has limited flexibility in his settlement numbers, if the mediator pushes the talks to his ultimate authority before the opposing party makes significant moves, the mediation may fail. He feels it is best that the mediators never ask, and in fact, Mr. Smith will typically refuse to answer.

More on the Power of Apology

While I was surfing around this morning trying to determine whether I could become certified as a mediator in Florida, I came across the blog of Perry Itkin, a Florida Supreme Court certified mediation trainer. His most recent post also discusses the use of apologies and references an excellent article in the June 2007 issue of The Washington Lawyer entitled, “The Art and Power of the Apology.” The article dovetails nicely with our Mediation Road Warrior Mr. Smith’s observations on the benefit of an apology discussed earlier.  Please check out both Mr. Itkin’s blog and the article on The Washington Lawyer website.

Lesson II – The Benefit of an Apology

One of the difficult things in mediation is the party that cannot look past a perceived personal slight or insult and look objectively at their case. They sometimes feel that they have been “singled out” or treated impersonally by a seemingly heartless corporation such as an insurer, or the employer of our Mediation Road Warrior, Mr. Smith. As these type of claimants frequently file the type of personal injury claim that Mr. Smith handles, I asked him how he deals with this issue.

Mr. Smith believes strongly that you have to get the parties looking at the matter from an objective, risk analysis perspective, and if the claimant is preoccupied with assessing blame or harboring ill will toward the defendant, they will not think objectively about the issue at hand – mediation and settlement of their claim. Mr. Smith believes that an apology or a statement of sympathy from the corporate representative will often defuse the tension in the room and allow the parties to focus on the issues at hand.

Many lawyers overlook this fact and view an apology or a statement of sympathy as a sign of weakness. Nothing could be further from the truth. Mr. Smith does not suggest an admission of liability or fault, but a statement along the lines of, “We understand that this has been difficult for you, Mr. Plaintiff. I hope you understand that nobody at XYZ Corporation intended for you to get injured, and we are sorry this happened to you. We are here in good faith to try to negotiate a settlement to which we can both agree.” Often, the claimant simply wants an acknowledgment of the pain and suffering he has endured at the hands of the offending party. A statement like the one Mr. Smith suggests could go a long way to making the claimant feel as if his needs and concerns are being heard, if not fully recognized, and that he is being viewed as a person, and not a file.

In fact, in a recent case in which I participated, the plaintiff’s demands included a formal apology from his employer for alleged wrongful treatment. There was some indication that this was his primary concern and that everything else was secondary. He felt isolated and unfairly treated and simply wanted someone to say, “I’m sorry. I understand your concerns.” Never underestimate the power those words may have in the context of a mediation.

Lesson I – The Mediator Should Know the Target Audience and Tailor the Opening.

In Mr. Smith’s his experience, the best mediators know their target audience and tailor their opening accordingly. Most mediators have a canned speech discussing the nature of mediation process, the role of the mediator and the confidentiality of the process. Mr. Smith believes that the best mediators not only explain the basics of mediation, but go beyond that – they explain the litigation process, especially the risks inherent in proceeding to trial. He believes that it is impossible to reach settlement until the parties understand that the matter before them is a risk-analysis exercise.

The questions facing the parties at mediation are really how much risk does each party bear in taking the matter to trial and how much is each party willing to forgo in order to ensure an acceptable result. Far too often, he encounters mediators who do nothing to help set realistic expectations and explain that the parties will not achieve their “best case scenario” at mediation.

Claimants get lots of advice from friends, family and co-workers, most of which is in the form of a story about their cousin who got $500,000 for a hangnail. The parties, specifically, PI claimants, need to know that for every jury that awards millions of dollars for spilt coffee, there is another than finds in favor of the defense.* The mediator must remind the parties that if they squander their opportunity to control their own fate, they leave it in the hands of, in Mr. Smith’s words, “twelve people too stupid to get out of jury duty.”

More tomorrow on the benefit of a well timed apology.

*P.S.. – When I spoke with Mr. Smith today, he was on his way to hear closing arguments and await the verdict in a case which he was overseeing. He just sent me a message from his Blackberry – “defense verdict.” It was a case in which both liability and damages were in dispute, but the plaintiff had unrealistic expectations – he refused to come below $2.5 million during mediation. Now, because Mr. Smith made an offer of judgment for 10% less than his highest offer at mediation, the plaintiff may end up owing Mr. Smith’s company almost $100,000 in fees and costs.

Lessons from a Mediation Road Warrior

I had the opportunity to speak this week with the regional settlement counsel for a large publicly traded retailer. He asked that I not mention his name or his company, so I will refer to him as Mr. Smith. It is Mr. Smith’s job to act as the corporate representative in the early stages of litigation against his company. His company takes an economic approach towards risk and litigation management, preferring to settle claims; therefore, part of his job is to persuade the claimants to participate in mediation. As such, he attends over 100 mediations per year and has a lot to say about the mediation process, the role of the mediator, preparation for a mediation and negotiation tactics. Some of this may be old hat to the more experienced, but I thought it might be useful to share some of his insights.