By Jennifer Grippa | Miles Mediation & Arbitration
Negotiating a settlement in a case with many parties can be challenging. Each case involves different personalities and legal issues, making a “one size fits all” negotiation strategy impossible.
Finding a creative, credible and diligent mediator makes a difference.
Construction cases can be particularly complex given the multitude of parties, disputed facts, legal issues and insurance coverage.
I faced a serious challenge recently when mediating a complex case with 38 participants in 12 breakout rooms. It wasn’t the first mediation in the case.
The previous mediation left a $10 million gap between the plaintiff and 11 defendants.
Using the negotiation strategies explained here, the litigants achieved mutual dismissals a few weeks later.
Be creative in considering more than one approach
I started the mediation getting all parties to agree to blind offers, so no defendant knew what any other defendant was contributing.
When a defendant feels a co-defendant is more liable, he is not going to exceed the co-defendant’s contribution, even if he has significantly more money to settle the case.
This doesn’t just apply among defendants. Sometimes plaintiffs make similar comparisons if they know the contributions of each defendant. Plaintiffs may alter their negotiation decisions because of what they perceive as inequities among the defendants.
By keeping the source of the funds confidential until after the settlement agreement is reached, the plaintiff is forced to look at the amount as a whole and disassociate each defendant’s perceived liability from the settlement total.
That kept the plaintiff focused on the ultimate goal. Blind offers reduced the gap but didn’t settle the case.
My next strategy was to seek confidential best and final numbers from each side to assess overlaps or gaps. That process works if the parties are honest and if they trust the mediator.
Getting down to the bottom line helped me consider my next tactic. Knowing the divide, I moved on to implement double blind offers.
The double-blind approach focused each party on their own contribution toward settlement. Plaintiff’s demand was kept confidential and only the gap was disclosed. Individual contributions and the global total remained confidential as the negotiation continued.
The focus stayed solely on each party and whether its contribution was fair in exchange for a release from all parties. After I got consensus from all parties, the written settlement was drafted with separate exhibits for each defendant, so in the end only the plaintiff knew what it accepted as a global settlement.
Preparation is crucial
I prepared a binder that included color-coded sections for each party, their roles, the applicable agreements and key documents in the case.
That made it easier to be familiar with all the legal issues, including the strengths and weaknesses of each party, so I could craft an approach appropriate to that audience.
A color-coded attendance list helped me identify who is in each breakout room, including the decision-makers.
Lastly, keeping a detailed color-coded Excel spreadsheet of offers and counteroffers is key while moving among the rooms during the mediation.
Being prepared for your substantive discussions with the parties and being able to access the information quickly and accurately in your files in a multi-party mediation is critical.
Multiparty cases take perseverance. I follow up with counsel and stay abreast of developments in the case so I can continue to adapt negotiating strategies. It can make all the difference when it comes to closing gaps and reaching a resolution for all parties.
Jennifer Grippa is an arbitrator and mediator with Miles Mediation & Arbitration Services LLC.