by Roger M. Deitz*
The health crisis has seeded a financial crisis in many respects far worse than anything anyone alive today has ever experienced. A good part of the nation is under self-quarantine. Millions are without work. Houses of worship, stores, and factories are shuttered. At the same time, business and household expenses need to be paid. Except for emergency applications, the courts are closed. FINRA unilaterally postponed all in-person arbitrations and mediations until May 1, and recently extended this to May 31.
Consider Telephonic Mediation
Some claimants will not want to wait a year or more until mediations and arbitrations are rescheduled. Some financial institutions may see a benefit in mediating cases now rather than when restrictions are lifted. Although in-person hearings have been postponed other deadlines continue to apply. Litigation expenses continue unabated. Telephonic mediation is perfectly suited to the current environment where social distancing is the norm, travel is discouraged or even prohibited, and many work from home. Telephonic mediation has been shown to be as effective as in-person mediation in arriving at resolution. Here are some suggestions for successful outcomes in telephonic mediation:
Before the Mediation
- Confer with the mediator before the mediation, jointly and separately. Everyone - counsel, the parties, experts, and the mediator - must be fully informed of all aspects of the dispute and the mediation process before the mediation begins.
- Agree on what is being mediated. What is the amount in issue? Are there any non-economic considerations? What are the legal issues? What are the facts in dispute? It is not necessary to have pre-mediation agreement on all items; it is necessary to understand what the arbitrators will be asked to conclude, both legally and factually. Pre-mediation agreement on the amount in dispute frees time to consider other issues.
- Do not mediate without a pre-mediation request from the claimant. This should be made well before the mediation begins. Surprise is the enemy of resolution.
- All participants must sign the Mediation Agreement before the mediation begins. The rules of mediation are critical, particularly confidentiality and that the mediator cannot be called as a witness and her or his notes may not be subpoenaed. There is much litigation about these issues which will be avoided with an executed mediation agreement.
- Preparation is key. Pre-mediation document exchange between counsel and the mediator is essential. Parties need to have possession of all important documents before the mediation begins.
At the mediation
After an all hands welcome by the mediator expect the mediation to continue by caucus. That doesn’t mean joint discussions, especially between the mediator and counsel, may not take place.
- Opening presentations have by and large been abandoned in in-person mediation. I would definitely discourage them in telephonic mediation. The parties need to be fully informed of each other’s positions before the mediation begins. One effective way to accomplish this is to have two-part pre-mediation submissions. Part A is exchanged between counsel and with the mediator. Part B, containing confidential information and negotiation objectives, is sent privately to the mediator only. There needs to be a commitment from counsel to share the other side’s Part A brief with the client.
- Expect telephonic mediation to take more time than in-person mediation.
- Block the entire day.
- Be accessible to the mediator.
- Many in person mediations are not completed in one day. Due to the asynchronous nature of how telephonic mediation is conducted, there may be need for additional time to achieve a fully deliberative resolution. I am not suggesting time limits for telephonic mediation. I am suggesting that with full and complete pre-mediation preparation the prospect of resolution the day of the mediation will be enhanced.
- Before the mediation begins discuss how documents will be exchanged among counsel, the parties, and the mediator.
- Do not increase the amount of the claim at the mediation. Do not advance a new theory of the case while the mediation is underway. This often happens in face to face mediations. It is fatal in telephonic mediation.
- The usual communication cues will either be totally absent or harder to find. Participants, especially the mediator, will have to employ all possible active listening skills. When numbers are exchanged, the tone and tenor of the delivery, pauses, inflections, and other signs – often not intended – but always telling must be spotted and incorporated in evaluating the offer or demand.
After the mediation
- There must be a writing at the conclusion of the mediation. All material terms of the settlement, especially non-economic terms must be discussed. This is especially important in employment disputes. Sharing a draft settlement agreement before the mediation can be a great help.
Not A Panacea
I am not suggesting telephonic mediation is the equivalent of in-person. It is not. There are two essential distinguishing characteristics: the inability of participants to fully communicate and diminished momentum. Do not insist on video conferencing. Even if video is employed, the best conference facilities will not capture all body signals and sounds. Many individuals will be unfamiliar or uncomfortable with video conferencing or lack high speed internet access; everyone knows how to use a telephone. Momentum fuels in-person resolution. The pace picks up as the day goes on; parties are drawn to resolution and away from conflict. Momentum in telephonic mediation is restrained by the time it takes to establish contact and shift from party to party. Despite these differences, telephone mediation works.
These are only a few suggestions for success in telephonic mediation. Speak with your adversary. Talk with a mediator with telephonic mediation experience. FINRA has an active and informed mediation program staffed by committed highly trained individuals with decades of experience. FINRA’s mediation administrators are an extraordinary resource and are available to all participants and their counsel: Leon.Deleon@finra.org; Narielle.Robinson@finra.org; Terri.Crombie@finra.org; Manly.Ray@finra.org. Today, as always, FINRA’s Office of Dispute Resolution maintains full case services including telephonic conferencing using Verizon and video conferencing through Zoom. Finally, FINRA Mediation is committed to continuous development, and welcomes any suggestions you feel would benefit your mediation.
*Roger M. Deitz is a member of the SAC editorial board. He is a FINRA mediator and has participated in numerous telephonic mediations. Mr. Deitz was the chair of the NAMC mediation subcommittee when FINRA’s mediation program was established. The author wishes to thank Terri Crombie, Leon DeLeon, and Narielle Robinson, as well as Manly Ray, for their valuable contributions.