Lack of Good Faith in Mediation Prompts Sanctions

A federal Magistrate Judge in Pennsylvania imposed sanctions against a corporate defendant for failing to mediate in good faith. It's a warning with reading about.

In Grigoryantis v Safety-Kleen Corp., US District Court, WD, PA, Case No. 1:11-cv-00267, on May 28, 2014, Magistrate Judge Kelly found the defendant liable for attorney fees and plaintiff's travel costs because the defendant attended a mediation with no intent to make a settlement offer because discovery had not concluded in the case and it was against their policy to make a settlement offer until discovery was closed.

The court noted that the defendant had opportunities to advise the court of its policy and thereby avoid the mediation scheduled but it failed to do so.

While the plaintiff had complied with the court order to provide a pre-mediation settlement offer to the defendant, the court also noted that the defendant did not comply and did not provide a pre-mediation settlement offer to the plaintiff. Apparently plaintiff's counsel was notified of the defendant's "no offer policy" by the mediator at the mediation itself.

In its 14 page decision the court noted that other courts had imposed sanctions in similar situations.

The moral of the story for all lawyers is simple. Never attend a mediation without authority to actually engage in the mediation process. If your client does not want to settle yet, then the mediation is premature and should be postponed. If you are not in a position to fully advise your client on all things necessary to negotiate, then don't schedule a mediation in the case.

The legal process can be hard on the parties and the lawyers and even, at times, on the court itself. Compounding that with a lack of good faith can result in serious damage to your reputation and your client's interests.

Ron Burdge
Helping Lawyers Win Cases For More Than 25 Years