The Best Way to Avoid Litigation

I have been a mediator since 2008. Although each mediation is different, I have found that there are several constants to successful mediations. In my experience, the following practices are good guidance for every mediation.

• • Recognise that mediation is an emotional experience. Mediation is an activity in which law and fact are by no means all of the elements involved in reaching settlement. Mediation brings into play many emotions: worry, anger, greed, jealousy, strength, weakness, etc. I am continually impressed by how large a role emotions can play in a mediation, often overshadowing the facts and law of the case.
    There is often a special level of anxiety. For example, one party may have a business or a relationship at risk. The other party may need payment or compensation to stay afloat. Before the mediator can get to the law and facts, he or she must first listen with empathy to the parties. Only after an upset party knows that the mediator hears the anguish and cares, can the facts, law and reality move to the forefront. The mediator never agrees with the anguished party, for to agree would be to abandon neutrality, but active listening and empathy do not require agreement. The goal of the mediator is to gain credibility and trust, and thereby have his or her observations accorded the requisite level of respect to conduct a serious settlement discussion in which the mediator’s observations are given heavy weight.To alleviate the parties’ anxieties and concerns, the mediator should create a cooperative environment. I remind parties that we are in a mediation meeting and the goal is to settle, thus each party must be prepared to consider compromise. One does not “win” a mediation. Indeed, the parties must work together to resolve the dispute, not employ litigation strategy.
    • • Be prepared. I cannot emphasize enough the importance of being prepared for the mediation. Mediators must understand the facts and issues of the case and be prepared to discuss the case with real understanding.
    • • Require all necessary parties to attend the mediation. All necessary parties should attend the mediation, especially those with settlement authority. If in-person attendance is not possible, the mediator can ask the parties to confirm with the necessary persons that they will be available by telephone. A drawback to participating remotely is that a party may not be able to fully experience the emotional process and the unexpected risk assessment elements of the mediation (such as discussion of the cost of discovery, cost of experts, cost of motion practice, the trial itself and possibility of losing). They will decide based on less complete information. This does not exclude settlement, but will probably complicate the process. While not common, I have successfully mediated several cases solely by phone. The operator can connect and disconnect individual parties or join all parties in a conference call, in each case at the mediator’s request. In phone mediations, all parties do participate in the whole discussion and thus see all factors.
    • • Establish credibility in the eyes of the parties. Actively listening is an excellent way to establish credibility with the parties. When the mediator’s attention is focused on the speaker, the speaker will have a positive impression about the mediator. Therefore, when the mediator realistically evaluates the settlement or suggests a solution, the parties will likely view the mediator as credible. 
    • • Be patient. Our natural tendency is to want to reach the bottom line quickly. However, most people need time to digest reality, especially when they are being nudged from an “I must have X” position to a “Y is a pretty good deal too. I get rid of the litigation, get a quick resolution, lower my costs and lose the stress.” That shift may take minutes, hours or days. In a very difficult securities case, the parties could not agree, and it looked like arbitration would be the only option. I waited a few days before asking the lawyers to proceed with arbitration. In two days, the respondent decided to increase his offer, and the parties settled the case. There may be a period of deadlock where it seems no movement is possible. This is often part of the process. Sometimes a stand still is an indication that the parties are not ready to resolve the case quite yet. At that point, a delay may be warranted, whether for an hour, a week or more, while the parties refocus. The mediator needs the parties to judge this element.
      • Ask the lawyers to submit statements of the case. Before meeting, the parties’ lawyers usually provide a statement of the case, identifying what they see as their strengths and weaknesses. I have also benefited from reviewing the discovery. In one case, there was a signed agreement that refuted a party’s position in the litigation. When counsel and I discussed it, he realised that the other side would likely discover this vulnerability in time, so settlement was chosen rather than litigation.
      • Look for the unexpected. The key to settlement may be something that is not even in the case. In one case a subcontractor was suing a contractor. They respected each other’s work, but had a legitimate business disagreement over responsibility for damage to a building. They settled in large part based upon their willingness to join forces on a new project that was not part of the case. Although it is not often possible, the best settlements are the ones where a new opportunity arises and becomes part of the parties’ solution. Both parties benefit from the new transaction and put the old dispute behind them.
      • Finalise the settlement. After a case settles, I initiate the process by writing a very short bullet point memo of the essential elements, such as dismissal with prejudice, mutual releases, amount to be paid, who pays any agreed amount and when payment is due. I then ask the parties to finalise the deal by drafting a written settlement agreement that incorporates the bullet points.
      • Above all, remain optimistic. The parties chose mediation to settle the case, and with few exceptions, they will resolve the case with gentle encouragement.

Philip J. Glick retired as general counsel of a major commercial financial services company before embarking on a career as a mediator and arbitrator. Mr. Glick has mediated many hundreds of cases with a settlement rate exceeding 90 percent and is a certified mediator for FINRA and the circuit courts of Cook, Lake, DuPage, McHenry and Will Counties, IL. Mr. Glick is a member of the Board of Directors of The International Academy of Dispute Resolution, a member of the Executive Committee and Treasurer of the Association of Attorney Mediators and a member of the Dispute Resolution sections of several bar associations, including the ABA and the Illinois State Bar Association. Mr. Glick also serves as an arbitrator for FINRA and several Illinois circuit courts, and is on the mediation and arbitration panels of the AAA and ADR Systems of America. Mr. Glick graduated from Loyola School of Law and has completed courses in mediation at DePaul and Northwestern Law Schools. Mr. Glick has written articles, and prepared and presented CLE courses on, mediation.

Philip J. Glick, Esq., Northfield, IL,

pglick144@icloud.com,

www.pgmediate.com

847-732-3307