Should Mediation be Mandatory?

Many courts in the United States make participation in some form of alternative dispute resolution mandatory for most civil actions. See, e.g., N.H. Super. Ct. R. 170(A). By far, the method of ADR preferred by the courts is mediation. Since most lawsuits settle anyway, the theory behind requiring the parties to mediate seems to be that the courts might as well nudge litigants in that direction so that settlements will be more likely to occur sooner, rather than later.

There is some force behind this reasoning. Inertia is probably the primary reason why many cases don’t settle until the parties are "on the courthouse steps," and forcing all the litigants to look at their files and sit down together at the same time can often settle cases that would have otherwise gone the distance.

In my view, when the parties want to settle, this imposition by the court does no harm, either to the litigants or to the public’s perception of the legal system. However, as much as I believe in the process of mediation, some cases are just not suitable for it, and it becomes a useless exercise, doomed to failure from the beginning. In my role as volunteer mediator for the New Hampshire Superior Court, I have participated in many like that. One in which I was involved within the last year is fairly typical — damages fairly well established, but hotly contested liability and an insurance company that clearly indicated it would roll the dice if the plaintiff didn’t reduce his demand to a level that would net him a figure roughly equivalent to the price of a case of beer. The plaintiff could afford to roll the dice too. All participants agreed that it would be stupid for the plaintiff to settle within the insurance company’s range, so the case didn’t settle.

Besides wasting the time of all participants, forced mediations where some or all of the parties really do not want to settle also have the effect of undermining the public’s confidence in the neutrality of the courts. Despite official protestations that mediation is an entirely voluntary process, many litigants and their attorneys maintain the rather cynical view that if they are being forced to mediate, they are really being pushed to settle; and if the case doesn’t settle, those whom the judge perceives as "unreasonable" will have cause to regret it.

The right to a trial in a completely neutral forum is firmly imbedded in our national consciousness. Any policy that has even the flavor of abridging that right should be avoided. Mediation as an option for resolving disputes is now well established in the legal community and the insurance industry. All who are motivated to settle cases are fully aware of this option, and need no nudging by the court to exercise it, if they want to. The choice should be theirs, not the court’s.

Mediation as Anti-Social Behavior

Geoff Sharp, of Wellington, New Zealand (mediator blah . . . blah . . .), has provided a valuable service for the mediation community with his posting entitled "Justices Seek Justice, Not Peace." In it, he calls attention to a critical view of mediation not usually given much press in recent years. Geoff’s post focuses on Owen Fiss’s 1984 article, Against Settlement, 93 Yale L.J. 1073, in which the author suggests that the enthusiastic acceptance of ADR, particularly mediation, overemphasizes the role of the court system as a dispute resolution tribunal, to the detriment of its role as society’s primary instrument of justice. Implicit in Fiss’s argument is that litigants who choose to settle, rather than let justice run its course, often cheat society out of the ability to have the court system address and correct societal ills that go beyond the interests of the individual parties. See also, Don Ellinghausen, Jr., "Justice Trumps Peace: the Enduring Relevance of Owen Fiss’s Against Settlement," also referred to in Geoff’s post.

Putting aside for the moment the question of whether individual litigants should be asked to spend their own money to carry society’s banners into battle (presumably for the honor of the thing), one flaw I see in Fiss’s approach is that it seems to ignore the risk that the courts may get it wrong. Major societal controversies presented to the judiciary for resolution usually have passionate advocates on both sides. Convincing arguments are marshaled both for and against, and the outcome of such matters is usually far from certain. One example cited for the idea that settlement would have been bad for society is Brown v. Board of Education (Ellinghausen, pp 30-31); however, I daresay that for every Brown, there is a Dred Scott.

Preparing (Your Opponent) for Mediation

I have been asked to prepare an article on mediation for publication in a forthcoming issue of the Tri-State Defense Lawyers Association’s Newsletter. The Association addresses issues of interest to defense lawyers, insurance claims people and corporate risk managers in northern New England (New Hampshire, Maine & Vermont).

The article points out that to be truly prepared for mediation of a tort case, defense counsel must do some advance work to prepare the plaintiff for the "business realities" of the process. The full article is available here.

Should a Mediator Evaluate?

One enduring debate in the mediation community concerns whether mediators should provide their own evaluations to the parties/clients. If the case is about dollars, and the parties are at impasse, some feel that the mediator can provide a "dose of reality" by weighing in with his or her own opinion on value. Others feel that this approach represents a retreat from the neutrality that characterizes the role of the mediator and inevitably damages the process.*

While I can agree with some of the points made by both sides, I personally believe that mediators shouldn’t provide their own evaluations. I have come to this conclusion primarily because I do not believe I am any better at determining value than the next person. In the context of civil litigation, evaluations represent an attempt to predict the future after factoring in all sorts of variables: the statistical range of jury verdicts (see, e.g., "Ask Not for Whom the Bell Curve Tolls"); the cost of taking the matter to judgment; the personal aggravation of dealing with a lawsuit; the parties’ personal risk tolerance, etc.

Risk tolerance is particularly important in evaluating civil litigation. It is also completely impossible for the mediator to assess its impact. Because the mediator cannot get completely into a party’s thought processes, all it is possible to do is say what the mediator thinks the assessment ought to be, not what it is.

Look at it this way: I may believe it is foolish to waste money betting on a horse at forty to one odds, or buying a Power Ball ticket. But I cannot say that doing these things would be foolish for the other person. My job as a mediator is not to prevent people from doing things I think are foolish, but only to do everything in my power to make sure that they understand the risks involved and make a knowing decision that takes those risks into account. It is not my job to tell you that you shouldn't draw to an inside straight, but only to tell you that the odds against improving it are eleven to one.

Because each person assesses risk differently, each has a different concept of value. The goal of mediation is not settlement at all costs; it is voluntary resolution. Thus, it is counterproductive for the mediator to recommend a settlement figure that differs from a party’s "eyes open" valuation.


* For a comprehensive discussion on the debate, which tilts toward the judicious use of the technique in some (but not all) circumstances, see Dwight Golann & Marjorie Corman Aaron, "Using Evaluations in Mediation," in American Arbitration Association Handbook on Mediation, ed. Thomas E. Carbonneau & Jeanette A. Jaeggi (Huntington, NY: JurisNet, LLC, 2006), 125-138.

To Every Thing There Is a Season

Saving the expense of trial preparation is one good reason to settle civil litigation. It does not always follow, however, that more money can be saved when mediation is scheduled early in the process – before suit or soon thereafter. This is because civil litigation settles when both sides are on the same page regarding value. To reach that stage, participants need to have a "feel" for the other side’s case for both liability and damages, and how they are likely to be presented to (and perceived by) a jury. And where there is an emotional component, the parties’ readiness (or lack thereof) to put matters behind them must also be factored into the equation.

Normally, it takes time and effort to reach the stage where enough is known about the facts and the law so that mediation is likely to be fruitful. In civil litigation, this usually means that the following should be accomplished before mediation, either formally through the discovery process, or informally by agreement:

• Exchange of all documents (e.g., medical records) pertinent to the litigation;
• Expert disclosures, if issues are likely to turn on expert opinion;
• Depositions of the parties; and
• Identification of legal and factual issues likely to be dispositive.

This is not to say that the participants have to act like they are on the same page, or even know for sure whether they are. After all, mediation’s main purpose is to answer that very question. Having the same feel for value does not mean that everybody has to know what the ultimate result will be, but only that they all have a good idea of the risks that will be run if they let twelve strangers decide their case.

Stakeholder Participation Is Crucial

In a perfect world, everybody with a stake in the outcome of litigation should be physically present at a mediation session. This is particularly true of those who will make the decision whether to settle or not. In civil litigation, this usually means the plaintiff on the one side, and the insurance company’s claims representative on the other. Let’s face it, litigation is more likely to settle before trial when all participants have prepared at the same time, and deal with each other at the same time and the same place.

Sometimes, however, there are pressures, usually economic, that make it difficult to achieve perfection, particularly in the garden-variety auto accident case, where injuries are moderate, liability is fairly cut and dried, and the claims rep’s office is 1,500 miles away in Jefferson Parish, Louisiana.

If you represent a party in such a situation, it is crucial to maintain as much of a communications link as possible between the absent stakeholder/decision maker and the mediator, parties and attorneys on the scene. Since instant decisions must often be made, it is important that all participants be instantly available.

The usual procedure is to have the absent party/ies "available by speaker phone." This can help, but, human nature being what it is, the people who are only peripherally involved invariably are not as focused on the mediation as are those who are physically present. They do not have the same "feel" for the situation. To paraphrase Kenny Rogers: How can they know what the cards are, if they can’t see how the other people hold their eyes? Moreover, sitting at a desk far removed from the action, other work usually intrudes, and events on the other side of the country are sometimes regarded as a distraction or a side show.

If one or more participants cannot be physically present, all efforts must be made to make sure those not present are, nonetheless, as involved as possible. There should be frequent communication between the participants at the mediation and the participants who are not. One hint: Don’t rely on land lines alone. For example, it is too much to expect a busy claims rep on the west coast to go to lunch at the same time as the "live" participants when the mediation itself is on the east coast; there is a three-hour time difference. A party’s representatives, when split in that fashion, should exchange cell phone numbers in advance of the mediation session, so that there will be no delays when decisions are necessary.

The "Aha!" Factor

We live in an age of instantaneous perception. By that, I mean that most of the public – those people who make up jury pools – are looking for the simplest path to a solution, regardless of how complex a situation might be.

Thanks to the magic of television, news and political ads are given to us in thirty-second bursts where complex issues are boiled down to their simplest components. Entertainment shows present story lines in half an hour or an hour. Detached reflection on the important issues of the day is rare; people simply do not have time for it.

For those involved in civil litigation, this expectation for instant answers must be factored into the valuation of every case. The side which can explain its position in the simplest terms has a leg up. The side that can present the essence of its case in such a way that people experience an "Aha! That’s it!" moment, will be the odds-on favorite. Such moments can move the value of a case significantly away from the center of the litigation bell curve. Conversely, the more time needed to explain things, the more problematic a litigant’s chances will be.

People tend to be skeptical of lawyers and their clients, so they look for the "common sense" or the obvious answer. "A picture is worth a thousand words," as someone once said. This is why, for example, an objective injury is far more compelling than a subjective one. A broken leg is more convincing than a whiplash.

The effect of this phenomenon is that in a long trial, people on juries are inclined to focus on bits and pieces of evidence, rather than on the big picture. For example, early in my career I was involved in a civil trial arising out of an intersection collision. The plaintiff had the right of way, and the only real question for the jury was the extent of the soft-tissue injuries resulting from the accident. During direct examination of the plaintiff, her attorney introduced as an exhibit a small exercise device that had been prescribed for his client, and she explained how she used it daily. On cross, one of the defense attorneys pointed out that the bag in which the equipment came still had its packing talc, indicating that it had been used only rarely, if at all. That was an "Aha!" moment, which resulted in settlement shortly afterward at a lower figure than the plaintiff and her attorney would otherwise have expected.