“Momma Doesn’t Want to Settle”: The Value of Mandatory Mediation — Part Two

 

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By Donald L. Swanson

Ad hoc orders mandating mediation have a different dynamic than planned-for mediations.  Usually, ad hoc orders arise because a judge sees special circumstances and orders the parties to mediate.  Such orders get a bad rap because they tend to achieve fewer settlements from one-and-done sessions than are achieved in planned-for mediations.  But ad hoc mediation orders must be evaluated in light of the special circumstances involved, not on a straight statistical comparison with planned-for mediations. 

If, for example, a judge orders mediation so parties can avoid a winner-take-all result on a close-call issue, the ad hoc order should be evaluated on whether a settlement is ultimately achieved, not on whether a single mediation session concludes the case.

In the “Momma doesn’t want to settle” case, the judge sees special circumstances on the eve of a plan confirmation trial and orders mediation.  In retrospect, the mediation session has little-to-no chance of settlement because, (i) Momma’s last pre-mediation offer is already lower than she actually wants to go, and (ii) Debtor’s focus at mediation is, naturally, on how much lower Momma might be persuaded to go.  Momma finally gets fed up in the mediation session, withdraws all offers, and walks away.  However, the result of the session is this: Debtor now fully understands negotiation realities.  So, Debtor decides to adjust accordingly.  The case thereafter settles . . . and does so on terms that both Debtor and Momma can actually stomach.  Final evaluation: the ad hoc mediation order in this case is a success and entirely vindicated.

Conclusion.  While mandatory mediation requirements are often criticized as being a waste of time, money and effort, the reality is that mandatory mediation requirements can be highly effective and valuable for disputing parties, whether the mandate arises from procedural rules or under an ad hoc order based on special circumstances.

Action Item.  We should all look for special circumstances in which a mandatory mediation order might be beneficial–and then ask the court to require a mediation in such circumstances.

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