DAVID J. WILLIS ATTORNEY
Copyright © 2013. All rights reserved worldwide.
Mediation in Texas
by David J. Willis
Attorney at Law
Mediation is a form of settlement conference that is guided and supervised by a mediator who has either been chosen by the parties or appointed by the judge. The “Rules For Mediation” put it as follows:
Mediation Rule 1: Mediation is a process under which an impartial person, the Mediator, facilitates communication between the parties to promote reconciliation, settlement, or understanding among them. The Mediator may suggest ways of resolving the dispute, but may not impose his own judgment on the issues for that of the parties.
Mediation Rule 3. The parties consent to the appointment of the individual named as the Mediator in their case. The Mediator shall act as an advocate for resolution and shall use his best efforts to assist the parties in reaching a mutually acceptable settlement.
The “docket control order” (sometimes called a “scheduling order”) generated by the court’s computer contains relevant dates and deadlines applicable to the case, including a date by which mediation must be completed. Most attorneys prefer to do at least preliminary discovery (requests for disclosure, interrogatories, and requests for production), and perhaps consult an expert, before mediating, so that “all cards will be on the table” when the parties talk settlement.
Some judges will name a mediator, others leave it up to the parties to agree upon one. Even though mediation is usually ordered today, the outcome – ie., whether or not a settlement is reached – is entirely voluntary. The parties can choose to walk away from the mediation without a settlement and go to trial instead – leaving their fate in the hands of a judge or jury. The mediator will report an “impasse” to the court and all matters relating to the mediation (including offers of settlement) will remain private and confidential.
Mediation vs. Arbitration
Mediation Rule 5. The Mediator does not have the authority to decide any issue for the parties, but will attempt to facilitate the voluntary resolution of the dispute by the parties. The Mediator is authorized to conduct joint and separate meetings with the parties and to offer suggestions to assist the parties achieve settlement.
Mediation is contrasted with arbitration, where the arbitrator makes a ruling just as if he or she were a judge. Arbitration is never ordered by a court, but may be agreed upon by the parties or compelled by the terms of their prior written agreement (ie., some contracts contain a mandatory arbitration clause).
Effectiveness of Mediation
Why is mediation so popular? The statistics show that it works. Depending on which numbers you believe, something like 70% of cases settle in mediation. Attorneys know this and generally encourage their clients to mediate with an open mind. In fact, when a client is recalcitrant and unreasonable, attorneys can become quite annoyed – and the reason is that they know full well how whimsical trials can be. Trial is often equated with “rolling the dice,” meaning that no outcome can ever be assured or guaranteed in the legal system, no matter how determined a client is or how capable the attorney is. All lawyers have horror stories about unexpected and even shocking verdicts (For more information on the trial process, see our companion article on this site, Litigation in Texas – An Introduction).
Mediation promotes predictability and certainty, but this requires compromise. You do not win your case at mediation. In fact, a good mediation is by definition one in which both sides leave unhappy. This is a fact of life in the legal world that many clients find difficult to accept. Remember, the “legal world” is not the same as the “real world.” Clients who rebel against this essential truth on the basis of “principle” almost always lose.
It is a rare case when a party is justified in refusing to mediate. However, if good grounds exist for doing so, the judge (after motion and hearing) can waive the mediation requirement. Judges do not like to do this for two reasons – first, they are seasoned realists who know that most cases should settle; and second, it assures that another case will be added to an already over-burdened trial docket. Do you want to alienate the judge? Object to mediation in your case. This office considers a party’s refusal to mediate in good faith to be grounds for attorney withdrawal.
Rules for Mediation
The parties must agree in advance to abide by the “Rules for Mediation,” which are quoted at various places in this article.
Mediation Rule 2. Whenever the parties have agreed to mediation, they shall be deemed to have made these rules, as amended and in effect as of the date of the submission of the dispute, as part of their agreement to mediate.
Mediation Rule 7. Party representatives must have authority to settle and all persons necessary to the decision to settle shall be present.
Mediation Rule 9. Prior to the first scheduled mediation session, each party shall provide the Mediator and all attorneys of record with an Information Sheet and Request for Mediation on the form provided by the Mediator, setting forth its position with regard to the issues that need to be resolved.
The mediator always asks at the outset if all parties are ready and willing to mediate in good faith and work toward a settlement with an open mind. This is the foundation of mediation, and the mediator will request that the parties make an unconditional commitment to do this. Additionally, it is important to determine that the persons present have actual authority to settle the case. Otherwise, the process can be futile.
Impartiality of the Mediator
Mediation Rule 4. The Mediator will only serve in cases in which the parties are represented by attorneys. The Mediator shall not serve as a Mediator in any dispute in which he has any financial or personal interest in the result of the mediation. Prior to accepting an appointment, the Mediator shall disclose any circumstance likely to create a presumption of bias or prevent a prompt meeting with the parties. In the event that the parties disagree as to whether the Mediator shall serve on the basis of any of the foregoing conditions, the Mediator shall not serve.
Mediators may or may not be certified as mediators. They are usually experienced attorneys or retired judges who act as “shuttle diplomats” in attempting to resolve the parties’ differences. After a joint session in which both sides have the opportunity to make an uninterrupted statement, the parties retire to separate rooms, and the mediator goes back and forth in an effort to promote a settlement. In doing so, the mediator points out the strengths and weaknesses of each side’s position.
Fees and Expenses of Mediation
Mediation Rule 17. The Mediator’s daily fee shall be agreed upon prior to mediation and shall be paid in advance of each mediation day. The expenses of witnesses for either side shall be paid by the party producing such witnesses. All other expenses of the mediation, including fees and expenses of the Mediator, shall be borne equally by the parties unless they agree otherwise.
Mediators do not have a financial stake in the outcome of the mediation (ie., mediation fees are not contingent upon a settlement being reached). Mediator fees vary and are paid at the beginning of the session. Half-day mediations are common since all but complex cases can be settled in that amount of time. Half-day mediations typically cost $400 to $500 per side. Mediators often require payment by cashier’s check or money order, since aggrieved parties have been known to go home and stop payment on their checks.
Time and Place of Mediation
Mediation Rule 8. The Mediator shall fix the time of each mediation session. The mediation shall be held at the office of the Mediator or at any other convenient location agreeable to the Mediator and the parties, as the Mediator shall determine.
Mediations are scheduled for half a day or for a full day – but may continue longer with the consent of the parties. “Midnight mediations” are not uncommon, since the accumulated pressure of time will often facilitate a compromise.
Using the location of the mediation as an opportunity to serve other parties with citations, pleadings, writs, and the like (however tempting that may be) is not allowed.
Rule 14 addresses when mediation may end:
Mediation Rule 14. The mediation shall be terminated: (a) by the execution of a settlement agreement by the parties; (b) by declaration of the Mediator to the effect that further efforts at mediation are no longer worthwhile; or (c) after the completion of one fully mediation session, by a written declaration of a party or parties to the effect that the mediation sessions are terminated.
After the mediation is terminated, the mediator has no further obligations to the parties other than to report the result to the court. If the mediation was successful, a written summary of the settlement will be prepared and signed by the parties and their attorneys.
Privacy and Confidentiality
Privacy and confidentiality are key elements in the mediation process. Clients often ask if family members or others may attend, participate, or observe. This is not usually permitted.
Mediation Rule 10. Mediation sessions are private. The parties and their representatives may attend mediation sessions. Other persons may attend only with the permission of the parties and with the consent of the mediator.
Mediation Rule 11. Confidential information disclosed to a Mediator by the parties or by witnesses in the course of mediation shall not be divulged by the Mediator . . . The parties shall maintain the confidentiality of the mediation. . . .
Mediators do not testify in court. Nothing that is said in mediation, including an offer of settlement, is admissible into evidence at trial. Tape recording the proceedings (either openly or surreptitiously) is forbidden. If mediation fails, it is the equivalent for evidence purposes of its never having occurred at all.
The Psychology of Mediation
The mediator’s job is to promote settlement and to be impartial in doing so. In the broadest sense, mediation is about communication – communication that may have happened only haphazardly between the parties or may never have happened at all. It is also a business-like endeavor, meaning that it should be stripped of emotion. Each side is encouraged to examine the costs and benefits of the available options and perceive settlement as a business decision. Attorneys play an important part in this analysis. They may continue to advocate, but in a far more muted way.
When the mediator confers with the client and lawyer, he usually points out the weaknesses in the client’s case and the strengths of the opposition. He may challenge the client’s cherished assumptions about the value of the client’s cause of action or defense. Clients often misinterpret this strategy and believe that the mediator is advocating for the other side. Not so. Mediation is designed to push the parties out of their respective comfort zones and into the zone of compromise. People who ardently believe in the rightness of their position naturally resist this process; but it must happen if settlement is to occur. Mediators have a tough but essential job in overcoming the parties’ resistance if the case is to settle.
Other Rules of Mediation
Mediation Rule 5. The Mediator does not have the authority to decide any issue for the parties, but will attempt to facilitate the voluntary resolution of the dispute by the parties. The Mediator is authorized to conduct joint and separate meetings with the parties and to offer suggestions to assist the parties achieve settlement. If necessary, the Mediator may also obtain expert advice concerning technical aspects of the dispute, provided that the parties agree and assume the expenses of obtaining such advice. Arrangements for obtaining such advice shall be made by the Mediator or by the parties, as the Mediator shall determine.
Mediation Rule 6. The parties understand that the Mediator will not and cannot impose a settlement in their case and they agree that a settlement, if any, must be voluntarily agreed to by the parties. The Mediator, as an advocate for settlement, will use every effort to facilitate the negotiations. The Mediator does not warrant or represent that settlement will result from the mediation process.
Mediation Rule 12. There shall be no stenographic record of the mediation process, and no person shall tape record any portion of the mediation session.
.Mediation Rule 13 No subpoenas, summons, complaints, citations, writs, or other process may be served upon any person at or near the site of any mediation session upon any person entering, attending, or leaving the session.
Mediation Rule 15. The Mediator is not a necessary or proper party in judicial proceedings relating to the mediation. Neither Mediator no any law firm employing Mediator shall be liable to any party for any act or omission in connection with any mediation conducted under these rules.
Mediation Rule 16. The Mediator shall interpret and apply these rules.
Information in this article is proved for general educational purposes only and is not offered as legal advice upon which anyone may rely. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well. This firm does not represent you unless and until it is retained and expressly retained in writing to do so.
Copyright © 2008 by David J. Willis. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, http://www.LoneStarLandLaw.com.