Before going to trial, the parties may attempt mediation. The decision to meditate a claim may come about in two different ways: (1) an agreement between parties or (2) an order by the court. Mediation is normally held after discovery has closed so both parties have a full picture of the case. The following is a description of the mediation process.
Parties Involved In Mediation
At its foundation, mediation is a voluntary means of alternate dispute resolution. Section 5-502(f) of Kansas law defines mediation as an outside party with no authority to decide the issue “assist[ing] the parties in reaching resolution.” Although mediation is considered voluntary, the court may order mediation before a case is tried. Additionally, even though the court does not require the parties to reach an agreement via mediation, both parties must at least put effort into the mediation. If the parties do not put effort into the mediation, potential sanctions (court imposed fines) could be issued to the parties pursuant to Section 5-518. Generally, most parties are willing to give mediation a shot because there is nothing to lose.
Prior to mediation, a mediator must be selected. Experienced attorneys or retired judges are most commonly selected as mediators because they are able to give insight of what is likely to occur at trial. The parties may agree upon a mediator amongst themselves or the court may offer a list of qualified mediators. One of the key rules regarding mediators is that they do not have any interest or connection with the litigation or parties. For example, the mediator cannot be a shareholder of a defendant’s corporation or a partner at the plaintiff’s firm.
After the mediator is selected, the mediation will be set for a future date. Most commonly, mediation occurs at either the attorney’s offices or at the mediator’s office. The attorneys for each party must be physically present at the mediation and the plaintiff and defendant must be present (though they may attend via phone). If one of the parties is an entity, such as an insurance company, the entity’s representative must be given the ability to settle on behalf of the entity. This type of scenario was seen in Price v. Clark where the defendant insurance company was sanctioned on two occasions for failure to mediate in good faith. The second sanction occurred because the representative sent by the insurance company did not have the ability settle on behalf of the company. Therefore, the representative’s presence at the mediation served no purpose because no agreement could be made and the court required the insurance company to pay a fine and compensate the mediator and opposing attorney for their wasted time.
Day of Mediation
The parties are divided into separate rooms once they have arrived at mediation. The mediation process involves the mediator going between the two rooms and discussing the offers and counteroffers with each party. Every mediator has a particular way of conducting the discussions. Generally, most mediators first visit with the plaintiff and discuss the claim, the judge that has been assigned to the case and the mediator’s opinion on the strengths and weaknesses of the case. After the interaction with the plaintiff, the opening offer is given and the mediator goes to discuss the same information with the defendant. It is helpful for a mediator to be an experienced attorney because he or she will rely on experience with trial work to provide opinions on strategic considerations, such as how likeable the plaintiff is. The mediator gives his or her opinion because it is helpful to “talk out” the claim with each side. After all, the mediator’s goal is not to force a settlement; rather, the goal is to facilitate negotiations between opposing parties. The mediator will go back and forth between rooms hoping to bring the two parties closer together in their offers. If the negotiation does reach an agreement, the mediator will bring the opposing parties together to agree on specific terms. The parties might sign a written agreement right away or the parties may simply verbally agree and complete a “handshake deal” that is written up later. Furthermore, once an agreement is made, the decision is binding and a party cannot back out. If a party does try to change its mind, the opposing party can bring the matter before the court to enforce the settlement under Section 5-514. Additionally, the party trying to back out of the agreement may be charged for the attorney’s fees of the other party and a potential fine for bad-faith in mediating the claim. The case is dismissed and a trial is no longer needed once a mediation agreement is enforced.
Under some circumstances, an agreement is not reached between the two parties. A party may inform the mediator of their bottom-line or top-dollar at any time during the mediation. At that time, the mediator will take the final offer to the other party and determine if the mediation needs to be ended. However, if the numbers are not terribly off the bottom-line or top-dollar, the mediator may return to the party even though it is beyond what the party had advised the mediator they would pay. At that time, the party will either decline the offer or consider taking and paying the new amount. An experienced mediator will know when an offer is in this gray area and work to get a deal done. If the parties do not agree on a settlement offer, the mediation will end and the parties continue onto trial. Regardless if an agreement is reached, both parties will split the mediator’s fees.