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April 19, 2024
Advance Resolution: Close the Deal

The key to a successful mediation is preparation. Counsel should arrive with a solid understanding of key facts and issues, a clear view of the clients’ goals and a proactive settlement strategy. Work with the mediator early to clarify all parties’ objectives, address potential settlement obstacles, identify available resources and pave the way for successful negotiations.  Importantly, attend the mediation ready to close a deal. Confirm Settlement Authority First, confirm settlement authority before arriving at the mediation. Identify the party representatives and, if applicable, insurance professionals who will attend the mediation with appropriate settlement authority. If the approval of an…

The key to a successful mediation is preparation. Counsel should arrive with a solid understanding of key facts and issues, a clear view of the clients’ goals and a proactive settlement strategy. Work with the mediator early to clarify all parties’ objectives, address potential settlement obstacles, identify available resources and pave the way for successful negotiations. 

Importantly, attend the mediation ready to close a deal.


Confirm Settlement Authority

First, confirm settlement authority before arriving at the mediation. Identify the party representatives and, if applicable, insurance professionals who will attend the mediation with appropriate settlement authority. If the approval of an elected board or another agency is required to finalize a deal, discuss the approval process with the mediator and/ or your opponents before the mediation.

In addition, address any additional issues that may impact the parties’ ability to finalize an agreement. For example, if a key player is bankrupt, a suspended corporation, or a juvenile, take the necessary legal  steps to address the situation and secure authority to close a deal. Perhaps a non-party’s signature is needed to finalize an agreement. 

As to this last point, take a step back and look at potential third parties whose involvement might expand resolution options. For example, three neighboring townhomes had construction defects. Two owners sued the builder, but the third owner wanted nothing to do with the litigation. As mediation approached, counsel realized that the most effective and efficient repair required access to the third townhome. The parties approached the third owner before mediation, worked out a plan with their neighbors and then negotiated a global resolution at mediation based on the preferred repair scope.

Take the necessary steps to ensure that the people seated at the settlement table are the appropriate representatives to finalize an agreement.


Consider Settlement Terms

Second, evaluate potential settlement terms. Prepare a draft settlement agreement before the mediation. Analyze the possible legal and practical impact of clauses that the parties would like in the final document. Will there be a mutual release? Non-disparagement clause? Confidentiality provision? What about payment security or a post settlement arbitration provision? In lieu of a strictly cash settlement, the draft may identify other types of compensation, such as complimentary services, an apology, the write off of money owed or a resignation letter. Take the time to revisit the client’s goals and consider the language of a potential settlement agreement.

Some attorneys prefer not to share a draft agreement before mediation. They believe they gain more leverage by waiting to raise confidentiality or nondisclosure issues until after an agreement in principle is reached. Others prefer to address key provisions from the start and work through any potential roadblocks while negotiating settlement numbers.

Whether counsel decides to share a draft agreement before or after an agreement in principle is reached, bring a draft agreement to the mediation. The document can provide the structure for negotiations and closing discussions. It also may create an efficient opportunity to finalize an agreement while all of the players are in one spot. The defense can close their files quicker, reducing the slow drip of attorney fees incurred in chasing signatures. Plaintiffs can deliver a fully executed settlement agreement and potentially shorten the time until payment.


Sign Sign Sign

Third, if an agreement is reached at mediation, avoid buyer’s remorse. Be prepared to sign a settlement agreement or a Memorandum of Understanding before leaving the mediation. Consider including a term that gives the court jurisdiction to enforce the settlement. At a minimum, ask the mediator to confirm any agreements reached in a written email to all counsel to avoid any later confusion.


Consider Plan B

Finally, if the parties do not reach a resolution, plan your next move. Is there any additional information that will help the parties bridge the gap? Should the parties re-convene after a particular motion ruling or event? Will the parties consider a Mediator’s Proposal? Enlist the mediator to schedule a follow up discussion or check in to see if additional resolution options emerge or the parties’ positions shift. Even if no agreement is reached at mediation, it is fairly common for additional settlement avenues to open after meaningful settlement discussions.


Conclusion

Advanced preparation brings significant value to settlement negotiations and ultimately allows all mediation participants to minimize risks, expand options and optimize the resolution of their client’s civil disputes. Enhance settlement opportunities by arriving at the mediation ready to close a deal.

 

Griffiths • Goyette are Leading ADR Providers Since 1993. Principal Anne M. Lawlor Goyette has streamlined and resolved thousands of civil disputes in California and nationwide as a full time Mediator, Court Appointed Neutral and Arbitrator.

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April 18, 2024
Advance Resolution: Develop an Action Plan

Chart a path to a successful mediation. Attend with a solid understanding of key facts and issues and a clear view of the clients’ goals. Work with the mediator in advance to pave the way for productive negotiations by clarifying all parties’ objectives, addressing potential settlement obstacles and identifying available resources.  Further, counsel can gain an advantage over less prepared participants by arriving with an action plan. Consider timing, structure and proactive approaches. By outlining desired outcomes and negotiation strategies, counsel can drive discussions towards a favorable resolution. Start Strong To start, ask your client: What do you want? What…

Chart a path to a successful mediation. Attend with a solid understanding of key facts and issues and a clear view of the clients’ goals. Work with the mediator in advance to pave the way for productive negotiations by clarifying all parties’ objectives, addressing potential settlement obstacles and identifying available resources. 

Further, counsel can gain an advantage over less prepared participants by arriving with an action plan. Consider timing, structure and proactive approaches. By outlining desired outcomes and negotiation strategies, counsel can drive discussions towards a favorable resolution.


Start Strong

To start, ask your client: What do you want? What are your goals? Continue to discuss objectives with your client as the matter proceeds. Mounting costs, other commitments and the stress of litigation can moderate the views of even the most aggressive or irate client. 

With an understanding of the client’s goals, develop a range of acceptable outcomes before mediation. Analyze factors that may impact the discussions, such as key facts and legal issues, similar deals, any previous experience with counsel or principals, a fast approaching trial date, anticipated delays, need for confidentiality, political elections and so on. Realistically, in what range do you think the parties will reach a settlement? Also, review alternatives to a brokered deal before mediation. What happens if the case does not settle? Assess the point at which the client is uninterested in making a deal. 

Then, looking at all of these factors, explore an opening position. Plot a course that will allow you to strategically move from offer to offer/demand to demand towards an acceptable endgame. Anchor the negotiations to set the parameters of the negotiations. The first demand and first offer basically set the high and low limits of the discussions. Ideally, your opening position is defensible and leaves room for negotiation. An unrealistic demand or offer can alienate the recipient and end the negotiations – or at least push the parties into expensive and perhaps unnecessary discovery and litigation. 

Consider the best timing for service of the initial settlement demand or offer. In cases involving business or insured claims, a demand generally should be served four to six weeks in advance of the mediation to allow counsel sufficient time to obtain appropriate authority from their client or insurance carrier. Having received a demand, counsel in an emotionally charged personal injury or wrongful death case may opt to withhold an offer until the plaintiff has had an opportunity to share her story. 


Be Proactive

Give some thought as to how you will move from offer to offer or demand to demand, so that you are not completely reactive in settlement negotiations. Take time before mediation to privately define the outcome you hope to achieve and outline a basic negotiation strategy. 

Counsel might consider anchoring with either a settlement demand or an offer backed by an explanation of damages, and then make moderate, measured moves until the opponent reaches a certain threshold. Alternatively, counsel might begin with aggressive moves and then signal an end point with smaller and smaller steps. Maybe counsel plans her moves based on past negotiations with her opponent.

Sometimes, the traditional practice of demand/offer, demand/offer loses momentum, leaving each side unclear as to the other side’s settlement range – despite hours of negotiation. Counsel’s strategy could include the use of settlement brackets if the parties are not within a particular range after a certain number of exchanges. 

Bracketing is a technique that allows negotiators to communicate their settlement ranges while maintaining their formal settlement positions. The proposing party can show it is willing to advance the discussion, perhaps with a significantly large move, if the other side reciprocates. If the bracket is rejected, neither party has compromised its “formal” settlement position. If the bracket is accepted, the bracket numbers become “real numbers.” The goal is to narrow the range of the negotiations and bring the parties closer to a final number.

For example, the plaintiff offers to reduce his demand to $ 2 million if defense raises the offer to $ 1 million. The defendant can accept the proposed bracket or reject the bracket and request a firm demand, simply make a firm offer or counter with a different bracket (e.g. – if plaintiff goes to $ 1.5 million, defendant will go to $ 500,000.) Regardless, the plaintiff is signaling that he is prepared to resolve the matter somewhere between $ 1 million and $ 2 million. 

Brackets are one example of conditional offers designed to keep the parties talking and avoid impasse. Another type of conditional offer involves tying your settlement position to a specific contribution by another party. For example, a defendant may agree to offer $ 100,000 if a co-defendant agrees to match his contribution. Or the lead defendant may offer to contribute 20% of a global settlement up to a specific sum if the remaining parties fund the difference. Or the plaintiff may issue individual demands to numerous parties that are contingent on a global resolution. Like brackets, these types of conditional offers are tools to advance productive discussions.

When preparing for mediation, privately inventory possible tools to further settlement efforts if negotiations hit an impasse. Would an Offer of Judgment add credibility to a party’s position and encourage settlement? What about a Mediator’s Proposal? 


Build Coalitions

In multiple party negotiations, ask: ”What do the parties want? Who can we team up with to further productive negotiation to our benefit?” Parties with common interests can increase their influence by joining forces with other parties who, at least for the time being, share similar goals and interests. Individuals negotiating as part of a single, large group may gain more leverage in the discussions and secure a more beneficial deal for the coalition members. 

Through joint defense agreements, parties also can reduce costs by coordinating strategy and sharing information. These agreements allow the parties to share otherwise confidential information or work product without waiving applicable protections. That said, before entering into a joint defense agreement, research how the courts in the applicable jurisdiction view joint defense agreements – especially any impact on privilege protections and conflict of interest concerns. At a minimum, the joint defense agreement should disclaim any attorney-client relationship between an attorney and any signatory to the agreement other than the attorney’s specifically named client.

An effective negotiation strategy in multiple party disputes considers both the benefits of joining a coalition and the potential dangers of being excluded from a coalition.


Sequence Negotiations

A global settlement in a multiple party dispute involves a series of smaller settlements with individual parties and coalitions. Conquer the chaos of multiple party negotiations by developing an early action plan for sequencing the discussions. 

In MDL litigation, counsel may want to start negotiations with a focus on resolving the claims that present the most exposure or maybe those that present the least. Perhaps pursuing inventory settlements with individual firms or the resolution of a specific category of injury would be more productive.

In individual cases with multiple parties, peripheral parties often want to know: Can I get out early? Do I have to go all the way through discovery and motions even though my client only played a very minor role in the dispute? Is there an early exit strategy? The plaintiff may agree to settle with either a particular individual, parties involved in a discrete issue or around a “problem” player. Conversely, the plaintiff may be set on a global agreement. 

In construction defect cases, the general contractor or developer typically  takes the lead in sequencing settlement discussions.

One approach to sequencing is to “Pay and Chase.” Here, the lead defense reaches a settlement with the plaintiff and then, with damages capped, confidently issues realistic demands to the remaining parties to fund a global deal. This approach can preserve an ongoing business or personal relationship between the lead parties. It can minimize costs and exposures and may be especially productive in a dispute with underinsured or funded parties. The downside with this approach is lead defense takes on the risk of having to fund a large share of the final settlement. For instance, once the plaintiff settles out, the remaining parties may view the lead defense as a less threatening claimant and lower their settlement evaluations.

A more popular approach is for the lead defense to focus first on raising money before making a global offer. The lead defendant may divide the other defense parties into groups. She then negotiates first with the more liable parties and then moves to the less liable parties. Or vice versa. She may focus on parties involved with one claim or a series of related claims that potentially could be settled separately from the rest of the group. Negotiating first with defense parties benefits the lead counsel by providing a solid understanding of available funding and allows counsel to approach the plaintiff with funds already secured. On the downside, these sequenced negotiations tend to be very time consuming. As talks continue, costs soar. The additional expense and delay can diminish any good will between the lead parties. At some point, once the lead defense has a better understanding of the final settlement range, he may cut deals with particular groups or individual parties. These parties may be more willing to put their best dollar on the table in exchange for an early dismissal. As defense parties begin leaving the case, previously recalcitrant parties often become much more interested in pursuing a settlement.


Conclusion

The most important lesson here is this: Execute an Action Plan. Effective negotiation strategies that benefit your client require you to start early, be proactive and, in multiparty cases, consider building coalitions and strategically sequencing negotiations.

 

Griffiths • Goyette are Leading ADR Providers Since 1993. Principal Anne M. Lawlor Goyette has streamlined and resolved thousands of civil disputes in California and nationwide as a full time Mediator, Court Appointed Neutral and Arbitrator.

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April 17, 2024
Advance Resolution: Engage the Mediator

Preparation is key to a successful mediation. Attend with a solid understanding of important facts and issues and a clear view of the clients’ goals.  Counsel can further increase the opportunities to informally resolve the dispute by working with the mediator early to pave the way for productive negotiations. Gain momentum through straightforward goals, streamlined data gathering, simplified problem solving and strategic conferences. Straightforward Goal Setting Encourage the mediator to use the talent and experience of all participating counsel to articulate goals and advance a clear and cost efficient resolution strategy. As a first step, assess if all necessary parties…

Preparation is key to a successful mediation. Attend with a solid understanding of important facts and issues and a clear view of the clients’ goals. 

Counsel can further increase the opportunities to informally resolve the dispute by working with the mediator early to pave the way for productive negotiations. Gain momentum through straightforward goals, streamlined data gathering, simplified problem solving and strategic conferences.


Straightforward Goal Setting

Encourage the mediator to use the talent and experience of all participating counsel to articulate goals and advance a clear and cost efficient resolution strategy. As a first step, assess if all necessary parties are at the table. Who will attend the mediation session? If applicable, what is the status of any insurance tenders? Are there any other relevant disputes pending? If so, will these be included in the settlement discussions? If a relevant dispute is not addressed, what impact will its exclusion have on settlement efforts?

In a multiple party case, is the plaintiff seeking a global resolution, or will he consider individual or small group settlements?

Ascertain if any additional information is needed for meaningful settlement discussions. For instance, will an accounting or real estate appraisal allow the parties to confidentially discuss damages? Have the parties produced sufficient backup documentation to support their claims and defenses? 

How much time do the parties reasonably need to prepare for meaningful settlement discussions? Is there an anticipated delay in securing or analyzing any necessary information? Determine if there is any event or deadline that may impact productive discussions, such as an upcoming summary judgment motion, potential real estate sale or fast approaching trial date. Adjust the timing of the mediation accordingly.

Identify an appropriate venue for the mediation. Perhaps an in person session is appropriate to resolve a large inventory of claims or manage a difficult, unfocused or emotional client. On the other hand, a remote mediation may be the ideal set up for a purely commercial dispute or a large construction dispute. 


Streamlined Data Gathering

Engage the mediator to assist with prioritizing and streamlining the production of key information. Litigation or arbitration preparation aside, what information do the parties need specifically for productive negotiations? If discovery is voluminous, will the parties agree to deposit relevant information at a single location without formal discovery?

Perhaps the parties will select a handful of depositions to explore narrowly defined issues.

If a key defendant claims that he has no assets to fund a settlement, is his verified declaration sufficient support to engage the players in settlement talks? Perhaps an informal meeting to review his financial documents and ask questions will address any concerns before mediation. Will the parties stipulate to the production of confidential documents under a protective order?


Simplified Problem Solving

The right experts clarify claims, defenses, risks and resolution options in disputes involving technical,  scientific, or other complex issues. Work with the mediator to define the experts’ most effective role in the mediation process.

Before mediation, counsel may allow their consultants to share their data and views with other consultants, with or without attorney involvement. Fairly candid expert exchanges frequently occur under the mediation privilege and before any formal expert disclosures and depositions. In construction cases, experts often analyze different repair scopes to bridge the gaps in the parties’ positions. 

In some cases, parties jointly retain a neutral expert. An objective, reliable appraisal, for instance, can be the catalyst to close a real property dispute. A respected professor’s geotechnical review may break the logjam regarding the cause of extensive cracking throughout a shopping center. A jointly retained financial expert can untangle complicated financial arrangements. 

Alternatively, the parties may opt to share individual expert reports solely with the mediator. As an example, expert summaries of treating physicians’ reports in medical product cases can be tremendously helpful to the mediator in preparing for productive negotiations. 

During a mediation, experts can effectively highlight the strengths and weaknesses of the parties’ positions, generate options, clarify areas of agreement, narrow areas of disagreement and provide the decision makers with a preview of the witnesses’ effectiveness at trial. Individuals who previously dismissed legal theories may sit up and pay attention to an objective, scientific explanation of events. Parties may realize that the jury likely will miss important technical nuances or overlook sound science and instead decide a case based on personal bias or incorrect assumptions. Any of these scenarios can generate productive settlement discussions.


Strategic Conferencing

Engage the mediator to conduct strategic one-on-one conferences with each party or small groups before mediation. These conferences may involve just the attorneys or any combination of attorneys, insurance professionals, coverage counsel, expert consultants and/or principals. 

The conferences allow the participants to privately discuss their specific goals, identify obstacles and explore resources in preparation for  productive negotiations. Participants can raise concerns about unrealistic client expectations or difficult personalities, highlight the potential impact of a personal message or apology, flag  emotional triggers, identify insurance or funding problems and explore available resources for resolution. The mediator and counsel can strategize on an effective approach to address these issues, avoid emotional outbursts and pave a path to productive dialogue at mediation.  


Conclusion

As you prepare for mediation, gain momentum by engaging the mediator early to execute clear and purposeful action and effectively advance dispute resolution

 

Griffiths • Goyette are Leading ADR Providers Since 1993. Principal Anne M. Lawlor Goyette has streamlined and resolved thousands of civil disputes in California and nationwide as a full time Mediator, Court Appointed Neutral and Arbitrator.

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