Mediation is one of the most useful tools lawyers have for resolving disputes before trial. In many matters, bringing in a neutral can help parties evaluate their positions more realistically and break through an impasse that counsel cannot overcome themselves. However, mediation can also be expensive, time-consuming, and difficult to schedule, especially when numerous lawyers, clients, insurance representatives, and other stakeholders need to participate. Before going through all of that, lawyers should sometimes try something simpler: getting counsel and the people with settlement authority on a conference call and seeing if they can resolve the case themselves.
I have participated in a number of these informal settlement conferences over the years. The format can be extremely simple. Counsel for each side and the relevant principals get on a telephone or video conference, the lawyers briefly discuss their positions, and everyone explores whether there is a number or other resolution that all sides can live with. There is no mediator, no formal mediation statement, and usually none of the ceremony that accompanies a traditional mediation. Of course, this approach will not work in every case, but there are several reasons lawyers should consider it before proceeding to formal mediation.
Perhaps the biggest advantage is cost. Mediators, especially retired judges and other highly sought-after neutrals, can charge substantial amounts for their services. Those expenses may be perfectly justified when a mediator is actually needed to move the parties toward a resolution. But sometimes the parties are already close enough that they simply need a dedicated conversation involving everyone who matters. If the parties can settle a dispute during a one- or two-hour conference call, there may be little reason to spend thousands of dollars on a mediator simply because formal mediation is the conventional next step.
Informal settlement conferences can also be arranged much more quickly. Scheduling a mediation can be surprisingly difficult. The mediator needs to be available, every lawyer needs to clear his or her calendar, and the appropriate client representatives usually need to participate as well. If a particularly popular mediator is involved, the parties might need to wait weeks or months for an available date. By contrast, it is often much easier to find an hour when counsel and their principals can get on a call. This can be especially valuable when the parties want to explore settlement before an upcoming deposition, motion deadline, or other event that will cause everyone to incur additional legal fees.
There is also considerably less preparation involved. Lawyers frequently spend significant time drafting mediation statements that summarize the facts, procedural history, legal arguments, damages, and prior settlement discussions. Those submissions can be helpful because they allow a mediator to understand a complicated dispute before everyone arrives. But preparing them also costs money, and in some cases the lawyers already understand the strengths and weaknesses of the case perfectly well. An informal conference allows the parties to skip that process and concentrate their resources on the actual settlement discussion.
Another advantage is that the exercise can provide useful information even when it does not produce a settlement. Once the principals hear directly from opposing counsel, they may better understand how the other side views the case. Lawyers can also learn whether the parties are actually within striking distance of one another or whether there is still a substantial gap. That information can make a later mediation more productive. Counsel may discover which issues are really preventing a resolution and can focus a mediator’s attention on those subjects rather than spending hours covering ground the parties have already discussed.
Of course, there are situations in which informal mediation is unlikely to work. Sometimes the personalities involved make direct negotiations difficult, and a neutral is needed to keep discussions productive. A mediator can also reality-test positions in a way opposing counsel usually cannot. A client who dismisses an adversary’s assessment of a case may take the exact same observation much more seriously when it comes from a retired judge or experienced neutral. Mediators can also shuttle between parties, preserve confidences, suggest creative compromises, and help everyone save face when changing a settlement position. Those are meaningful advantages that a conference call between adversaries cannot completely replicate.
But trying an informal settlement conference usually does not eliminate any of those benefits. If the call succeeds, the parties have saved the cost and inconvenience of mediation. If it fails, the parties can still retain a mediator afterward, and they may enter the formal mediation with a much clearer understanding of the issues separating them. The informal conference should therefore be viewed less as a substitute for mediation than as a possible first step in the settlement process.
Lawyers sometimes default to familiar procedures simply because that is how disputes are usually handled. Once negotiations stall, someone suggests mediation, the parties select a neutral, lengthy statements are prepared, and everyone blocks off a day on their calendars. In many cases, that process is worthwhile. But before spending the time and money required for formal mediation, counsel should consider whether everyone might benefit from simply getting the decision-makers on a call. Sometimes the best settlement tool is not another professional or another submission, but getting the right people talking to each other.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothman.law.
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