C. First Caucus

1. Goals of the First Caucus

There are four primary goals the mediator seeks to accomplish in the first caucus with each party. First and foremost, she seeks to begin building a sense of trust, rapport, and confidence in her role as peacemaker. By showing interest in each party’s case, and in the parties themselves as individuals, she can convey her sincere desire to find a peaceful resolution all can accept. As this rapport is developed, the parties often are willing to compromise more than they originally intended when entering the process.

Second, the mediator seeks to gain a better understanding of the facts and law of the case. Because of confidentiality, the mediator can ask questions of all parties that have never been asked in a judicial setting. She can inquire as to what the weaknesses in the case are from the lawyer’s perspective. As further discussed later, this gives the mediator an understanding of the case, to which a judge, jury, or arbitrator would never have access.

Third, the first caucus gives the mediator a chance to begin reading the parties. What is their real goal—to get as much money as possible, to find vindication, to have the matter resolved at any cost? The mediator also should determine if a party has unreasonable expectations or if the lawyer is unlikely to cooperate unless she gets what she is demanding. Whatever scenario exists, the mediator must accordingly adjust.

Fourth, the mediator seeks to identify any hidden agendas that might exist. Not infrequently, parties come to a mediation seeking something other than money. Sometimes they seek vindication or they just wish to vent and have someone listen to their side of the case. Many times an apology or expression of concern will further the process. There are even times when a party may not even be aware of the fact that there is a hidden agenda or that something they need or want can be part of the resolution.[69]

2. Format of the First Caucus

The format of the first caucus is the same for all parties, plaintiff and defendant alike. The format is as follows: (1) strengths of the case; (2) weaknesses of the case; (3) jury verdict—best and worst case; (4) settlement discussions; and (5) new demand and offer. Other matters that can be covered, depending on the circumstances, include insurance coverage, subrogated liens or debts, and costs of litigation.

a. Strengths of the Case. During the first caucus, the best way to begin building rapport is to invite counsel to discuss the strengths of the case. This invitation should be extended even if the mediator already knows what they are from the material she has reviewed and the opening statements of counsel. If the mediator begins the caucus by asking what the weaknesses in the party’s case are, it suggests a lack of interest in the party’s case or perhaps even an “alliance” with the opposition. In either situation, it does not establish rapport with the attorney or party.

Some mediators begin the first caucus by asking counsel what the strongest points she can make are when caucusing with the other side—those things which will get their attention. She might even inquire about strengths not yet discussed, thereby demonstrating strong interest. She should take careful notes and ask supportive questions that demonstrate an understanding of the party’s position.

After the mediator has listed the party’s strengths, she might even review them to be certain all are covered. This again shows interest and support, which begins to build the rapport needed. It is essential the mediator not rush this first step because its primary goal is to build rapport.

b. Weaknesses of the Case . Examining the weaknesses of a party’s case is one of the most important steps in the process. It is certainly the most sensitive step and distinguishes mediation from all other forms of dispute resolution. Through a frank discussion, the mediator can begin to understand what the case is really about, stripped of advocacy and rhetoric. Unlike a judge, jury, or even arbitrator, the mediator can get closer to the true facts and be positioned, after caucusing with both sides, to give meaningful guidance. For example, counsel may argue in front of the judge or jury that the light was yellow at the intersection when her client entered it and broadsided the plaintiff. In private caucus, in strictest confidence, she might disclose to the mediator that there is reliable evidence that the light was red and that she is concerned this evidence may come out at trial.

When the mediator inquires about weaknesses, counsel is generally forthright and willing to discuss them because of the shroud of confidentiality.[70] At times, counsel wants the question to be asked so that she can discuss them in front of the client, when the latter previously would not listen to them.[71] Because the mediator is now asking, however, the attorney must discuss them and the client must listen.

c. Jury Verdict Range—Best Case/Worst Case. Another question a mediator will ask to gain a better understanding of the case is what counsel believes a jury will do—best case/worst case for the client. This is also asked in confidence and not shared with the other side. This will help the mediator determine how far apart the opposing sides are in their evaluation of the case. If one side or the other gives an unrealistic evaluation, this signals that the mediation will be long and patience will be required.

In asking counsel her evaluation of the case, it gives her an opportunity to discuss the possibility of an adverse verdict if she so chooses to do so. In this way a difficult client will be given a reality check, which perhaps the attorney could not do previously. Many clients have expressed concern over the range given when hearing that the verdict could be very low or very high, depending on the side of the case the party is on. As to plaintiffs, they often have unrealistic expectations based on what they have read or advice given by friends who have no idea what happens in court.

When discussing the jury range, the mediator might inquire whether the venue is more liberal or conservative.[72] Generally, the more rural a venue is, the more conservative the verdicts are. Some venues like New York City, Los Angeles, California, and Cook County (Chicago), Illinois, are known for their liberal verdicts, and this needs to be taken into consideration. Perhaps the most liberal venue in the country is Madison County, Illinois, just outside St. Louis, Missouri.

d. Settlement Discussions. After evaluating potential jury verdicts, inquiry should be made as to settlement discussions to determine if there is any pattern. Many times a demand has been made by the plaintiff without an offer yet being made by the defendant.

Here, it is suggested that the issue of settlement discussions should not be raised in the joint session because there may be discrepancies. Arguments have even erupted in the opening session because of a discrepancy. This could threaten the process before it even gets started. If a discrepancy exists, it is better to learn this with the parties separated. The mediator can then ask for any documentary record of the prior demand and offer. Going back and forth between the parties, the mediator can help reconstruct the bidding and get the parties to a common starting point.

e. New Demand or Offer. At the end of the plaintiff’s first caucus, the mediator should request the party to make a new demand or offer. If the plaintiff has already made a demand and the defendant has not yet responded, then the first move should come from the defense side. If the plaintiff is going first and makes a very unrealistic demand, the mediator should not react or try to get the plaintiff to change her demand. If a demand is totally unrealistic, counsel knows that the defendant will make an unrealistic offer in response.[73] Regardless, it is not appropriate for the mediator to push either side at this early stage. To push a party sacrifices rapport and trust, which are the primary goals of the first few caucuses.

When requesting a new demand or offer, there are times that counsel will ask if the mediator wants the party’s final figure. This should be immediately rejected, because a party giving a final demand or offer will draw a line in the sand and the party will now have an emotional investment. Almost without exception, a settlement, if there is to be one, will require movement off the final figure by both sides. The safe course, when a party offers to disclose the final demand or offer, is to request that it not be disclosed so that a line is not drawn.

A problem may arise during the first caucuses if the plaintiff’s demand is so high or the defendant’s offer so low, is that the other side is reluctant to respond. The mediator should require some response, however slight, rather than go back to the first party and ask for a more realistic demand or offer. Parties do not like to go twice in a row, for they are bidding against themselves. This they will not do. As long as there is some response, the process can move forward. Sometime during the day, the parties will begin to make more realistic moves, recognizing that they are simply wasting time and money.

After a new demand or offer has been made and the mediator begins a caucus with the other side, the new demand or offer should not be disclosed until the caucus is completed. If the new figure is disclosed in the beginning and it is unreasonable, the caucusing party might get discouraged and not wish to complete the caucus, feeling that settlement is not possible. Therefore, the mediator should put off disclosing the figure, even when requested, in order to complete the work that must be done first. It should be remembered that the longer the parties are involved in the process, the greater is their investment in it, thereby increasing the likelihood for final compromise.

f. Insurance Coverage. In the first caucus, the mediator should inquire what the policy limits are if there is insurance coverage. If a plaintiff’s demand exceeds policy limits, this indicates that the plaintiff hopes to settle for policy limits or intends to go after the defendant’s personal assets above policy limits. In the latter instance, the defendant should be present with separate counsel to advise her. In any event, when the plaintiff makes a demand of policy limits or less, the defendant should put the insurance carrier on notice, in writing, to settle or face a potential bad faith claim.

It is also helpful for the plaintiff to know if the defendant has a deductible which requires her to pay, for example, the first $100,000. The mediator, therefore, knows that until the offer exceeds $100,000, the carrier has paid nothing except the costs of defense.[74] Generally, if the carrier attends the mediation, the mediator can assume that it is willing to contribute to the settlement.

g. Subrogated Interests, Liens or Debts. In any mediation, it is important to inquire whether there are any subrogated interests, liens, or debts that must be paid out of any settlement obtained. Many times, the lien or debt is so substantial that it dictates the settlement terms. Typical liens or debts include medical expenses paid by a health care provider and workers compensation medical payments and benefits paid by the employer’s carrier. Generally, these lienholders join the plaintiff’s side of the case, because they are interested in the plaintiff recovering as much as possible so that they can obtain one hundred percent of their lien.[75]

h. Costs of Litigation. Litigation costs are an important consideration and should be inquired into on the plaintiff’s side of the case. If experts have to be retained and a number of depositions have to be taken, costs could become significant. It is possible that the anticipated costs through trial might exceed the value of any expected jury verdict. If a case is cost-driven, this should be discussed with the party. There is always a point where risk-free settlement (a bird in the hand) is worth more than incurring substantial costs and risking an adverse verdict (two birds in the bush).[76]

On the defense side, costs are even more real because not only must experts be reimbursed, but attorney fees and costs must be paid. Sometimes these proposed costs might be substantial enough that if paid by way of settlement, the case could be resolved. There are even some statutes that have fee shifting provisions, that is, the defendant must not only pay its own costs and attorney fees, but those of the plaintiff if the latter is successful at trial.[77]

There is one caveat, however, when inquiring about costs when an insurance carrier is defending. Some insurance companies will not consider costs of litigation—they would rather pay counsel than have the reputation of paying costs in meritless cases. Therefore, they object to being asked what their costs might be. For this reason, an inquiry concerning costs might be delayed until later in the mediation if it becomes clear there is liability and the case is not meritless.[78]

Date: 2015-01-02; view: 690