February 27, 2007

I recently attended a client meeting where the issue of mediation was hotly debated.  My client expressed reluctance in participating in a process with a party that my client regarded as intransigent and obstinate.  My client also thought that proposing mediation would suggest to the other side that our case was weak and we were looking for a way out.  After persuading my client that mediation was at least worth considering, a more substantive debate arose as to when to mediate.  This debate deserves some comment.

In many ways, mediation is all “the rage” and early mediation is especially championed in the estate setting.  In general, society is reluctant to see family members fight over what is perceived as a windfall.  The courts reflect and promote this view.  My colleagues and I have all blogged on the merits of mediation and I won’t repeat them here.  But parties can mediate too early.  Often parties attend mediation without knowing the full extent of the estate assets or merely having a vague idea.  Liquid assets might be readily ascertainable, but have all the liquid assets been uncovered i.e. have proper inquiries been made?  Assets such as art, vintage cars, or family antiques are harder to evaluate and may require a professional appraisal, all of which takes time.  Moreover, the parties have often not exchanged relevant documents before attending mediation, something which they would be required to do if mediation took place at a later stage.  Exchanging relevant documents will help a party better understand the risks they face in pursuing litigation, the weakness of their case, and the strength of their opponent’s case (and vice versa).  Forewarned is forearmed.

Back to my client meeting where it was decided that it was too early to mediate.  An allegation had been made that an estate trustee had stolen money from the estate.  However, no one was quite sure how much was taken and whether the estate trustee acted alone or in concert with an investment advisor.  Some sort of accounting was required, supported by back-up documentation before mediation could take place and ultimately be effective.  A court order might even have to be obtained to get at the necessary information.  Mediation would happen, but at the right time with the right information.  It is imperative that a party know their case so that they know when to mediate and how best to settle.