One of the fundamental components of a mediation is, of course, the mediator. Continuing the Manufacturing Industry Advisor’s series on mediation, we discuss how to select the right mediator for resolution of your dispute. Selecting the right mediator may well mean the difference between a great settlement or facing continued, expensive litigation.
Once mediation is on the horizon, a mediator must be selected so the parties, their counsel, and the mediator can identify a mutually acceptable date, time, and place. Unless the court orders the parties to use a specific mediator, which happens occasionally, the parties and their counsel negotiate and select a mediator. Several factors influence which mediator is the right fit for a particular dispute.
- Subject Matter Expertise. Does the dispute involve a competitor’s advertisements in claims based on, among others, the Lanham Act or trade dress infringement? Is the case intensely scientific because of the intellectual property involved? These are just two examples of subject matter that would be very difficult for a mediator to handle if he or she does not have the right experience. However, in many cases, no special knowledge is necessary for the mediator to be effective.
- Mediator’s Style: Active vs. Passive. Active mediators strategically facilitate resolutions. They press both sides on points of contention in the dispute, and often suggest potential proposals. Passive mediators, on the other hand, do little to assist the parties. These mediators tend to work as mere conduits, simply carrying messages from one room to the next. (While active mediators often make litigants feel that they are not neutral, understand that the mediator is pushing both sides on the weaknesses of their case.)
- Mediator’s Biases. Mediators undergo extensive training to remain neutral in a dispute. Your counsel’s familiarity with a given mediator is a plus, especially in evaluating the above points, but do not count on it “giving you an edge” in the mediation. In fact, the mediator is not trying to reach a result that he or she deems correct. Rather, the mediator’s role is none other than to bring the parties to a result which they All that said, if a mediator is known to be biased in any way, cross that person off the list.
- Mediator’s Rate. Importantly, in most commercial disputes, the mediator’s rate should not be a factor in the decision making process. As any litigant can attest, attorneys, experts, and other litigation expenses cost substantial sums. Mediators’ fees do not add significantly to litigation costs, especially because the parties almost always split the mediation fees. Consider the following examples:
| 1 Day Mediation in a Mid-Market | ||
|---|---|---|
| Mediator A | Mediator B | |
| Rate | $325/hr | $575/hr |
| Hours | 8 | 8 |
| Total Fee | $2,600 | $4,600 |
| Each Side’s Share | $1,300 | $2,300 |
While the hourly rates may seem materially different, the difference in total cost probably is immaterial. And the cost is usually worth it: First, if the parties reach an agreement, the dispute is behind them, and future costs are avoided. Second, even if the parties do not settle, an experienced mediator may be able to correct erroneous views held by your opponent or its attorney, which can help focus the actual issues that remain to be litigated. Simply put, marginal cost ($1,000) in these mediators likely pales in comparison to marginal benefit ($10Ks or $100Ks in exposure or attorneys’ fees) that are saved when a resolution is reached.
Discuss with your lawyer the following questions regarding each mediator:
- What experience do you have with this mediator? How many times have you participated in mediations with this mediator?
- What is the mediator’s background? Does he or she have experience in the subject matter presented in this case?
- Is this mediator relatively active or passive? Do you trust this mediator to be fair?
- What were the outcomes of the mediations in which you previously participated with this mediator?
- Would you recommend that we use this mediator? Why or why not?
Working with your counsel to select the best mediator possible is well worth the time and expense. In the end, it could save you a significant amount of money and stress. Stay tuned for our next post explaining how you should help your attorney prepare for mediation, once the date has been set and the mediator has been selected.
