What is a Failed Mediation?
If we define a failed mediation as one in which a case does not resolve at the formal mediation proceeding, we are, I think, being overinclusive. Would anyone argue that a case that settles days or even weeks after a mediation, building on the mediation’s momentum, is the product of a “failed mediation”? Probably not.
It has been my experience, as both a Mediator and advocate, that a successful mediation often serves as a recalibration of sorts, which, with the benefit of time, produces a settlement – a settlement accelerated by the mediation process. So, for purposes of this commentary, let’s define a failed mediation as one in which little or no progress is made, and the mediation concludes with the parties and the mediator going their separate ways. I list below some, but by no means all, of the reasons why mediations fail and conclude with some thoughts on how we might avoid them.
It’s Too Soon. Many courts put their mandatory mediations on a fast track. Despite mediation being mandated in the first months of the action’s existence, these cases have a remarkably high settlement rate. Nonetheless, the embryonic discovery can present settlement challenges, as the facts supporting the claims and defenses have not sufficiently developed. It may simply be too soon to mediate.
The “Line in the Sand”. Many of these subheadings overlap. For example, what I call the “line in the sand” might also be the foundation of a “no-pay” position. While rare, there is the occasional case in which there is a principle at stake that a party feels compelled to validate. Examples include a defense refusal to pay on a claim it considers fraudulent or initiated by a Plaintiff’s intentional tort. A plaintiff may feel that his/her loss can only be adequately addressed in the public forum of a courtroom. There may be a legal principle at stake with implications beyond this one matter. Whatever the reason, cases in which a party feels they need to establish or validate a principle present challenges to settlement.
On a positive note, this is not a common scenario. Presuming a voluntary mediation, there is an accompanying willingness to settle and compromise. These situations are more frequent in a court-ordered mediation or multi-party mediations, in which a given entity participates in name only, but has no real inclination toward settlement.
Emotions Run High. Perhaps a subset of “it’s too soon,” strong negative emotions can inhibit settlement. A plaintiff enduring a catastrophic injury, loss of a loved one, an ugly employment discharge, harassment, or discrimination, may simply not be ready for the compromise and bargained exchanges in a mediation. Often an aggrieved party needs time and support to transition from dealing with the emotional aspects of a loss before they can consider reducing that loss to dollars and cents.
Tensions in the Same Room. Very often the greater task for the Mediator can be working within a given room [as opposed to between]. It is quite common for counsel and clients to have different valuations. This typically takes the form of the plaintiff’s counsel trying to reduce a client’s expectations and defense counsel needing to convince a client or insurer to increase the upper boundary of its settlement range.
The structure of insurance can be a factor here. Imagine a situation in which the insured has a hefty retention but the insurer is responsible for counsel fees from dollar one. The insured in this scenario is not subject to the usual leverage of trading off settlement for anticipated legal fees. There may also be tensions as to who has the right to settle, given this unusual delineation of indemnity and costs. The people in the same room may not be on the same page.
The mediation may stall If the parties in one room cannot agree on valuation and strategy.
The “No-Pay” Position. Much like the “line in the sand,” this is more likely to be encountered in a mandatory mediation. It has become more common of late for a municipal defendant to come into the mediation to “check off the box” for mediation, having no authority to settle at the early stage it is ordered. Again, the parties in a private mediation can be expected to be more invested in the outcome.
The Mediator and the “Riot Act”. As advocates, we are all challenged to avoid falling in love with our cases and positions. Some lawyers enter a mediation hoping to convert the Mediator into an advocate who will, in turn, disabuse the other side of their inflated [or deflated] view of the case. This seldom plays out as the zealous advocate hopes, and while a mediator can take an evaluative approach, he/she cannot do so at the expense of neutrality – the cornerstone of the process. And of course, the Mediator cannot ethically predict court outcomes.
Unprepared Party. The advocates have a responsibility to prepare the client, particularly the uninitiated client, for the mediation process. The client should have an understanding of the general process, the specific approach of the chosen Mediator and, ideally, should also have reviewed any submissions and discussed them with counsel. While the Mediator shares responsibility for making everyone comfortable, this process starts with the lawyer. A client confused or blindsided by the mediation process itself does not portend well for a successful outcome.
Unprepared Advocate. Although well short of that needed for a full-fledged trial, mediation requires proper preparation. For counsel, this includes preparing the client, considering likely opposing arguments and positions, familiarity with the procedural posture of the case, a thorough review of any shared mediation submissions, considering the range of potential outcomes, and evaluating your acceptable settlement range. On an personal level, it is often in our nature to compensate for lack of preparation with overzealous advocacy, which is not the right formula for effective mediation advocacy.
Unprepared Mediator. This last one is inexcusable and beyond the control of the parties. Mediations are of limited duration, and wasting time educating an unprepared Mediator on the day of mediation wastes valuable time. Ideally, the mediation is preceded by pre-mediation caucuses with counsel, which help ensure adequate preparation all around.
Some Takeaways
Many of these reasons for failure can be reduced with communication and preparation. This begins with my oft-repeated mantra on the value pre-mediation teleconferences a/k/a “caucuses” with the Mediator, where many of these potential obstacles can be broached. If a client is not yet emotionally prepared to mediate, inviting the party to a pre-mediation caucus might assist. At a minimum, the Mediator will benefit from understanding the emotional hurdles to settlement and that the mediation might best begin at a deliberate pace that allows for some emotional release before money is even mentioned.
Disunity among lawyer and client is also a key subject for a pre-mediation conferences. When the mediator knows this in advance of the mediation, he/she will be in a better position to work within the room and develop a strategy to help the lawyer with his/her “client control” problems. Often, a mediator’s vetting of the case with lawyer and client can gently bridge this lawyer-client gap.
When a given party anticipates converting the Mediator to an advocate to “read the riot act” to the other side, this can also be nipped in the bud in the early going. The pre-mediation conferences present the evaluative mediator with a chance to discuss both side’s positions bilaterally and without favoritism. The party having the less realistic expectation may benefit more from questioning and active listening, and the process of reciprocal vetting, listening, and questioning, may adjust expectations without a perceived loss of credibility, objectivity, and neutrality.
If the mediation is “too soon” by reason of insufficient discovery, the mediator may be able to work with the parties and develop a short list of discovery items to “fast track,” perhaps even at the expense of delaying the first-scheduled mediation, for a more productive session, with the benefit of this initial exchange. Even court-annexed mediations often afford the neutral this flexibility as to scheduling.
In sum, given the percentage of cases that will ultimately settle, mediation often serves the function of accelerating the inevitable. In the context of a voluntary mediation and the implicit interest in settlement that accompanies it, many of the above listed reasons for failure can be avoided by preparation and candid pre-mediation communications among counsel, client, and Mediator. Mediation is often about momentum, and progress made toward a settlement that would not have been achieved as quickly, but for the mediation. If, with the benefit of hindsight, the mediation was the catalyst for settlement, even if displaced in time, it may well have been more of a success than a failure.
FPA July 2022 (published in ABA)
