Entries Tagged as 'Commercial Mediation'

No Mediation, Case Dismissed!

A federal court in California recently ruled that a company who did not mediate their dispute prior to filing suit, according to the agreement between the parties, will have its case dismissed.  In Brosnan v. Dry Cleaning Systems Inc, plaintiff entered a dry cleaning franchise agreement with the defendant.  The agreement stipulated that any disputes must be put to mediation before filing suit in court.  That did not happen in this case.

Plaintiff argued that the case should be stayed (paused) until a mediation could be held.  The court did not agree, holding that unlike in an arbitration case, there were no preliminary issues to be settled, and granted defendant’s motion to dismiss.

Hat tip to National Arbitration Forum.

Who Must Attend?

Many of you have heard of the weight loss drug Fen-phen.  This drug, after being banned by the FDA, was the subject of a class action lawsuit against the manufacturer.  Subsequent to that lawsuit resolving, there was another lawsuit that was questioning the fees paid to the attorneys.  Of the $200 million settlement, $125 million ended up going to the attorneys representing the class.

The fee case was ordered to mediation and the primary defendant did not show up.  His attorney claimed that he was in Israel, but in constant contact with his client.  The plaintiffs have asked the court to impose sanctions.

This raises an interesting question: is it necessary for a client to be physically present at a mediation?  I personally prefer that everyone be phyiscally present at my mediation sessions.  Why?  Someone who is there is more engaged in the process.  I can see their body language and they can see everyone else’s body language.  There is more of an imperative in coming to a resolution and feeling pressure from the mediator and the other side when you’re there.  It also shows the other parties that you want to reach a settlement, as you’ve also given up your time to be there.  Often, disputes arise about how a person was treated, not necessarily what the claims are about.

There are other factors in whether I mandate attendance by a litigant.  Is the defendant local or local enough to attend?  How big is the claim or disputed amount?  There’s a large difference between $25,000 and $125 million.  What’s the time frame on the trial?  Is there time to arrange the mediation where someone will come from far away or can re-arrange their schedule?

The end goal of mediation is to resolve the dispute.  If all parties come to the table with that goal, it will happen.