Four Examples of How Local Customs Impede Mediation

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Struggling against headwinds

By: Donald L. Swanson

Local mediation customs and practices can provide a foundation for growth and development of mediation–but can also be an impediment, providing headwinds against progress.

Here are four examples of headwinds.

First example: Timing.

Customarily, mediation occurs in the late stages of a case: when discovery is winding down, trial is in the offing, and the parties are weary of the litigation effort: concerned about fees, and wary of risks at trial.

So, the idea of mediating in the beginning stages of a case (e.g., as soon as an answer is filed) gets little-to-no consideration, let alone traction. After all:

  • How can we know what the facts might be, before discovery begins?
  • How can we be ready to discuss settlement when we don’t know what all the issues might be?

But missing out on early settlement opportunities is a mistake, in all types of litigation.

In bankruptcy the need for speedy resolutions can be particularly acute. That’s because interests of maximizing value in liquidation or from continuing operations are preeminent. So, the need for prompt resolution, in such contexts, takes precedence over other litigation needs. Early mediation efforts can meet this need.

But the idea of appointing a mediator near the beginning of a Chapter 11 case, to deal with confirmation-related issues, is contrary to custom. Hopefully, that will change.

Second example: One-and-done.

Local custom often views mediation as a single session and nothing more: it’s a one-and-done event. Either the case settles at the end of a single mediation session, or the mediation effort is deemed a failure.

If, for example, the parties decide, during a mediation session, that more information is needed before settlement can occur, the mediation is over. Why can’t they simply recess the session and then reconvene when the information becomes available? I don’t know. But according to local custom and practice in many places . . . that won’t happen. And that’s a shame.

The one-and-done custom is particularly problematic in multiparty and complex bankruptcy disputes. What’s needed, instead of one-and-done, is for sessions to continue as the process develops. The one-and-done custom is an impediment.

Third example: The Ideal of an aggressive mediator.

Local custom often values an aggressive mediator: one who’s good at twisting-arms to encourage settlement (let’s call this “pounding-on” a party).

This pounding-on ideal almost always relates to the other side: “The mediator needs to pound-on the other side and bring them to their senses.” Often, it seems, a mediator’s effectiveness is rated, by a party, on how vigorously and effectively the mediator is perceived as pounding-on the other side and bringing them to submission.

Rarely is a mediator rated favorably for “pounding-on my client and me and showing us the errors of our positions.” That almost never happens.

It takes an experienced and talented mediator to navigate and manage such expectations while maintaining a position of neutrality.

Fourth example: Settlement counsel role.

The settlement counsel role is a relatively new idea as part of a party’s litigation team.  This role is, as of yet, rarely utilized.

Here is how the settlement counsel role is described:

  • A disputing party hires “Settlement Counsel” as part of its litigation team to take the initiative, in earliest stages of a case, toward settling the disputes.
  • The same party also hires separate “Litigation Counsel” to fight the legal battles and win the case.
  • The settlement counsel role is a supplement to (not a substitute for) mediation, and settlement counsel can serve an important function in the mediation process.

Hopefully, local custom will incorporate a settlement counsel role into the dispute resolution process.

Conclusion

Local mediation customs can provide a foundation for growth and development of mediation . . . or act as an impediment.  Practitioners need to constantly evaluate their local mediation customs to assure that better practices are identified and incorporated.

**  If you find this article of value, please feel free to share.  If you’d like to discuss, let me know.

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