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<xTITLE>Settlement Authority: Don't Leave Home Without It</xTITLE>

Settlement Authority: Don't Leave Home Without It

by Michael P. Carbone
November 2000 Michael P. Carbone
A successful mediation is one that ends the litigation through a negotiated settlement. Granted that there may be other benefits to mediation, such as exchanging information with the other side, getting input from the mediator about the strengths and weaknesses of one's case, or finding out if the case is likely to settle, but most lawyers and clients use mediation because they want to an end to the litigation. Failure to reach a settlement generally leaves everyone with a sense of disappointment.

The most common causes of a failed mediation have been identified as:

1. Absence of persons with real settlement authority;
2. Lack of a genuine intent to settle; and
3. Choosing the wrong time to mediate.

This paper deals with settlement authority, which is the most critical of the three.

Settlement authority means the authority to agree to whatever is necessary and prudent in order to dispose of the case. Often we see client representatives being sent to mediation who purport to have full authority to settle but who in reality have only limited authority based upon their side's unilateral evaluation of the dispute. Any attempt by the mediator or the other side to convince them that the case should really be settled on terms that are beyond that authority is generally futile.

Before long the lack of authority becomes apparent to everyone. If the other side is fully empowered to settle, they will become justifiably upset at the uneven playing field and will probably lose interest in further mediation. Attempts to bring them back to the table at a later time may not succeed.

Sometimes it is not possible to have the person present who has unlimited discretion to settle. In such cases I generally recommend that the mediation be rescheduled until that person is available. As a last resort, you may have to send someone with a reasonable amount of authority and make arrangements to have the ultimate decision-maker available on standby or by telephone. In that event be sure to secure the agreement of the mediator and the other parties in advance.

It is the mediator's job to require that the individuals who are authorized to settle the case will be present. If you really want to have a successful mediation, do not try to mislead the mediator or the other side about this critical element of the process.


MICHAEL P. CARBONE is a senior mediator who has also served as an arbitrator and court-appointed referee. His dispute resolution practice has been built over a period of more than 25 years and covers a wide range of fields.   His exceptional combination of transactional and litigation experience enables him to handle complex litigation and other challenging cases.  

Michael resolves business and commercial cases, real estate disputes, employment claims, construction claims and defect cases, estate and trust matters, insurance issues, legal malpractice, corporate and partnership disputes, and personal injury cases.  In his capacity as a court-appointed referee he has undertaken a wide variety of responsibilities, including sales and appraisals of real property, and the adjudication of trust accounting and administration matters.  

He is a member of numerous dispute resolution panels, including the National Panel of Arbitrators of the American Arbitration Association.  He is also listed on the mediation and discovery facilitation panels of several Superior Courts. 

He is a founder and past president of The Mediation Society, and a member of many other professional organizations, including the Academy of Court-Appointed Masters, the Dispute Resolution Section of the American Bar Association, and the Association of Business Trial Lawyers.

Michael is a frequent author and speaker on alternative dispute resolution issues.  He publishes a monthly newsletter entitled "Resolving It" which provides timely advice on strategies for successful mediation and discusses current issues, such as reforming the commercial arbitration process and mediating e-discovery.

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