Using third-party witness testimony at mediation in the employment case

Aside from the credibility of your plaintiff, a third-party witness may be your most powerful tool to increase the settlement value

Dave Rudy
2015 June

When this author was in practice and attended a CLE or read a practice-related article, the time was well-spent when it resulted in something – even one thing – that could be immediately applied in a real case in a practical way.  This article provides practical help to the practitioner regarding preparation and use of third-party evidence at mediation in order to enhance the settlement value.

The problem

In many single employee cases involving claims or issues of wrongful termination, hostile work environment, discrimination, ADA (accommodation) and other employment-related claims, a major evidentiary/valuation issue (possibly next in importance to the credibility of the plaintiff) is the testimony of co-workers and/or supervisors.  Indeed, the value of such cases is usually influenced by three factors, which may be present or absent to varying degrees and in varying ways: 

• Credibility of the plaintiff;

• Existence, substance and persuasiveness of objective evidence (e.g., documentation);

• Testimony of third-party witnesses

Where the goal of plaintiff is to persuade the defense to be willing to pay more to settle the case1, these are the sources of information available to make the attempted persuasion effective.  The first two – plaintiff’s credibility and the power and effectiveness of objective evidence – are beyond the scope of this analysis.  We will limit our focus to the third: those cases in which there are third-party witnesses who are accessible to plaintiff prior to mediation, and whose testimony may be used to enhance settlement value.

It is not unusual for the plaintiff to contend at mediation that many co-workers will support his claims, or that any who won’t are still employed and “under the thumb” of the employer. 

Those still employed will likely side with the employer out of fear, intimidation, inducements and promises or the like, plaintiff may contend.  Thus, these retained employees do not present a serious threat to the plaintiff’s claims and can be dismissed from consideration due to obvious bias.  Former co-workers, on the other hand, are free of that bias and thus will be more credible.

The defense, for its part, often claims that former employees who appear to confirm plaintiff’s allegations are in fact not credible because of “sour grapes” or the like, and thus do not present a serious threat to the defense of the case because of their obvious bias against their former employer.  They too, the defense may assert, should essentially be ignored because of obvious bias.

Beneath the posturing that pervades this aspect of the negotiation is an important reality – to the extent that the defense believes that plaintiff actually has credible witnesses who can corroborate plaintiff’s claims, the defendant’s perceived settlement value of the case will increase, resulting in greater willingness to settle for higher amounts, and benefit to the plaintiff in the negotiation. One recurring challenge to the plaintiff’s counsel in attempting to settle a case to the client’s best advantage at mediation is the plaintiff’s ability to influence the defendant’s perceived settlement value through use of third-party witnesses and the substance, quality and credibility of their expected testimony.

It should be emphasized that the goal here is persuasion, but not of the usual kind.  As advocates, persuasion is our life’s work.  Trial advocates are successful in Court in relation to their persuasiveness to judge and jury. But here, the goal is for the plaintiff’s counsel, assisted by the mediator, to persuade the defense that the testimony of credible third-party witnesses who are likely to appear at trial and present that evidence actually increases the settlement value.  Arguably, persuading the opponent is the toughest task one can ask of an advocate.  Lawyers are notoriously (and understandably) skeptical of the claims of their adversaries.

To maximize the impact on settlement of valuable third-party witness testimony, plaintiff’s counsel should carefully work through several issues:

• By what means is the testimonial evidence to be gathered, preserved and presented to the opponent through mediation in a way that uses the mediator to full potential and serves to persuade the defense of greater settlement value (and not merely better prepares the opposition for trial.)  The presentation also must be made in a way that communicates strength on the presenter’s side, not weakness or overenthusiasm to settle.

• When does the presentation occur; more specifically, when is the best time to mediate this case with an eye to presentation of third-party evidence?

• How (by what mode) is the evidence to be presented, and when and under what circumstances to use it during mediation?

The means of gathering and preserving the evidence

In order to enhance the opponent’s perception of settlement value, the evidence has to be presented as real and substantive, not merely wishful thinking on the part of plaintiff’s counsel.  The third-party witness must be believed by the defense to be credible, so that it makes sense for defense counsel to conclude that the witness could sway the jury in plaintiff’s direction.  Finally, the defense has to believe that it is at least likely (if not definite) that the witness will appear at trial and actually give the predicted testimony.

There are several avenues to achieve the level of substance and credibility necessary.  Which is used will depend on a multitude of factors, including the nature of the issue, the level of hostility between the parties, the level of trust, respect and hostility (or the opposite) between the lawyers, the gravitas of the witness, etc.

• Plaintiff’s statements as to what the witness is likely to say.

Statements by the party or counsel are not likely to be taken too seriously by the other side.  In the observation and experience of this writer, rarely are these statements effective in increasing the perceived settlement value of the case to the defense.  Indeed, when that is all that is forthcoming from the plaintiff’s side, the perception may be the exact opposite – that there is no firm, credible third-party evidence which bolsters the plaintiff’s case, or it would have been presented as such.

• (Trained) investigator’s notes of interviews of third-party witnesses 

Leaving aside the privilege issues, these notes may have some value but are likely to be of limited value in accomplishing the plaintiff’s objective.  While an investigator’s notes may be presumptively strong evidence of what the investigator was told on a given day, the witness may or may not maintain the same views until the time of trial.  With notes alone, the defense is in effect being asked to substitute plaintiff’s investigator’s judgment for its own counsel’s (claims adjuster, corporate representative, party) judgment as to quality of testimony, credibility, likeliness that views will not change by the time of trial, etc.

• Sworn statement of witness

This is the strongest evidence short of formal discovery of what the witness will say at trial.  While it doesn’t address credibility (except through characteristics such as internal consistency, lack of exaggeration, measured, credible speech), it does portray a witness who was willing to swear to the truth of what was said, and is now committed to the facts (and subject to impeachment/rehabilitation at trial if there is later wavering).

• Deposition testimony

Obviously, this is the most powerful method of presenting third-party witness testimony to the defense as a vehicle to
increase the defense perception of settlement value.  It is also the most expensive and has the most risk.  Defense counsel will be allowed to cross-examine the witness at deposition, to test recollection and credibility and to try to make the witness more susceptible to impeachment at trial.

• Creative, mediation-specific means

Presentation of witness at the mediation.  Plaintiff counsel can have a third-party witness physically present at the mediation and present the witness in some form to the defense live.  This is extremely effective when successful, but includes a number of risks – some obvious, some subtle. The witness may appear to be overly interested in the successful outcome of plaintiff’s case, raising questions of bias on its face.  If not well delineated with the mediator and through the mediator by agreement with the opponent, the interaction can turn into an opportunity for cross-examination of an unprepared witness or worse, a hostile and unproductive exchange in the presence of the witness and parties.  The witness’s statements, (indeed, the whole mediation), is “off the record”, so the witness is free to later change or recant the testimony.  Unlike the full deposition or sworn statement options, plaintiff is vulnerable to the danger of providing a roadmap to the defense for how to handle plaintiff’s best third-party witness as the case proceeds without having first irrevocably committed the witness to her testimony.  Some of these risks can be ameliorated by careful preparation and precise agreement on how this joint session is to proceed.  For example, the parties can agree that questions may only be asked by the mediator, that questions may only be asked by the plaintiff’s counsel, or that the witness only be allowed to present a narrative of what she has to say.

Other modalities for presenting the undeposed witness at the mediation.  The witness may appear by conference call (now probably outmoded), Skype or video connection, and the examination may still be limited as above.  The witness may appear by pre-recorded video in which the plaintiff’s counsel (or another as may be appropriate) questions the witness in front of the camera.  The witness may do a narrative presentation by pre-recorded video. (Both of the last two methods have been used very successfully as part of “day in the life” presentations in catastrophic injury cases, sometimes to address critical issues of such things as complex medical causation, for example).

Finally, a means of presentation that is not recommended is to show or provide testimony (in any form, sworn or unsworn) to the mediator, then charge the mediator with the task of convincing the other side of the power or threat or value of the witness and her testimony.  There are two reasons to avoid this method.  Both involve compromising the mediator’s credibility with the other side, in subtle but potentially devastating ways.  The (facilitative) mediator is an effective advocate for each side precisely because of their neutrality. The mediator does not advocate from personal commitment but simply by effectively stating the position in the context of risk-based analysis to a willing and attentive audience in the opposing room.  The mediator remains an effective advocate for each side in the other’s room only to the extent that they do not cross the line and advocate from personal opinion or commitment.  When that line is crossed, the mediator is no longer regarded as objective by the opposing party, and their usefulness is impaired (or destroyed) from that point forward.  Second, if the mediator is persuaded that the third-party witness represents great value to the plaintiff and great risk to the defense, the mediator again injects their personal opinion and judgment into the equation in a manner inconsistent with mediator neutrality. By saying “trust me, I have seen this evidence and you need to change your settlement evaluation as a result of it,” the mediator is both crossing an impermissible line and demanding a change of position from the defense purely as a matter of personal trust.  In fact, for either party to change its settlement value or range, it is imperative that the decision-makers (including counsel) make their own assessment of the evidence, and not be asked to take anyone else’s word for it.

Timing of the mediation

Great thought and preparation is required of counsel not only in how to present the third-party evidence, but in when to do so as well. 

Timing of mediation is a complex issue in almost every case, but especially so in the circumstances discussed here.  If it is apparent at the outset of the case that it is likely to require multiple mediations, counsel should strongly consider an early mediation (maybe even less than a full day) and seek the mediator’s assistance – before as well as during the mediation session – to arrive at procedural agreements which will, for example, allow for the scheduling of key third-party witness depositions prior to mediation, without having to conduct unlimited discovery in every area prior to coming back to negotiate a settlement.

Even in cases which ought to resolve with only one session, it is advisable for the plaintiff’s counsel to consider what information to provide to the defense ahead of mediation and when.  A confidential brief to the mediator with instruction not to share it with the other side delivered to the mediator 24 hours before the start of mediation will not likely be effective to modify the defense view of settlement value.

Who are the decision-makers on the defense?  If an insurer representative is involved, the more time she has to consider the issue and allow others at the insurer to evaluate the significance of the evidence, the more chance that the evidence will have a productive effect on settlement value.2

The decisions and alternatives considered here are never as easy in the real world as in a one-dimensional analysis.  Many factors bear on whether and how to use third-party evidence in mediation.  Many factors also bear on when to mediate, a good number of which are not in the plaintiff’s sole control.  The defense must agree and be prepared to mediate as well, or the whole enterprise will be fruitless.

Use of the witness testimony in negotiation

Finally, in those cases where counsel finds it inadvisable to present the third-party evidence prior to mediation, there remains the question of how to best present it at mediation.  We have already considered different presentation modalities – the question here is rather whether and when to release the information at mediation.

Information and its timing and release are critical negotiation decisions.  If counsel never provides a “preview” of witness testimony to the opposition, there is not much chance of damaging the witness’s effectiveness at trial.  On the other hand, all good negotiators know that information properly released at the right time is critical to better negotiation outcomes.  Once the defense has evaluated the case (even tentatively), information is required to change the evaluation.  Value-changing information can come through pleadings, discovery, motions and even trial – or it can come in mediation when each party has the opportunity to persuade the other to change its view of risk or value or both.

The problem is that most advocates resist the unilateral provision of information to their opponents – and not without good reason.  In mediation, all information disclosure (even the re-framing and re-positioning of known information) is voluntary.  There is no requirement that either side ever do so.  But the underlying assumption here is that one side wants to influence the other side’s case valuation.  That can only be done by providing information to the opponent.  Mediation provides arguably the ideal forum, since experienced mediators can collaborate and strategize with parties about when and how to release such voluntary information.  But there is always risk that information will be disclosed which will educate the other side without achieving the goal of improving your negotiating position.

A couple of suggestions are worth considering to minimize that risk:

• Work through with the mediator ahead of time the desirability and timing of the release of information.  Ask the mediator to help you “qualify” the other room – does the mediator think they can get through to your opponent?  Are you talking to closed minds, or is the other side willing to listen – if not to you, to the mediator? What and when are the most effective means and times of providing the information?  The right mediator is a source of good intel on the mood and receptiveness down the hall.  They are also a good sounding board, and a good ally in strategizing how to improve your negotiation position and be persuasive in the other room.

• Follow a simple rule: whenever possible, trade information for movement.  This rule is simple to state, but like most things in negotiation application is often more difficult than recitation. The point is that if the mediator is telling you that they believe that the other side will respond productively to the witness testimony or evidence, you can get corroboration for yourself by seeing movement in response to your willingness to provide information.

Dave Rudy Dave Rudy

Bio as of Jul 2017:

Dave Rudy has been a full-time San Francisco mediator for 26 years. He is grateful to be affiliated with ADR Services.

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1 This article is really about the use of a very specific kind of information to enhance a party’s result in negotiation – it applies as well to defendants with third-party witness information as to plaintiffs.

2 That is why the day-in-the-life presentations are often furnished to the defense well in advance of mediation, with
plenty of copies made available for circulation to all of the decision-makers (those visible to the plaintiff as well as those invisible).

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