Too Many Cooks Spoil the Broth: What to do when Multi-Party Mediation Derails Your Settlement Efforts

By October 16, 2012

By Abbey L. Kaplan
Recently I found myself in multi-party mediations where parties on the other side were represented by one attorney.  Problems arose when my client and I believed we settled the case only to find that the interests of the parties represented by joint counsel diverged, derailing the settlement in the process.
In this situation, an attorney can find himself or herself on one of two sides – 1) the attorney with two (or more) clients whose interests are no longer aligned, who now has a conflict issue, and 2) the attorney who thinks he or she settled the case for a client, only to find that circumstances outside the attorney’s control prevented resolution.

Instance #1 is fairly common.  In that case, the lawyer must get clear and distinct conflict waivers from the outset.  Even where the interests of the parties appear to be aligned, and the parties retain one lawyer to conserve resources, it is possible that interests diverge and the lawyer and firm must protect themselves by recognizing this risk before it arises.
Instance #2 is less common and especially frustrating for the attorney who has to explain to a client that the “settled” case is not actually resolved – yet.  When you are litigating against multiple parties, it is important to recognize the potential of a conflict outside of your control and understand that settlement may be a slow process.  Next, evaluate the positions of your respective adversaries to evaluate which parties on the other side have the greatest ability to influence resolution of the case.  If settlement with a “weaker” party conflicts with the goals of a more “powerful” party on the other side, settlement is probably not in your client’s best interest because it will not resolve the entire case.  In these instances, I recommend mediation – it may require multiple mediations – with a strong mediator that can explain the reality of the conflict to the parties on the other side and guide them towards the understanding that compromise in order to achieve a resolution that is in the best interest of all parties.