By Layn R. Phillips, Miles N. Ruthberg, and Niki L. Mendoza
Prior to the COVID-19 pandemic, mediations in complex cases were almost always conducted in person, with subsequent follow-up communications by email and telephone. But, just as in healthcare, banking, and retail shopping, the pandemic triggered a mass learning event for ADR firms in using online platforms to do business. Many experts came to this new-game landscape with great skepticism, their mindset shaped by deeply embedded old-game dominant logic. But now, experience driven by necessity has demonstrated that virtual mediations can work in many circumstances. Further, hybrid mediations – i.e., combining in-person and virtual aspects – have emerged as a new norm in complex mediations. Fully in-person mediations still are sometimes preferable, albeit in narrower circumstances than in the past. The key is to tailor the format to the specific circumstances, needs of the case, and availabilities of the parties and mediator.
1. Virtual Mediations
a) Overcoming Past Skepticism
Here are some relics from a pre-COVID era when virtual mediations were rare:
Lawyers and mediators alike insisted in-person mediations had unique qualities that conferred benefits only available through face-to-face dealings which increased settlement prospects. The main benefit most often cited was that more personal interactions between parties triggered a virtuous cycle of events. These interactions build trust, empathy and understanding between a mediator and the parties, while allowing mediators to observe parties’ body language and nonverbal cues, deemed key to discerning their needs, interests, and emotional dynamics of a case, and using these to infer a path to resolution.
Not surprisingly, early in the pandemic there was great trepidation about virtual mediations given these and other concerns. Many thought then and even still voice concerns over missing “accidental meetings” with people during mediation coffee or bathroom breaks, which can help overcome a deadlock. There were also worries that participants in online mediations would be more easily distracted by incoming texts, emails and “outside noises,” or that parties might even self-distract as a way to disengage from negotiations, something hard for mediators to control.
Another oft-cited concern with virtual mediations was that the parties may be less committed to the mediation process in online mediations, not taking it as seriously as they would if they dedicated travel time and expenses. When a party sends a representative, so the logic went, they’re more likely to be serious about achieving a settlement.
At the start of the pandemic, many views about virtual mediations were driven more by perception than experience. A 2020 KPMG survey of lawyers, judges, mediators, and clients reported that 65% were not in favor of virtual mediations, yet only 21% had actually participated in one. Of those who had, most rated it positively. (1)
The pandemic brought about an explosion of new ideas, approaches, and technology advances in mediation, as people embraced online capabilities and adapted the process from the legacy model that dominated the past. In doing so, the value proposition of virtual vs. face-to-face mediations has become clearer. A review of the tsunami of blogs and the research studying the value of online mediations vs. in-person formats since the pandemic began reveals that there are important merits to virtual mediation.
b) Virtual Mediations Offer Significant Savings in Time, Cost and Stress for All Participants.
Virtual mediations save travel time, expense, and stress for litigants and counsel, as well as any insurers and litigation funders that may be involved. There is little doubt that a stressful travel experience leading up to mediation is not a helpful factor in achieving resolution. Beyond the avoidance of personal wear and tear from having to travel and spend many more hours away from home and office, there is no need for a neutral facility with multiple rooms to conduct a virtual mediation. With a mouse click, mediators can create break-out rooms for people to meet privately. Also jettisoned are the catered breakfasts, lunches, late night pizzas, and all the logistics these entail. For court-ordered mediations, the cost savings of virtual mediations may make them a default option since outcomes of these mediations are sometimes less certain at the outset, and saving time and cost is a key factor, allowing more lawyers and clients to participate with no added expense.
c) Virtual Mediations Offer Increased Scheduling Flexibility Across Multiple Fronts.
With virtual mediations, there are no geographical constraints. Parties have more flexibility choosing a qualified mediator, and by eliminating the need for travel, that time can now be productively devoted to other high value-added activities like mediation preparation. The capability to connect mediators, counsel, witnesses, experts, and decision makers who can contribute to an accelerated resolution, yet hail from different or even remote locales, allows a level of flexibility that can expedite settlement negotiations.
It can take days, weeks, and sometimes even months to schedule a date that works for all interested and necessary parties involved in an in-person mediation, whereas a virtual mediation with many participants can be more easily arranged without the worry of travel logistics and added time. The willingness of law firms to invite more junior attorneys, and a more diverse selection of attorneys, to participate in a mediation has also increased through virtual mediations, where their valuable contributions can be felt, but at a lower investment cost.
Virtual mediations that span far flung geographic regions across many time zones have also resulted in increased likelihood of participation by key decision makers and stakeholders crucial to reaching settlement, including insurance representatives, senior executives, investors, board or family members, and experts, potentially shortening the time span to achieve a settlement.
In one high profile case, a collaborative virtual “hot-tubbing” of two experts working out of different cities on different continents provided a structural breakthrough which helped set the stage for the remainder of the negotiations.
d) Virtual Mediations Engender Surprisingly High Levels of Participant Engagement and Offer Participants Hard-to-Replicate Levels of Personalized Safety and Comfort.
With 3 actors as children, Judge Layn Phillips has found that people on camera, including many mediation participants, seem to put their best foot or face forward, which can generate more civility, fewer interrupted conversations and entrenched positions, and more sharing of relevant information.
Virtual mediations often produce a heightened comfort level in participants that goes along with their being in their own environment, whether at their office or in their home, enabling them to dress more relaxed and engage more calmly and candidly.
e) Virtual Mediation Data
Comparative data on virtual vs. in-person settlement rates from New York’s Southern District show many areas where the two formats have similar settlement rates, such as Contracts, Consumer Credit and Employment, while there are some areas where virtual mediations fall short, such as Civil Rights and IP matters.
The US Equal Employment Opportunity Commission recently released 2 reports in 2022 comparing virtual vs. in-person mediations in EEOC’s mediation program, surveying 1200+ participants and 139 mediators, with 70% reporting that they’d prefer online mediation to in-person mediation in the future. Mediators found online mediation easier to use, more flexible with similar or better quality and value of settlements for the parties, as well as increased access to justice for the parties. (2)
Another survey of 500 mediators reported that the shift to online had not led to a significant change in settlement rates. 71% said they settled no more or fewer cases online than in person, whereas ~10% reported more cases settled online, and ~10% saying that fewer settled. These results were attained despite 42% reporting difficulty building rapport online and 28% noting a lack of party engagement in the process. These deficits were offset by improvements in access to participants (81%), 36% saying an online environment enabled participation by party decision makers. This same study confirmed previously mentioned advantages in terms of time efficiency (80%) and cost efficiency (72%) from mediating online. Similarly, 45% of mediators observed benefits from the flexibility of virtual mediations, many noting participants seemed more comfortable joining from their environment. EEOC respondents also cited flexibility, convenience, cost savings, and a “safe space” as reasons for preferring online mediation.
f) Many Other Once Perceived Tradeoffs Linked to Virtual Mediations Have Now Been Mitigated.
Many legacy technical problems that once plagued virtual mediations, such as poor internet connections, poor hearing or sound caused by low quality microphones or speakers (and the still-repeated refrain “you’re on mute”), and difficulties in reading shared documents online, have dissipated as technology platforms have advanced along with people’s skillsets in using them. Similarly, long standing confidentiality and privacy concerns with virtual mediations have decreased as the major tech platforms implemented new security measures like password protected sessions, waiting rooms, encrypted communications, ability to lock the session once participants enter, and so forth.
Concerns that it would be harder to concentrate in a virtual setting and that Zoom fatigue would set in from staring at a screen for 8 hours, particularly in mediations that go on for days, seem to have abated as a plethora of new solutions for dealing with screen weariness have come forward. Some mediators and parties benefit from having 10 minutes away from the screen between virtual sessions, to relax or prepare for the next session. Some mediators and participants utilize this time to move around and stay alert.
Even concerns over the long standing “etched-in-stone” drawback of virtual mediations – a mediator’s inability to read the parties’ body language and use this to determine the best course for resolution – have started to dissipate, with some mediators now saying they can do this well (or well enough) in virtual settings (assuming no masks are used), particularly with participants with prior relationships with the mediator. Although it’s not a perfect substitute for observations of in-person body language, in some circumstances it is actually easier to note a person’s on-screen reaction. Many mediators say that once interpersonal connections are established, they can be just as effective online at building areas of agreement, addressing conflicts and moving toward compromise, and assisting the parties in finding mutual solutions and creative settlements that resolve disputes.
The parties also may benefit from seeing the outside world of the mediator and other participants. Perhaps they notice travel photos, sports memorabilia, or family photos. The conversations that these observations foster can help to build trust and openness, requisite for a successful outcome.
g) Bottom Line.
Virtual mediations are here to stay. What began as a forced march driven by the pandemic has now become a veritable race to leverage an evolving platform that delivers effective and cost-effective outcomes in many circumstances.
2. The New World of Hybrid Mediations.
Whether or not virtual mediations evolve further into a “default” or “norm,” hybrid mediations combining virtual and in-person elements have become a new norm in complex matters. This hybrid approach can apply to what used to be fully in-person sessions – that is, it is now common for some participants to participate in person in a mediation session, while others participate virtually. In ways, this is the best of both worlds, if done right. But that last part is key. If you are going to have a hybrid mediation session, you need both sophisticated technology and sophisticated people. As for technology, to make the hybrid session most effective, you need not just a laptop, but also a screen to project the “Hollywood Squares” into the room where the in-person participants are located. This sounds simple enough, but that means you need some way to hook up a laptop, which connects to the screen, the microphone, and the speaker. And you may need to move from one virtual room to the next while the in-person participants remain in the room.
Having someone in the room who is well-versed in hybrid sessions is critical because they need to communicate in real time with the virtual participants as to which room and when to enter, while avoiding the unwanted “pop in” on a screen in a private room, but also avoiding the delay of waiting for virtual participants to reappear.
Once confirmed that the technology and personnel are a good fit for a hybrid session, the upsides of such set-up are apparent. You experience the benefits of some counsel and party principals having invested their time and effort to go physically to the mediation location. Add to that, those who attend the mediation in person may feel they’ve somehow demonstrated more of a sacrifice and received more of the front row seat (literally), and may be more engaged. Partly for this reason, if any party is planning to send at least one representative to attend in person, it may be most effective to have at least one representative from each party, rather than having some sort of obvious imbalance and the perceptions that may accompany that situation.
The beauty of having party attendees both in person and virtual is that some representatives will still be present to more closely take in observations of body language, and to have that “chance” meeting in the hallway, and at the same time, the mediation can still go forward in a timely manner even if some participants aren’t available in person on the chosen mediation day. An added benefit that applies particularly to Phillips ADR mediations is that if some counsel or parties are not traveling in the days leading up to the mediation, they may be more available and responsive to the extensive work-up that our teams do in advance of mediations, to make the mediation day itself most efficient and effective.
Another effective hybrid tool, and one that appears to be headed towards becoming the dominant mediation process, involves having one or more mediation sessions in person and other sessions virtual. Particularly in complex or high-dollar-value disputes, it is common to make progress but not achieve a resolution on the first mediation day. Subsequent sessions may be required, either to go over additional subject matter, or to address, for example, new court rulings or new discovery that has been conducted. In mediations with multiple parties, sometimes the first mediation session is more of a “table-setting” session where the multiple parties, and often times insurers, are sharing and gathering information and preparing for what will later be a more active numerical negotiation. Any of these scenarios may make the circumstances best suited for a hybrid approach. It’s becoming more common for initial mediation sessions to be held in person – which is often when the heavy-lifting on merits discussions occurs – and then subsequent follow up sessions occur virtually. Again, the best of both worlds.
3. But for all of their Benefits, Virtual and Hybrid Mediations Will Never Completely Replace In-Person Mediations.
There are those of us who prefer pieces of the past. Some of the best mediators, to use a sports term, are “grinders,” with highlights from our best results often coming from grinding out resolutions in the crucible of in-person interaction at mediations with the key thought leaders and client representatives. Indeed, we like to think of ourselves as “grinders with people skills,” mediators who can read a room, evaluate personalities, make personal connections, and achieve breakthrough results by channeling these qualities into a handful of small meetings, or one-on-one encounters with a key mediation participant. For a mediation with incendiary potential, erring on the side of getting everyone under the same roof to work together can make sense. Such situations may include bitter intra-family or corporate disputes, or parties or counsel who may be less reactive and more constructive when talking in person with the mediator (and perhaps even the other side), in a context where the mediator has the full range of interpersonal tools available to manage the situation.
In addition, although virtual or hybrid mediation sessions often can work even with very large groups of parties and counsel, when an army of lawyers and parties is involved, it sometimes is easier to manage the process successfully when everyone (or almost everyone) attends in person. A recent example handled by Phillips ADR is a mass environmental tort situation involving a roomful of plaintiffs’ lawyers, where three in-person sessions were needed to reach a global settlement number. In that and other circumstances, there is no substitute for face-to-face meetings. Again, the needs of the case and parties dictate which format is best for the particular situation.
4. CONCLUSION
The COVID-19 pandemic fundamentally changed the working world and numerous industries, promoting greater efficiencies in time and cost in many circumstances. The mediation milieu unquestionably has benefitted from the new approaches that have evolved. Just as with the evolution toward remote and hybrid work arrangements, many mediations now are successfully conducted virtually or using hybrid combinations of in person and virtual participation. There is no turning back.
