You may hear that most disputes are settled at Mediation, with the parties compromising their claims in order to avoid litigation. This is true, but settlement doesn’t just happen. To achieve a settlement, especially one that you are satisfied with, you need to prepare thoughtfully and carefully for the day of your Mediation. With this situation in mind, we offer the following tips:
1. Identify your key interests in the dispute
This relates not just to prioritising your claims but working out if there is anything else important to you; for example, avoiding adverse publicity or preserving a business relationship for the longer term. Having identified your broader interests, work out a strategy for trying to reach a settlement that addresses them.
2. Be ready to make the first offer
Extensive research shows that the party making the first offer in a negotiation tends to be happier with the final settlement reached than the other party. This is due to what is called “anchoring”, where the first offer helps define the range of the negotiation to follow. So be prepared to seize the initiative and make the first offer.
3. Reality check your case
Ask your lawyer what your prospects are if your case goes to court. Put your lawyer on the spot! Then, in the Mediation, factor this advice into your decisions about settlement terms.
4. Obtain an estimate of the costs of litigation
Obtain a costs estimate for the litigation from your lawyer. Litigation costs are the immediate price you will pay if you don’t settle, so make sure you quantify the costs and build this liability into your decision-making at the Mediation.
5. Say something at the plenary session
Many times, it is just the lawyers who speak. However, it is usually more powerful if the parties, in person and directly, speak and explain their position coming into the Mediation. Focus on the main points from your perspective and don’t be afraid to express emotions (sadness, anger, etc.). Authentic expressions of emotion, provided delivered appropriately, can help the understanding of your counterparty and shift positions.
6. Check there isn’t anything preventing you from committing to a deal at the Mediation
If you need to arrange funding to pay the other party, arrange this in advance and if possible come to Mediation armed with proof of funding.
Make sure you have authority to settle within realistic parameters, not just at the level of the best possible outcome for your company.
If you need legal advice about a possible settlement outcome, obtain the advice before the day of the Mediation.
7. Be ready to talk to your counterparty face to face
Often parties find this prospect uncomfortable but it can help break deadlock. In preparation, think about how you might handle this situation and what you might say.
8. Think about how you will present your position
It is not usually productive to make bare demands, with no explanation. Much better is to explain your position in some detail so that your counterparty understands why you are demanding something. This will increase the chances of your demand being accepted.
Be wary of making “bottom line offers”, especially in the early stages of a negotiation. These offers are usually unhelpful. If you do make such a statement, make sure it is fully explained and backed up so that your counterparty understands why you have had to take this line.
9. Treat the Mediator as a colleague
Your private discussions with the Mediator will be completely confidential; they cannot he revealed to your opponent. Be prepared to confide in your Mediator therefore and use him/her as a sounding board for your ideas about how to find a settlement.
If you would like to comment on or discuss these ideas, please contact Adrian Lifely, lead partner of Osborne Clarke’s Mediation practice.