Mediation Continuums: How They Overlap

By: Donald L. Swanson

“Joint Session <———> Caucus Only”

“Fact Disputes <———> Law Disputes” 

These are two sets of mediation continuums.

Here’s a theory I’ve heard on how the “joint session” to “caucus only” continuum and the “fact disputes” to “law disputes” continuum overlap in commercial cases. 

I’d like to know what everyone things about the theory.

Theory

The continuums overlap, says the theory, like this:

1. Fact-intensive disputes, when legal standards are clear, need a joint session mediation, with the mediator focused on maintaining neutrality while the parties discuss the disputed facts;
2. Disputes over the legal significance of undisputed and well-understood facts are better handled in caucus, with the mediator tending toward evaluation; and
3. Everything else is in the middle, requiring a combination of mediation styles and techniques.

Illustrations

This theory is based on bankruptcy mediation experiences. Here are hypothetical illustrations.

—Caucus for Legal Disputes

Evidence in a single-payment preference dispute consists of, (i) bankruptcy schedules, (ii) debtor’s checks and bank statements, (iii) invoices, and (iv) creditor’s account records. Once such evidence is available, there is little to discuss about what happened—the facts are straightforward and well-understood. The only question is whether the evidence reveals a subsequent advance, ordinary course or other defense.

So, caucus-only mediation, the theory says, is the best approach. Caucus-only is how the mediation of such disputes typically happens. And caucus-only is, typically, effective for resolving such disputes. The parties in such a mediation expect the mediator to apply pressure toward settlement—and they often blame the mediator for inadequately (or in-artfully) applying such pressure when a settlement remains elusive.

—Joint Session for Fact Disputes

A plan confirmation dispute over feasibility, by contrast, is fact-intensive, with disagreements and distrust over reliability and meaning of data: e.g., financial statements, cash flow projections, appraisals, liquidation analysis, etc. There is little disagreement over the legal standard that income must be adequate to pay expenses and plan payments.

A mediator in such cases bopping back and forth between caucused parties, the theory says, cannot even begin to address, let alone resolve, such data disputes. It’s only in direct discussions between knowledgeable representatives of the parties that common understandings of the data can be achieved, allowing breakthroughs to become possible.

In such a context, a mediator’s neutrality on factual disputes is essential. The entirely-neutral mediator can still be helpful in gaining a common understanding of the facts, with comments like, “there’s a math error here” and “you are both saying the same thing, and here’s why you are not connecting . . .”

—Everything In Between

For every dispute falling between the ends of the fact <—> law continuum, a combination of joint sessions and caucuses would be helpful, the theory says. A mediation session could, theoretically, begin in joint session and, once the fact disputes are addressed, move into caucus. Or, it could go the other way, too. The combinations of possibilities are many.

The focus of how to handle the mediation should, the theory says, depend on the unique circumstances and needs of each mediation.

Conclusion

Distinctions on when to mediate in joint session or in caucus or with a combination are ill-defined.

Does the theory described above provide any assistance or clarity?

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