MEDIATING COMPLEX MULTI-PARTY CASES

The complexity of facts, legal issues, and respective needs and interests involved increase significantly when multiple parties are engaged in a dispute.  Mediation, with its inherent flexibility and unique components, is ideally suited to handle the complexities of multi-party cases.  To understand why this is so, it is important to consider some basic differences between multi-party and one-on-one mediations and how the process of mediation can be sculpted to meet the needs of the many parties involved and the issues that often arise when there are many disputants.  Beginning from the start:

The Mediator Selected:

Managing mediation with a large number of parties, akin to issues of crowd control, is certainly a challenge to any mediator in a multi-party mediation.  The more people there are, the more likely it also is that a mediator must manage diverse personal dynamics, high emotions as well as cultural issues.  It is important that a mediator experienced in handling multi-party cases be selected.  He or she will not be overwhelmed by the multiplicity of parties, counsel, issues, or negotiating strategies.  The mediator must be able to get and keep control of the process.  As an analogy, a large orchestra may need a stronger conductor than a duet would.  Co-Mediators or a team of mediators may be needed in certain multi-party settings to better facilitate the separate groups.

The Facilities:

In many more complex cases, there can several plaintiffs and several defendants with different counsel representing each of them.  There must be sufficient rooms for all parties collectively and individually as necessary. There must be a room sufficient to handle opening statements and other joint caucuses of all parties and counsel. There must be a room sufficient to house all defendants together so as to obtain unified or collective offers. There also must be a room large enough for all plaintiffs to gather to the extent that such collective caucusing is appropriate among them.  It may be necessary to have each plaintiff separated in rooms from the others because their injuries were different and/or their settlements not uniform and the offers may need to be separately communicated to each of them.  It may also be important to have an attorney breakout room so the mediator can meet with attorneys or they can meet among themselves during different stages of the process.

Pre Mediation Conferences:

Even more so than in one-on-one mediations, to sculpt an efficient and effective mediation process in multi-party cases it is critical that pre-mediation conferences with the mediator occur to determine, among other things, the issues involved, who is coming, the makeup of each parties’ team, who has the ultimate settlement authority and who will be the primary spokesperson.

These pre-mediation conferences can be done by telephone or it may be advisable to have a meeting with counsel and/or some of the key disputants.   By way of these conferences, an experienced mediator will be determining what form of process is best suited to this particular dispute.  The mediator also uses this time to determine the relationships between the various parties, verify the issues involved, and also clarify the issues on which certain parties may be aligned.

The mediator seeks to avoid a situation where the parties enter the mediation with different ideas as to how the mediation will be conducted, the issues to be resolved, or how the process of negotiation will proceed.  Having everyone on the same page, and incorporating the input of the disputants and their counsel into sculpting the upcoming mediation session enhances their buy in to this process and furthers the prospects of their co-operation and collaboration at the sessions to follow.

Pre Mediation Position Statements / Briefs:          

An experienced mediator will usually request short summaries of the dispute from each party, and also submission of the key documents.  Position statements from each party are often sought in multi-party mediations, to educate the mediator and allow each side to see those issues and positions of the other side that are critical to their individual evaluation and to their collective resolution. The more each side knows about the other’s position, the more effectively they will be able to achieve resolution. In certain situations confidential position statements can submitted and remain confidential between a party and the mediator.

The Mediation Session – The Joint Session:

Traditionally, the mediation itself begins with the opening (joint) session. The tone for conciliation must be set by the mediator in their opening remarks.  It is then that the mediator again describes his role, the process to follow, and emphasizes the confidentiality of the entire session and also of the private caucuses that will follow.  The overarching goal of the mediator’s opening is to create a positive environment of optimism, safety, conciliation and mutual respect. The parties are encouraged to remove the litigation boxing gloves for a day and work jointly toward a resolution of the case.

In complex multi-party cases, a mediator must also consider the factor of excessive time being expended by multiple parties making opening statements. In certain situations, time limits on these statements can be agreed to, keeping the mediation session fresh and moving forward toward private caucuses and the hard work of collaboration and negotiation.

The dual purpose of an initial joint session is to allow each party the opportunity to highlight the merits of their case or defense while also listening to another perspective on the dispute. Executed well, the joint session combines subtle advocacy and reflective listening. The content of a joint session can range from a short statement to an elaborate Power Point presentation.

The joint session is often the only opportunity for a party to speak about their case directly to the opposing party. On the other side of the joint session coin, is the opportunity to engage in some reflective listening, and to understand there are at least two sides to every story.  The “listening” party gets a preview of what they are likely to encounter at trial.

The chief peril of a joint session is that it can alienate parties, with a wrong word or gesture at the wrong time causing an otherwise well-intended joint session to spiral out of control.  The first inquiry should be whether to hold a joint session, which often can be determined by advanced preparation, determining the dynamics involved and the level of emotions involved. Counsel have likely been involved for a long period of time and can be helpful to a mediator in determining the wisdom of a joint session.

Private Caucuses – Dealing with Idle Time While in Private Caucuses:

A mediator often will have private discussions or caucuses with individual parties during the course of a mediation session. Often in one-on-one mediations, these private caucuses can be somewhat short and roughly equal time can be devoted to both sides for these caucuses. In multi-party cases, a private caucus with a large group of plaintiffs or defendants can take much longer, while the other side sits bored, or worse feels unattended or ignored.  A client may not see the mediator for several hours.

Often the lawyers for the parties and the mediator can discuss how to keep the teams engaged while private caucuses are taking place with the other parties.  A mediator can task the waiting group with updating risk analysis, brainstorming possible solutions, visioning the issues through the other’s eyes or suggesting/setting up working groups, to keep the team working as a team during the idle time.

At times an entire session can be scheduled only with the defendants to assist them in working out their differences without leaving the plaintiff(s) unattended for hours during this process.

The Mediator’s Toolbox:

The many tools employed by skillful mediators to break impasses and bring parties to agreement will not be fully explored in this article.  Many of these tools of persuasion are used most effectively in these private, confidential caucuses with the parties. Briefly stated, a skillful mediator will listen, understand, and flush out areas of agreement that can be the foundation for most successful mediations.  They will explore the positions of all sides, probing for underlying needs and interests and settlement possibilities. Reality testing will be undertaken by the mediator in private caucuses. Often parties have taken hard positions which have become matters of principle to them. The impartial mediator will probe these positions. Private caucuses are the time for the prepared mediator to be pointing out the factual and legal problems of the case.  An experienced mediator lets no risk go unnoticed.  When the mediator is trusted and acts with integrity, this information exchange validates the mediator’s role as expert.  The mediator must also emphasize the costs of litigation, as well as other, more difficult measurements, such as the emotional toll on the parties.

Different Types of Settlements:

It is often the case that multi-party mediations, particularly multi-issue/multi-party mediations, can lead to several deals being made. This may be in settlement of the overall dispute or in settlement of some issues with others left unresolved.

Levels Of Insurance Coverage:

In multi-party and catastrophic injury cases, differing levels of available coverage add further complexity to the mix.  A carrier with high limits insuring a defendant with only marginal liability, for example, may find itself pressured into paying more than it thinks it ought to. The availability and extent of insurance coverage needs to be determined by the mediator.

Agreement on Percentages Of Contribution:

Mediators are all too familiar with the challenges that multi-party cases present. Among the most frustrating situations are those in which warring defendants or multiple plaintiffs place conflicting conditions on the negotiation that cannot be satisfied. Most commonly, parties will insist that their financial participations bear consistent or inconsistent relationships to other parties’ participations. For example, Defendant A in a multi-party case may insist that it will not contribute 25% percent to a settlement fund unless all three other defendants do the same.  This conditioning is oftentimes conceived prior to the session, and poses the additional challenge of unraveling that perception of logic in order to introduce new proposals.

Best Offers From Each Defendant:

Sometimes, the defendants never reach agreement on the percentage each will be willing to make.  If that happens, another technique is for the mediator to meet separately with each defendant and obtain the best offer each is willing to make. At the end of this exercise, the mediator then, by agreement, will disclose the total package available from all defendants, but does not disclose the individual contributions each has authorized. Having obtained total authority from the defendants, the mediator will then meet with the plaintiff — or plaintiffs, if more than one — and determine if settlement is possible within the authority given. Of course, if the cumulative best offer is not enough, this step may have to be repeated.

Separate Settlements with Defendants:

If, after all is said and done, the mediator cannot get substantial commitment from all of the defendants, he or she can explore whether the plaintiff(s) may or may not be willing to settle separately with some of the defendants, while continuing to pursue the others.

Settlement with Plaintiff / Further adjudication between Defendants:

As a last effort to achieve at least a partial settlement, the mediator may seek preliminary contributions from the defendants sufficient to settle with the plaintiff(s), with the defendants agreeing to resolve their final contributions through separate arbitration (or litigation) among themselves. This course of action has the advantage of capping the total amount to be paid to the plaintiff(s), thus protecting the defendants from the consequences of a runaway verdict, while allowing them to fully litigate their final contribution percentage.

 The Mediation Agreement:

Just as in the two-party mediation, when settlement is reached, the mediation agreement in a multi-party negotiation is vital. The delineation of each party’s commitment and participation in the resolution must be memorialized.  At times, the parties (or their counsel) will insist on not disclosing who is getting what among the plaintiffs, or who is paying what among the defendants. While the opposing sides do not need to see this distribution, it is suggested that a written, supplemental mediation agreement be entered into among defendants or among plaintiffs to identify the distribution. The terms of the release to follow should be set forth as generally or as specifically as is required. Standard provisions in releases are well-known in the local communities of attorneys. However, terms such as confidentiality, indemnification, and waiver of subrogation claims should be set forth in the settlement agreement. While one side may draft the release agreement, the other side should be given the opportunity to review and approve it. Thereafter, all parties participating in the release should be required to sign it, with said signature requirement being set forth in the mediation agreement. Dismissal of the case with prejudice or such other judicial disposition should be set forth.

Conclusion:

The very essence of multi-party negotiations is the totality of benefits to the parties, the attorneys and the courts. In one mediation, multiple parties, allegations, defenses, and interests are being resolved in place of expensive and time consuming litigation, as well as the uncertainty of so many in going to trial.  A large group of parties, with the wise assistance of a skilled mediator, can sculpt a flexible resolution that meets their individual needs and avoids the win–lose/winner take all result associated with trial in the court system.