Sanctions and Mediation

Those who take mediation seriously want to encourage parties to participate in good faith, and to prepare properly for mediation sessions, so that the process can achieve maximum benefit. We have to recognize, however, that there can be a tension between the desire to make sure that the parties don’t waste each others’–and the mediator’s–time, and the need for confidentiality, safety and flexibility in making mediation work. In other words, how do you promote the most effective use of mediation without slipping into exactly the kind of rules and sanctions-based world that mediation was designed to escape?

Don’t ask the courts to resolve this dilemma, because they don’t see it. Courts are entirely comfortable operating in the world of rules and sanctions. Here’s an example from the Nevada Supreme Court. In the case of Pasillas v. HSBC Bank, arising out of Nevada’s statutory foreclosure mediation program, the Court mandated that sanctions be imposed based on the mediator’s (required) report that the bank failed to bring required documents to the mediation, and failed to negotiate in good faith. The bank may also have failed to make a person with authority available. I imagine most mediators are of two minds about a case like this one. On the one hand, we want to make sure parties participate in good faith, and bring the information and people necessary to increase the chances of success. But we are less comfortable being thrust into the role of adjudicator, or even reporter, of whether one party or the other has complied with those conditions. Most mediators prefer to act as facilitators, not adjudicators. In fact, the whole regime of rules and sanctions is antithetical to the voluntary spirit of mediation, and to the feeling of safety and confidentiality that we want to encourage participants to rely on.

Fortunately, in California I don’t face this problem because we operate under different rules. When I have to deal with situations such as parties failing to show up for mediation, or failing to come prepared, or failing to show any willingness to negotiate, my inclination is to find out from the parties whether they think there is any point in proceeding. If they think we can still accomplish something useful, I am usually inclined to go forward regardless of whether or not one side or the other is in default of some obligation. But if somebody is in default, and the parties prefer not to go forward, and I also don’t think it would be productive to go forward, I am probably just going to report to the court that the mediation did not go forward. In fact, at least in state court, the confidentiality rules may prohibit me from saying much more than that. Then it is up to the parties to ask the court for whatever sanctions might be appropriate. Courts are in the sanctions business. Mediators are in the agreement business.

(Thanks to Heather Kulp at Just Court ADR for drawing my attention to this case.)

                        author

Joe Markowitz

Joseph C. Markowitz has over 30 years of experience as a business trial lawyer.  He has represented clients ranging from individuals and small businesses to Fortune 500 corporations.  He started practicing with a boutique litigation firm in New York City, then was a partner in a large international firm both… MORE >

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