A well thought out strategy is critical to successfully negotiate the resolution of a court action. Although every case is different, there are foundational principles that can be utilized to increase the likelihood of resolving any type of claim. The purpose of this article is to outline 10 practical tips that can be applied to make settlement discussions and mediation more fruitful and ultimately more successful.
1) Be as trial-ready as possible before engaging in settlement discussions. Your level of trial-readiness will depend on the stage of the litigation when settlement discussions occur but always try to be the party who is clearly prepared to advance to the next stage of the litigation if settlement does not occur. Being ready to move the file forward, and being in a position to set it down for trial if necessary, provides additional leverage that can be a powerful tool during settlement discussions.
2) Have an overarching strategy on how best to approach settlement discussions or a mediation. Creating a strategy requires you to think about how you want the file to settle but also how you think the other side wants the file to settle. The differences between the parties in how they analyze the file, and how they want resolution to occur, will have the greatest impact on the settlement strategy you employ. Each case will have its own considerations which will determine the best strategy. Some strategies include: a) holding steadfast to certain positions in order to set expectations for the litigation; b) providing larger-than-expected concessions in certain areas to build good-will; c) taking the time and effort to fully set out technical or complicated arguments on liability or quantum of damages; and, d) leveraging your ability to incur further legal costs should the matter not resolve. Whatever your strategy is, take the time to think about it and have a plan each time you enter into settlement discussions.
3) In formal mediations, typically each party provides an opening statement. This is likely the only opportunity during the mediation where the opposing party directly hears your position in your words. The opposing party should be the audience for your opening statement rather than legal counsel or the mediator. Your strategy will dictate tone to be set with your opening statement. Opening statements should be short and direct and usually should not address more than two or three discreet issues. Pick the most important parts of your position that are the most likely to be a hurdle to resolution and set out your argument in a way that is easy to understand.
4) Be patient. Most people do not have extensive experience with litigation or mediation. Some come into the mediation ill-prepared and without a complete understanding of how the process works. Making counter offers that move 5% or less may seem like a waste of time but to an individual plaintiff it may feel like a lot of money at the beginning. It is easy to get frustrated when minimal moves are being made but try to plan your strategy in such a way that the mediator has time to work with the plaintiff and the plaintiff has time to digest and process the situation. Often, plaintiffs start to understand that more significant moves are going to become necessary if mediation is going to be successful.
5) Know when to change tactics or strategies during a mediation. In most mediations there is a “turning point” where you start to know whether settlement is going to occur that day or not. Long breaks in between counter offers or smaller incremental reductions in offers are usually signs that the other side is getting closer and closer to their limit or the mediator is having a difficult time eliciting reasonable counter proposals. Start to strategize whether you should make an offer at the limit of your settlement range. The less likely it is that the file will settle, the less beneficial it is to put your final offer on the table. Oftentimes a couple days of sober reflection post-mediation causes parties to take a more reasonable and less combative approach and settlements can be reached soon after an unsuccessful mediation. Having room in your settlement range to make an offer or two post-mediation can make all the difference.
6) Allow the opposing party the opportunity to “save face”. The more combative and aggressive the litigation has been, the more likely it is that some measure of face saving will be required in order to settle. Resolving a file within your settlement range is a “win” and that should be the focus of your strategy rather than attempting to pursue some vague goal of winning the negotiations.
A common view is that whoever has their offer accepted “wins”. Nothing could be further from the truth. Executing a strategy that allows you to accept the other side’s offer and still come within your settlement range is a win. Allowing the mediator to forecast to the other party that an offer at a specific number will be accepted by you is a small way that the other side can save face and feel like they were successful in the mediation. Other options are: i) allow the other party to save face by attributing higher values to a head of damage that is important to them; ii) agree to pay for an additional disbursement like the mediator’s fees; iii) waive your claim for interest or eliminate contentious items on your bill of costs. The better you know the opposing party and what motivates them, the more likely it is that you can find an area in the dispute to compromise on that allows them to resolve the file and save face.
7) Try to settle apportionment with other defendants in multi-party litigation if possible. Having apportionment among multiple defendants determined prior to mediation cuts down the amount of time the defendants spend negotiating among themselves and it allows the mediator to focus on offers as between the defence group and the plaintiff. Limits of settlement authority don’t need to be discussed as between defendants so long as they all have a common understanding of the likely settlement range.
8) Ensure that you have a fulsome understanding of costs, disbursements, and interest once settlement discussions are getting closer to resolution. Request that opposing counsel set these numbers out at the beginning of mediation so that everyone is fully aware of the total cost of settlement.
9) Do your homework when selecting your mediator and then trust your mediator during the mediation. Take the time to fully vet proposed mediators to ensure they are suitable for your dispute. If you are not confident in a mediator’s ability to assist you with resolving the dispute then you should select a different mediator. Once you enter into a mediation with a mediator you have agreed is suitable, trust him or her to help guide the discussions to resolution. Your mediator has spent time with the other party directly discussing with them the strengths and weaknesses of their case. Usually your mediator will have a good understanding of where the offers need to go in order to resolve the file. Unless there is a very good reason not to, follow your mediator’s lead and give him or her the ability to frame offers and arguments in a way that will assist with resolution.
10) Manage the expectations of your client. Ensure that your client comes prepared to resolve the claim if negotiations reach the realm of damages which would likely occur at trial. This necessitates providing your client with all of the information they need to make an educated decision at the mediation. This information would, as a start, include all of the lay and expert evidence for and against their case, intangibles which may swing the case one way or the other, caselaw both in support of and against their position, and your assessment of what will likely occur at trial.