For any mediator or practitioner, whether novice or seasoned, I would recommend reading Getting to Yes: Negotiating Agreement Without Giving In (Second Ed.), by Roger Fisher, William L. Ury and Bruce Patton.  I was first introduced to this book while taking a negotiation course in law school.  This book presents a step-by-step guide on the art of negotiation and how to get to a win-win solution for all parties involved; a skill and tool that is useful in daily activities, the boardroom, around the conference table and in the courtroom.  It is very readable and practical.  While Getting to Yes is likely an obvious choice-read for practitioners, the principles outlined are key for the mediator as well.  Knowing how to guide parties from adversarial to problem-solving is pertinent to every mediation.  The Getting to Yes method approaches any dispute or problem by encouraging parties to forego bargaining over positions to produce a wise agreement (if possible), an efficient negotiation and an improved (or at least not a damaged) relationship between the parties.  The method includes the following guiding principles:

  • Separating the people from the problem;
  • Focusing on interests, not positions;
  • Inventing options for mutual gain; and
  • Insisting on using objective criteria.

Truly a must read.

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WHY MEDIATE BANKRUPTCY-RELATED MATTERS?

Although not limited to just the following, I have identified six of the top benefits of bankruptcy mediation:

  1. Confidentiality Protected– “A firewall to protect confidentiality can be raised by the specific terms of a court order or by mediation rules under which it is agreed that the procedure is conducted.  If confidentiality is so protected, then the particular terms of the order, or specifics in the rules, govern the degree to which communications are privileged and not discoverable.”
  2. Cost Reduction– Reduces discovery, transactional and litigation costs.
  3. Efficiency– Bankruptcy cases are typically on a faster track than proceedings in other courts due to the necessity of streamlined estate administration to move the debtors closer to plan confirmation and/or discharge.  The use of mediation or other forms of alternative dispute resolution in adversary proceedings or contested matters may shorten the amount of time the bankruptcy estate is open.
  4. Judicial Econony– Mediation can reduce the number of pending matters in any given bankruptcy proceeding.  For example, in bankruptcy proceedings with multiple preference actions, a mediator can work with the court to approve the implementation of procedures allowing for mediation of pending preference actions on a rolling basis to resolve the more complex issues that the parties could not settle through negotiations by cousel.  Mediation has been used in bankruptcy cases involving anywhere from 250 to 1,500 preference actions.  Additionally, “[m]ediation in large bankruptcy cases may resolve disputes which otherwise would block confirmation (e.g., disputes resolving claims or plan negotiations). . . . Mediation can be employed in Chapter 11 plans where parties are at an impasse.”
  5. Settlement– Mediation allows parties to “retain control over the method of dispute resolution and the outcome.”   Because mediation is voluntary, the affected parties decide how their disagreement will be settled.
  6. Utility– For example, significant portions of discovery, or at a minimum, key documents will generally be exchanged in advance of the mediation.  Through mediation, the parties can determine what documents will provide information necessary to make informed decisions regarding settlement.  Mediators can also assist with the resolution of discovery disputes, guide the parties toward stipulations of fact, or point to additional documents for production prior to a trial or hearings on contested matters.

Sources:

Quotations from Thomas H. Oehmke, J.D. and Joan M. Brovins, J.D., Arbitration and Mediation of Bankruptcy Disputes, 105 Am. Jur. Trials 125 (2007).

Interview with Lester J. Levy, Esq., ABI Journal, Vol. XXII, No. 3 (April 2003).

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Practitioner Tip #1

While there are several approaches to mediation, you should work with the opposing side to agree on a method, communicate that approach to the mediator and re-evaluate where necessary to change methods given the particulars of your individualized situation and any changed dynamics during the course of the mediation.  See also Evaluative, Facilitative, Transformative, Narrative and Bankruptcy, Oh My! (posted 10/9/12).

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Practitioner Tip #2

  1. Be selective.  Choose “an effective, knowledgeable and reliable mediator, otherwise all parties involved will suffer.”  For bankruptcy mediation, specifically, it may be necessary to look for experienced bankruptcy attorneys and judges to serve as mediators.  Selection of a bankruptcy practitioner or judge, however, is dependent on the issue at hand.  For example, it is likely more crucial to seek a mediator with background knowledge of plan confirmation matters if that is the basis of the dispute, as opposed to the mediation of mass tort or personal injury claims.
  2. Explain the mediation process to your client prior to your first session. “Attorneys should explain to clients that they are not required to agree to any terms they are not comfortable with and that mediation involves a lot of give and take for all . . . parties involved.”
  3. Know your case, its strengths and weaknesses and explain same to your client.
  4. Familiarize yourself with the applicable law, procedures and local rules, so you “can comfortably resist any effort by a mediator [or the opposing side] to [suggest or] impose unfavorable terms on your client.”
  5. Know your settlement authority before beginning the mediation.  Better yet, bring a client representative with settlement authority.
  6. Know when and when not to use mediation.  Remember, a mediation “cannot establish legal precedent or deter future parties from bringing similar claims. . . .  Mediation may also draw out a process that may have been quickly adjudicated if before a bankruptcy judge.”  Also, if your client truly is not willing to mediate to attempt a settlement, then the process will be futile.

Source:

Quotations and excerpts from, Kim, Ji Hun and Nicholas M. McGrath, Mediation: Can’t We All Just Get Along?, ABI Journal (Sept. 2011), at 52-53, 61 (citations omitted) (some internal quotation marks omitted).

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Practitioner Tip  #3

When engaging in a mediation session with your client, explain don’t argue.  As advocates, we are used to proving a case for our clients, but a mediator’s job is not to decide the case.  A mediator’s role is to guide the parties to their resolution.  So, leave your attorney hats at home, but bring your counselor caps with you.