Preparing for mediation

This is the first article in a series about participating in mediation. This series should be suitable for parties facing a dispute, and for lawyers looking to prepare their clients for mediation.

Many participants in mediation have never been involved in one before and have little idea of what to expect. Even many lawyers think of mediation simply as a conference where parties meet to negotiate the resolution of a dispute. That is certainly an element, but it is important to understand that the structure and process of the mediation also plays a vital part in setting the disputing parties up for success.

In this series, I will cover how mediation should work. First, I want to set the scene and highlight some of the difficulties parties often experience. Imagine the following scenario.

It is mid-afternoon in a mediation that has been running for several hours. The mediator is moving back and forth between the parties and now meets with the claimant party and her lawyer in a private session.

MEDIATOR: I passed on your offer in the terms you asked me to. It has been rejected. They have asked me to pass on a counteroffer of $50,000.

CLAIMANT: But that is completely unreasonable. Don’t they understand what their actions have done to me? Don’t they know how much this case has cost me? Don’t they know I couldn’t possibly accept that offer?

MEDIATOR: Well, as we discussed earlier, I can only pass on the offers you each ask me to, and I can only give the information you ask me to. Everything else discussed in private is confidential. The same is true for what [other party] tells me.

If you want to have a discussion directly with [other party] to explain the situation, I can arrange that.

CLAIMANT: I don’t want to meet with them – we will just end up in an argument. Can you please put another counteroffer of $150,000?’

This is not how mediation is supposed to work, at least according to modern best practices.

The inescapable truth is that, for most participants (and many of their lawyers), mediation is confronting, stressful and very personal. It is natural to want to shy away. Most clients will readily agree if a lawyer offers to do the talking for their client. If a mediator is willing to pass on the difficult offer, why not do that?

Think of it like a situation when someone writes a text message to pass on news that would be uncomfortable to have to explain in person. A break-up. A resignation. A death in the family. Mediation should not, and need not, be used this way.

To get the best result from mediation, the parties (and their lawyers, if lawyers are involved) need to be prepared so as to give themselves the best chance of achieving a good result. 

Understand the process

A mediation is not a trial.

Mediation is not the same as ‘going to court’, even if the mediation happens to be held in the same building as the court. No-one imposes a resolution on parties to a mediation.

Most lawyers will participate in at least a few mediations in their careers. Some will see dozens. But few other people will ever see more than one. Even if they know that mediation is not like a trial, their first mediation will be almost as stressful to them as appearing in the witness box to give evidence.

Mediation is also not just another word for negotiation. Mediation involves an independent third person facilitating and assisting disputing parties to reach an agreement to resolve their own dispute.

If you are not experienced in mediation, you may wonder about the extra secret ingredient that makes mediation different from negotiation. If you have participated in a few mediations, you may have seen how the actions of the mediator guide the parties and their representatives through a process to understand the dispute differently, consider their options, and analyse offers and counteroffers in light of those options.

The fundamental principle of the mediation process is that willing and informed participants can reach an agreement that differs from the outcomes they could achieve in court. The difference may be in the timing and cost of the resolution or in the content of the resolution.

It is in your interests to understand that the possible outcomes from mediation are not limited to those that could be ‘won’ in litigation. ‘Win-lose’ thinking limits options before you start. Think, for example, about a situation where parties in dispute can agree in mediation to work together on a new venture rather than continue to fight about an old one. That is not something that a judge or court can order. Sometimes you really can get more from mediation than from a court.

Mediation is a complex skill.

Many mediators in Australia are trained and accredited under the National Mediation Accreditation System. Under that system, every newly accredited mediator has undertaken a training course that lasts about a week of full-time study and practical training, and then has been assessed in conducting a mock mediation. The assessment is not a ‘rubber stamp’. It has rigorous requirements designed to test the mediator’s ability to help lead parties to a place where settlement becomes possible.

Trained mediators will generally follow a process with about six steps (although from the outside, it may not always be obvious where one ends and the next begins).

Step 1: Pre-mediation planning

Before mediation begins, the mediator will help the parties decide where and how the mediation will be conducted, and who should attend. If lawyers are involved, sometimes this is mostly a formality, but the planning step is still important in setting expectations.

Step 2: Mediator’s opening

When the formal mediation starts, the mediator will gather the parties in the same room, introduce the participants (or get them to introduce themselves), explain what everyone should expect in the mediation, and lay out ground rules for behaviour and confidentiality.

The mediator will also explain the goal of the mediation – usually settlement of the whole dispute – while making it clear that settlement will only be by the parties’ agreement. The mediator does not decide who is right and who is wrong.

While the mediator’s opening is almost always given in the presence of all participants, very occasionally, one party will not be present in person. This may be because of the inability to travel or because of emotional or psychological concerns. However, as far as possible, everyone should participate at the same time by video or telephone, to hear what is said and have their own say.

In the few cases I have experienced where one party says they cannot bear to be in the room (or even on the phone) with the other party, the mediation becomes much more difficult. The opening sessions set the tone for the whole mediation. 

Step 3. Each party’s opening remarks

Next, each side explains their view of the dispute without interruption. It is usual for parties to describe the issues as they see them, and it is natural for parties to express their feelings – to ‘get things off their chest’.

This is important for several reasons, some of which I will cover in later articles, but I want to mention two key reasons because they help explain the following steps.

First, it sets a tone for the mediation where each side realises they can have their say without the session devolving into an argument. This comes from the mediator’s previous instructions to the participants and most people’s reluctance to act out in a relatively public forum.

Secondly, it allows the mediator to hear from each party (in their own words) the things that are important to them. The mediator makes it clear that these words are heard and understood, and uses the parties’ own words to guide discussion in step 4.

It has become common in many commercial mediations for lawyers to give the opening remarks on behalf of their client. That is a relief to the client, but does tend to weaken both of the purposes of this step. Many mediators will recommend the parties speak for themselves, at least in part.

Step 4. Joint discussion

The mediator will guide the parties to discuss and flesh out the issues that are important to them. The participants can ask questions of each other to better understand each other’s needs and interests.

This is where the mediator’s skills can really shine. The mediator can ask the questions that each party needs to hear and have answered, but may not be willing to ask. The mediator can repeat information, summarise, rephrase and clarify. The mediator can direct attention to issues in the order most likely to be productive. 

Regrettably, many participants and their lawyers find this step very scary. Participants don’t know what to expect from each other, and lawyers are worried their clients will say or do something they will regret later. Participants may want to jump straight to step 5. However, this is the stage where parties can best convey their views. If that happens in step 4, as part of a robust but confidential and courteous discussion, the unfortunate conversation between mediator and participant that I set out at the start of this article is much less likely to occur.

Step 5. Private sessions

These private sessions, where the mediator meets alone with one side and then the other, are sometimes called ‘caucuses’.

Discussions in private session are confidential, as far as the law allows, unless the party wants the mediator to disclose some part of it. This confidentiality is intended to encourage participants to tell the mediator things that they felt they could not say in step 4.

In this step, the mediator should also explore with each party (separately) their options open to them if they cannot reach a settlement in mediation. The goal is to identify the party’s best alternative to a negotiated agreement, called their ‘BATNA’. Then the party can judge whether any option or offer is better or worse than their BATNA.

Again, this can be quite confronting – often, in litigation, a party’s best alternative will be to carry on with litigation at enormous cost in money, time and stress. By those lights, almost any settlement offer can seem preferable. But remember that both parties are going through the same process, and assessing the BATNA is a key step in putting parties in the right mindset to settle rather than either capitulate or bull ahead.

The mediator will also encourage the parties privately to ‘brainstorm’ options and creative solutions that might form part of an overall settlement. These need not be fully formed offers.

Step 6. Negotiation

Here, the mediator helps the parties formulate ideas and proposals.

This can happen with all parties in the same room, or in ‘shuttle diplomacy’ over a series of private sessions. I encourage parties to try to do as much together as possible because shuttling proposals and ideas is particularly hard for a mediator to accomplish while also maintaining appropriate confidentiality. It is also very hard for a mediator to convey why a proposal is a genuine attempt at a resolution when the temptation of isolated parties is to assume that only their side is acting in good faith.

That said, it is often efficient at some points for the mediator to act as the messenger once the parties are well on the path of positive negotiations.

Most, but not all, mediations result in a settlement – although not always on the day of the mediation itself.

Some resolutions are ‘win-win’, but many involve an element of making the best of a bad situation. In both cases, developing a clear BATNA makes the process and the outcome more acceptable.

When an agreement is reached, the parties or the mediator will record the terms of the settlement.

If you are inexperienced in mediation but would like some reassurance about how a mediator will approach the process, I suggest you have a look at the NMAS Practice Standards which set out the process and skills expected of a good mediator in Australia. 

For more information on this facilitative mediation model, I also recommend resources available from the Harvard University Program on Negotiation.

In the next article in this series, I will look at some other aspects of the process which are important to have the best chance of a successful result.

Preparing for mediation series