Yogi Berra had it right. There are cases in which, despite making substantial progress, a settlement is not achieved during the initial session. When that occurs, it is essential that the lines of communication be kept open. For that reason, it is my practice to contact counsel periodically to assess whether there has been any change in the parties’ settlement posture.
In my experience, this type of sea change can occur quickly. Sometimes, after the initial session fails, one or more of the parties will suffer remorse at an opportunity lost. Absent intervention by an activist mediator, that party will fear its quick reopening of settlement discussions may be seen by its adversary as a sign of weakness. When discussions resume at the instance of the arbitrator, any such concern is alleviated.
In other instances, a decision on a critical issue, the completion of document discovery, an important deposition, or an expert’s report, among other things, can all alter the parties’ perception of their litigation strength. If a mediator tracks the case through periodic review of the docket sheet, he or she can choose the most opportune time to reach out to counsel for resumed discussions.
Another scenario I have seen is when even though the correct decision maker attended the mediation, progress stops because of a lack of authority to proceed further. This frequently occurs when a party has under or overvalued its case. In these situations, the party’s representative has to go back to re-present the case to committee, report up the chain of command, or build consensus among management in order to proceed with a settlement.
In a small number of cases, a case may not settle initially simply because one of the parties is inexperienced with litigation. False assumptions about the time and expense involved in litigating a case, and a lack of appreciation about the uncertainty of any litigation, will cause a party to resist a settlement that is in its best interests. The emotional need to be “vindicated” by a Court often drives unsophisticated litigants to bad decisions. By reaching out periodically, a mediator can reiterate the limitations of our litigation system, and emphasize that 99.9% of cases settle — it’s only a question of when seeking complete judicial vindication, as a matter of principle, is a luxury of the truly wealthy in our system, where even with a victory at trial, there will be no recovery of legal fees, except where a statute or contract provision provides otherwise.
For all these reasons, unless instructed otherwise, the mediator’s best practice is to make periodic inquiries to counsel about the case. If they are receptive to resumed discussions, those negotiations can occur through counsel, or if appropriate, a second mediation session can be scheduled.
Joe DiBenedetto recently retired from Winston & Strawn LLP, after spending 46 years in its Manhattan office as a capital partner specializing in commercial litigation. He formed JDB Mediation LLC to further develop his mediation and arbitration practice, which is centered in Manhattan and its surrounding counties (including Westchester, Nassau and Suffolk). Joe DiBenedetto’s experience, training, and other credentials are more fully described at www.JDBMediation.com .