Mediation & Arbitration
Mediation is a form of Alternative Dispute Resolution (ADR) by which parties in a lawsuit meet with a neutral third party (a mediator) in an effort to settle a lawsuit. The mediator’s role is to assist the parties in reaching a mutually agreeable decision.
The purpose of mediation is to avoid risk, uncertainty, time and expense of pursuing further litigation by settling a lawsuit early on in the process. Mediation is not binding on the parties unless a settlement agreement is reached.
Mediation is an informal process. Depending on the complexity of the issue, mediation may take several hours, days or longer. The length depends on the parties involved, the complexity of the dispute, and the desire to resolve their dispute. The cost of mediation can be economical compared to the alternatives of trial and trial preparation.
It is important to hire an experienced, fair-minded litigator to handle your dispute. The best mediator is someone familiar with the subject matter of your case who has the ability to navigate you through the process and guide you toward finding your own solution to the dispute.
Chris Kenney is a trial lawyer with over thirty years of experience litigating a wide variety of tort and contract claims before state and federal courts, administrative agencies, at mediation and arbitration. Chris has also served as a mediator and arbitrator in a diverse array of cases.
Representative Cases
Negligence/Personal Injury and Property Damage, Business Interruption
Business Disputes – Breach of Contract, Consumer Protection Violations
Employment Law/Wrongful Discharge and Discrimination
Insurance Coverage and Indemnification Issues
Construction and Real Estate Development Disputes
Product Liability and Professional Malpractice Claims
Mediator’s Corner
Chris Kenney has built a burgeoning practice as a mediator. In that role, he helps parties to resolve pending lawsuits before trial. The cases Chris has mediated range from business disputes, personal injury claims, and wrongful death claims to employment disputes, real estate matters, and construction claims.
Past issues:
Spring 2025
Mediation is a voluntary, confidential settlement conference facilitated by a neutral third party called the “mediator.” When preparing your case for mediation focus on managing all other participants’ expectations. Expectation management eliminates surprises, disruptions, and delays at the mediation.
If you are the plaintiff, make a detailed settlement demand and provide evidence to support it. If you want a check at mediation, make sure the defendant knows beforehand the strength of your case, so he comes to mediation with sufficient settlement authority to resolve the case. If you are the defendant, you should respond to the settlement demand outlining your defenses to the liability and damages claims. If appropriate, you can make a pre-mediation settlement offer to show good faith and get some traction on negotiations.
To avoid a slow start to settlement negotiations at mediation, ask all parties to exchange written position statements with each other and the mediator at least two weeks before the mediation. Too often parties keep their case secret and then wonder why their mediation negotiations are inefficient and ineffective. It’s difficult for the parties to achieve progress, even with the best mediator, if they are hearing about their opponent’s case, witnesses, and exhibits for the first time at the mediation hearing.
Under the Rules of Civil Procedure that govern civil lawsuits, each party has ample opportunities to conduct “discovery.” Through this process a party can obtain evidence to support or rebut the claims and defenses in dispute. Therefore, by the time the case is ready for trial it is rare to have any “smoking gun” evidence the other side is unaware of. Even if you have such evidence, consider whether sharing it as part of the “privileged” mediation process will help you to settle the case within your settlement parameters. After all, that is why you agreed to mediation in the first place.
Mediation is a supervised settlement negotiation overseen by a neutral third-party (the mediator). The object of the exercise is to settle the dispute, normally through payment of money in exchange for a release of legal claims. It’s imperative that the party who will be required to make the settlement payment take steps well before mediation to ensure that it has authority to negotiate and consummate the settlement with payment of money.
Many disputes, such as claims for personal injury, property damage, employment discrimination, professional malpractice, and claims against corporate directors and officers are covered by liability insurance. Those policies generally have two parts: defense against the claim, and indemnification of the policyholder for any settlement payment or damages arising from the claim. The policies normally impose certain duties on the policyholder that are conditions to coverage for the claim.
For example, liability insurance policies require the insured policyholder to promptly notify the insurance company of any claims that might be covered by the policy. This is known as the “prompt notice condition.” Failure to provide the prompt notice can harm the defense, prejudice the insurer, and therefore lead to a denial of coverage.
Likewise, these policies frequently have “cooperation clauses” that require the policyholder to reasonably cooperate with the insurer in all reasonable, practical ways, such as providing information and documents, attending depositions and court proceedings as necessary, and otherwise taking reasonable steps to protect the defense to the claim. If the policyholder refuses to reasonably cooperate, the insurer may deny coverage under the policy.
Last, liability insurance policies also frequently prohibit the policyholder from making or promising any voluntary payment of insurance policy proceeds. In other words, the policyholder cannot spend the insurance company’s money without the insurance company’s authorization, advance knowledge, and informed consent. Sometimes a policyholder will get out ahead of its insurer in settlement negotiations and make admissions of liability, representations about settlement, or promises of payment. The insurer may interpret these actions as a “voluntary payment” or lack of cooperation, at least, and potential collusion, at worst. Either way if the policyholder makes a voluntary payment of money itself or commits to make such a payment using the insurer’s policy proceeds without the insurer’s knowledge and consent, that can lead to denial of the claim under the policy.
The rules applicable to indemnification agreements are much like the insurance conditions outlined above. In many respects you can simply substitute “indemnitee” for “policyholder” and “indemnitor” for “insurer” and follow the rules outlined above. When in doubt, consult with your attorney or insurance agent.
A couple of words to the wise are in order. If you or your company are facing a claim that might be covered by a liability insurance policy, give written notice to the insurance agent and insurance company early and often—and certainly well before you schedule a mediation hearing or discuss settlement. Meet the prompt notice requirement. Thereafter, the company will normally hire an attorney to advise you about how to defend against the claim. Be sure to cooperate with the attorney and the insurance company in all material respects, and make no voluntary payment affecting policy proceeds. Remember, you are playing with house money.
Policy proceeds are not your money to spend until and unless the insurer authorizes it with informed consent.
The purpose of mediation is to negotiate a full, final, and mutually agreeable resolution to a dispute. It is designed to bring decorum and deliberation to what can otherwise devolve into a “street brawl.”
Psychological studies show that negotiations proceed more efficiently, effectively, and harmoniously if the parties meet in person at the beginning of the mediation. Simple things like eye contact, oral greetings, and a personal handshake diffuse the tension and anxiety that litigants (and sometimes their attorneys) bring into the mediation proceeding.
EYE CONTACT – It’s been said that “the eyes are the windows to the soul.” In other words, eye contact suggests truthfulness and candor, whereas looking down or away connotes deceit and deception. That is how the saying: “Look me in the eye and say that” came to be. Eye contact is a cultural barometer of truthfulness. The time to communicate this is in person at the beginning of the mediation because the rest of the mediation hearing is normally conducted with the parties separated into their own rooms waiting for the mediator to shuttle back and forth between the parties to convey their respective bargaining positions.
ORAL GREETINGS – Social scientists have determined that 55% of a person’s “first impression” is based on his or her nonverbal communication (e.g. body language, dress, accessories, grooming, and facial expressions). The next 38% is based not on what one says, but how one says it (e.g. voice inflection, tone, tenor, volume, and pitch). Thus, 93% of one’s credibility and likability are based on personal interaction with others. If you skip the opening greetings and refuse to even say “good morning,” that awkward isolationism promotes suspicion and distrust that will only hamper your ability to persuade your opponent to consider your position and compromise their position.
HAND SHAKES – This ancient tradition reportedly arose to show your opponent that you come in peace to talk in good faith. Most people are right-handed, so the custom of shaking hands has always involved two people clasping each other’s open right hands—one can’t hold a sword, knife, gun, or other weapon in his right hand while extending it to shake hands in a good faith greeting.
I’ve been at mediations where there was no opening session, and the opponents even refused to meet and shake hands. Needless to say, those mediations did not resolve in a settlement.
Traditionally, the opening session included greetings from the mediator, and then a brief opening statement from each side’s attorney. This model is designed to promote fully informed decision-making by letting the parties’ decision-makers hear directly from opposing counsel, just as the jury will if the case does not settle and instead goes to trial.
More recently, mediators and litigation counsel have moved away from making opening statements at the opening session. In my experience, that is often a mistake. If parties can’t be in the same room and listen to a presentation of their opponent’s case for 15 minutes, they’ll never survive a multi-day trial in court in front of a judge and jury.
It is the mediator’s role to set the tone for a substantive, professionally courteous negotiation session at the mediation hearing. Although counsel act in an adversary capacity as advocates, their role as officers of the court and professionals should have them assisting the mediator in setting the tone for a constructive, productive, and worthwhile negotiation.
After all, every mediation is a bargaining session. As Ben Franklin said: “You catch more flies with honey than you do with vinegar.”
Mediation is a constructive and worthwhile exercise in risk management and dispute resolution. It’s frequently a detour off a litigation path after the court sets a trial date. The mediation hearing is a confidential, voluntary meeting with an objective, neutral party acting as mediator. The objective is to review whether the prospect for a reasonable, full, and final settlement is better than the expense, uncertainty, and downside risk of trial.
The mediator facilitates settlement negotiations and, if asked, provides an objective evaluation of each side’s claims and defenses. Inevitably, negotiations lead each party to consider whether the outcome would be better or worse if they go to trial. Mediators call this outcome assessment “BATNA,” an acronym for “best alternative to a negotiated agreement.” This evaluation should include consideration of additional monetary elements that will automatically be added to a trial verdict (e.g. prejudgment interest at the rate of 12%/year, and an award of “costs” to the prevailing party) and other monetary elements that could potentially be added to a trial verdict (e.g. an order to pay the opposing party’s legal expenses, the potential for multiple damages in some cases). These other monetary elements normally are not included in a negotiated settlement.
If the likely outcome at trial is worse than the settlement you can achieve with certainty at mediation, the trial alternative is not better, and you should settle the case.
People embroiled in a business dispute often consider the benefits of submitting the case to mediation. Mediation is a less expensive, faster, and less risky cousin to its two dispositive cousins: arbitration and litigation. This article will summarize how these three dispute resolution avenues differ from each other.
Litigation is the process by which a civil lawsuit proceeds through the public court system. It is governed by rules of civil procedure and rules of evidence that are enforced by a judge who works for the state. The parties are entitled to broad pretrial “discovery.” This process is designed to ensure that everyone knows the strength and weaknesses of their case and their opponent’s case. The discovery process is generally inefficient, lengthy, and expensive, but it often promotes settlement or at least streamlines the case for trial when you eventually get there. Importantly, the losing party in litigation has the right to appeal from the trial judgment to get at least one more bite at the apple.
Arbitration, unlike litigation, does not go through a public trial. Rather, it is a private dispute resolution process in which the parties jointly select an arbitrator, who has absolute authority to resolve the dispute. The hearing proceeds roughly like a trial, but there are no strict rules of procedure or evidence applied. Importantly, unlike litigation, arbitration is designed to be final and binding. With almost no exceptions, the losing party at arbitration has no right to appeal from an adverse ruling.
Mediation, unlike litigation and arbitration, is voluntary, confidential, and non-binding. The parties submit the dispute to a jointly selected neutral party, normally an experienced civil litigator or retired judge, to serve as the mediator. The mediator is a learned sounding board who works with the parties to help facilitate a settlement that the parties mutually agree to. Most cases that go to mediation settle because the parties have agreed to engage in settlement negotiations thereby implicitly committing to mutual compromise. There is no downside to mediation. Other than sharing the expense of the mediator’s time, usually over the course of one day, the parties either settle—and cancel the trial—or do not settle and revert to the trial schedule. At the very least, the parties do a dry run of their case and learn more about their opponent’s case. During the course of mediation, the scope of the dispute is almost always narrowed and clarified, which promotes the prospect for settlement. If settlement is not achieved, the parties simply revert to their pending litigation or arbitration proceeding with all rights reserved. Anything that was said, done, or exchanged as part of the mediation process is confidential and inadmissible.
Winter 2024
A common negotiating tactic during mediation is to use “brackets” to break through an impasse. For example, consider a case involving a hypothetical construction accident in which the plaintiff, a subcontractor’s employee who was injured on the job, sued the general contractor for alleged negligence resulting in serious personal injuries. The plaintiff’s initial settlement demand is $1 million. The general contractor, who believes the accident was caused by the plaintiff’s own negligence, has offered $10,000 as a “nuisance value” initial settlement offer.
At mediation, both sides recognize that they face risk and expense, so they both would secretly prefer to avoid trial. However, negotiations are in the fourth hour at mediation, and it is “death by 1000 cuts” as each side makes minor “tit-for-tat” changes in their respective settlement positions. Proceeding by small increments like this, matching each other begrudging proposals, breeds frustration and distrust.
To break through an impasse like this, the mediator often suggests brackets to narrow the gap, test resolve, and expedite progress in negotiations. In this hypothetical, with the plaintiff’s revised demand still at $900,000 and the defendant’s offer only up to $50,000, the mediator might suggest a “bracket.” For example, “if the plaintiff reduces his demand to $750,000 would the defendant increase its offer to $100,000?”
Be careful about how you respond to such a proposal, as it could unwittingly signal your willingness to accept the number assigned to you in the proposed bracket. That could psychologically transform your next settlement position to the number ascribed to you in the bracket. Instead, consider asking, the mediator to propose the brackets using a “double blind” procedure. In this method, the mediator proposes the bracket numbers, but only informs both counsel of agreement to the bracket if both sides confidentially inform the mediator that they agree to the proposed bracket. Otherwise, the mediator informs both sides that the proposed bracket was rejected by both sides and the negotiation reverts to each parties’ last position.
This protects the status quo ante, and eliminates the risk that one party has unwittingly telegraphed a monumental change in its settlement position without getting any corresponding change from the other side.