Get There Faster: Early, Private Mediation is Always Better than the Alternatives

Eleventh-hour mediations (or efforts to settle, for that matter) always frustrated this author.  In the litigation context, particularly in the United States, they are judicially imposed.  Under the best circumstances, the parties are ordered to mediate by a busy judge before a private mediator trusted by the court.  Often, however, the mediation is conducted by a magistrate, or, worst case, by the judge him/herself.  This is a tactical disaster for at least one party, but often all of them.

Where an arbitration clause governs, especially in a cost-shifting environment (e.g., most Bermuda-form insurance policies and contracts containing international arbitration clauses), late settlement dialogues may be economically worse.  Enormous costs have already been incurred by both sides and the loser (in the event the matter cannot be resolved) is responsible for essentially all of it.  The potentially winning party, by contrast, must walk away from its cost recovery even if the matter settles.  These dynamics can lead to desperate negotiations.

All of this can be avoided if the parties are proactive as early as possible.  This requires those parties to take control of the negotiations, and to own the process.  With no disrespect intended to fellow members of the Bar, complex disputes invite a principal-agent tension that is candidly enhanced by fears of professional liability.  It is far easier (and safer) to pound through warehouses of documents in search of the last piece of evidence that nothing was missed than it is to acknowledge that litigation/conflict is resolved in a context of imperfect information.  Only the client can do that.  Litigation, like war, is about deception.  (Carl von Clausewitz.)  Perfect information does not exist in that space.

Wise parties choose to resolve their disputes early in the process, and to do it privately, either across a table, or with a mediator of their choosing.

John C. Lenzen, FCIArb

John LenzenGet There Faster: Early, Private Mediation is Always Better than the Alternatives