The NCAA basketball tournament in March always brings fun and surprise in the form of upsets. To the enjoyment of all but the loser, the upsets are a delight. Every year a small school from a lesser-known conference scores a win over a heavily favored major conference opponent. This got me thinking about mediating between parties where there is a significant power imbalance. Perhaps you are suing the federal government, a huge corporation, an insurance company, or some other organization that has far superior economic resources. How do you win during mediation and negotiate a good deal? I deal with a variety of claims running the gamut from business and intellectual property disputes, D&O claims, construction problems, real estate, and catastrophic personal injury and death. It is hoped that these comments have wide application.
If you are a claimant, here are a few swing thoughts to keep in mind as you prepare for and attend mediation with an organization or person that appears to have more money and resources. Sometimes the “bigs” can seem intimidating to the smaller players but there are ways to work around them.
Acknowledging fault within any organization is no easy thing. If you can frame the claim in a way that deflects responsibility from those presently employed and pivot to old decisions or past decision-makers, you make the problem easier to digest. Some corporations have a steady-stream of litigants and are accustomed to lawyers overreaching and putting a high value on less than compelling claims. Being grounded in reality and provable facts creates credibility which over time is rewarded.
Bad or obnoxious behavior in the litigation and during depositions creates ill-will that is absorbed into the fabric of the case. If you are fishing in unknown waters, pay attention to the way the line and bait appears. I have seen large dollar demand letters given the short shrift because the claimant’s counsel was viewed as a jerk. In other cases, the demand letter had misspellings or bad grammar. If you are asking for seven figures but don’t proofread, what message does that send? Avoid any evidence of carelessness and amateurish conduct or communication.
Make sure your law firm’s social media and your client’s social media is scrubbed clean with no morally suspect content. Companies look for reasons to low-ball your claim even if it is for a tenuous reason or based on evidence that may not be admissible. Tik-Tok videos and Facebooks posts may not be admissible, but you do not want your client seen in a morally turpitudinous light.
If you are mediating in person, give them their choice of venue. Never mediate in close quarters. Big fish like space. Large conference rooms with windows on a high floor bespeak power, money, and status. Don’t cram someone with a large checkbook into a small room. If you are a solo practitioner, bring extra bodies. Bring a paralegal and try to find a seasoned person as a third chair. This could be the client’s accountant, a consultant, or business partner. Dress well. You don’t want to be in a room where the headcount is five to one and your client is in jeans. Tell the mediator and the other side in advance who you are bringing and make sure the mediator has the space needed. In-person mediation is typically a better option in hard or high-end cases. In large cases, I use Milestone Reporting in downtown Orlando which has well-appointed professional offices with good views and comfortable seating.
If the litigation has been acrimonious, consider using someone other than lead trial counsel to serve as settlement counsel. The other side may have been bracing for another round of heated communication in mediation. Taking the temperature down by adding a new attorney is worth considering. Companies don’t like writing checks to people they despise.
Another truth. If the reality of the claim is embarrassing for the company, they will pay to shut it down. Consider how the litigation may impact their client base, customers, tourists, downstream distributors. It’s not uncommon for a company to settle a claim for reasons outside the merits of the dispute because there are third parties adversely impacted by the litigation. You may feel like a mouse, but sometimes the mouse scares the elephant for reasons which lie outside the four corners of the case. Sometimes the mediator can help you figure that out.
Use the opening session efficiently and be cordial but blunt. Limit your talk to two or three bullet points. Brevity bespeaks strength. Long presentations lose their impact. And don’t forget, as my Dad told me when I was a young lawyer, “always be gracious in the presence of assholes.” Prepare your client for insulting offers and condescending nonsense. Some of that may just be for show or ego or whatever. The key is to stay calm, poised, and confident.
Do not expect a large company to act quickly and don’t chide them for delay in reaching mediation during opening comments. How is that helpful? Organizations need to achieve internal consensus before writing a big check, and you cannot possibly know what that process entails. Griping about delay is pointless. You cannot do much to accelerate the other side’s decision-making. It is occasionally frustrating to me as well, but accept the reality that you cannot move the needle very much over the course of one day. Settling with a large company is like catching a large fish; sometimes you need to let the fish run off the end of the boat until it tires, and it will take longer than you like to get it in the boat. Sometimes you are trying to land a shark and you need to shoot it dead at trial or by summary judgment before you can haul it in the boat. Well-funded litigants have the luxury of being able to run in deep water and waiting for trial. Defense costs are frequently not a concern as they treat it as the cost of doing business.
Use the mediator to stay engaged if the first mediation is unsuccessful. Do not be the first to declare impasse. Plan on a second mediation. It is not uncommon for a big organization to “re-calibrate” after the first mediation. I have seen numerous situations where the preliminary exposure assessment was myopic (for reasons too many to list) and the company under-values the claim, initially. Sometimes they have to shuffle their lawyers, evaluators, or claims personnel. Sometimes there are market forces, like a pending deal or desired financing, which create an impetus for settlement. It will sometimes take time for the pieces to shift – but like the moving staircases in Hogwarts – you can sometimes gain access to places that at first seemed out of touch.
September 11, 2024
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