Mediation: Making Mandatory Mediation Work in Your Favor

Mediation is now an unavoidable and often mandatory part of the litigation process. Mediation is frequently unsuccessful and a waste of time. Even worse, a bad mediation actually can do significant damage to your case (I will explain further below). Today, I am releasing a 40 minute YouTube video that provides an extensive discussion of mediation strategy. I am not a mediator. I am a lawyer. My purpose here is not to sing kumbaya and tell everyone to play nice. Instead, I am looking at mediation through the lens of a litigator who generally mistrusts the "make a deal at any cost" paradigm. This is how you leverage mediation and make it work in your favor.

Below, I will recap some key points (but I urge you to watch the video because it goes into much greater depth).

1. Risks of a Bad Mediation. Many mediations are just a waste of time and benefit neither side. But sometimes you have a truly bad mediation that is not just a wash. It actually harms your case. Here's how: You pick the wrong mediator. The mediator does not have adequate (or even any) experience litigating that particular type of case. Or, the mediator only has experience litigating one side of that type of case. Let's use a hypothetical from my wheelhouse. Plaintiff sues defendant for theft of trade secrets. In reality, it's a bad faith trade secret lawsuit designed to eliminate competition. The plaintiff is demanding $10 million. But in a year of litigation, the plaintiff has yet to clearly articulate what its trade secrets are or how it has arrived at that $10 million figure. I see these types of cases all the time. You pick the wrong mediator. The mediator either (a) lacks sufficient experience in these cases or (b) only sees these types of cases from the plaintiff/corporate perspective. Rather than press the plaintiff regarding its trade secrets or damages, the mediator simply embraces their case theory. The entire mediation is basically the mediator pushing you and your client to settle. The settlement? A deal that is absolute trash. It's basically a home run for the plaintiff. The supposed "deal" represents what the plaintiff would get on its best possible day at trial. The parties reach an impasse. The problem? From the defense side, the case is now even worse. Because the mediator has basically co-signed on plaintiff's case theory. The plaintiff is now even more emboldened/dug in. This is a real risk. Be aware.
2. Pick the Right Mediator. You can reduce the risk of mediation being a disaster by picking the right mediator. The right mediator has extensive experience litigating that exact type of case. I don't mean they litigated 2 or 3 cases of that nature. I mean they litigated 10, 20, 30+ cases like yours. That's the kind of experience you want. You also want a mediator who has litigated both sides, or, who might have specialized in one side but who understands the case from both sides. Beyond this, you want a mediator who has experience with the entire litigation process. That means motion practice, discovery, summary judgment, pre-trial, jury instructions, trial, post-trial, appeals, injunctions, etc. Good luck having a meaningful discussion about damages evidence with a mediator who has never litigated a lost profits case and never fought over excluding a damages report. Finally, never pick a mediator whose paradigm is settlement at all costs. Mediators like to settle cases. When they mediate a case and it settles, they consider that a win. Some (many) mediators do not know when to call it quits. Even if one side is being absolutely ridiculous, these mediators will just pressure the more reasonable side to keep giving ground. This happens all the time. A good mediator does not operate like that and will be reasonable about calling it a day. A good mediator will be able to say, "Party A is being ridiculous." A bad mediator will keep pressuring Party B because he feels like they are more flexible. Why? Just to make a deal, even if it's an objectively terrible one.
3. Prepare a Mediation Statement. Before mediation, you should prepare a written mediation statement. This statement should lay out your side of the case. It should include facts, citations to the record, case law, etc. It should be thorough but not so long that nobody will ever read it. In most cases, you can do this in 3 to 5 pages max. I am a fan of preparing a mediation statement that can be provided to both the mediator and opposing counsel. This will give the other side a clear picture if your current case.
4. Do a Mediation Presentation. At mediation, it is imperative that you do a live presentation. In many cases, certain lawyers will try to skip opening statements. Never skip opening statements. An opening statement at mediation is often your only opportunity to talk directly to the decision makers on the other side. Throughout the litigation process, everything that happens is translated through the lawyer to the client. In many cases, lawyers do not accurately translate or convey the other side's position. It's one thing to say, "Pollard is demanding $1 million. He's clearly crazy." It's totally different to provide the client the actual demand, explain it to them, walk through the risk/reward, etc. Mediation gives you an opportunity to present your case directly to the party on the other side, without their lawyer filtering everything. It can even be a preview of trial. Do a PowerPoint. Make it count.
5. Be Prepared to Prove Your Case. I know; this sounds crazy. It's mediation, not trial. But use this opportunity to your advantage. If you follow the strategies outlined above, you will create a crisis point for the other side. The client on the other side will be questioning their lawyer and doubting the accuracy of his advice. The lawyer on the other side will be desperate to win back his client's confidence. At this point, the lawyer will probably start (a) making factual allegations that he cannot substantiate or (b) making legal arguments that are not supported by the actual law. Be prepared to counter all of this with actual documents/evidence and case citations. You will eventually be in a mediation where this happens 3 or 4 times. Mediator goes to the other side's room and comes back with their smoking gun allegation. You rebut it. Mediator goes to the other side's room. They come up with something else. You rebut it. Rinse, repeat. You do this 3 or 4 times and eviscerate the other side at every turn, there is a good chance they will collapse.
6. Settlement at Any Cost is Disastrous. We live in a settlement culture. Many people operating in the system have embraced the paradigm of settlement at any cost. That is dangerous and often disastrous. You settle when the settlement makes sense based on the facts, the law, the risk, the business realities, the cost of litigation, etc. But going into mediation with the mentality of "WE MUST SETTLE!!" sets you up for failure. You might take a bad deal-- or worse. You might take a deal that subjects you to lingering exposure vis-a-vis the other side. That happens all the time. Bottom line: It's about having good enough judgment to know when to settle and when to reject a bad deal.

Jonathan Pollard is a competition lawyer based in Fort Lauderdale, Florida. His firm Pollard PLLC has extensive experience litigating complex, high-stakes non-compete, trade secret, and unfair competition cases. His office can be reached at 954-332-2380.