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I. When to Schedule the Mediation

Numerous factors come into play when contemplating when to schedule a mediation so that it has the best possible chance of succeeding. Every dispute is different. One must evaluate what is going to work best for this particular disagreement.

Early mediation has both pros and cons depending on context. Some of the pros are fairly obvious:

It may be easier to settle before each side has incurred substantial attorneys’ fees, costs, and positions have hardened.
If there is an on-going business relationship, getting past the dispute early allows that relationship to continue.
If due to the nature of the dispute, each side has a shared understanding of most of the material facts, early mediation will have a better chance.

The cons are also apparent:
There may be lots of unknowns, which makes lawyers nervous to recommend a settlement.
The extent of the damages may not be known.
If the cons outweigh the pros for early mediation, then strategic decisions need to be made about when during the later processing of the case is the right time. Some considerations include: Do the parties have a reasonable idea of what facts are still in dispute? Do the disputed facts make a difference in the legal analysis? Does the plaintiff have a good handle on the damages? On the other hand, the later the mediation, the more that attorneys’ fees and expert costs may end up being a significant driver.
Parties often find that a good time to schedule a settlement conference is when the litigation has reached a leverage point. Examples of leverage points include a pending Motion for Summary Judgment, or a series of expensive, out-of-town, depositions, or expert depositions are being scheduled. In other words, the issues have matured, the parties have a good vision of what is at stake, and either something bad, or something expensive, might be happening. Time to talk.

II. Timing During the Mediation

The right idea at the wrong time is just a wrong idea.
One would not start the D-Day invasion by just landing the Marines on Omaha Beach. Instead, you would take steps to soften up defensive positions and drop paratroopers behind the enemy positions. Obviously, timing everything out is important.

Even marginally trained mediators have lots of tools in their tool box. These include:

Allowing the parties to vent
Moving parties from positions to interests
Reality testing
Decision trees
Move from facilitative to evaluative
Enlarge the pie
Flip the script
Out of the box options
Bracketing
Focusing on where there is agreement before tackling what is holding things up.
Use objective criteria to evaluate the offers and counteroffers
BATNA
Baseball arbitration
Take a break
Secret poll
Have just the lawyers talk to each other
Have just the parties talk to each other
Mediator’s proposal
There are undoubtedly even more tools available then just this list. Keeping in mind that there is no “one size fits all,” the “art” of mediation is knowing when to use the available tools to maximum advantage. A mediator needs to be able to read the room in order to judge when the time has come to reach a reasoned compromise.
So, from a timing standpoint, why not just start with each party’s bottom line and cut out the negotiations? Why not start out by just splitting the orange and moving on?

If that is the approach the parties want to use, they don’t need a mediator. It might not result in the best outcome for the parties. You also need to worry about the winner’s curse. The plaintiff makes an opening demand. The defendant agrees immediately. Since the plaintiff got exactly what she asked for, she should be thrilled. But, of course, she is not. Because the defendant agreed to the opening demand, the plaintiff is now sure she left money on the table. This same psychological principal works on a defendant. Seller’s remorse. If the plaintiff immediately accepts the defendant’s first offer, maybe the defendant paid too much. At least some back and forth satisfies a need that both sides have to test the numbers with the other so that they believe they have obtained the most favorable settlement possible.

From a timing standpoint, conventional wisdom, born out by substantial experience, acknowledges that mediations will be more successful if certain steps are taken at the start.

The parties need to have an opportunity to be heard. If this means venting; so be it. The mediator also needs to allow the parties time to digest the information they are receiving, sometimes for the first time. This is best left to initial caucuses as opposed to in an opening joint session, but there may be times when some dialog between the parties in a joint session may be beneficial.

As part of the initial caucuses, the mediator needs to help the parties to consider interests, instead of just positions, and at least some degree of reality testing should begin.

The next movement may be inviting the parties to formulate a realistic evaluation of their potential upside and potential downside. This can be done using a decision tree model, or any other approach that will create realistic expectations on both sides.