When Judges Mediate: Perspectives on Reaching Successful Outcomes
In recent years, bankruptcy judges — including the co-author of this article — have been mediating cases with more frequency. Parties in bankruptcy-related disputes often request that one of the local bankruptcy judges mediate their cases, or in other cases, that a bankruptcy judge refer a matter to a colleague for mediation. Having bankruptcy judges mediate disputes can be an effective and economical way to resolve contentious matters.
Of course, not all matters are suitable for mediation, and not all matters suitable for mediation will result in consensual resolution. In this article, and with the unique perspective provided by a judge mediator, we outline some of the factors and issues that often dictate or contribute to the result of a mediation effort.
Is It Ever Fruitful to Order Parties to Mediation?
When the parties have no interest in giving anything up in exchange for a consensual resolution, a successful mediation is a long shot, and ordering the parties to mediate is generally futile. But occasionally ordering otherwise-reluctant parties to mediation makes sense when the case appears well-suited based on the relative merits and the costs to conclude a full-scale litigation. In those circumstances, the presiding judge is essentially asking the lawyers to do their jobs — to properly explain the risks and costs to their clients and to make sure they are evaluating their cases objectively.
A judge may also be inclined to order mediation if the reluctant party is a trustee or debtor-in-possession with the duties of a trustee. Because a trustee (or debtor-in-possession) is an officer of a federal court, a bankruptcy judge (including one of the co-authors) may expect such a party to agree to mediate in view of federal policy that encourages mediation and order mediation over its objection.
Sometimes, however, emotions and egos are too entrenched — both of the lawyers and their clients. In such circumstances, ordering mediation may only add to, rather than minimize, the expense.