Ultimate HR WorkshopMay 23, 2014

Toronto

Tips for Successful Mediation Presented by

Stuart E. Rudner

• I am employment lawyer• Used to be with national firm• Formed own firm last year exclusively employment law • so now also an employer

• Ers and Ees• Also a mediator• From 3 vantage points, have seen where mediations succeed and fail• Particularly fascinating to see it from mediator’s perspective

• Biggest Mistake: not taking it seriously• “it’s just mediation”

• How many trials• How many mediation• In the age of the “disappearing trial”• I wish I could do more of them

• Costs• Unpredictability• Time

• Rarely get to trial • 10 years ago: <2% of claims filed

• Doesn’t even take into account all potential claims settled before litigation• So the vast majority of claims will settle at some point• Many settle at mediation

• Litigation used to be all about preparing for and getting to trial• Now, far more likely to mediate than try case• Mediation is critical• Should not assume no trial or get lazy• “Best way to ensure peace is to prepare for war”• Best way to increase odds of successful settlement is to prepare for trial• 1st time neutral 3rd party will see it• Want to be instrong bargaining position• Also want impartial assessment of case

• Mistake: not gathering evidence• i.e. my recent mediation• Issues of cause, both sides convinced they had witnesses

• Mistake: not being realistic• Put emotion aside• Listen to counsel• Hopefully have good counsel• Ie. have seen arguments between party & their lawyer or deer in headlights

look when told of likely outcome• Obvious counsel did not do their job – awkward for mediator

Tips

• Speak with counsel before it becomes a litigation matter• Maintain all documents• Trial is an imperfect search for the truth• You win or lose based on evidence, not reality

• Even winning costs money (especially in some venues)• Settling is often more cost-effective but fighting can send a strong

message• You can’t force someone to settle

Litigation Process

• Pleadings• Foundation of entire litigation process1. Claim2. Defence3. Reply4. Could have counterclaim, crossclaim, 3rd party claim• first thing trial Judge will see, and typically the only thing that they will see before trial. • Sets out parameters of evidence

• Documents• Discoveries

• Sets out limits of claim• Can be cross-examined on them

Discovery Stage

• General: avoid trial by surprise / ambush• No smoking gun

• Documentary• Affidavit disclosing the existence of every relevant document or

record which is or has been in your possession, control or power. • Docs defined broadly - handwritten notes, calendar or daytimer

entries, photographs and audio and videotapes• Consider metadata – need for original docs• “Relevance” defined broadly though not “semblance of relevance”

• Duty to disclose is continuing• Produce everything as early as possible so counsel can assess

strengths and weaknesses• Often tempting to wait and see if goes ahead, but…

• List of people with info

Discoveries

• First chance to assess people• Crucial to prepare• Do not guess• Can be cross-examined• Perform as if judge was watching you

Motions

• Can happen any time• Usually if one side is being silly• This is part of reason why costs are so hard to predict

Summary judgment

• Important development in law• Way to circumvent entire process• Becoming more common in wrongfuls• Even if allegations re mitigation, cause – court will take critical look• Means defendant cant assume simply dismissal will take 1+ yrs

Pretrial

• 2 purposes• Then on to trial

Offers

• Important for cost consequences• Often advisable to make offer if don’t settle @ mediation

Mediation

• Can happen at any point• Some jurisdictions like TO require it before trial• Can do it any time – even before litigation• Can be extremely effective• Important to use right mediator• Knowledgeable• Right personality• Ie Barry vs Elaine

Tips

• Focus on the future, not the past• Too many parties at mediation are focused on what the other party did that

caused them to be in litigation. Employees continuously refer back to how poorly they were treated after devoting their lives to the organization, and employers often refer to the conduct of the employee and how it destroyed the employment relationship (particularly if there is an allegation of just cause). Whether or not any of that is true, I always remind the parties that they cannot change the past.

What’s done is done, and they need to move forward.

• Let reason, not emotion, rule • This point is closely tied with the first point above. It is understandable that some or

all the parties will be quite upset or angry with the other side. That is often the case for the individual, but it is frequently true for the employer as well.

While many people think of employment -related disputes as a David and Goliath scenario, the reality is that, in Canada, the vast majority of employers are small businesses. Many of them are run by individuals or families, and they take the issues and disputes that arise as personally as their employees. While it is perfectly understandable that some or all of the parties will be upset or angry, ultimately, a reasoned decision must be made with respect to their best course of action, and emotion will only interfere with that reason.

• Take time to assess your BATNA• Common negotiation theory suggests every party consider their Best Alternative to a

Negotiated Agreement (BATNA). In the context of mediation in litigation, not settling means the litigation will continue to trial.

So, parties must assess the strengths and weaknesses of their case and the likely result. Included within this assessment should be the time it will take to reach a conclusion, the costs — which include time, money and stress — and the risk and uncertainty. Employers should consider the opportunity cost of having management and staff time spent preparing for litigation, rather than pursuing what the organization is intended to pursue. If clients or customers will be needed as witnesses, the impact upon the relationship should also be considered.

• Don't overestimate the value of having your 'day in court'• I often hear people say that they want to go to court so they can explain to the judge how

poorly they were treated, and that they want the judge to explain to the other side that they cannot get away with treating people that way.

• “when the judge sees…”But, in many cases that evidence will not come out, or at least not in the way that you think it might. For example, if the sole issue before the court is how much notice of termination a worker was entitled to, then all of her evidence regarding her devotion to the company, long hours, and how unfair it was that she were dismissed will be largely, if not entirely, irrelevant. A judge may well cut her off when she starts to talk about it. Similarly, if the employer has not taken the position that it had just cause for dismissal, the individual's poor performance or misconduct are irrelevant to the assessment of how much notice of dismissal she was entitled to, and may well be shut down by a judge that is focused upon the legal issues before her.

• Come with authority to settle, and with flexibility• Recently, I have taken to warning both parties at the outset of mediation that, almost inevitably, we will have difficult

conversations during the course of mediation, and I will end up recommending that the defendant pay more than they want to and that the plaintiff accept less than they want.

In most cases, both parties will have come to mediation with an amount, or a bottom line, in mind. And in most cases, that amount will be unrealistic. While mediation is generally touted as a likely way to resolve the dispute and end litigation, it is also usually the first time a neutral third party will be assessing the case to some degree. If the mediator offers her comments with respect to the strengths or weaknesses of a party's case, the parties should take those comments seriously and adjust their expectations as appropriate.

Furthermore, while they may want to settle the dispute for a certain amount, they have to assess their BATNA and then consider any potential resolution in comparison to it. While individual litigants will usually have the authority to do what they want, organizations that send one or two individuals should ensure those representatives have reasonable authority. It is a waste of everyone's time if the individual attending at mediation on behalf of an organization is told that they are allowed to agree to no more than $10,000 when any realistic assessment of the case would suggest that, if a settlement is going to be reached, it will be in the six figures.

• Take advantage of the opportunity to settle – but don't feel pressured• This may sound somewhat contradictory. However, as I often advise my clients and the parties if I am the mediator,

while it is possible to settle at any time, mediation provides a fantastic opportunity to do so. Outside of mediation, settlement discussions will take time while each lawyer discusses each offer with their client and then responds to the other lawyer. Simply conveying and responding to an offer can take weeks or months as everyone works around everyone else’s schedule.

Conversely, at mediation, the parties and their lawyers are all together, for at least a few hours, focused on the particular case. Offers and counteroffers can be made quickly and efficiently, and if an agreement is reached, it can and should be documented immediately. This helps to avoid the situation which often occurs outside of mediation where the parties notionally agree on a resolution, but then take weeks or months to finalize the details.

• At the same time, settlement discussions can quickly develop momentum at mediation, and sometimes, a party will feel as though they "have" to settle. While parties should listen to the advice of their lawyers, and to the recommendations of the mediator, they should not be forced into accepting a settlement they are not comfortable with.

• Just because a matter does not settle at mediation, does not mean that it will not settle at another time. In many cases, settlement will take place within weeks of the mediation. For the reasons discussed above, the negotiations may be less efficient outside of mediation, but that is no reason to accept a deal that you are uncomfortable with.

• If a resolution is reached at mediation, it is always advisable to document all the terms and conditions and have the parties sign off, so that there is no ambiguity and no opportunity for someone to have second thoughts and change their mind. • If not, consider what mediator had to say• Assess any areas of agreement• Consider weaknesses identified• Use this to assess case & strengthen it

• Mediation is the new battleground• Far more time there than in trial

• take it seriously

• Also: don’t rely on it• Lawyers have become lazy• Used to pick up phone• Can always settle before mediation• Ask counsel why they don’t

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