Tag Archives: mandatory mediation

How can my business benefit from mediation?

Most business owners are sold on the benefits of mediation. What they don’t know is how to use this tool in their business. Some suggestions:

First, require mediation.

Every business has written agreements with some people and entities that are part of its business model. Employees, customers, contractors, agents, suppliers, affiliates, and others have some form of business agreement with your business. Every business could have a dispute with any of these elements of its business model. Each business can and should adopt a mediation position that it incorporates in each of these written agreements with its business “partners.”

How?

Let’s look at employees. Employees start out as job applicants. They submit written job applications. As soon as your business announces a job opening, there are obligations under state, federal, and local laws not to discriminate or infringe civil rights, among others. Job applications are the natural place to state your commitment to mediating disputes and require the applicant to agree to mediate before filing claims or suing your business. The successful applicants and the unsuccessful applicants will be bound by this promise to mediate first.

What about customers? The variety of customer “engagement” communications in which a mediation first requirement can be inserted is vast. Let’s take a simple one, a job proposal for a construction project. There are countless varieties of forms and formats for these common contract documents. Every business has developed some language that describes its terms for offering to perform services. That proposal “boiler plate” may not be something the business even thinks twice about now but it includes obligations that carry through to the end of the project. It could just as easily include a requirement for pre-litigation mediation as anything else it includes. Supply orders can include pre-litigation mediation requirements too.

Businesses that operate on the web can include the pre-litigation mediation requirement in their terms of use of the website, which everyone routinely accepts in order to do business efficiently on the web.

The opportunities are endless once you have made the commitment to mediate before allowing your business to be sued.

Rhonda Smiley
Resolution Guru
Mediators To Go
www.mediatorstogo.com
smiley@mediatorstogo.com
(c) 2011

Lead story from ABA Section of Litigation Journal=Mediate.

The latest issue of the American Bar Association’s Section of Litigation Journal arrived on my desk this week.  I love this journal so I usually get to it right away.  The “Opening Statement” starts with this acknowledgment: “statistics show that currently only about 1 percent of cases filed in our courts are actually resolved through trial.”   Go here to read the full article for free:  http://www.abanet.org/litigation/journal/opening_statements/LitMagSum10_bass.pdf.

If you have a lawsuit, you will have a mediation.

As we have said before in this blog, court rules require nearly all cases to be mediated with an objective third party before the courts will set them for trial. The author observes that changes in our judicial system have led “many litigants [to] make a well-reasoned, rational decision to resolve their dispute by entry of a voluntary pretrial agreement.”

Preparing for a mediated result is different from preparing for a jury result.

The impact on case preparation is enormous.  When parties and their attorneys are working toward the best possible pre-trial resolution rather than a trial they do things differently.  An example.  As trial attorneys we routinely planned the cross-examination at deposition of the opposing side’s expert witness so that the “gotcha” was not revealed until trial.  Why?  Because a clever expert and a clever attorney will change their positions  to take the wind out of what would otherwise be a grand gotcha moment before the jury.  You only get one chance to make that winning impression with the jury.

But, how do you handle this differently if you assume you will settle before you get to the jury?  What do you do with that killer information in mediation?

The old rules don’t work for mediated resolutions.

Old school attorneys still counsel their clients to save it for the jury.   They may tell the mediator in confidence about their secret weapon against the opposing expert, but then hamstring the mediator by preventing disclosure to the other side that has the weakness.  This tactic robs the mediation of some serious power to produce a settlement.

What about the “gotcha” moment?

Mediation savvy attorneys maximize the value of such information during the mediation and increase the chances of resolution before trial.   The very best gotcha moment I ever saw at trial:  Trial attorney had the opposing expert on the stand swearing that the devastating event occurred at the hottest part of the day.   The witness’ position was the attorney’s client’s product was defective.  The trial attorney meticulously took the witness through his calculations.  Each time getting the witness to reaffirm the timing of the event.  Then, the attorney got the witness to admit that the weather report he relied on was based on GMT (Greenwich Mean Time) not the local time of the event.  The several hours time difference destroyed the witness’ argument.  More importantly, it destroyed his credibility with the jury on everything else he said too.   Just like cross-examination is supposed to do.   It was glorious.  The attorney won.

What happens when you lose the case your lawyer said you will win?

If you have a fact as devastating as this and your attorney can accomplish a cross-examination as masterfully as this, perhaps you should wait until trial.  If you have doubts, consider this.  This victory came at the end of the second trial of this case.  The first case led to a multi-million dollar verdict against the defendant.  Stark realities.   The witness’ reliance on his erroneous  time assumptions was already in his deposition and his expert report.  He was tied to it.  Even if he could change his opinion, there would be damage to his reputation and his credibility with the jury.  The opposing attorney was certainly smart enough to understand the potentially disastrous result of having his expert crushed at trial.  If this information were used in the mediation, it may have led to a resolution before trial.  Of course, a complete victory from a jury verdict could not have been achieved.  But the cost and risk of trial may well have been sufficient to get a mediated settlement.   Defense attorneys often discount the impact of the prospect of zero dollars on plaintiffs and their attorneys.   Mediators see that impact clearly and can help both sides get the resolution they want.

Prepare for mediation.

The Journal article concludes by musing:  “Perhaps our focus going forward should be on helping our clients resolve their disputes in the most expeditious and economic way–regardless of whether or not the result is a trial.”  Sounds good.  Trials are about lawyers.  Mediations are about you.

A business can require customers to mediate before filing a lawsuit.

Do you want to gain the benefit of mediation but don’t know how? Every contract can include a pre-litigation mediation requirement. The terms and procedures can be just one more paragraph in the contract.

What benefit would you get from having a pre-litigation mediation requirement? If the requirement is worded properly, you can block a lawsuit. In legal terms, if a lawsuit is filed before mediation, the court could dismiss the lawsuit until the mediation takes place. This can eliminate the race to the courthouse.

There are different ways to state the mediation requirement. And, there are different types of penalties for failing to mediate that can be put in the contract.

The important thing is that more and more businesses are learning that they can save money and time by agreeing to mediate disputes before allowing people to sue them. They also gain the advantage of the confidentiality mediation provides. Lots of good reasons to mediate.

Some states (notably Florida) are getting strict in requiring mediation before litigation. The legislature recently added a pre-litigation mediation requirement for medical malpractice lawsuits against the University of Florida Health Sciences hospitals and medical professionals. It also requires mediation before suits against condominium associations.

There is no need for a statute or an act of Congress to allow you to take advantage of mediation.  You just need to work with your attorneys to draft a good mediation clause.  Watch this space for a collection of samples we are gathering.

Rhonda Smiley

Resolution Guru

Mediators To Go

www.mediatorstogo.com

Copyright 2011 MediatorsToGo.com & Rhonda Smiley All Rights Reserved.