Top 5 Construction Mediation Tips and Techniques: Tip #4 – Take your Construction Mediator Selection, Pre-Mediation Conference, Mediation Statement and Mediation Presentation Seriously.
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Please allow this Blog post to serve as the fourth installment in a five part series entitled “Top 5 Construction Mediation Tips and Techniques.” The previous installments can be found below:
Tip #1 – Ensure you and your client fully understand what mediation is and what its benefits and purpose are.
Tip #2 – Know your case well. Know their case better.
Tip #3 – If there are reasons why your case may not settle at a construction mediation, understand them in advance.
The Blog posts from this series are intended to be cumulative and should be reviewed as a whole in order to fully receive the message of the author. This post will focus on the importance of participation in the pre-mediation process.
The vast majority of civil cases represent relatively straightforward disputes which do not require the same level of preparation to mediate or even try as complex construction cases require. Trial exhibits in such cases often number in the handful and can be carried easily in a trial briefcase. Comparatively, for even the most basic construction dispute, trial exhibits number in the hundreds (if not thousands) and require a band of foot soldiers to tote the weapons of war. If the dispute falls into the former category, this tip may seem overkill. If the dispute is the latter or anything beyond, significant consideration should be given to the needed level of pre-mediation preparation efforts.
As this field of alternative dispute resolution continues to develop, various theories are espoused as to the process of mediation. One such theory advanced is that a mediator’s knowledge of the nature of the dispute and the particular area of the law is unnecessary to the mediator being effective in bringing the parties together. Instead, what is posited is that mediators only need to facilitate discussions between the parties so that the parties resolve the dispute as between themselves. However, in a technical industry such as construction, is a mediator truly effective as a guide along the path to resolution if the mediator does not know how to read a map? Mediators who come to the mediation without any insight as to the industry or the dispute find themselves in only a slightly different position than a juror or the trial judge unfamiliar with case. Before any substantive discussions can proceed, the parties must spend time educating the mediator as though the mediator was actually going to make a decision. That effort, though, diminishes the process because rather than spending time educating the mediator, the parties should be focusing their attention on communicating their respective positions to each other. Therefore, to facilitate the mediation process, the parties should actively engage in pre-mediation communications with the mediator. How that looks and the depth and complexity of such pre-mediation efforts are determined based upon the case itself. However, counsel and clients should deliberately engage in a pre-mediation effort as part of the process of being prepared for the mediation.
a. Selecting the construction mediator
Construction mediation helps businesses with conflicts to explore, and oftentimes to agree on, mutually acceptable settlements. Positive results turn on several factors, not the least of which are the mediator’s training, skills, and experience. Competent construction mediators come from a variety of professional expertise, and employ different styles. Among other factors consider each person’s legal and technical experience, reputation, advanced degrees or certifications, mediation training, and trial experience on matters similarly grounded in fact or law. Also, consider your personal preferences. Do you want a mediator who dictates solutions, one who suggests options, or do you prefer a less directive approach?
The minimal qualifications for anyone who presides over a construction mediation are: impartiality; integrity; candor; respect; threshold intelligence; ethics; listening skills; maturity; creativity and analytical skills; persuasiveness; and subject matter expertise. My preferred approach for finding a qualified construction mediator is through word of mouth referral from colleagues. Thereafter, I perform my own research as to the mediator before I present my client with the options available. Beyond the minimal qualifications listed above, I will usually want to ask:
1. How long has the construction mediator been in practice, both law and mediation?
2. How frequently has the mediator been chosen to serve on construction mediations? What percent of these were withdrawn, or settled before the mediator actually met with the parties?
3. How many cases has he/she mediated in the past 3 years?
4. What is the construction mediator’s batting average? Most mediators resolve between 65 and 80 percent of cases assigned to them. These statistics vary with the nature of a conflict; whether it was voluntarily submitted to mediation, or court referred; the number of disputants; the amount of money in controversy; whether the parties are represented by counsel; and the “emotional heat.”
5. What are the quality and quantity of their legal and mediator experience/training?
6. Is the construction mediator a proven authority in the field as demonstrated by articles, speaking at workshops, and active participation in professional associations?
7. What are the mediator’s fees, and are those fees commensurate with the market?
8. Is the construction mediator willing to provide references, or allow you to contact people who are familiar with his/her legal and mediation services? Can the mediator provide you with case numbers on similar matters litigated while in practice?
While going through this process can be a bit tedious and time consuming, it will undoubtedly get better construction mediation results than the fallback “I’ll defer to your client’s mediation selection- my case is my case and the mediator won’t change that.” This is a flawed and antiquated model of thinking, for this inherently develops a divide that the mediator is a homer and their opinion is influenced by self-interest and thus devalued. When this happens, a construction mediator cannot challenge the parties the way he/she should in a complex case.
b. Pre-mediation conference
Despite their expertise in the field, prudent construction mediators should approach each construction mediation differently and seek to consult with each counsel jointly or separately in telephone calls in advance of each mediation. The purpose of these calls is to address logistical details and to gather information about the case that will allow him/her to tailor the mediation to the needs of the parties and enhance the possibility of resolution. These conversations also enable counsel to be better prepared for the mediation and to prepare their clients more effectively. When engaging in these calls you will want to discuss:
- Factual and procedural background of the dispute, including the settlement history;
- The legal issues;
- The status of discovery and any unfinished document discovery. Can the construction mediator assist in the information exchange?;
- Status of motion practice;
- Trial date and trial order;
- Any upcoming events;
- The needs of the lawyers for advance information essential to settle the case at the mediation;
- Information about the participants, including the nature and quality of their relationship, their experience and comfort level with mediation and their goals for the mediation;
- Any issues between the parties beyond those presented in this case
- Any issues in which the parties are in agreement
- Attendance of experts and use of expert work product
- The lawyers’ suggestions about the format for the mediation, including discussions about the subject matter and role of the parties in any joint sessions;
- Suggestions for preparing clients for mediation;
- Confidentiality of proceedings and information exchange;
- Technical requirements for attendees;
- Mediator fees;
- Mediation schedule;
- Travel or personal restrictions associated with the day of mediation; and
- Any additional information the lawyers think would be helpful to the construction mediator in planning and preparing for the construction mediation.
Though pre-mediation conferences in large construction disputes are worthwhile, the case itself and the interest of the parties will dictate whether this is a productive use of litigation resources. I submit that the majority of the time it is.
c. Mediation statement
Most court ordered mediations require the submission of mediation statements. It is very tempting to blow this requirement off and focus only on the presentation itself. Some cases that may be a better strategy, but it is not the most effective strategy in most cases. While an effective mediation presentation is extremely important, it is verbal and unrecorded so its impact will likely be limited by regressive memory and personal interpretations. A written mediation statement, however, can serve the dual purpose of educating the mediator on the issues and providing a matter of fact opening statement as to where the case will be going if a deal cannot be reached.
An earnest construction mediation is all about doing what it takes to settle on the most favorable terms for your client. A large part of that process is providing frank and candid information that will help the construction mediator settle your case. Remember that all submissions are strictly confidential and it is your option on whether you want to disclose your statement with the opposition or not. Items to be considered for inclusion in a mediation statement are:
1. The name and title, if any, of the client or authorized representative who will be attending the conference with counsel along with the file Certificate of Authority.
2. A brief statement of the key factual and legal issues involved in the litigation. Careful consideration should be given to divulging honestly and openly the strengths and weaknesses in your case, whether factual or legal.
3. The main challenges affecting potential settlement.
4. A description of any important rulings made or pending motions in the case which may have a bearing on settlement.
5. The status of settlement negotiations, including the last settlement proposal made by you and to you.
6. A likely judgment range if plaintiff were to prevail, and the chance, expressed as a percentage (and associated with a legal theory with factual support), that plaintiff will prevail at trial.
7. A settlement proposal that you would be willing to make in order to conclude the matter and stop the expense and turmoil of litigation.
8. An estimate of costs and legal fees from the date of the conference through trial, if the case is not settled.
9. An enclosure of key documents necessary for the construction mediator to understand the case, such as:
a. Pretrial Stipulations and/or a Pretrial Order;
b. Expert Reports;
c. Brief excerpts of important deposition testimony;
d. Pleadings and/or dispositive motions which summarize issues;
e. Key trial exhibits;
f. Any other documents which counsel believe may be of benefit to the
construction mediator in evaluating the case.
A pre-mediation statement is akin to an opening statement for trial; an outline of the case which addresses the fundamental and basic components of the dispute and foreshadows discussions to come. The pre-mediation statement should be concise and direct, defining only the key issues that merit discussion at mediation. A pre-mediation statement is not a closing argument, nor a full-fledged trial brief. It certainly isn’t a forum for one party to complain about the tactics employed by the other party or throw haymakers that are unproductive to reaching a mutual beneficial collaborative resolution. If you are going to put items like this in your mediation statement, you are better served just sending a copy of the pleadings with a brief cover letter saying “see enclosed.” Don’t lower yourself to that level as it will surely backfire and express your lack of confidence in your case. It is critical to understand who your audience is. While you do want to educate the mediator, it is important to remember that construction mediators do not settle disputes, the parties do. So while you may address your statement to the mediator it should be written primarily for the other parties. Presumably you want them to read and seriously consider the points you are making so avoid phrases like “the defendant’s frivolous arguments” or “the patently false allegations made by the plaintiff.” You hope to come out of the mediation having reached an agreement with the other side and insulting them going in will not make that any easier.
If you are the party looking to get paid, explain your damages clearly and with as much detail as necessary so that they are understandable and above all credible. Setting forth gross numbers with no discernible rationale may signal you don’t really know what your damages are, or worse that you are having difficulty proving your damages. If you are defending against a claim tell the other side exactly what your issues are. A general denial simply signals that you have not done much in the way of studying the claim, or worse, that you have no real defense.
Don’t hesitate to make any valid argument you have, but don’t make arguments that you don’t seriously intend to pursue. You were required to assert all possible claims and defenses in your pleadings. You don’t need to do that in your mediation statement. If you are the defendant, conceding liability where it is not really an issue will send the message you are serious about trying to resolve the case and may add credibility to your arguments about the plaintiff’s damages. A plaintiff who has more theories of recovery than facts to back them up will be perceived as someone who is less than confident in their own case.
It is important to not bluff or include puffery in your mediation statement. All too frequently lawyers will write that if the case does not settle they will be making any number of motions that will decimate the other side’s case. If you have the goods get them out on the table. Explain what your motions will be, why you think they will be successful and why the other side should resolve the case on the terms you are proposing. Otherwise your bluffing will be seen for what it is.
Actively involve your client in writing the mediation statement and the mediation presentation. The client will be expected to participate in the mediation itself and starting that involvement with the drafting of the statement can be a valuable experience for the client and you. Especially for the client who expects you to be an aggressive advocate in every encounter with the other side, getting them involved in drafting the mediation statement will give you an opportunity to explain exactly how and why mediation is different than litigation. During the mediation the client will be asked to make some difficult decisions about compromising positions they have long held and are deeply committed to. If they participated in the preparation of the mediation statement they will have already given some serious thought to the dispute and hopefully will be able to make decisions based on their best interests, not just their positions.
A mediation statement should be an honest examination of both your case and what you understand to be the other side’s position and an explanation of where you think the differences lie. The ultimate goal is to get the other side to understand you. Understanding does not always lead to agreement, but resolution is almost impossible without understanding.
d. Mediation presentations
The question of whether to make a formal presentation at mediation turns, in part, on the nature of the dispute and its litigants. In the context of a construction dispute, a mediation presentation tends to be the rule as opposed to the exception. Typically revolving around technical issues, construction disputes are often better defined when both parties participate in establishing the predicate for discussions and issue resolution. Moreover, while a risk exists that such a presentation could inhibit rather than promote settlement communications, the presentation should also represent a window into trial if the matter is not resolved. Each party (including the client) then has the opportunity to consider and evaluate the other party’s stated position and how it may have changed over time.
Even if pre-mediation statements are submitted and a pre-mediation conference takes place, construction disputes tend to be a laced with highly technical factual disputes that need to be flushed out and consolidated. The effort involved in putting together a cogent, but persuasive mediation presentation forces counsel to be better prepared in their case and adequately narrowing the issues if the case doesn’t settle at mediation.
In smaller cases, a mediation presentation can be as simple as a 5 minute overview of the key issues and items addressed in the mediation statement, but in larger, more complex construction cases, I prefer to gather and present evidence, factual accounts, caselaw/statutes and other key informational data in an organized formal presentation. While a formal PowerPoint is not right for every construction mediation, a mediation presentation in a technical focused and technologically innovative industry such as construction can condense the evidence deduced from thousands of pages of documents and photographic evidence to 25 key slides focusing on the gravamen of the dispute. As with any presentation, there is a delicate balance between overwhelming the audience with details that cloud the issues and not sufficiently presenting the key facts that make your argument persuasive. To this end, should you opt to do a formal presentation, it should be organized, streamlined and persuasive.
Remembering that the goal of all mediation preparation is to gain a mutual understanding of the issues and value of each party’s case, your presentation should be focused on ensuring the other side appreciates your position and adequately assesses its risk of not settling at mediation. In taking the time to present your version of the events, you are going a long way at building credibility both as a negotiator and a trial lawyer in the event you cannot settle the case. You don’t need to divulge your whole case (such as the order of witnesses, order of evidence or order of proof), but you should surely not be afraid to divulge your theme of the case and supporting data. I would even go as far as stating that you should go ahead and disclose your smoking gun piece of evidence rather than withhold it, for it is statistically likely that the case will settle at mediation and thus the smoking gun evidence is likely to drive settlement value up. Further, there is no assurance that those key pieces of evidence you rely on for your theory of the case will ultimately make it in to evidence at trial. If used properly, they may have their most value at mediation. As a lawyer, I want the other side to know the strength of my client’s position and rest assured that what they are going to see at trial is only an improved and refined version of what they will see that day at mediation.
One challenge I have found is to try to avoid the tendency to be over inclusive of information in my construction mediation presentations. Often jargon laced construction mediation Power Points digress into a mind numbing narrative of technical terms that are just read from the slide, repeated over and over again. Avoid the temptation to do this and let your pictures speak for themselves. If a picture speaks a thousand words, there is no need to add 1001. Show the pictures, highlight the key defects with your clicker, add candid but productive commentary and move on. Small details matter in a presentation, such as incorporating technology that highlights the key provisions of contracts or communications rather than showing the whole document, or embedding audio/video of testimony or site inspections into the evidentiary review. Remember, everyone in the room may not speak your language or be as educated on the case as you are. Present and speak in terms that everyone can understand, using platforms that relate to even the most uninformed or disinterested party in the room. Rest assured that this person is ten times more attentive than the average juror. If you cannot hold that person’s attention in a mediation, what makes you think you will keep a jury interested for a week-long trial?
Another thing to consider in construction mediation presentations is whether to include clients or experts in part of the presentation. Personally, I prefer to include my entire “trial team” in the presentation as part of showing the opposing side our position, building credibility and gaining confidence and valuable experience in public presentation. Sophisticated clients who are capable of expressing their position are in a unique position to speak of first-hand knowledge regarding the litigants’ history and issues in dispute. Often litigation shields the participants and a mediation is the first time the parties have been in a room together since the contract was terminated and the respective contractor(s) left the job. Oddly, I have found that construction mediations are less about an opportunity to confront the adversary as much as they are about being heard and mending fences. The industry is just too incestuous for solid companies to be at odds for too long, and mediation often offers that cathartic experience of knowing your adversary is experiencing the same inconveniences of litigation that you are. Client presentations can create a spark of clients interacting amongst one another without lawyer interference. This can be good, but oh boy it can also be bad. Tread lightly and if you give your client latitude to speak- ensure there is a focal point of the speech that you have vetted and restricted. Keep them on task. You are not putting your client’s best foot forward if you give them unfettered authority to speak at will during a construction mediation, I don’t care who the client is. Just like your presentation, there should be boundaries and restrictions that are well rehearsed. Having your client speak should be far from a given, for the norm in the construction industry is that while clients may be very good within their field of endeavor, that field does not include public speaking or persuasive legal presentation. Nervous, rambling, aggressive, or off-topic presentations run the risk of doing more harm than good.
Additionally, while expert witnesses (and claims consultants) can be wonderful value added attendees, and possibly add perspective to their reports or rebuttal to opposing experts, most experts are not naturally blessed with the ability to be effective presenters. A classic example is the scheduling expert. A cottage industry that has grown exponentially with the advent of more refined scheduling software has not given rise to a singular method of analysis that can be easily understood outside of the industry itself. Rather, for every scheduling consultant there seems to be a different process by which they have analyzed the “delay” requiring the use of construction-centric terms like “criticality.” Even attorneys who work exclusively within the construction industry routinely are required to consume an inordinate amount of time first understanding the method and results of the analysis and then figuring out ways to convey the same to those who have never heard of the Critical Path Method. If the joint session presentation is a window into the trial, the glass should be clear and not opaque. Consider carefully experts and claims consultants as presenters before making the decision to give them a scope of presentation at a construction mediation.
Lastly, unlike any other time in a case, attorneys are able to communicate directly with the other side’s client at a construction mediation. Such an opportunity should not go unused if the situation warrants it. Should you decide to engage the opposing party directly, it is absolutely imperative that you are as direct and respectful as possible. Explain that you are the attorney hired to represent your client’s interests and ensure that they are aware that this is your interpretation of the issues and facts and how they will be presented. That doesn’t mean your interpretation will match their interpretation, but this is what they will be up against. Explain that you are going to make certain statements that they (the opposing party) will disagree with, but ask them to try to understand your client’s position, even if they disagree with it. Let the opposing party know you will do the same when their attorney is speaking, and you have told your client not to interrupt and to listen carefully when the opposing attorney and party are speaking. Acknowledging that different versions of the facts exist builds goodwill and helps the parties move in the direction they need to be going. Explaining why you believe the judge or jury will accept your client’s version of the facts is an effective means of advocacy if done with class and conviction. I prefer to always let them know that this is the most friendly they will ever see me again in this matter.
Please revisit the site tomorrow as we post Part 5 of our 5 part Construction Mediation Tips and Techniques series pertaining entitled: “Tip #5-Draft your settlement documents in advance of the construction mediation.”
Robert J. McPherson, Building Resolutions, News from the AAA Construction Division, Issue #1, March 2010
Gregory S. Martin, Mediating the Construction Dispute- Are You Ready to Mediate, RPPTL Action Line, Volume XXXII, No. 2, Fall 2010
Larry R. Leiby, Florida Construction Law Manual, Volume 8, 2011-12 edition