As a mediator, there are sound business reasons why I should be encouraging everyone to engage in mediation as soon as possible in every single dispute. It’s tempting to claim that early mediation always works, but there are cases where an early mediation can be a waste of time and money, and it can even make it harder for a subsequent mediation to succeed.
Here’s a few questions to consider when deciding whether to arrange an early mediation.
1. Does your client have a clear understand of the strengths and weaknesses of their own case?
Generally, a client walks into their lawyer’s office for the first time with a pretty clear opinion of their own case. A claim will often seem compelling when they have not heard what the defence will be, or stopped to think about how they will prove it.
A client will sometimes react with annoyance when advised that the Court will not immediately be able to understand that the claim is clearly correct, or that a Court may actually believe the other party’s version of a particular conversation. A client’s usual response to such advice is to state unequivocally that the other party would have to lie in order to dispute the client’s version of events. Until a client understands that it is possible for two people to genuinely have a different recollection of the same conversation, and that even if the other person is lying, the Court cannot always tell, they will probably have an unrealistic view of their chances of success.
2. Do you have enough information to provide advice to your client?
Some cases cannot realistically go to mediation until the parties have gone through the discovery process. A shareholder who believes that the company is not correctly reporting its profits will not be able to put forward a clear claim unless they have a chance to take a detailed look at the books. A person seeking a financial settlement with their partner following a separation will not be able to tell if an offer is good or not unless they have seen proof of their partner’s income and copies of their bank statements and superannuation statements.
Clients often need a little bit of persuading to accept a settlement, even when you clearly know that it is in their best interests. It is very hard to persuade a client to accept a settlement if neither of you know whether it is in their best interests. For obvious reasons, I don’t recommend that you even try.
In other cases, it will not be possible to have a sensible conversation about settlement without an expert report. Parties often try to agree on the cost to buy out the other person’s share of a property or a business when they have wildly differing ideas of what that asset is worth. They may think they are saving money by avoiding the cost of engaging an expert, but in most cases they are instead incurring the cost of a mediation that is doomed to fail.
If your client is cost sensitive, there is often the possibility of jointly engaging an expert and agreeing to accept that expert’s opinion as conclusive. This is often a very useful step in the right direction, so long as the client understands the obvious risk that the expert may not share the client’s optimistic views on what a given asset is worth.
3. Does your client understand the alternatives to settling?
As we all know, lawyers are required to give advice at the outset of a dispute about what it might cost to take the case to Court. They also have to advise on the costs that might be recovered if they are successful, and how much their client might have to pay to the other side if the case does not go as planned.
Unfortunately, another thing that we all know is that some of our clients do not even read the Disclosure Statements that we send them, and those who do read them do not always understand them.
Experience suggests that early on, a client will probably feel confident in their case and they will probably focus more on the likely benefits of pursuing the case. Many clients will not want their lawyer to spend too much time talking about the costs and the risks involved. They may feel that their lawyer secretly lacks confidence in their case if the lawyer spends too long on the negatives.
The result of all this is that both sides come to an early mediation with a firm belief that it is not risky for them to go to Court because they have a strong case and they will recover most of their legal costs at the end. They may reluctantly move a small distance from their starting positions, but that will still usually leave them several miles apart.
Even though it may upset your client, they have to be told, sometimes quite bluntly, that there are no guarantees in litigation, that every case involves some degree of risk, that the risk is probably higher than they think, and that no costs order will ever cover all of their costs (unless you are doing the case at an amazingly generous hourly rate)
4. Is your client ready to settle?
Some cases are only about money, but most cases have some degree of emotion to them. We expect emotion in a family law case, but often a fight over a Will, or a fight between old friends who went into business together, will also be driven by emotion.
A person who has not accepted that their relationship is over may not be willing to settle no matter how good an offer looks on paper. In a dispute between business partners, at least one of them may see the business they started as their dream, and they may not be ready to accept that the business needs to be sold. Even in a case where the parties barely know each other, your client may believe that there is a point of principal at stake, or they may simply be too proud to admit to themselves that they need to settle.
We know that the vast majority of cases are settled at mediation, but sometimes a client needs time to get to the point where they are ready to consider this. Unfortunately, sometime a client has to find out for themselves just how unpleasant the litigation process is before they accept that compromise is a better option than the often hollow satisfaction of having their day in Court.
If you bring any case to me I will always do my absolute best to help your client settle it. Sometimes having an independent third party asking some pointed questions about the case is the quickest way for a client to get a clear picture of their position. However, we can achieve much better results if everyone has the information they need, you have been able to give them detailed advice, and they have accepted that settlement is their best option.