Why Pre-Suit Mediation is Good for You and Your Clients
By: Theodore Deckert, Esquire,
Mediator and 3rd Party Neutral, Matrix Mediation
Recently I was conducting a pre-suit mediation in a substantial personal injury case. The well respected and very successful attorney representing the claimant shared with me that a local judge commented how he hadn’t seen the lawyer at the courthouse for a long time. The attorney said he replied “that’s because the money is not here, it’s out on Palm Beach Lakes Blvd.” 1 That comment reflects what most experienced trial attorneys know and the reality that the outcome of well over 95% of civil cases is not obtained at the courthouse but rather through settlement. Whether it is a claim for money damages or other relief, in most cases the earlier in the process a settlement can be achieved, the better it is for both sides.
I and several other mediators in our group have noticed more pre-suit mediations in insurance cases as well as all other types of civil cases. Some of these are because mediation is a statutory or contractual condition precedent to filing suit. However, the following are some of the reasons I believe more good lawyers and sophisticated clients are seeing the advantages of pre-suit and early mediation.
Mediation is a bargain. Litigation takes time, money and energy.
Most clients want an outcome as quickly and inexpensively as possible. It is a rare lawsuit that can be litigated to judgment in less than one year. The loser can appeal and keep the fight going for years. Most people don’t like the stress of a lawsuit. Business people are better off putting their energy and money into activities which make them their profit than fighting over who is to blame for the deal that went south. Given the overwhelming odds the case will be resolved by agreement rather than the court, it is advantageous for both sides to find out what the settlement options are before engaging in battle. The cost of the mediation to the clients will very likely be less than the first deposition and the court is going to order the case to mediation before trial anyway.
The earlier the parties discuss settlement, the better the prospects for settlement.
It is important to remember that a settlement agreement is simply a deal all sides are willing to agree is a better choice than continuing the lawsuit. The further the litigation goes, the more the parties are invested financially and emotionally in the dispute. The earlier they can explore the settlement options, the more open they are to appreciating the control, certainty and closure settlement provides and the more flexible they are regarding the difference between what they want and what they need. The mediator can help the party seeking money or other relief to consider the effect further litigation will have on their “net outcome” and the risk of losing what they can have now. The mediator can help the party being asked to pay or do something to consider whether it is worth spending their money and energy to do battle for something better.
In most cases, the litigation process does little to change the parties’ settlement perspectives.
Some will argue they cannot “evaluate” their case without discovering all of the facts and the validity of their opponent’s legal theories and evidence. Certainly there are those types of cases. However, in most cases, especially if each side has good counsel, both sides often already know most of what they need to know in order to evaluate the relative strengths and weaknesses of each sides case and the potential outcomes of trial.
In non-personal injury cases, the parties usually know most of the story out of which the dispute arose. The case has reached the litigation stage because the event occurred, communication between the parties broke down, the parties “lawyered up” and the focus shifted to blame rather than resolution. Many times I have mediated non-personal injury cases where the mediation is the first time there was any contact between the parties and the private session begins with one or both sides saying something like “I wish they had made that proposal long ago and saved me .... but now it is too late for that.”
In personal injury and other claims involving insurance, experienced plaintiff lawyers will know that carriers’ settlement evaluations are usually in fairly predictable ranges for common injuries or claims. Once they get past positioning, experienced claims people and attorneys will also usually agree on the probable verdict range in a particular case, but will disagree on where in that range is most probable. Negotiation generally involves addressing the ways in which the strengths and weaknesses in a particular case put its “Potential Verdict Value” and therefore “Acceptable Settlement Value” closer to the high or low end of these ranges.
Helps Solidify Long Term Attorney/Client Relationships.
Although pre-suit mediation and early mediation are more common, that’s not to say that all pre-suit and early mediations end in settlement. However, they give the parties the opportunity to learn what alternatives they have and to make an informed decision about proceeding with the lawsuit. Often by identifying the different settlement perspectives the parties are able to re-evaluate their differences and reach a settlement agreement before going much further with the lawsuit. Sometimes the parties are able to agree to focus further investigation or discovery on specific information needed to fully evaluate the settlement options. In personal injury and other types of claims involving insurance, the carrier gets to evaluate the claimant’s jury appeal and learn what the claimant is willing to accept. Often the carrier reconsiders its evaluation and comes up with enough additional money to get the case settled shortly after the mediation.
Most plaintiff P.I. attorneys and insurance defense attorneys will agree their time is more “financially” productive out of court than in court. Plaintiff attorneys must consider the time and money they will need to invest in a particular case to achieve an outcome that puts more money in the client’s pocket than the settlement offer. Most commercial litigation attorneys will agree that it is better in the long run to have a client who feels they achieved an acceptable outcome and good value for their legal dollar. Remembering it is most likely the case will not go to trial, the commercial lawyer needs to consider how likely he or she is to achieve an outcome for the client later in the case that the client will feel was worth the additional expense and aggravation to the client.
Remember it’s about the client, not the lawyer.
I don’t believe agreeing to pre-suit or early mediation is a sign of weakness. Good attorneys prepare and present their client’s case to the other side in a way that shows the other side they are ready and able to litigate if necessary. However, it is the client’s case and the client deserves the opportunity to find out what their alternatives to the lawsuit may be.
I believe one of the reasons we see more insurance companies proposing pre-suit or early mediation, especially in more significant cases where it’s really just a matter of value, is that they have come to recognize the benefit of mediating to see if an acceptable settlement can be achieved and, if not, how much of a stretch it takes to close the file now rather than later, after further defense costs have been incurred.
I was a Board Certified Civil Trial Attorney for 25 years with an active trial practice for more than 30 years. Over those years I observed that in the overwhelming majority of my cases, what the clients appreciated most was not the outcome of the case, rather it was “it’s the end of the case.” My 13 years as a mediator have only further validated this. I believe good attorneys should recognize this and take advantage of how pre-suit and early mediation can help them achieve the outcome that matters most to their clients. It’s good for the client and good for the lawyer.
1In West Palm Beach, Matrix Mediation as well as several other mediation firms and individual mediators have their offices on Palm Beach Lakes Blvd.