- If the other parties are not interested in mediation, doesn’t a Guided Choice pre-mediation investigation just add another layer of expense?
No. Retaining a mediator early in a case can actually reduce expenses. The mediator can facilitate an efficient information exchange. In some cases, parties may have signed a commercial contract that requires mediation, or some parties may be interested in mediation, even if there is no contractual agreement to mediate. But the lawyers may be skeptical about hiring a mediator at the start of a case, thinking that the other parties (including insurers) are not interested in settlement, because of the wide disparity between the parties’ positions. Lawyers may also believe that they need significant discovery to “teach” the other side that their position is unrealistic.
A mediator can help overcome these obstacles to settlement. Using Guided Choice principles, a mediator can conduct a quick and confidential investigation, often through phone calls and the review of existing documents. The mediator and the parties can agree on a budget and schedule. And after the investigation, the parties and mediator may assess whether settlement negotiations are ready to begin.
- I am concerned that the mediation process will delay getting the dispute resolved by court or arbitration.
That won’t happen when you use the Guided Choice process. The Guided Choice mediator’s job is to resolve disputes earlier: get the case settled faster or move it to the next adversarial step if settlement is not achievable. Since 2015, American Arbitration Association Rules for Commercial and Construction specifically require that the parties consider mediation when a demand for arbitration is filed, even if there is no specific pre-dispute requirement to mediate. Those rules specifically provide that any mediation process should be in parallel with arbitration and should not delay that process.
- We have tried to settle the case, but we are too far apart. Won’t mediation be a waste of time?
No, it won’t. Most commercial disputes eventually settle before adjudication even after early negotiations have broken down. It’s important to remember that agreeing to mediate is not agreeing to start settlement discussions before the parties are ready. Rather, it is an agreement to employ a mediator to first facilitate the settlement process before helping with settlement negotiations.
The mediator’s early role is to facilitate information exchange. Discovery disputes often delay settlements and increase litigation expenses. The amended Federal Rules focus on proportionality in discovery. The Guided Choice mediator can reduce expenses by helping the parties determine whether and to what extent they need to exchange information before making a settlement decision. The mediator can also work with experts to see if they can come together to reach a creative solution. Always remember, though, that parties cannot be forced to accept settlements they don’t want.
- The contracts have a step negotiation clause requiring executive level negotiations before mediation or arbitration. Shouldn’t we have a meeting of senior executives before we start a mediation?
Guided Choice is a process to help guide the parties to a negotiated settlement. It is not just a single-day meeting. Negotiations before mediation begins can be helpful but they work best when outside litigating counsel is not yet involved and the parties have a good business relationship. If these factors are not present, executive meetings may make parties angrier and more entrenched in their positions. Under Guided Choice, a mediator performs a confidential investigation to learn the reasons why the parties haven’t settled. Based on this investigation, the Guided Choice mediator may have ideas about how the executive meeting should be conducted, and whether the presence of the mediator or attorneys is desirable. Using a mediator in this way can be a good investment in any type of negotiation.
- Should I include an arbitration clause in my commercial contracts?
Arbitration has many advantages over court. Especially in areas likely to involve technical and custom and usage issues an arbitrator is a more reliable trier of fact than a judge. Arbitration is also more private and usually quicker. The key to a good arbitration process is using a mediator to assist in the customization of the arbitration process.
The new American Arbitration Association Commercial and
Construction Rules require that parties who demand arbitration also retain a mediator, The mediator, through his confidential investigation, can help create a customized arbitration process that is more cost-efficient than litigation. Using a mediator in this facilitation role does not mean that the parties are required to start settlement negotiations until they are ready.
If it is likely that your dispute would be tried in a foreign court system, then it is expected that the parties will agree to arbitrate.
- What if I don’t have an arbitration clause in the underlying contract?
The Guided Choice mediator may recommend that the parties design an expedited arbitration process that can be limited in scope to the questions to be decided. For example, an arbitration could decide liability or damage issues without deciding the final award.
- Is Guided Choice really a new idea?
It’s not brand-new but it is a new way of introducing the best practices used by the best mediators to a broader audience. Unfortunately, many mediators do not receive training in these techniques. Pre-negotiation activities have always been necessary to create an efficient settlement process but have gotten lost in many mediations. Instead, counsel focus on litigation expectations and preparations. Early case assessment with the help of a Guided Choice mediator can materially advance either negotiated or mediated settlements.
- I am a businessperson and hire lawyers to resolve claims. How can I get the benefits of the Guided Choice process?
Include a mediation provision in all your project or “deal” contracts. If you are involved in a dispute, ask your lawyers early on to consider how to achieve the earliest and least expensive settlement and to consider mediation.
- Should my contracts that include a general mediation requirement also have a detailed clause implementing the Guided Choice Mediation Process?
No, because Guided Choice is not a one-size-fits-all process. We generally recommend that you not include the specific Guided Choice process in a pre-dispute dispute resolution clauses because each mediation process should be customized, based on input from the mediator after investigating the causes of any impasse.
However, there may be situations where the parties are already involved in arbitration or litigation and prefer to set out the specific mediation process to which they agree. This link is to a model clause for this situation.
- My company is being represented by an insurance company, though we have a high deductible/self-insured retention. How do I ensure that the lawyers who represent us settle the case early to avoid the expense that we have to absorb within our deductible/retention?
You may need to apply pressure directly or through your broker. If that is not successful, you may need to retain coverage counsel. Finally, you should look to a Guided Choice mediator to help with any negotiations.
- I understand that having a mediation requirement in our contracts is a good idea with no downside. How do I ensure that all of our subcontractors, consultants, vendors, and sureties participate in mediation if a dispute arises that affects all of us?
Include an obligation to mediate in all your contracts. In the construction industry that would include the General Conditions document. The language for that type of clause is contained in all standard form construction contracts, which can serve as models for other disputes.
- After we have reached an impasse, my client does not want to pay additional mediation costs. And I don’t want the mediator interfering in my trial strategy. What should I do?
Don’t set an expectation that disputes will be settled at the initial negotiation session. Too often parties and the mediator are angry or disappointed if the case does not settle at the first (and sometimes only) negotiation session. A good mediator prepares the parties for a situation where a negotiation may have to be adjourned for the parties to resolve an impasse issue.In such a situation it is common for disputes to settle without the later involvement of the mediator.
Even if there are no planned post initial negotiations, the mediator may help reduce the dispute resolution costs significantly by helping to design an efficient discovery process for whatever is the going forward default resolution process. If arbitration is the default, the mediator can also help the parties select the best arbitrator(s). The mediator can also help the parties to be mindful of opportunities to resume settlement discussions.
- You talked about the mediator suggesting arbitration as a tool to break impasse. Would the mediator also be the arbitrator?
No, we do not generally recommend that the mediator also act as an arbitrator. We are concerned that a party may be reluctant to share important information with the mediator if the mediator could ultimately make a binding decision in the case. There may be situations where this concern doesn’t apply, but they would be an exception to the general rule.
- I am an in-house counsel. I don’t want to give up control of managing the settlement. The Guided Choice mediator seems have more control over the negotiation than a traditional mediator does.
We understand your concern, but remember that you still control the negotiation process and the offers and demands you are willing to make. The Guided Choice mediator is your resource and not your negotiator. Remember, too, that the Guided Choice mediator can assist by learning about your opponent’s position and what needs to happen for you to reach a settlement.
- Is Guided Choice Mediation useful if a lot of time has already been spent in discovery?
Yes. While Guided Choice encourages settlement as early as possible, sometimes the case is further along the road to trial or hearing and saving the expense of discovery and experts is not possible. Even late in the game, though, a mediator can facilitate settlement by designing an effective negotiation process.
- How do you get a mediator involved as early as possible when a party objects that it is too early for mediation?
We have prepared a simple one page Agreement to Retain the Mediator for Pre-Negotiation Services for downloading. One of the FAQs about Guided Choice is how do you get the mediator involved early in the history of the dispute if one of the parties objects the use of mediation early in the history of the dispute. This objection is often based on a desire to first pursue discovery or motions or to engage experts. This objection is usually based on the lack of understanding of the multi-phase role of the mediator. The objectors believe that by agreeing to mediation means an agreement to agree to settlement negotiation. It does not. The objector does not understand the important pre-settlement negotiation role the mediator can play. Mediators can use their power of confidentiality to learn the needs of the parties which must be satisfied before they are ready to negotiate. These needs are more than just discoverable information and include biases and heuristics that must be dealt with.
- What If Scenario Planning to Avoid and Overcome Impasse
Another FAQ is how does Guided Choice overcome impasse? Guided Choice has a pre-negotiation activity whose purpose is to anticipate impasse during negotiations. The mediator can confidentially explore with the parties ways to overcome such impasse should it occur. This minimizes the chance that impasse will cause the mediation to fail. Anticipating impasse is particularly important if the mediator has been hired early in the dipute’ or if the parties are eager to start negotiations even though all their information needs have not been satisfied.
This technique is called “What If Scenario Planning.” It is a well known technique taught in business schools. When used in the construction industry a variatoin is called “partnering.” For example, if it appears that impasse will arise during negotiation over the legal consequence of a contractual term, the parties can collectively or separately discuss the pros and cons of using impasse breaking tools such as binding or non-binding third party opinions. This prevents terminations of mediator because the “parties are too far apart.”