In my previous blog posts on this subject, I discussed lack of preparedness on the part of counsel and/or client, and the counterproductive use of the opportunity to make an opening statement, as two of my pet peeves as a mediator.

In no particular order, my third pet peeve has to do with unreasonable settlement positions.

At some point in every mediation, and usually fairly early on, a party will be called on to take a formal settlement position by making an offer to settle.  Most of the time in commercial cases, the offer will involve either the payment or the receipt of money.  Invariably, the offer is made in the setting of a private consultation between a party, his or her counsel and me and it is intended that I convey the offer to the opposing side in a separate private consultation.

From time to time, offers are provided to me with the accompanying caution that this is that party’s final position or, alternatively, that while it may not be the final position, there is very little room to move.

Nobody ever believes that.  Mediators don’t believe that, and opposing sides certainly never believe it.  If the party making such an offer is actually telling the truth, then the offer has to be revised in order to leave more room for movement before it is presented to the opposing side.  The nature of the process, and human nature generally, is such that a party receiving an offer will assume that there is room to move and simply will not believe anything to the contrary.

The difficulty that arises, and therefore a pet peeve of mine, is that from time to time a party will make an offer that is so outrageously excessive as to cause a complete loss of credibility.  If the offer is ridiculous, the opposing party will respond in one of a number of ways and none of them enhance the possibility of settlement.  Firstly, the opposing party may conclude that the offeror simply has no reasonable or rational appreciation for the probabilities of the offeror’s chances of success or failure in the action.  An offeror held in such low regard will generally not receive a reasonable counteroffer.  Secondly, the receiving party may conclude that the offeror has no sincere interest in settlement so that the entire process is a complete waste of time and that it might as well conclude on the spot.

Where the receiving party responds with a reasonable offer and the next number put forward by the offeror betrays the fact that the offeror obviously knew that his first number was outrageous, the receiving party will invariably resent the offeror for having wasted everyone’s time.  If the offeror’s response to the counteroffer shows only a slight movement, once again the opposing party may conclude that the entire exercise has little or no chance of success.

The bottom line, of course, is that there is no substitute for the conduct of a thoughtful and reasoned analysis by each party of the likely outcome or ranges of outcomes at trial.  Once that analysis has been conducted, there is certainly no harm in aiming at the high or low end of that range so that a party comes in within shouting distance of a reasonable result, while leaving room to move in the subsequent negotiation.  A party who shoots for the moon will likely end up shooting himself in the foot.

Recently I published a blog post in which I reflected on lack of preparation on the part of parties and their counsel as a serious impediment to settlement at mediation.

Another serious impediment, and one which frequently arises at the very start of a mediation, involves opening statements.

In the classic mediation scenario, the parties and their counsel will begin the mediation by convening in a meeting room with a mediator. The mediator will begin the session by introducing himself/herself. He/she may ask the others in the room to introduce themselves as well. He/she may make a brief statement about why settlement is a good thing and going to court is a bad thing. And then he/she may ask counsel on each side to make an opening statement, an opportunity which most counsel simply use to reiterate what they’ve already written in their mediation briefs filed in advance of the mediation. The mediator may or may not invite the parties to speak as well.

The extent to which these opening statements will increase the tension in the room and the degree to which each party has demonized the other, on one hand, or contribute positively to the process by increasing the other side’s understanding of the opposing position, on the other hand, will vary from case to case.

Obviously, it is in the interests of all concerned (or at least the attendees who are seriously interested in settling the dispute) to make a positive contribution to the process through the mechanism of an opening statement. An opening statement which makes clear the position of the party delivering it, either personally or through his counsel, will be particularly helpful if the opposing party does not have a full and complete understanding of the opposing position – presumably because he has not been properly prepared (see my earlier blog post on poor or no preparation). Unfortunately, this is not always the case. More often than not, counsel take the opportunity to show their clients how tough they are by making opening statements that are simply inflammatory. In such cases, the mediator is faced with the prospect of dealing with parties who are even angrier with each other than they were before the mediation started.

A few years ago, I conducted a small survey involving a total of ten mediators: six from the United States, three from Canada, and one from Argentina. In the course of the survey I asked the mediators whether or not it was their normal practice to invite opening statements from parties or otherwise invite them to participate in open discussion at the outset of their mediations.

Their responses varied widely. Five mediators indicated either that they never ask for opening statements, or that they would not do so unless counsel specifically requested it. The other five indicated that they always, or almost always request opening statements. One of them made it clear that while his preference was to have opening statements, he would refrain from asking for them if counsel were clear that they would be counterproductive.

There was no apparent correlation between the responses from these mediators and the level of experience or training among them.

It is easy to dismiss the idea of opening statements as a source of information because mediation briefs are filed prior to the session and in theory, parties should be familiar with the position being taken by the other party. Nevertheless, an unprepared party would benefit from hearing an articulation of the opposing position at the outset – assuming that it is expressed in a reasoned and business-like fashion.

My own practice is to contact each counsel prior to every mediation and obtain their input as to whether or not they feel that an opening statement would be helpful. Where opening statements are going to be provided, I do insist that counsel refrain from making statements or adopting a tone that is aggressive or obnoxious. Counsel who do behave that way may feel that they are winning points with their client(s). That may be true. However, if an inflammatory opening statement means that the odds of a successful resolution are diminished, the client’s interests will not have been well served.