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How to prepare for mediation: a checklist

by Matthew Rushton on 12 Jan 2017

prepare_for_mediation

Clients have a right to expect a high level of technical expertise from their lawyers. Beyond this, what distinguishes the excellent from the merely acceptable in mediation advocacy is often the quality of prior preparation.

One salutary tale is that of the mediator who, while practising as a solicitor, acted for one of the world's leading professional gamblers. The gambler concerned made a living taking on all-comers at Blackjack. She became involved in a rights dispute and sought advice on her prospects of succeeding in a legal claim. The solicitor gave his standard line: "You've got a 70 per cent chance of succeeding with the claim, your costs will be X if you win and X if you lose." "Is that it?" she asked. "What kind of a risk assessment is that? I need to know about my opponent – what advice are they getting? What's their personality? Are they gamblers? Will they see this thing through to the end? How do they cope with stress? Will they break under cross-examination? Is their house on the line?" In short, she wanted a full risk assessment of all the relevant circumstances. Litigation was not a gamble she was about to undertake lightly.

The message is: the better informed you are of all the circumstances that might potentially affect the outcome, the better able you are to take advantageous decisions.

How to prepare for mediation: risk assessment

Mediators all agree that realistic and comprehensive risk assessment is critical in preparing for mediation. Mediators might force parties to complete a decision-tree analysis, getting each side to attach a percentage value to their prospects of success in each phase of the dispute. Opinion is divided as to whether decision-tree analyses produce mathematically sound results. "They are," concedes one mediator, "pseudo-science, but it's better to have them than not have them." Others will resort to them only when desperate.

Part of what this process achieves is the breaking down of partisan perceptions. Research shows that it is natural to view one's own side as "more talented, honest and morally upright", while simultaneously vilifying the opposition. The result is that exaggerated perceptions of the other side's position leads to overestimates of the substantive conflict.

Risk assessment and reality testing help counter this tendency; being aware that either side's arguments are coloured merely by the roles adopted in a conflict situation helps broaden one's perspective.

At a minimum, therefore, lawyers should consider, and have in writing answers to the following:

  • The sum claimed.
  • A list of unquantifiable elements: injunction, accounting, rectification, declaration.
  • The sum counterclaimed (if applicable).
  • A list of unquantifiable elements of the counterclaim: injunction, accounting, rectification, declaration.
  • A comprehensive list of each aspect of the claim and percentage prospect of success.
  • The percentage prospect of the main claim succeeding, and the sum payable or receivable.
  • The percentage prospect of a significant part of the claim succeeding, and the sum payable or receivable.
  • The percentage prospect of the counterclaim succeeding, and the sum payable or receivable.
  • The percentage prospect of a significant part of the counterclaim succeeding, and the sum payable or receivable.

Cost

  • Are you fully indemnified for your own costs to trial?
  • Are you fully indemnified for your opponent’s costs to trial?
  • If you settle before trial will your opponent’s costs be indemnified?
  • If not, estimate your opponent's costs to date of settlement.
  • What are your total costs and expenses to date?
  • What are your estimated legal costs to the end of a trial, including witness expenses, expert costs, counsel’s costs and all other items.
  • If you succeed, how much of your costs are you likely to recover?
  • If you succeed, how much of your costs will not be recoverable?
  • If you do not succeed, how much of your opponent’s costs are you likely to pay?
  • If it goes to trial, estimate the time taken by management, staff and others in preparing, seeing lawyers and attending court? Put a value on this.
  • Estimate the resulting loss of business/income.
  • If you succeed at trial, what interest, if any, are you likely to receive?
  • If you do not succeed at trial, what interest, if any, are you likely to pay?
  • If either side appeal the judgment, estimate what extra costs you might incur. 

Time

  • What is the date of the trial? Estimate the length of the trial?
  • If either side appeals, estimate the further time involved.
  • Is there any prospect that your opponent will not have the resources to meet a judgment, immediately or at all? If so, estimate the time, prospects and costs of enforcing a judgment. 

Other factors

  • If the other side has made a Part 36 offer, what are your percentage chances of beating that offer?
  • If you have made a Part 36 offer, what are the other side’s chances of beating that offer?
  • How damaging would an adverse decision at trial be for your business? Put a value on that.
  • How damaging would an adverse decision at trial be for your opponent’s business? Put a value on that.
  • Might there be any indirect benefits from a settlement, like restoring or preventing further damage to goodwill, or trading opportunities?

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Topics: ADR, Mediation

Matthew Rushton

Written by Matthew Rushton