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Vol 2, Num 3 l October 2015

Technology and Intellectual Property

Multiparty Mediation


Donald L. Swanson
Koley Jessen
Omaha, Neb.

Here’s a confession: I’m in a four-party mediation. It begins at 9:30 a.m. in a joint 30-minute session. The mediator then spends 30 minutes with each party. It’s now noon — we’re taking lunch orders — and the mediation process has only just begun! At mid-afternoon, positions are far apart, and pressure mounts to make lots of progress in a hurry. At 4:30 p.m., one party meets with the mediator for only the second time — that’s after six hours of mostly twiddle-your-thumbs down-time! However, all parties want to get a deal accomplished, and by 6:30 p.m. a settlement document is signed. Relief prevails. But still, I’m thinking, “There has got to be a better way!”

During a three-decades-plus career representing bankruptcy committees and trustees, I’ve moderated the resolutions of many multiparty disputes (can’t say “mediated” on those because my client always had an interest in the outcome). However, a learned-the-hard-way lesson for multiparty dispute resolution is this: Advance communications are needed to prepare multiple parties for a final negotiation session.

Advance communications among the mediator, the parties and their attorneys can be helpful in creating organization, structure and efficiency for a multiparty mediation session. The following is a checklist of the types of subjects that should be addressed in the advance communications:

  1. Settlement Impediments. To help parties divert attention from their most-cherished arguments and toward settlement possibilities, each party should provide the mediator with written answers to the following questions: (1) Why haven't the parties settled already?, (2) what settlement possibilities might reasonably be anticipated?, (3) what impasses and impediments to settlement currently exist?, (4) what are the costs and risks of failing to settle now?, and (5) what settlement terms might be negotiated in a mediation that could not otherwise be obtained?
  2. Parties. Are all necessary parties included in the mediation? Are insurance or other indemnification rights implicated? Would a party’s absence from the mediation tend to undermine or create problems for any settlement that might be achieved? Absent parties have torpedoed many a mediated settlement.
  3. Information. Do mediating parties have all the information they need? If not, what specific information and documents (not merely generalized categories) need to be produced before the mediation session begins? A mediation session is not the proper venue for fighting discovery battles.
  4. Use of Joint Sessions. This is a truism: disputing parties don’t want to spend time together. So, to what extent are the parties open to participating in joint sessions to streamline and facilitate communications? May the mediator exercise judgment on bringing some or all parties (or their attorneys only) together in joint sessions to communicate and discuss offers and information?
  5. Tax Issues. Are the parties aware of tax issues or consequences that might arise from a settlement? Will parties have advance discussions with their own tax advisors to anticipate potential tax issues and consequences? Will each party have a tax advisor standing by via telephone during the mediation session to address tax issues and concerns that might arise? Trust me on this: In business cases, taxes are almost always a bigger issue than initially anticipated.
  6. First Offer. Which party will make the initial offer at the initial mediation session? A common practice is for the claimant to go first; should that practice be followed here? Could the first offer be prepared in advance and ready to present when the mediation session begins? Should the mediator work with such party and attorney in advance of the mediation session toward developing the offer?
  7. Non-Monetary Terms. Non-monetary terms are often as important to a settlement as monetary terms — sometimes more so. What non-monetary terms might be important in this mediation?
  8. Documenting the Settlement. Once a settlement is reached, what document(s) will the parties use to confirm settlement details — a term sheet, a settlement agreement, something different? Will attorneys work together on an advance draft of such documentation (with blanks left open) to identify issues and focus discussions at the mediation session and to minimize drafting needs at the end when everyone is tired? Perhaps the attorneys could even resolve some issues — and fill in a few blanks — during the document-preparation process? Are the parties open to concluding the mediation with essential issues resolved but a comprehensive settlement agreement yet to be drafted?
  9. One or More Mediation Sessions. Do the parties expect that all issues can be resolved in a one-day mediation session? If additional sessions are needed, (1) does the next session need to be in-person, or can it occur by telephone or video conference, and (2) what scheduling details need to be considered? Might a separate session be useful for parties who have related-but-separate issues that don’t materially affect other parties — i.e., no sense wasting everyone else’s time?
  10. Use of an Assistant Mediator. Are the parties open to utilizing both a lead mediator and an assistant mediator to enhance the efficiency and effectiveness of the multiparty mediation process? If so, is the proposed mediator (1) open to using an assistant mediator, (2) experienced in utilizing an assistant mediator and creating an efficient division of labor between them, and (3) willing to negotiate an acceptable fee arrangement?

Advance communications on subjects like those identified above will significantly enhance the efficiency and effectiveness of a multiparty mediation session.

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