Are You Ready to Mediate?: Part 2 - Timely Information Exchange

To make the most of a mediation opportunity, share information that helps the opposing side understand the strengths of your case.  

Unfortunately, too often the sharing of key information – financial
statements, medical documentation, mitigation efforts in wrongful dismissal disputes, expert reports – is incomplete,  hasn’t been provided to the other side at all or is provided so late that the opposing side doesn’t have adequate time to review and respond to it before
the mediation date.  Not only do you miss the opportunity to preview for the opposing side the strengths of your case, but you may also create a negative inference that you don't have document back-up to support your theory of the case, indirectly undermining your negotiating power.

I recognize that there may be rational financial reasons for not obtaining and exchanging documents that help your case in advance of an early mediation date.  For example, expert reports are expensive to obtain and counsel will often wait to see whether the matter settles at an early mediation before incurring the cost of retaining an expert and having a report prepared.  
 
However, the following mediation scenarios demonstrate the value of early information gathering and exchange.  
 
In a commercial mediation, liability for breach of contract is not an issue; however, the president of the defendant company asserts at mediation that the company is in deep financial difficulty with limited means to pay even a modest portion of the plaintiff’s claim.  The defendant has come to mediation with limited and incomplete information about the company’s financial health.  The plaintiff is not prepared to settle the case at a deep discount without full financial disclosure.  At the conclusion of the mediation session, defendant counsel agrees to disclose specific financial information relating to the defendant’s company.  The information is obtained and exchanged and we reconvene for a follow-up session over the phone a month later.  The parties reach a settlement in less than an hour.  

I recently conducted two wrongful dismissal mediations.  The claims were brought by middle managers who had been terminated by the same employer.  The employees in each case were represented by different counsel.  The cases were relatively straightforward – the employees had similar jobs and seniority – and the issues were the same: what was the appropriate notice period and had the employee taken reasonable steps to mitigate his damages by seeking alternative employment.  In the first case, the employee prepared a detailed chart outlining his mitigation efforts, including the following: name of organization applied to (and electronic link to a job ad, where applicable), name and contact information for prospective employer, date of letter or email sent, follow-up efforts, and results of the application.  He also provided a copy of his resume and an abstract of his LinkedIn profile.  In the second case, the employee had prepared a one-page document listing half a dozen companies that he said he had applied to for work.  Both cases settled, but the outcomes were substantially different. In the first case, the employee obtained
a settlement at the high end of the range for an employee with his background while in the second case the employee settled for a notice period at the low end of the same range.

Early information gathering and exchange is hard work, but it is critical to maximizing negotiation power at the mediation table.