Most attorneys can attest to filing or defending cases that should have been settled early, but how often does that actually happen? Instead, we are plagued with cases that settle only after the close of discovery that was incredibly expensive and ultimately a waste of time and money. When cases settle early through mediation, we can save our clients money. So how do we do it? There are many different reasons why parties may be hesitant to participate in early mediation, but understanding the many, many benefits of early mediation may help you to convince your client to go forward with early mediation and save time and money in litigation.
3 Common Obstacles to Early Mediation
Many lawyers, as well as insurance adjusters, express three common reasons they are hesitant to recommend early mediation to their clients. First, many parties to litigation fear of losing leverage in negotiations if they are the first to suggest mediation, particularly when it is early in litigation. So, instead both sides proceed with costly discovery. This is typically not beneficial when you consider that 90% of cases settle before trial. The second reason is that parties feel uncomfortable negotiating with they do not have all the information. It feels that they are negotiating at a disadvantage because they do not have full understanding of the facts and evidence. Finally, some defendants are dissuaded from agreeing to early mediation because plaintiffs make excessively high demands, which can prevent meaningful settlement talks. Despite these real issues, there are so many advantages to early settlement that they outweigh most if not all of these concerns.
Discovering Invaluable Information
Participating in early mediation can provide invaluable insight to information early on that can help with making decisions on strategy. For example, during mediation plaintiffs can find out whether insurance coverage applies to the claims. Parties can also discover information about companies that are involved, such as who the real decision-making authority is as well as information about the company’s financial situation. Can the company fund long-term litigation or pay a substantial judgment, or is it likely a settlement would lead to bankruptcy?
Another incentive to early mediation is uncovering the perspective and motivations of the parties. You may gain insight into not only their perception of the relevant facts, but also what they remember, who they talked to or what they overheard. Also, gaining insight into their concerns for the future gives you a better understanding of their underlying motivations and interests. This information can allow for broader options for resolution. Maybe more valuable is discovering opposing counsel’s opinions about the strengths and weaknesses of their case.
Avoiding the Publicity of a Lawsuit
Depending on the type of case and the type of parties involved, parties may be motivated to settle early in order to avoid the publicity that a lawsuit will undoubtedly bring. Lawsuits are ultimately public and one party or both may be concerned about reputation or negative publicity. It may be as simple as not wanting others to know that you have sued someone or that you have been sued, regardless of the outcome. Mediation and a resulting settlement remain confidential. This may be a selling point for your client.
The Possibility of Non-Monetary Relief
Another consideration, depending on the type of claims, is whether monetary settlement is required. Not every claim is based on monetary compensation and some claims can be settled with reinstatement, a new position in the company, a letter of reference and an apology, renegotiation of severance or an agreement, or some other structured deal. Being able to negotiate these types of non-monetary relief can also decrease the cost of either party and lead to a successful resolution early on.