ADR SPOTLIGHT: Improving outcomes in mediation with use of in person pre-hearing conferences in Business Court cases

By Jerome F. Rock

Each mediator develops a style or approach that reflects their training, experience, skill and personality. Some mediators are skillful in maintaining a productive joint session, while others prefer to keep the parties sequestered the entire duration. Some mediators adhere to the facilitative style of mediation; others are comfortable in suggesting terms of settlement in what is referred to as an evaluative approach. Some mediators characterize themselves as generalists while still others offer their subject matter qualifications in fields such as engineering, construction, technology or business, and integrate these skills into their mediation practice.

I'd like to expand the option of available styles or techniques to include the use of an in person Pre-Hearing conference with each side well in advance of the scheduled Hearing date. This approach can be useful in any civil case mediation, but I think it is particularly useful in "early case" mediation, and in business court cases where the principals are actively involved in their disputes and insurance coverage is a secondary factor or not involved at all.

I've broken down the discussion to elaborate on some of the key aspects of the Pre-Hearing Conference, and how they benefit the formal Hearing by improving the likelihood for settlement of the case. These topics are easily molded to the specific controversy and apply well beyond business court type cases. If you begin your task with a Pre-Hearing Conference, whether you are a mediator or as counsel, you will engage and communicate to the great benefit of the mediation process.

The importance of a relationship of trust with the parties

During the Pre-Hearing Conference, the environment is relaxed but business like. Even if the mediator has prior experience with the attorney, it is likely this will be the first time the mediator has met with the principal. If you have the opportunity, schedule the meeting at the principal's place of business. Business people are proud of what they do and what they've built. They'll appreciate the courtesy you show by meeting on their turf. This session is an important first step in showcasing your role as mediator and explaining the formality and flexibility of the mediation process. You are building a relationship of trust and confidence in your role as mediator; and assuring the principal that you will be diligent in working to arrive at the proper resolution to the dispute. When you meet again in the formal Hearing, you will have a solid foundation to build on during negotiations.

Executive briefing on the dispute

The Pre-Hearing Conference is the opportunity to get a briefing on the legal theories and positions of the parties. You can initiate a dialog with counsel and the principal to clarify key issues, and maybe elicit some candor on which issues or terms are key to achieving a settlement. As a result of this meeting, I can gauge the status of document exchange and discovery (whether it has been completed, or whether further information exchange is required) and integrate this into my ideas for the formal process ahead.

The mediator as process leader - Design the process

The mediator is educated and trained to support a productive interaction between parties and counsel, to take initiative, exploring the facts, legal issues and relationships between the parties, and suggesting and explaining alternative dispute resolution techniques or processes that best match to the special conditions of the case. The term Dispute Resolution Advisor has been used to emphasize the consulting role of the mediator in selecting the appropriate ADR process for the matter. I present a Pre- Hearing Conference AGENDA, in the form of a comprehensive checklist of important issues and strategies that should be considered as part of the design of the mediation process. This Agenda exposes counsel and the principals to the broad range of ADR options and useful ways to customize the process to best suit the nature of the dispute. I can explore basic preference of each party to caucus, plenary or joint session, facilitative or evaluative styles of mediation, and I can make sure I will adopt these preferences, or I will get their support to stretch their comfort zone. This Agenda also explores hybrid approaches, such as Med-Arb, (Arbitration of unresolved issues after completion of Mediation), Summary Jury Trials and Early Neutral Fact- Finding/Evaluation. If I sense the advantage to have an expert involved in the case, I'll suggest that the parties jointly select the expert, jointly develop and agree on the scope and assumptions, and share the cost. The parties would then have the benefit of unbiased, objective information to support the negotiation process in mediation. In shareholder dispute issues this need for a jointly selected expert is so universal, mediators immediately offer a list of accounting firms conversant with valuation issues as a way of avoiding the inevitable confusion that results from two experts engaging in battle.

There may also be opportunities for me to act in some informal manner as a discovery facilitator, exchanging requests for information, maintaining schedules and resolving prehearing issues. Many times I will encourage materials (including joint expert reports) be prepared and used FOR MEDIATION PURPOSES ONLY. In the event settlement is not achieved in mediation, the future litigation strategy is not restricted.

As a result of this activity during the Pre-Hearing Conference, I feel comfortable with a recommendation on the design or structure of the forthcoming steps, including the details of the formal mediation Hearing.

Demonstrate mediator's role as problem solver

During the Pre-Hearing Conference, I operate in a "problem solving" mode to explore strategies and underlying needs or requirements that aid in conducting the formal Hearing and resolving the case. I also explore interest based factors such as existing or prospective business relations and the chance to resolve disputes that may be outside the scope of the current litigation. This is also the opportunity for the mediator to demonstrate the value of their special experience or subject matter qualifications by offering insightful and challenging questions and constructive comments or suggestions. Because the Pre-Hearing conference is conducted in advance of the mediation Hearing, I have the time to suggest options or different strategies or float the trial balloons. The parties have sufficient time to evaluate and react to these suggestions before the hearing. These new ideas are often key parts of the mediated settlement.

Although settlement will almost always involve the grudging exchange of money, "other issues" can be important factors that facilitate negotiation or reduce barriers to settlement. The Pre- Hearing conference is the appropriate time to explore these issues. The following factors are illustrative, but certainly not exhaustive:

i) the importance of continuing business relations, or the acceptable path to sever ongoing business relations; negotiating non-competition and non-disclosure disputes.

ii) the importance of confidentiality, avoidance of adverse publicity, non-disparagement, nondisclosure of settlement.

iii) recognition of financial hardship, escalating legal transaction costs (litigation fatigue), the time value of money, immediate receipt of money, or extended payment terms.

iv) the importance of limiting the future distraction to ongoing business operations.

v) future transaction costs, delays, appeals, multiplicity of actions.

vi) simplicity or complexity of legal theory or facts, ease or difficulty in presenting witnesses, experts, etc.

vii) opportunity to exploit or avoid "special factors" such as adverse publicity or egregious conduct that tend to be "multiplying factors" to trial court judgments.

viii) the importance of principle, value of apology, the need to be heard or for a "day in court," or to be in control of the outcome.

ix) reframing the damages from what was lost to what can be done with the settlement.

x) opportunities to settle and dismiss other litigation matters; or to address issues not a part of the present controversy, or that could not be granted by formal legal process such as settlement and release on other potential or future claims.

Benefits to the hearing

My interactions with the parties during the Pre-Hearing Conferences, as well as follow on activity, are conscious efforts to get the parties into a cooperative mindset, and to a limited extent, to act collaboratively. Whether it's agreeing to exchange information readily without reservation (For Mediation Purposes Only), or jointly selecting an expert, or discussing options and evaluating trial balloons, the parties have temporarily suspended the sharp edges of trial advocacy. I've explored and attempted to exploit the "other issues" and anticipate how these topics can be used to side-step contentious issues, or reframe the discussion. If the mediation results in a creative solution, the chances are strong the seed was planted during the Pre-Hearing Conference.

Prior to the Hearing, I've heard and talked with both sides, seen the legal theories and documents and understand the facts. I often feel I'm in a unique position to appreciate the extent of "confirmation bias" that keeps the parties in their intractable positions. This insight is useful during the negotiations and when explained in a convincing way, can reduce the reluctance to accept compromise.

Finally, the Pre-Hearing Conference eliminates the frustration of waiting impatiently in a conference room while the mediator gets an initial briefing by the other side. At the start of the Hearing, the parties are prepared to engage in substantive discussions in a timely and efficient manner.

For these reasons I'm in a better position to lead the parties to a successful resolution of the litigation, in large part because of the ground work that started with the Pre-Hearing Conference. Counsel can take the initiative to suggest a Pre-Hearing Conference to any mediator if they see the anticipated benefits. The Pre-Hearing Conference may be taking on added importance in situation where the court is initiating "early case" mediation where time lines are collapsed and traditional full discovery may never be required. The lawyer may want to have their client fully engaged in "real time" during the early phases of mediation so they will be prepared to understand and participate in the process. As they say, this may be their only day in court. No better time or more conducive environment to engage the client than the Pre- Hearing Conference. For your consideration, just one more technique that makes Alternative Dispute Resolution your responsibility.


Jerome F. Rock is an attorney, engineer, and former business executive who maintains a full-time practice as a mediator and arbitrator for general civil, insurance and indemnity, business, technology, and construction industry disputes. He is on the panel of arbitrators for the American Arbitration Association for commercial, construction, labor, and large complex cases as well as the e-discovery panel. Rock is also on the panel of civil mediators for the Wayne, Oakland, Macomb, and Washtenaw County Circuit Courts, with a focus on early case intervention and enhanced multistage facilitation for complex cases. He is on the roster of approved ADR Neutrals for the Business Court for the Third and Sixteenth Judicial Circuits. He has served as court-appointed mediator and special master in federal and state courts and acts as a facilitator of negotiations for complex business transactions. With degrees in mechanical and civil engineering as well as law, Rock is a licensed residential builder, a former adjunct lecturer in engineering and construction law at Wayne State University, and the holder of a U.S. patent. He is a member of the Engineering Society of Detroit and serves on the board of directors of the Michigan chapter of the Design-Build Institute of America. Rock is also a member of the Professional Resolution Experts of Michigan (PREMi, and an instructor for the SCAO-approved advanced mediation course on Med-Arb. Rock has been awarded the highest Martindale-Hubbell Peer Review designation of AV- Preeminent, and is rated a Super Lawyer in the field of ADR by Thompson Reuters.

Published: Fri, Jul 01, 2016