By Abby Tolchinsky and Ellie Wertheim
July 29, 2008
More and more courts and legislatures are turning to mediation. Public policy, easing the burdens of overcrowded dockets, and recognizing the personal relationships underlying particular types of cases are among the factors contributing to this phenomenon.
This article concerns itself with the voluntary nature of these mediation sessions. In other words, do parties participate willingly or do they participate in order to merely appear to be cooperative? Do the means by which the parties arrive to mediation affect the outcome or the process itself?
In some instances, judges may encourage mediation, but participation remains objectively voluntary. In such cases, the court suggests mediation as an option and the litigants decide whether or not to make the shift. In other court-based mediation programs, the judge has the power to order parties to mediate. And in yet others, there exists a contractual obligation to mediate.
Voluntary vs. Ordered Mediation
Is there a difference, for parties and for lawyers, when participation in mediation is entirely voluntary as opposed to when it is ordered? As a corollary, does the specter of ongoing litigation similarly impact the nature of the mediation process?
Courts order mediation in a fairly wide range of scenarios. These cases come from Bankruptcy Court to U.S. District Court to Family Court. Interestingly, each of these court-administered programs ensures confidentiality protections in an effort to provide a successful opportunity for the parties in conflict to resolve as many of their underlying issues as possible.1
In voluntary mediation cases outside of the litigation context, there may be a more sincere motivation to reach an understanding and to resolve conflict through direct negotiation. The result of such a negotiation yields the benchmark benefits of a successful negotiation: clarification of issues, time and cost savings, detailed and personalized settlements.
When litigation is pending and the court offers parties the opportunity to mediate on a voluntary basis, the goals may be similar. Thus, even though discovery may already be underway and the friction of litigation already creating tension, the parties may still appreciate the opportunity to get down to work with a neutral facilitator and negotiate openly, with the cloak of confidentiality. Initially, parties may have the added incentive of appearing agreeable to the court, and open to reaching a settlement. While the agreements to mediate include the protection providing that the court will not be privy to the details, should negotiations break down, the parties may have a concern of being perceived as responsible for failure to reach a settlement.2
While wishing to please the court may be enough to motivate the parties to begin a mediation process, it will not sustain the process. At some point, after the initial meeting, there must be a genuine desire to hear the other party’s concerns, to assess one’s needs and best alternatives and to negotiate directly.
The specter of litigation can serve as a motivating factor for those in conflict. The cost and stress of document production and discovery, not to mention the risk of an unfavorable outcome, can prompt serious consideration of alternative forums to court. On the other side of the same coin, within a mediation session, pending litigation can weaken the resolve to compromise if one party believes that a court-ordered result will be in their favor. In the extreme, pending litigation can serve as a hammer, a tool with which to push for reasonableness under the threat of returning to court.
Long-Term Benefits of Mediation
Regardless of whether a settlement is reached, at least one study has demonstrated long-term benefits to the parties from just a few hours of mediation. Dr. Robert Emery of the University of Virginia conducted a longitudinal study of families seeking divorce through the family court.3 Couples seeking to divorce were either sent to mediation or to litigation by calling heads or tails at the flip of a coin, thus ensuring a random sampling for test purposes. The study demonstrated that even five hours of mediation provided long-term benefits to the parties. In fact, even 12 years after the attempt to mediate, nonresidential parents had much more frequent contact with their children than the national average and, perhaps even more surprising, the former spouses held each other in much higher regard when asked questions of the other’s ability to parent, again 12 years after just five hours of mediation.
While this study focused on the parenting context, the concept of mediation enabling ongoing relationships may apply to other areas of law as well. Among these, consider: elder law, labor law and family-owned, intergenerational businesses. In these areas, the anger underlying the conflict may not be the principal driving force in the negotiations; rather, laying the groundwork for how the parties will function together in the future is a paramount concern and yet another feature of the mediation discussions.
In cases in which mediation is mandatory, there may be similar concerns about pleasing the court, but lower expectations that the parties can reach a settlement if they are not coming to the mediation sessions voluntarily. Additionally, the parties come with different goals (business-settlement and finance-driven concerns may override the interpersonal dynamics) as compared to the types of cases referred to above. Because the underlying relationships may be of less importance to the parties, the law necessarily is more of a driving force in these negotiations. In other words, the possible litigated outcomes are a higher consideration in analyzing and weighing the offers for settlement during the mediation than concerns about establishing the groundwork for ongoing relationships. The benefits of control in a mediation process as opposed to ceding that control to a fact-finder in a courtroom, not to mention cost and time involved, are all at the forefront of the decision whether to remain in mediation.
Nonetheless, even in court-ordered mediations, where the parties have no wish to engage in future dealings, time spent in mediation may provide a forum in which to resolve at least some contested issues. It may also allow the parties the opportunity to learn the other side’s priorities, and to negotiate directly and efficiently. It is the hope that the parties and their attorneys thereby lower the animosity and distrust attendant to most litigations and shorten the litigation process itself.
Our November 2007 column focused on the recent Fourth Department decision in Hauzinger v. Hauzinger.4 That decision involved a subpoena of a mediator in a matrimonial case. The Wife challenged the terms of the negotiated mediation agreement when the Husband sought, after a one-year legal separation, to convert the terms of the separation into a legal divorce. The mediator resisted the Wife’s subpoena, arguing, inter alia, that a confidentiality agreement protected the process, and that mediation negotiations are tantamount to settlement negotiations. The Fourth Department rejected the mediator’s arguments, holding instead that the mediator must testify. On appeal, the Court of Appeals last month affirmed, however, applying different reasoning than that of the Fourth Department.
The Court of Appeals decision5 was limited to the facts surrounding Mr. and Ms. Hauzinger’s conflict.
Two major issues were not addressed: whether or not the separation agreement met the “fair and reasonable” standard6 and whether mediation is afforded confidentiality as a “settlement negotiation.” Rather, the Court held that Mr. Hauzinger had signed an explicit waiver enabling the mediator to communicate details of the mediation with Ms. Hauzinger’s attorney, thereby releasing the mediator from maintaining confidentiality. The court went on to reason that Ms. Hauzinger implicitly waived confidentiality by subpoenaing the mediator’s testimony. The Court is, in effect, saying that due to these specific facts – the dual waivers of confidentiality – the Court is not ruling on the broader question of confidentiality in mediation. In other words, we now have a narrow, fact-specific limited ruling.
One issue that remains open is whether, in the absence of a signed waiver, confidentiality is necessarily waived if the mediator communicates with an outside professional involved in the process. For example, if a mediator receives a phone call from a consulting attorney asking for clarification on the language in a mediator-drafted agreement, is such communication an implied waiver of the confidentiality of the process? Similarly, should a financial adviser to a party attend a mediation session in order to facilitate understanding of underlying facts (e.g., the value of a contested item) is that third-party’s presence in the mediation a waiver of the confidentiality cloak over the process? Perhaps mediators should consider asking these third-party professionals to sign on to the original agreement to mediate, thereby binding the confidentiality among all involved in the mediation process.
As the law stands today, both mediators and parties to a mediation face an unresolved question as to the nature of the confidentiality. This poses an ongoing dilemma: how open can one be in a mediation and how confident can one be regarding subsequent proceedings? One practical effect is that this decision should serve as a clarion call to mediators in all areas of the law to come together in an effort to pass legislation that may protect the integrity of the mediation
Abby Tolchinsky and Ellie Wertheim are partners at Family Mediation.
1. See, e.g., United States Bankruptcy Court, S.D.N.Y. In re: Court Annexed Mediation Program: Adoption of Procedures Governing Mediation of Matters in Bankruptcy Cases and Adversary Proceedings 5.2 (1995), adopting F.R.E. Rule 408.
2. See e.g., U.S. District Court E.D.N.Y. Local Rule 83.11(d).
4. 43 AD3d 1289, 842 NYS2d 646 (4th Dept. 2007 ).
5. NE2d, 2008 WL 2519811, 2008 N.Y. Slip Op. 05781 , N.Y. , June 26, 2008 (NO. 183 SSM 16, 4).
6. DRL §236[B].