Movement on Motions Can Boost Mediation Settlements
An attorney comes to mediation and says, “I don’t think we will be able to reach an agreement today because the court has not ruled on my motion to ________.” In making this statement, the attorney assumes that there is a relationship between the motion filed in litigation and the likelihood that the case will settle in mediation. Could this be true? Is there a relationship between pending motions and settlement in mediation?
A recent study says, “Yes, there is definitely a relationship between pending motions and mediation settlement rates!”
The study concludes that cases with pending motions are 11 times less likely to settle in mediation than those cases in which no motions are pending.[i] The settlement rate for cases with pending motions in the study was only 19%, compared to a settlement rate of 81% when all motions were ruled on by the court and 75% when no motions were filed. These findings indicate a strong inverse relationship between pending motions and mediation settlement rates. Let’s peek behind these dramatic numbers to see what’s going on at the mediation table.
When a party files a motion, the dynamics of the dispute change. The filing party shifts to a position of entitlement on the issues raised in the motion. If a response is filed, the opposing party also moves to a position of entitlement. From these respective positions, it will be difficult for the parties to realize a mutually beneficial resolution because they will attempt to claim value rather than create value in negotiations. Each party will be unwilling to consider a resolution that requires a perceived concession of valuable property rights declared in their motions, and each is likely to adopt a competitive, rather than a collaborative or compromising, negotiation strategy.
If the court rules on the motions, the entitlement issues are put to rest, and the mediator can focus on helping the parties indentify where their best interests lie in light of the court’s ruling. The mediator will need to be prepared to deal with certain psychological barriers on both sides. For example, the party prevailing on the motion will want to negotiate from the perspective of having been justified, and the losing party will want to negotiate from the perspective of having been treated unfairly or perhaps from a need for vindication. The mediation process has proven to be very effective in dealing with these types of barriers, and it is certainly not surprising if mediation settlement rates jump when cases are in this position. Experienced mediators will help the parties reevaluate the risks involved in litigation, redefine case value, explore the new probabilities of trial outcomes, narrow the range of settlement negotiations, and move the parties to a less competitive negotiation style.
If the court does not rule on the motions, the entitlement issues remain on the table. The intensity of the dispute escalates and positions harden as the parties dig in to defend their positions. The likelihood of reaching a mediated settlement drops precipitously before the mediation even begins. However, all is not lost; by filing motions, the parties have at least identified in advance the major barriers to negotiation, giving the mediator an opportunity to devise strategies to deal with them. The mediator can then bring the parties together, establish a constructive ambience for negotiation, collect confidential information from each side, and judiciously communicate selected portions of that confidential information. The mediator always allows the parties to work out their own solutions while helping them clarify their values, deflate unreasonable claims, loosen commitments, seek joint gains, keep negotiations going, and articulate the rationales for agreement. Strategies for dealing with overly-optimistic parties and for reality testing take high priority early in this type of mediation session, and the mediator must help parties explore resolution options that go beyond the four corners of the motions to see whether there are mutually beneficial trade-offs to be made.
Even if motions were not filed before mediation, the mediator should find out whether either party plans to file motions in the event that the case does not settle in mediation. The difference in settlement rates between cases in the study in which no motions were filed, 75%, and cases in which the court ruled on all pending motions, 81%, indicates that some parties in the research sample were probably holding off on filing motions until after mediation. Too often motions are not filed before mediation, and one or both parties mediate from a hidden agenda that creates invisible barriers to settlement. The bargaining strategy employed by the party with a hidden agenda may be more competitive than the situation appears to warrant and may frustrate negotiations. An informed mediator can help bring the issues to the surface and mitigate the adverse effects.
By ruling on pending motions prior to referring cases to mediation, judges can increase the likelihood of their cases settling in mediation by 1,100 percent! And mediators should make a habit of asking the parties about motions they have filed or intend to file and develop strategies to address the dynamics of motions practice.
We can see that while litigation and mediation are separate and distinct processes, they are not mutually exclusive. As we continue to study this complex relationship, we will no doubt find ways to improve the effectiveness of each while respecting the integrity of both.
[i] Naman L.J. Wood, Can Courts Increase Mediation Settlement Rates? Of “Coase” They Can, 26 Ohio State Journal on Dispute Resolution, Number 4, 683 (2011).