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Los Angeles Daily Journal, Verdicts & Settlements

Matching Mediators:  Some neutrals are good for one kind of case but turkeys on others.  The trick is to discern their strengths and weaknesses and think carefully about how they will affect a case.

August 22, 2001

Q:  Why do some mediations with neutrals with terrific reputations turn into nightmares?

A:         Like attorneys, some mediators are good for one kind of case but turkeys on others.  The trick is to discern the strengths and weaknesses of the proposed mediator and think carefully about how they will impact your client and your case.

One mediator might have great instincts about what a case is worth but may not necessarily be as effective in situations requiring enormous patience.  Another might know how to deal with emotional clients, but can’t handle clients who don’t immediately “buy” the mediator’s perspective.  Another mediator might lack the humility necessary to stay out of the way of progress, also known as not snatching defeat from the jaws of victory.  Or an otherwise great mediator might not have a fallback strategy when impasse looms. To be not just good, but great, mediators need to have, and know when to utilize, an entire panoply of available behaviors, as well as the intuitive ability to know precisely what will move the participants in the right direction.

Some mediators have great instincts.   Foregoing a joint opening session may be the perfect call in some mediations, but it must be done with awareness of the ramifications.  The mediator who avoids a plenary session and spends the first hour of the mediation in caucus with defense counsel, in-house counsel, the HR representative and the CFO inadvertently tells the plaintiff that the deck is stacked against him or her. Tomás Olmos, a plaintiff’s employment lawyer with the Los Angeles firm of Allred, Maroko & Goldberg, believes the mediator should first explain to the clients what he or she is going to do. “It’s only good bedside manner. If the mediator doesn’t do this, I have to convince my client that it’s OK, there’s no ‘set-up’, nothing untoward is going on.  I have to do some back-pedaling because I’ve assured my client that the mediator is neutral.  Attorneys understand, but clients are new to this process.” 

Richard Rosenberg, a management employment lawyer and mediator with Ballard, Rosenberg, Golper & Savitt of Universal City, agrees with Olmos: “The most critical thing you do is establish your neutrality.”  Rosenberg also believes the joint session serves an important purpose for both plaintiffs and defendants. “Retired judges often underestimate the value of providing the plaintiff the opportunity to vent in a structured joint session.  Often, there is so much emotional content, the plaintiff may never get past it and start looking at the numbers.  Also, from a defense perspective, my clients need to see and feel just how bad the plaintiff can make the case look.  Without a joint session, the person who is being asked to write the settlement check doesn’t get this experience.”    

On the other hand, clients who are veterans of many mediations, and many mediation styles, might be just fine with a mediator who dispenses with “small talk” and gets right to work with one side and then the other.

Sometimes counsel want a mediator—usually a retired judge--who unequivocally tells the clients, based on his or her experience, what the case is worth, and then works to get the parties to settle in that range.  In this kind of mediation, which is more akin to a settlement conference, patience and tact are not as important as authority and confidence.  This method works like a dream with the right clients and the right case, but we heard horror stories about it as well.

Beverly Stuart, Senior Counsel at Kaiser Foundation Health Plan, points out that counsel do not necessarily want the mediator to put a value on the case in joint session.  This is particularly true if, realistically, the number is unlikely to be embraced by both parties.  By putting a number on the table in joint session, the mediator prematurely takes the negotiations out of the parties’ hands—they can only assent or decline.  Several more rounds of confidential negotiations might have resulted in a vastly different, but mutually acceptable number.

A related problem with placing a value on the case is that, while it might accurately reflect the legal merits of the claims and defenses, this method fails to take into account the parties’ other interests. Only the clients themselves can calibrate the factors--their respective tolerances for risk, their willingness to commit financial resources to protracted litigation, the effects on their workforce of discovery and trial, and other intangible interests and values--that ultimately determine their comfort level with a given settlement proposal. 

When the parties do not accept the valuation proposed by the mediator, the mediator must be able to remove his or her ego and focus on helping the clients reach a settlement that they can live with.  Otherwise, Kaiser’s Stuart says, “there are three numbers that have to be considered—the number from each party, and then there’s the mediator’s number.  There’s the danger that the mediator will have a vested interest in his or her number.  The mediator shouldn’t really have an interest in the outcome as long as the parties are happy.  Some mediators become enthralled with their own settlement number, and they’re trying to move the parties toward their settlement number, instead of trying to help the parties find the number that would be satisfactory to them.  There’s a problem when the mediator wants to be able to take credit and say at the end, ‘I assessed it properly and that’s why the case settled.’”

Jeremy Roth, a senior employment defense litigator with San Diego’s Littler Mendelson, relates a nightmarish tale about a mediator who placed a value on the case based on his caucus with the plaintiff, and tried to “sell” it to the defense:  “We were two weeks away from what was anticipated to be a very nasty trial.  Plaintiff proposed a retired judge who many of my Los Angeles colleagues opined was ‘one of the best’,  ‘a miracle worker’, ‘tells it like it is’, etc.  At the request of plaintiff, who was ill, we had no joint session. The mediator spent 90 minutes with the plaintiff and then came to us and essentially said, ‘The plaintiff is a destroyed man; the only question in this case is “how many” millions of dollars a jury will award him.’  Besides being in shock over the assessment, I had ZERO credibility with my client at that point.  Either I had been horribly wrong about the case for the past two years or I had been horribly wrong about the mediator!”  The case did not settle, even though the defense offered several hundred thousand dollars.  “{Our offer} was laughed at by the plaintiff and ‘pooh-poohed’ by the mediator,” Roth recalls.  Following a 3-week trial, however, the jury rendered a defense verdict.  The defense was also awarded a cost judgment against the plaintiff. 

Barry Capello, managing partner of Santa Barbara’s Cappello & McCann, thinks some mediators lack versatility.  “People that go to mediation expect a deal to be made.  Particularly former judges don’t have the power of the court behind them anymore and they don’t know how to close the deal because they have no threat—they can can’t take it off calendar, or otherwise utilize the court’s power.”

“A mediator can’t be lazy, either,” says complex business litigator CapelloHis advice to mediators?  “You have to be there until one, two, three o’clock in the morning.  You get it done, get it signed, before anyone leaves.”

In some cases, it is important that the mediator have an excellent sense of timing.  For example, a mediator’s proposal made prematurely can torpedo an otherwise promising mediation.  Capello describes the problem: “If the proposal is too high, plaintiff will never back down.  If it’s too low, and too soon, it just reinforces the defense position.”  When the parties are close enough to sense that settlement is possible, and worn out enough to believe that compromise does not imply a lack of principle, might be the right time for a mediator’s proposal.

            Probably the worst mistake a good mediator can make is to substitute his or her judgment for that of the parties and their counsel. Mike Hood, a management employment lawyer with Paul Hastings’ Costa Mesa office, tells of a mediation that ended unsuccessfully when the mediator, a retired judge, refused to communicate a demand from the plaintiff in a sexual harassment lawsuit.  He felt that her refusal to make a more significant move would only make matters worse, and told her that if she wouldn’t bring her demand below a certain number, he would declare an impasse.   The matter settled a few months later, with a different mediator, but at considerable additional expense to the parties, as the case involved a great deal of factual material.

Hood had another unfortunate experience where the mediator arrogated power that rightfully belonged to the parties.  In that case, recalls Hood, “A mediator’s proposal could have effectively resolved the case—we were at impasse.  We used a retired judge, and he refused to make a mediator’s proposal—he thought it wouldn’t work because the parties were too far apart.  I don’t see what the harm would have been.  At worst, the  case still wouldn’t have settled.”  This mediator would have done well to remember the immortal words of Yogi Berra—“It ain’t over ‘til it’s over.”  The best mediators telegraph that they will not call an impasse until one of the parties leaves.  This enthusiasm and optimism encourages the parties not to give up, even when resolution seems like a pipe dream.

            Like Goldie Locks and the Three Bears, the mediator must not be too presumptuous, nor too passive, but must rather have the ability to glide along the spectrum as necessary.  Barry Capello sums it up this way:  “There are nice people who are mediators but don’t know how to push, or they throw up their hands too quickly and say, ‘this is just too far apart.’  The mediator has to know who’s posturing, and work on them.  A good mediator must be able to break the lawyer on his or her brief—first intellectually, then psychologically.” 
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Deborah Rothman is a nationally known Santa Monica-based mediator and arbitrator.  She is on the Large Complex Case panel of the American Arbitration Association, as well as the Employment and Commercial Law panels.

Jeff Kichaven is an independent mediator in Los Angeles.  He is an Adjunct Professor at Pepperdine Law School, a Fellow of the International Academy of Mediators and a Director of the Los Angeles County Bar Association's Dispute Resolution Services, Inc.

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