IDENTIFYING CONDITIONS TO SETTLEMENT PRIOR TO THE COMMENCEMENT OF NEGOTIATIONS

February 1 2016, By: Richard P. Byrne, Esq.

Oftentimes, parties come to a Mediation session completely focused on “big picture” issues – their leading claims and defenses and the consequent damages they are seeking to advance or refute. Great time and labor is then invested in the ensuing debate and negotiations relative to these issues. Indeed, significant progress may be seen during the course of the Mediation session to the point where the parties, in fact, believe that a deal has been struck and that a settlement in principle has been achieved.

That is, until one side interposes a condition which, to them, might have been an afterthought. Presented as an “Oh, by the way” point, it nonetheless ends up scuttling the settlement because it was not anticipated by the adversary and it is not, despite the soft sell, considered a minor point. Experienced practitioners, of course, have seen this arise time and time again. The introduction of such an ill-timed condition then spirals into intellectual craftsmanship of increasingly heightened doomsday scenarios that require the introduction of conditions upon conditions and the loss of the progress and good will which had been achieved. These conditions can take a variety of forms – confidentiality provisions, the need for payment over time, employment of form Releases, indemnity and hold harmless requirements, liquidated damages clauses, etc., etc. Conflict arises because these components may be standard operating fare for one party (particularly large corporations or insurers) and are not front and center in the minds of their counsel as the Mediation gets underway. In contrast, the required terms are unknown and unanticipated to the other side, whose counsel will cry foul upon their first mention at day’s end.

The path to avoiding this encounter is simple enough, although rarely taken – counsel should place any such conditions on the table at the start of the Mediation session. While it may seem somewhat out of sync, the requirements are much more innocuous and apt to be successfully addressed at 9:00 a.m. rather than at 5:00 p.m. when they may take on a life of their own and serve only to re-ignite flames from darkening embers.

Some practitioners are hesitant to announce such conditions at the start of a Mediation session out of fear that they may be misperceived as weaknesses or an anxiousness to settle. To alleviate any such concerns, the Mediator can be employed to keep both sides on equal footing by inquiring in joint session if the parties have any required terms or conditions – assuming that an agreement can be reached on the monetary component of a settlement by the end of the day. This Mediator has, in fact, made it a practice to unilaterally pose this inquiry in employment cases, for example, where conditions to settlement, such as non-disparagement clauses and “no re-hire” provisions are best addressed and cleared at the inception of the session.

Regardless of the manner in which they are raised, however, conditions to a settlement should be identified prior to the start of the negotiations. As all practitioners know, “the Devil is in the details”. It is better for the parties to have those details known and resolved at the start, rather than to grapple with the Devil at the finish.

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Richard P. Byrne, Esq., is a member of NAM’s (National Arbitration and Mediation) Hearing Officer Panel and is available to arbitrate and mediate cases in the NY Metro area and throughout the United States. He was named one of the Top 3 Mediators in the U.S. by the 2015 Best of the National Law Journal Annual Reader Rankings Survey, and was voted a Top Ten Mediator in New York State by the New York Law Journal Reader Rankings Survey in 2014 and 2015. Mr. Byrne is Co-Managing Partner of L’Abbate, Balkan, Colavita & Contini, LLP.,in Garden City, N.Y.

Click here to view Richard Byrne’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.