06 Dec

Better than Average Returns: Making the Most of Your Investment in Mediation

By Emily McCartney, Norton Rose Fulbright Canada LLP and Jim McCartney, McCartney ADR






Done well, mediation can be a valuable tool for parties to litigation to save time and money, and reach a confidential negotiated settlement of their dispute.  Based on our experience as counsel and a mediator, these are the things that lawyers and their clients can do to maximize their chance of success and get the most out of the mediation process.

Have you ever gone into a mediation thinking “there’s no way this is going to settle”, but it does?  Or conversely, “this is definitely going to settle”, and a few years later you found yourself in a trial of the action?  You’re not alone.  The question is, what can counsel and clients do to ensure the greatest chances of success at mediation?  The following are the most important things that we believe you can do to maximize the return on your investment in the mediation process, whether you settle or not.

  1. Treat the mediation with the same level of preparation and care that you would treat an application for summary judgment.

Know the case inside and out.  Put your best foot forward, regardless of whether the opposing party does the same.  In fact, strive to be more prepared than the opposing party, just as you would in a summary judgment application.  There is no point in trying to settle an action with a cavalier attitude about the merits and risks of the claim or defence.  Clients will fare much better when both counsel and client come ready to speak to any issue that might arise, and can make compelling points against the position of the other party.  As an added bonus, if you do not settle, the time and money spent preparing for mediation is not wasted, as you will be much further ahead in preparing the case for the next steps.

  1. Mediation is not a “low-cost” alternative to the traditional litigation path.

Mediation can of course save substantial amounts of money in the long-run, if the matter settles.  But to achieve a settlement, and particularly the best possible settlement, a reasonable budget for preparation is essential.  Counsel should:

  • do all the research needed to fully understand and assess the claim;
  • be very familiar with the documents and the evidence; and
  • prepare a strong and compelling mediation brief.

Anything less is a waste of counsel time and client money.

  1. Come prepared to make and consider all reasonable offers.

Most of us have been in the situation, especially in multi-defendant actions, where one defendant comes to a mediation loudly announcing that it will make only the tiniest of contributions.  This is pointless.  It will serve only to infuriate the other participants who thought they were there to make good-faith and reasonable efforts to resolve the action.  Counsel should discuss dollar values with their client well in advance, and impress upon the client the importance of coming to the table with an objectively reasonable offer.  Even if the client believes (realistically or not) that it has no liability whatsoever, it is still going to incur substantial legal fees if the matter goes to trial.  Put some of those fees towards a settlement offer instead.  This of course requires counsel to manage client expectations in advance and to consider whether or not mediation is actually appropriate in the circumstances.

  1. Have a real understanding of potential exposure.

This can also be stated as “do the research”.  Do it in advance, and do it thoroughly.  Counsel should have a frank discussion with their client about the merits and risks of their position.  If both don’t have a fulsome understanding of these things, and the matter does not settle, counsel will have to do all that research anyways.  Why not do it now, and maximize the chance of settlement?

  1. There are only a few real chances to settle an action.

Settlement is more likely when all parties are thinking about the case – the start of the action, before and after questioning and undertakings, at a mediation, and on the eve of trial.  Make the most of the earlier opportunities, and remember that if the matter does not settle at mediation, clients are going to spend a lot more money before the next opportunity arises.  Settling on the courthouse steps eliminates litigation risks, but it saves far less than would an earlier mediated settlement.

  1. Consider exchanging pre-mediation settlement offers.

Depending on the nature of the claim and the characteristics of the parties, consider whether to set out settlement positions in advance of the mediation.  Perhaps the parties are closer than they think, which will make the mediation more likely to succeed.  If the matter is personal to one or more of the parties, or there is a tendency to posture, consider having a pre-mediation settlement discussion just between counsel or just between clients.

These tips can be summarized as “be well-prepared, be reasonable, and come in good faith”.  If both counsel and client cannot, or will not, do so, then mediation is not the right fit.  But if both are willing to put in the time and effort, and are prepared to make some compromises, mediation can save significant amounts of time, money, and in many cases, ongoing stress for clients and their businesses.  In most cases, a confidential mediated settlement agreement is a much better option than a costly and public trial decision, with the attendant costs and risk of appeal.

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