By Charlotte E. Thomas
Special to the Legal
We all can recall the settlement conference with a judge or magistrate judge that took three hours and seemed endless. So it is reasonable to ask whether settlements can be accomplished in a three-hour mediation, particularly since most court-mandated mediation is scheduled for just three hours. Judicial settlement conferences, however, are different than mediations in that judges have leverage over the parties. After all, a judge can deny that recently-filed summary judgment motion, or affect those intangibles like jury instructions read in a tone unfavorable to your client. Incidentally, I am not sure that these things actually happen in practice, but the fact is that lawyers believe they do. That perception of leverage is probably more important than actual judicial leverage, exerted or otherwise.
Mediation differs in that it is predicated on the use of advocacy to motivate parties to settle, not because a claim's value will be affected by judicial action, but rather because it is the rational thing to do under the circumstances. Mediation involves the combined persuasion of party and mediator directed toward the opposing party, while simultaneously the opposing party and mediator attempt to persuade the original party to settle. There is no "hammer" of judicial wrath if a settlement is not achieved at mediation.
Without the "hammer," mediations do take time, and in most instances, more time than a judicial settlement conference. Three hours just may not be enough time, depending on what needs to be done at the mediation. In any given mediation, a range of areas may need to be explored, including: (1) the substance or merits of the dispute; (2) the costs/expenses in advancing the dispute through the alternative of litigation; (3) the psychology of the parties to the dispute; (4) the available assets to fund dispute resolution; (5) raising additional funds for the settlement; and (6) crafting the settlement terms. Can all that be done in three hours? The answer is undoubtedly "yes," but unless the dispute and settlement terms are straight forward, three hours may be insufficient to explore all of the areas described above.
As litigators we are acutely aware that mediators' fees can be hefty, and the longer the mediation goes on, the more it costs. The costs of the mediation, however, can be reduced through the cooperation of counsel in identifying the needed areas for exploration and to the extent possible sharing information - including the pre-mediation memoranda - in advance of the mediation. For example, if available assets are an issue, financial statements could be shared in advance of the mediation. That way, more pointed inquiry can be made during the mediation about specific aspects of financial condition. If the parties have engaged in pre-mediation fact discovery, further exploration of that area at the mediation may be unnecessary and the mediator should be so advised in advance. The process will progress quicker if the parties can work through as many issues as possible prior to the mediation session. The pre-mediation telephone conference with the mediator is an excellent time to identify the issues that can be addressed by the parties before mediation and the areas that are better explained at the mediation.
I still maintain that the one three-hour mediation session is not long enough for most disputes to result in settlement. Like all aspects of mediation, however, the parties are in the position to control how much time is required. Those who work hardest in advance will be rewarded with settlement at lower cost.
Charlotte E. Thomas is a partner with Duane Morris, where she practices in the area of complex business litigation. She represents parties in securities actions, broker-dealer and financial adviser arbitrations, lender liability actions, directors and officers actions, intellectual property lawsuits, environmental and toxic tort actions, actions under 42 U.S.C. § 1983 and the defense of class actions. She can be contacted by e-mailing email@example.com.