NAM PERSPECTIVE

December, 2015

WANT TO SETTLE? CONSIDER BRINGING YOUR EXPERT TO THE MEDIATION

By: Erica B. Garay, Esq.

Erica Garay, Esq. Most lawyers know that in order to ensure a successful mediation, it is important to have the right people in attendance. A client or representative who is familiar with the facts, claims and/or defenses at issue with settlement authority must attend, in addition to counsel. But many attorneys do not give consideration to whether having an expert in attendance at a mediation will also help their client arrive at the best resolution. There are many reasons to bring your expert to the mediation.

In commercial cases, for example, a forensic expert on damages or valuation may be a great asset at the mediation. Whether that expert has a report in hand or just schedules that analyze damages, such support can prove invaluable. After all, one purpose of the mediation is to convince the other side about how a litigation (or arbitration) may resolve itself, including what damages are or are not recoverable. Bringing the expert to a mediation can turn the tide.

An expert, such as a forensic accountant, can explain lost profits and can assist counsel in convincing the other side about damages recovery or why a party’s expectations are unreasonable. This information can help the mediator, too, as the more data the mediator has, the more likely he or she can help the parties find common ground.

Technical experts on causation or concerning intellectual property matters that are at issue can also play an important role. For example, where causation is in dispute, each side can bring experts to “talk to each other” about what caused the damage at issue. Counsel and client can each better consider the strengths and weaknesses of the case and possible outcomes. Engineers can speak the same language and, through science, can try to convince each other about the evidence, assumptions and conclusions. This can be especially important in assessing whether a party can meet its burden of proof.

Mediation is designed to “think outside the box” and come up with creative business solutions as a basis for a settlement unavailable to a judge or arbitrator. For example, many shareholder disputes and derivative actions involve mediations that address a buy-out of plaintiff’s interest in the company. Counsel should consider having an appraiser attend, armed with a valuation and ready to point out weaknesses in the other side’s appraisal. This analysis is helpful to educate the mediator, too, and ensure that there is an understanding of how the valuation was performed and on what assumptions it was based.

In many commercial disputes, having the company’s regular accountant in attendance to address various accounting and tax issues, valuations, financials and damages can also be helpful. His or her intimate knowledge about the company is invaluable and can answer questions posed by the mediator or the adversary. Often, that professional has a close relationship with management or ownership of the company and can be influential in helping the parties come together to resolve the dispute at hand and in bridging a gap in their positions.

Tax advisors can address the characterization of payments a party may receive as part of a settlement. If not in attendance, consideration should be given to having the expert “on speed dial” and ready to take a phone call – especially if tax treatment is an important factor in vetting proposals. Outside experts can also become mechanisms in resolving disputes. This is true where the parties have greatly differing views on valuation or damages or how the business interests can be divided among warring partners. Counsel should consider bringing their experts to a mediation to ensure its success.

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Erica B. Garay, Esq., is a member of NAM’s (National Arbitration and Mediation) Hearing Officer Panel and is available throughout the New York Metro area for arbitrations and mediations. Ms. Garay is Chair of the Alternative Dispute Section of the Nassau County Bar Association and an experienced commercial litigator.

Click here to view Erica Garay's resume.



For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228.
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