IFA’s 45 Annual - International Franchise Association · PDF fileIFA’s 45th Annual...

IFA’s 45th Annual

LEGAL

LEGAL SYMPOSIUM IFA’s 45th Annual

KEYS TO SUCCESSFUL MEDIATION: TACTICS AND STRATEGY

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WHAT IS MEDIATION?

• Voluntary, out-of-court dispute resolution • Often court-ordered • Mediator helps parties reach an agreement all

can live with – “Everyone’s unhappy, it’s a good settlement”


WHAT IS MEDIATION?

• Private and confidential (with some limits) – Item 3 of FDD requires settlement disclosures

• “Good faith” required but not heavily policed – In practice, “suit up and show up” is enough

• Main benefit: total control over outcome – Avoid the “black box” of court or jury


THE MEDIATOR’S ROLE

• Mediator “represents” The Deal – Advocates for settlement the same way lawyers

advocate for their clients

• Helps clarify positions and assists parties in realizing what they really want

• Proposes creative resolutions based on experience in industry or as mediator


THE MEDIATOR’S ROLE

• Far more than “shuttle diplomacy” carrying offers back and forth

• Emphasize the costs (money, psychological, other) of continuing to fight

• Remove emotion from the process and focus on settlement as a business decision


PREPARING FOR MEDIATION

• Mediator needs to be fully informed • Not just law and facts

– History of parties’ relationship – Business issues – Emotional factors


PREPARING FOR MEDIATION

• Comprehensive mediation statements are needed – Confidential submissions promote candor by

parties and their lawyers

• Crucial that both sides have someone present with authority to settle – Insurance company participation


WHEN TO MEDIATE?

• Early: when parties are well-informed about the other side’s position – Often more helpful in small stakes cases

• Usually, better to wait until both sides have landed a few punches

• Waiting too long may get parties too invested in result – “Might as well roll the dice”


PICKING A MEDIATOR

• Check franchise agreement for any requirements

• Lawyer/retired judge/neither? • Industry expert? • Pros and cons of agreeing to the other side’s

choice/proposing first – Court ordered mediations often name “default”


PICKING A MEDIATOR

• Mediator’s fees – wide range • Mediator’s availability and other

commitments • Mediator’s history – with these parties and

lawyers, success rate, experience, reputation • Fact finder as mediator?


MEDIATOR STYLE AND SUBSTANCE

• Conciliatory versus aggressive – Good mediators can be both over the course of a

day

• Facilitative versus evaluative – Or, settlement expert versus subject matter expert – Practically, very difficult for effective mediator to

avoid evaluating strengths and weaknesses


MEDIATOR STYLE AND SUBSTANCE

• Some clients insist on former judges; some require significant industry experience

• Probably not wise to have the mediator and the fact finder be the same person


MEDIATION STATEMENTS

• Pre-mediation discussions often help educate the mediator about potential problems – Important that everyone know and approve of

discussions with one side only and what can and cannot be shared with the other side

– Discussions help to focus the mediation statements and session on the big obstacles to resolution


MEDIATION STATEMENTS

• Many different approaches to written submissions

• Parties and counsel need to remember that statements are often written to “send a message” – Don’t take it personally; don’t let it obstruct the

goal of settlement • Explain technical terms for everyone


OPENING SESSIONS AT MEDIATION

• Mediator should always gather everyone and explain the process – Emphasize confidentiality of mediation process and

cost and uncertainty of litigation – Be aware of non-monetary conditions that can scuttle

a deal at the last minute • Pros and cons of opening statements by parties

and counsel – The need to vent can be a real barrier to resolution


SETTLING THE CASE

• No case can settle unless the parties have realistic expectations – Pushing one or both parties to “get real” is one of the

main things a good mediator does

• Focus the parties on all costs of continued litigation – not just money – Diversion of time and attention from business and life – Emotional toll of being in a lawsuit


SETTLING THE CASE

• Emphasize: settlement is the only way to have total control over the result

• Put anger, revenge and other emotions aside and focus on the business deal

• Mediators: don’t win an argument with a lawyer or party and lose the chance to get a settlement

• Don’t let non-cash components derail settlements at the last minute


CLOSING THE DEAL

• Be sure to get some kind of written agreement that contains enough detail to be enforceable

• Some mediators have parties bring laptops with draft settlement agreements

• Sometimes a bullet point sheet is enough • Check state law requirements for a written

settlement agreement

IFA’s 45 Annual - International Franchise Association · PDF fileIFA’s 45th Annual...

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