Effective Advocacy in Mediation

Christina Magee is a Florida Supreme Court Certified Circuit Civil and County Mediator and the principal in Brevard Mediation Services, LLC a mediation practice founded in 2011.  Her current practice is restricted to full-time mediation.

She would like to gratefully acknowledge the research and editorial assistance she received from Scott Gibson and Tim Coons of Davis Miles McGuire Gardner, PLLC, 80 E. Rio Salado Parkway, Suite 401,Tempe, AZ 85281.

Effective advocacy in mediation is a laudable goal, especially where it results in a settlement that resolves your client’s situation.  Getting there in spite of the competing, conflicting — and all too often — shifting goals that accompany any mediation is the focus of today’s discussion.   Some factors to consider as you prepare for an effective mediation appear below.

1. I. Who is attending and what is their role?

Mediation usually involves the parties who brought the suit (or will bring the suit, in pre-litigated matters), the parties who have to (or will have to) respond to and defend the suit, and the mediator.  In this scenario, there is a single impartial party – the mediator.   Everyone else in the room is advocating a position.

Deciding who should attend, especially where the “client” is not an actual person, may present a topic that calls for mediation in advance of the mediation.   For example, in an employment mediation, does it help or hurt to have the allegedly discriminating decision-maker appear with a “neutral” HR company representative?  Where there is a large self-insured retention, the insurance carrier’s presence may be required by local rules, even though doing so may change the plaintiff’s expectations, raising the floor for settlement negotiations.  If the carrier’s coverage position boils down to covering defense costs, with rights reserved as to all alleged intentional or punitive damage triggering allegations, will the dynamic between the insurer and its customer impede the ability of the defense side to resolve the case?

To resolve these questions, which admittedly often turn on the internal politics of the parties involved, consider also the local statutes and rules governing mediation in your jurisdiction before you stake out a position on who will appear for your client.   Remember too that most mediation statutes allow for the parties to stipulate to an arrangement that is not provided in the statutory construct.

1. Counsel to Counsel Mediation:

In a mediation of this type, where each side is represented by counsel, the balance of power between the parties tends to be equal – most lawyers are competent and good at being zealous advocates for their clients.  Here, the mediator may play the role of forcing the party to consider alternatives he has previously been blinded to by the light of his counsel’s expertise.   Pointing out the possibility that something other than victory can occur and quantifying that possibility in terms of dollars and time is usually effective in moving the parties to a different position.   Nothing prevents counsel from conducting the same type of exercise with a client, and most do as a part of their preparation for mediation.  When an outside neutral reaches the same conclusion over the course of a mediation session, it can be more effective because it resonates with what counsel previously said without putting counsel in the place of not advocating his client’s strongest position.

1. Counsel to Claims or Company Representative Mediation:

The representative for the company or insurer may or may not be a lawyer, and the matter may be in suit or not.   The company or carrier representative may or may not be accompanied by defense counsel who will be representing the interests of the insured under this scenario.

It is important to be sure that the parties at the mediation have “full authority to settle” and understand what that means in the particular jurisdiction where the mediation is being conducted.

On its face, “full authority to settle” means, to many, that the representative who appears must bring the full value of any insurance policy or self-insured retention with them to use to resolve the claim.  To others, the “full authority” language means only that the representative have the ability to cover the full value of the claim that is presented and the discretion to pay that amount without having to seek additional approvals.

But consider the outcome where the demand exceeds a policy limit or where the policy limits demand has been previously made and rejected by the carrier.

For instance, Florida Rule of Civ. Pro. 1.720 Mediation Procedures provides:

RULE 1.720. MEDIATION PROCEDURES

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(b) Appearance at Mediation. Unless otherwise permitted by court order or stipulated by the parties in writing, a party is deemed to appear at a mediation conference if the following persons are physically present:

(1) The party or a party representative having full authority to settle without further consultation; and

(2) The party’s counsel of record, if any; and

(3) A representative of the insurance carrier for any insured party who is not such carrier’s outside counsel and who has full authority to settle in an amount up to the amount of the plaintiff’s last demand or policy limits, whichever is less, without further consultation.

(c) Party Representative Having Full Authority to Settle. A “party representative having full authority to settle” shall mean the final decision maker with respect to all issues presented by the case who has the legal capacity to execute a binding settlement agreement on behalf of the party. Nothing herein shall be deemed to require any party or party representative who appears at a mediation conference in compliance with this rule to enter into a settlement agreement.

(d) Appearance by Public Entity. If a party to mediation is a public entity required to operate in compliance with chapter 286, Florida Statutes, that party shall be deemed to appear at a mediation conference by the physical presence of a representative with full authority to negotiate on behalf of the entity and to recommend settlement to the appropriate decision-making body of the entity.

(e) Certification of Authority. Unless otherwise stipulated by the parties, each party, 10 days prior to appearing at a mediation conference, shall file with the court and serve all parties a written notice identifying the person or persons who will be attending the mediation conference as a party representative or as an insurance carrier representative, and confirming that those persons have the authority required by subdivision (b).

(f) Sanctions for Failure to Appear. If a party fails to appear at a duly noticed mediation conference without good cause, the court, upon motion, shall impose sanctions, including award of mediation fees, attorneys’ fees, and costs, against the party failing to appear. The failure to file a confirmation of authority required under subdivision (e) above, or failure of the persons actually identified in the confirmation to appear at the mediation conference, shall create a rebuttable presumption of a failure to appear.

In Carbino v. Ward, 801 So.2d 1028 (Fla. 5^th DCA 2001), the Carbinos sued Ward for auto negligence.  At the Court-ordered mediation, Ward’s insurance carrier, State Farm, appeared with full policy limits authority ($100,000).  A prior policy limits demand had been made by Carbino’s counsel and rejected by the carrier.  Also attending mediation were counsel for Ward, and the Carbinos, plus their counsel.  The only party not in attendance was Mr. Ward.  Relying on the versions of (b)(1) and (b)(3) in place at the time of the mediation (substantially similar to the text above), Ward contended that he was not required to appear – his counsel was present and he was not prepared to make any payment over policy limits to settle the claim – an amount which the State Farm representative had available to use for settlement negotiations.    The Court disagreed.  Ward, unlike a corporation or a minor, did not need to appear via a representative. Id. at 1031.  Secondly, the Court determined the State Farm representative was not a “representative having full authority to settle without further consultation” because the State Farm representative could not address any demand greater than policy limits.   Id.  Plus, the Court pointed to the bad faith hammer that Ward may have employed in the event a settlement demand was made within policy limits.

In 2012, the Carbino ruling was explicitly applied in the context of Appellate level mediations.   Carden & Assocs. v. C.O.D. Trees Partnership, 83 So.3d 862(Fla. 5^th DCA 2012).  Florida’s United States District Courts have taken a similar course.  Dunning v. Portfolio Recovery Associates, LLC, 2012 US DIST LEXIS 162093 (S.D.Fl. 2012)(applying sanctions against plaintiff for failing to appear personally at mediation).

A somewhat different perspective on “full authority to settle” comes from the Seventh Circuit.  In G. Heileman Brewing Co., Inc. v. Joseph Oat Corp., 871 F.2d 648, 653 (7^th Cir. 1989), the Court found:

“[A]uthority to settle “ when used in the context of this case means that the “corporate representative” attending the pre-trial conference was required to hold a position within the corporate entity allowing him to speak definitively and to commit the corporation to a particular position in the litigation.  We do not view “authority to settle” as a requirement that corporate representatives must come to court willing to settle on someone else’s terms, but only that they come to court in order to consider the possibility of settlement (emphasis added).

For the advocate who wants to have an effect on mediation, it is essential to know in advance who is coming to the mediation for the company or carrier, as well as which kind of “full authority” rules will apply.   Armed with that knowledge, the advocate can have an impact on the mediation process.

1. Counsel to Pro Se Litigant Mediation

This point is significant for how it may affect the balance of power between the parties.   Many states have multiple layers of statutes and rules that govern mediations.   As an example, in Florida, there are statutes that set out the scope of mediation as an alternative to judicial action. See, e.g., Fl. Stat. §§44.1011 (2012), et seq.  In addition, the  Supreme Court in that state has promulgated rules and standards of  professional conduct for certified  mediators, which act in conjunction with the appropriate Florida Rules of Civil Procedure to provide guiding principles for mediations in that state.   One of these principles is self-determination:

Rule 10.310:  Self-Determination

(a)    Decision-making.  Decisions made during a mediation are to be made by the parties.  A mediator shall not make substantive decisions for any party.  A mediator is responsible for assisting the parties in reaching informed and voluntary decisions while protecting their right of self-determination.

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(d) Postponement or Cancellation.  If for any reason, a party is  unable to freely exercise self-determination, a mediator shall cancel or postpone a mediation.

In the context of the pro se litigant, the mediator must carefully balance the rights of the represented party with those of the pro se party, without falling into the trap of becoming the pro se party’s de facto advocate.   Where it is clear a pro se litigant is not comprehending what is happening, the mediator can suspend the mediation, or suggest the pro se party seek independent legal advice, or come to an agreement with the other side to let a proposed resolution remain available for a limited time period so that the unrepresented party can obtain the advice or tools necessary to make an informed decision.   However, the mediator cannot level the purportedly “tilted” playing field.  Making arguments on behalf of the pro se litigant rebutting the represented  party’s take on value or exposure may cross the impartiality boundary line and cause the defense side to request an impasse.  Pointing out problems with the defense side’s arguments, especially where a court would sua sponte raise those issues, arguably does not trigger the same impartiality concerns.

1. The Non-Party Attendee and Confidentiality Problems

Everyone assembles for the previously scheduled mediation.   Suddenly, it becomes apparent that there is an extra person in the conference room:  the plaintiff’s best friend.   Plaintiff’s friend is attending for “moral support,” and she continues to work for the same supervisor who is the subject of plaintiff’s allegations.   The defense side objects.

The non-party attendee may be excludable under local rules governing mediations.  As pointed out above, in Florida, the non-party is not provided for as a permissible attendee, and thus, there is a strong argument that the non-party attendee is not permitted to attend any portion of the mediation – either joint sessions or private caucuses.   The counter to that argument is the practical matter of the mediation’s goal – to resolve the parties’ dispute.  The non-party’s attendance may be exactly what is needed to get to an agreement from both sides.

Participation in a mediation session doesn’t come without obligation.  For example, if an agreement is reached, the confidentiality provisions may explicitly include the non-party attendee as an obligor for liquidated damages.   In addition, confidentiality statutes and the Rules of Evidence may impose burdens on the non-party that make staying for the mediation session too onerous.

The Federal Rules of Evidence on offers to compromise states:

Rule 408. Compromise Offers and Negotiations

(a) Prohibited Uses. Evidence of the following is not admissible — on behalf of any party — either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept — a valuable consideration in compromising or attempting to compromise the claim; and

(2) conduct or a statement made during compromise negotiations about the claim — except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.

(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

See also Fla. Stat. § 90-408 (2012).  To the extent that the parties wish to use information learned via the mediation process, it must be discovered independently, or is barred from admission.

Florida’s statutes governing mediation contain a section providing for confidentiality, and the limits and exceptions to that rule:

Under Florida’s statutes, participating in a mediation conference as a non-party means the participant is equally bound by the confidentiality obligations imposed on the parties.  This rule applies even where the participant is someone whom an attending participant telephones.  See Fla. Stat.§  44-403(2) (2012).   And the confidentiality provision applies for the “duration” of the mediation – which can continue indefinitely until  an agreement is reached, the mediator declares “no agreement,” the court terminates the mediation or, as to a party, the party provides notice it is no longer participating and withdraws.  See Fla. Stat. § 44-404(2012).  Civil remedies for breach of that obligation include payment of compensatory damages, attorneys’ fees, mediator’s fees, and costs of the mediation; attorney’s fees associated with seeking relief for the breach, and appropriate equitable relief.

Knowing the law in your state or the state where the mediation occurs is another way to be as effective as possible in mediation.  Contrast Arizona’s law (shown below) regarding confidentiality with Florida’s (set out above).

12-2238. Mediation; privileged communications; exceptions; liability; definitions

A. Before or after the filing of a complaint, mediation may occur pursuant to law, a court order or a voluntary decision of the parties.

B. The mediation process is confidential. Communications made, materials created for or used and acts occurring during a mediation are confidential and may not be discovered or admitted into evidence unless one of the following exceptions is met:

1. All of the parties to the mediation agree to the disclosure.

2. The communication, material or act is relevant to a claim or defense made by a party to the mediation against the mediator or the mediation program arising out of a breach of a legal obligation owed by the mediator to the party.

3. The disclosure is required by statute.

4. The disclosure is necessary to enforce an agreement to mediate.

C. Except pursuant to subsection B, paragraph 2, 3 or 4, a mediator is not subject to service of process or a subpoena to produce evidence or to testify regarding any evidence or occurrence relating to the mediation proceedings. Evidence that exists independently of the mediation even if the evidence is used in connection with the mediation is subject to service of process or subpoena.

D. Notwithstanding subsection B, when necessary to enforce or obtain approval of an agreement that is reached by the parties in a mediation, the terms of an agreement that is evidenced by a record that is signed by the parties are not confidential. The agreement may be introduced in any proceeding to obtain court approval of the agreement, where required by law, or to enforce the agreement. If a party requests that all or a portion of the agreement remain confidential, the agreement may be disclosed to the court under seal with a request to issue appropriate orders to protect the confidentiality of the agreement, as permitted by law.

E. Notwithstanding subsection B, threatened or actual violence that occurs during a mediation is not a privileged communication. The mediator may inform the parties that threatened or actual violence is not privileged and may be disclosed.

F. A mediator is not subject to civil liability except for those acts or omissions that involve intentional misconduct or reckless disregard of a substantial risk of a significant injury to the rights of others.

G. For the purposes of this section:

1. “Mediation” means a process in which parties who are involved in a dispute enter into one or more private settlement discussions outside of a formal court proceeding with a neutral third party to try to resolve the dispute.

2. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and that is retrievable in a perceivable form.

3. “Sign” means to execute or adopt a tangible symbol with the present intent to authenticate a record or to attach or logically associate an electronic symbol, sound or process to or with a record with the present intent to authenticate a record.

Applying Arizona’s law, a federal district court has held:

The statute does not apply because the written exchange and the matters testified to were not “during a mediation” as the statute defines mediation. A.R.S. § 12–2238(B) and (G)(1). They occurred after “private settlement discussions … with a neutral third party to try to resolve the dispute” and when the parties had passed into conscious and formal contract formation. A.R.S. § 12–2238(G)(1). Written offers and acceptances of settlement agreement, on their face expressing intent to be bound, fall outside the mediation privilege, even if the person who was the mediator is a witness to or conduit for them.

As one court has explained:

‘[C]ommunications to the mediator and communications between parties during the mediation are protected. In addition, communications in preparation for and during the course of a mediation with a neutral must be protected. Subsequent negotiations between the parties, however, are not protected even if they include information initially disclosed in the mediation. To protect additional communications, the parties are required to return to mediation. A contrary rule would permit a party to claim the privilege with respect to any settlement negotiations so long as the communications took place following an attempt to mediate the dispute.’

…

Indeed, this general boundary between mediating and contracting is affirmed in the very text of A.R.S. § 12–2238, in language that fits this case exactly. Subsection D states that when necessary “to enforce or obtain approval of an agreement that is reached by the parties in a mediation, the terms of an agreement that is evidenced by a record that is signed by the parties are not confidential. The agreement may be introduced in any proceeding to obtain court approval of the agreement, where required by law, or to enforce the agreement.” The emails were in writing and signed by the parties (Campbell by affixing his name to his emails, Skelly doing the same with authorization of Smith for the County). The mutual intent that the agreement be legally binding immediately upon email acceptance is explicitly stated in the reference to satisfying Rule 80(d) of the Arizona Rules of Civil Procedure.

Donahoe v. Arpaio, 872 F. Supp. 2d 900, 910-11 (D. Ariz. 2012). Arguably, this result could not be obtained in Florida under its confidentiality statute.

1. II.                 Impasse — or Maybe Not

When and how does an impasse (or “no agreement” in some jurisdictions) get called and who is responsible for making the call?

Is the jurisdiction where mediation will take place one where mediation statutes, local rules and procedures govern (such as Florida)?  If so, having a grasp of these rules and guidelines can help you be a more effective advocate.  If only the mediator has the authority to terminate a court-ordered mediation by calling an impasse, then be aware when you attend that simply getting up and walking out might not get you an actual impasse; instead you may find yourself incurring additional legal costs and being compelled to return to the bargaining table.  In that situation, you will have to persuade the mediator that you are finished negotiations and that no agreement can be reached.  On the other hand, if your jurisdiction is focused on the “self-determination” aspect of the mediation process, then you be able to simply direct the mediator to call the session as terminated for no agreement.

More fundamentally, the threat of impasse as bargaining chip is timeless – in essence, one side says to the other that if you don’t come back and meet me with an offer in good faith, we’re done talking.  Mediations where this occurs must be legion; it seems that in every mediation session, at least at some point, each side will raise the issue that negotiations appear hopeless and that reaching a mutually acceptable compromise seems beyond comprehension.  Mediators also use the threat of impasse as a bargaining chip frequently, especially when the parties seem stuck or unable to achieve any bargaining momentum.

The best way to determine if an impasse is an impasse or something else is to test it.  One means to test a potential impasse is with a mediator’s number.  Pulling counsel out together in a session absent their clients, a mediator will restate what is already known – The defense side says they are at their limit in terms of what they can offer to resolve the case, and the plaintiff side is unwilling to accept that amount.  The mediator has no authority to say what each side will say to what is about to be proposed, but wonders if each side would consider settlement at a figure that the mediator proposes.  If the counsel for the parties find the number potentially acceptable, they can seek authority from their respective clients to extend and accept the offer.  In the conversations with their clients, it may become apparent that the defense side doesn’t like the mediator’s number, but would offer an additional “x” amount, if that would settle the case.  On the plaintiff’s side, the plaintiff can’t accept the mediator’s number either, but can see a way to reduce the demand.  Even if the mediator’s number isn’t the ultimate settlement number, the parties have regained settlement momentum and can proceed to bargain further without impasse.

Another version of the mediator’s number is where the parties agree separately to provide the mediator with a number they would accept to resolve – a true “bottom line” number.  The mediator tells the parties in advance that if the numbers are within an agreed percentage or dollar amount of each other (10 per cent or $5,000, for example), the mediator will disclose that fact to the parties without disclosing the amounts on the separate papers.  Then the mediator will seek permission to disclose this de facto bracket between the two parties to reach a compromised amount between their two numbers.

1. III.             Mediation’s Magic Questions

Being fully prepared is an obvious way to be an effective advocate in mediation.  In addition to having the facts and law that determine the case at your command, as well as knowing all of your client’s circumstances that could affect your position for mediation and/or litigation, be prepared to answer the following questions, often used by mediators to enhance the discussion of what the parties’ real issues are and to tease out the obstacles to resolution.

Knowing the answers to these questions can give you the ability to position the mediation to achieve the outcome your client desires.

1. What are you hoping to achieve?
2. Is what you are doing now enabling you to reach that  result?
3. What other options do you see here?
4. What do you think is the most effective step we can take now?

1. IV.             Conclusion

Despite the many different perspectives advocates and clients bring to mediation, understanding the mediation process more fully can enable you to achieve your desired result.   Considering and adroitly using the various rules, statutes, and guidelines that govern mediation in your jurisdiction can change the dynamics of mediation for all involved.   Effective advocacy in mediation is not just understanding your position, and your adversary’s position, but also your respective clients’ interests and needs.  Knowing what to expect from the mediation process and what the parameters of mediation may be will enhance your ability to effectively advocate for your clients.