Mediation vs litigation: The successful one-third

Mediation vs litigation: The successful one-third

As a way of resolving disputes and an alternative to far more costly and protracted litigation, mediation works about a third of the time.

When it does work, mediation appears to have its best chance for success when the parties want to avoid facing off in court -- that is, when they at least have some desire to settle.

Assuming that in a particular instance you seriously prefer a mediated settlement to litigation, it's important to know what needs to be done to assure that yours will fall into the one-third of cases where mediation works. So the question is, What can you do to make mediation work for you?

Whether mediation succeeds depends largely on three factors:

a. The mediator's skills

b. The quality of the advocacy of the lawyers involved

c. Subsequent follow up

In one complicated multiparty dispute where sales, trading, hedging, cover and other damages issues were at stake, a professional mediator was involved along with the attorneys representing both parties. Early on, both sides moved off their pre-mediation positions, but the mediator was unable to advance the parties along. The mediator prematurely pushed for dialogue on the numbers, when, clearly, the parties were not ready to "horse trade." What's more, the sessions were marred by sniping between the lawyers. Fortunately however, the parties and the lawyers did the required follow-up, and as a result, further discussions occurred -- without the mediator. Ultimately, the matter was resolved, and the parties avoided discovery and a lengthy trial.

In an insurance coverage dispute, the parties appeared before a court-appointed "neutral" in a federal court. The mediator listened to the parties' presentations, came to the conclusion that the parties were far apart -- which everyone already knew -- and suggested that the mediation be postponed pending further developments. At the mediation, the two co-defendants with their attorneys were placed together in a room, without the mediator, and began a dialogue. That dialogue, supported by quality lawyering and good follow-up on a party-to-party basis, led to a settlement.

By contrast, in a case being mediated before the Director of Mediation at the New York Supreme Court, it became clear that one of the parties had no intention of settling. The mediator quickly recognized the folly of the situation at hand, and the mediation ended.

The skills of the mediator can be critical to bringing about settlement. If you have a choice, choose a mediator with a proven track record and sufficient gravitas to have credibility with all sides involved.

The lawyers and lawyering skills also matter. Mediation is not a time for histrionics. The lawyer's command of the issues and credibility are central to having the mediator and your opponent realize that your case has merit and that settlement is in order.

Finally, if the case is not resolved at the first session with the mediator, and you really want to settle, your lawyer has to follow up. This may mean seeking another session, or looking for a creative angle of approach -- be it party to party, or lawyer to lawyer -- to forge a way to a mediated settlement, if settlement is your goal.

Bruce G. Paulsen joined Seward & Kissel as counsel in 1997, and is a member of the firm's Litigation group, specializing in commercial and maritime disputes.