Improve Settlement Odds

Tips for Selecting a Mediator

Mediation provides an alternate means of resolving disputes. But how effective is mediation? Who should use mediation? In this article, Nancy Neal Yeend answers these questions and offers key points to consider when selecting a mediator.

Most court statistics indicate that fewer than three percent of all cases filed ever go to trial. There are many reasons that cases do not progress very far along the litigation path, but over the past 10 years, mediation has played a significant role in resolving thousands of those cases. Depending on the type of case, and at what point mediation is introduced,¹ the settlement rate hovers around 80 percent.

Several factors can significantly increase the settlement rate:

• Timing—the earlier the mediation, the higher the settlement rate
• Preparation—the more the parties are prepared, the greater the odds of a settlement
• Mediator—the neutral, who is trained and experienced with similar cases, greatly improves settlement rates

Key Factors to Consider
Since only a few states actually regulate mediators, it is important to not only check out potential candidates’ websites and resumes, but also actually interview them. Primary areas to explore: their mediation background; actual experience mediating cases similar to yours; procedural issues; and disclosure, scheduling, and cost.

Background. When looking into a mediator’s background, find out if the person was actually trained in mediation. Forty hours for a single mediation course is the minimum amount of training necessary. Remember that no previous job (experience or title) or degree guarantees that the person actually knows how to function as a mediator.²

Experience. If the potential candidate has not mediated a case similar to yours, find someone who has direct experience (legal and non-legal) and understands the nature of your case or the industry. A mediator who does not know the construction industry will not be effective with a case involving a failed foundation; just as the person who does not know about business valuation is not well-suited to mediate a corporate take-over. Remember, you do not want to be their test case!

Procedures. Mediation is a simple process of a neutral facilitating negotiations between disputants, so why bother spending time on this topic? Asking questions involving basic procedures may save time and money later. Necessary questions to ask related to the process include “Is it confidential, and if so, what are the exceptions?”³ “What is the mediator’s style?” “Does the mediator keep the parties separated for the entire process, or do the participants get to interact and negotiate directly?” Consider if the mediator is merely a “numbers runner,” then you are not getting all the information necessary to make an informed decision.⁴

Since approximately 80 percent of the time in mediation is spent negotiating, and if you never get to talk directly to the other side, you are playing the old childhood game of “Telephone.” Remember how tangled up the message got when people repeated what they thought they heard? Of course, another important question to ask during the mediator selection process is, “Do you know any of the participants?” The mediator must disclose any personal or professional association or financial connections with anyone involved with the case, including the attorneys and/or law firms involved in the process

Scheduling. A major benefit of mediation is that once the process is initiated, it resolves cases quickly, and one avoids the delays often associated with trial. If the mediator is not available for months, then a major benefit of mediation is lost. Typically, mediations are scheduled within 30 to 60 days of contacting the mediator. Mediation sessions, for most business related matters, are resolved within a half-day to two days. Typically, only the large, multi-party, complex cases take two or more days.

Hopefully the mediator has a facility that will accommodate all the mediation participants. If not, then try to have the mediation at a neutral site, such as the court. If no neutral site is available, then understand that mediating at the offices of the attorney for the other side does give them the “home field” advantage.

Cost. Fees and related costs must be disclosed upfront. Private mediators typically charge by the hour or by the day. It is unethical for a mediator to base a fee on a percentage of the amount in dispute or the amount saved or paid. Fees are most often divided equally between the parties. Inquiring if there are any additional charges is prudent. A significant number of firms add charges for scheduling, travel, and related services. Some court-connect mediation programs provide the mediator pro bono or at a reduced fee.

Conclusion
Most mediators who serve on court panels have been pre-screened; however, it is wise to conduct a complete interview with all prospective mediators. Asking a few questions of potential mediators will prevent surprises during the process and will improve the probability of settlement. Remember, mediation settlement rates are balanced on a three-legged stool: timing, preparation, and quality of the mediator.

Be sure to read “How to Select a Case Appropriate Mediator,” by Nancy Neal Yeend in the November/December 2014 edition of The Value Examiner.

Nancy Neal Yeend is a mediator with Silicon Valley Mediation Group. She has served as a professional mediator and dispute management strategist for over 25 years, bringing a practical approach to dispute prevention and resolution. Ms. Yeend’s strong background in business benefits a wide variety of cases involving contracts, real estate, partnership, employment, copyright, and related issues. She also serves as an expert witness in mediator competency matters. Ms. Yeend can be contacted at (650) 947-1799.

© 2014, Nancy Neal Yeend.

¹ There can be significant variations in settlement rates. Cases mediated before a lawsuit is filed or immediately thereafter may get settlement rates of 90 percent. Cases mediated on the eve of trial tend to range between 65 and 80 percent. The major influencing factors are the number of parties and the type of case. Divorce and family related cases tend to have higher settlement rates. Appellate cases have the lowest settlement rates, since those cases have gone through a trial—therefore a “winner” and “loser,” thus making it harder to get the parties to negotiate.

² In fact, the longer people have been in a decision-making profession, the harder it is for them to stop making decisions for others and telling people what to do.

³ Confidentiality is an extremely important component of mediation, so be sure the mediator explains what it means and any exceptions.

⁴ Mediators have different styles that range from facilitative to evaluative, and each has it own benefits. What is important to remember is that if you want control over the negotiations, it may be better to select a mediator who focuses on managing the process and less on telling the parties what they should or should not do—directing the outcome is not mediation.