A Mediator–ish Role: “Settlement Counsel”

By: Donald L. Swanson

Here’s an experience that’s common to all trial attorneys.

We’re working in our litigation War Room.  Trial is scheduled to begin in ten days.  Our focus on trial preparations is intense.

But then the phone rings.  It’s an attorney on the other side with a settlement offer.  The offer is a pretty good one – much better than their final offer at mediation.

So, now we have a problem:

–Our clients wants to settle the case, if possible, and wants us to focus our attentions on negotiations.

–But, if we focus on negotiations to settle the case — and the negotiations fail — we’ll then be scrambling with trial preparations.

The Settlement Counsel Solution – Bringing People Together

Here’s a solution to the problem:  “Settlement Counsel.”

–A disputing party hires “Settlement Counsel” to take the initiative, beginning in the earliest stages of the case, toward bringing parties together, identifying disputes that can be resolved, and focusing on settling those disputes.

–The same party also hires separate “Litigation Counsel” to fight the legal battles and to focus on winning the case.

So . . . when that call with a settlement offer arrives shortly before trial, Settlement Counsel steps in to handle the settlement negotiations, while Litigation Counsel continues preparing for trial.

But . . . better yet, Settlement Counsel would have been working since the earliest stages of the case to achieve a settlement long before trial is about to begin;

Settlement Counsel Information

“Settlement Counsel” is an actual thing.  There are lots of articles on the Settlement Counsel subject, such as:

–“Why Should Businesses Hire Settlement Counsel?” in the Journal of Dispute Resolution

–“In Their Own Words,” a publication of the Section of Litigation, American Bar Association, in the series called “50 Shades of Settlement Counsel—What Role is Best for Your Client?”

Settlement Counsel in Bankruptcy

The Settlement Counsel role seems to be perfectly-suited for bankruptcy cases, and especially those cases with multiple parties and high levels of complexity.

Here is an example of a division of labor in bankruptcy that makes perfect sense:

–-Debtor’s litigation team fights the legal battles:  prosecutes first day motions, defends motions for relief from stay, presents a plan and disclosure statement, etc.

–-Meanwhile, Debtor’s settlement team identifies disputes to be addressed and takes initiative to resolve as many disputes as quickly and efficiently as possible.

My guess is that nearly every attorney who’s made a career of representing bankruptcy debtors or committees or trustees is really-good at the “Settlement Counsel” function.  They’ve been doing “Settlement Counsel” types of things their entire career, while functioning as “Litigation Counsel” at the same time.

Mediator Role and Settlement Counsel Role are Similar

A two-part article (appearing here and here) connecting the mediator role with the Settlement Counsel role is by Mitchell Rose, a mediator and Settlement Counsel in Toronto, Ontario.  He writes:

–“In addition to practicing as a mediator, I regularly attend mediations of civil disputes as settlement counsel.”

–“As Settlement Counsel I approach mediation differently than when I was a conventional litigator. This is best reflected in how I participate in joint sessions and make opening statements at mediation –- two things that I used to loathe as a litigator, but have now (dare I say it) grown to love — or at least like on most days.”

A Basketball Analogy

Differences between a Mediator and a Settlement Counsel are like differences between a point guard and a shooting guard in basketball.

–A “point guard” must be really good at bringing the ball up the court, initiating and directing the offense, and assisting others to score.

–A “shooting guard” must be able to score off the drive and from mid- and long-range and must be able to create his/her own shot against defensive pressure.

–A “combo guard” performs equally well at both the point guard and the shooting guard functions.

A mediator is retained by all sides collectively, must be able to perform as a neutral, tries to help all sides find common ground, and usually performs in a passive manner (i.e., others bring disputes to him/her for mediation).

A Settlement Counsel is retained by one side, makes no pretense at neutrality, tries to help all sides find common ground, and usually performs in a proactive manner (i.e., identifies disputes to be resolved and initiates negotiation action).

I’m sure that many successful mediators, like Mr. Rose identified above, would also serve well as Settlement Counsel.  We might call them “combo” professionals.

Applications

1.  Many experienced mediators should be a perfect fit for the Settlement Counsel role.  Those two roles, it seems, go together like peas-and-carrots and are easily embodied in a single person.
2. Settlement Counsel seems particularly helpful in disputes among multiple parties and with high complexity.  And since bankruptcy often has multiple disputing parties with complex disputes, bankruptcy is a perfect context for utilizing the Settlement Counsel role.

What do you think?