Empirical Research Confirms that Negotiated Results are Superior to Going to Trial

Recently, there was a report published of empirical research confirming that settlement is preferred to trial because the potential result is statistically found to be a better economic result. The newly released study reviews the results on a large number of cases that did not settle after mediation and eventually went to trial and addresses how those cases fared in comparison to the last settlement offer or demand.

The September 2008 Journal of Empirical Legal Studies (Vol. 5, No. 30, pp. 451-491), a joint venture of Cornell Law School and the Society of Empirical Studies, has published the results of a quantitative evaluation of “the incidence and magnitude of errors made by attorneys and their clients in unsuccessful settlement negotiations.” The study entitled, “Let’s Not Make a Deal: An Empirical Study of the Decision Making In Unsuccessful Settlement Negotiations,” was done by two faculty members and a graduate student from the Wharton School of Finance, University of Pennsylvania. The study analyzed 2,054 California cases in which the plaintiffs and defendants participated in settlement negotiations unsuccessfully and proceeded to arbitration or trial and compared the parties’ settlement positions with the award or verdict. As the study states, it “reveal[ed] a high incidence of decision-making error by both plaintiffs and defendants in failing to reach a negotiated resolution.

The study actually builds, as is noted below, on prior research in four studies so that the cases analyzed totaled 9,000 in the past 44 years. It compared the results in selected cases in which the parties exchanged settlement offers, rejected the offers of the other side, and proceeded to trial or arbitration. While the large group of cases were jury trials, court trials and arbitrations were included. The study was based on the report of results from California Jury Research (formerly California Jury Verdicts Weekly), which the authors found reliable.

As it states: “The parties’ settlement positions. . . [were] compared with the ultimate award or verdict to determine whether the parties’ probability judgments about trial outcomes were economically efficacious, that is, did the parties commit a decision error by rejecting a settlement alternative that would have been the same as or better than the ultimate award.”

Prior studies were reviewed and summarized as follows:

• Priest/Klien (1984-1985): Trials occur in “close cases,” and plaintiffs and defendants equally make mistakes; plaintiffs win about 50% of the cases that proceed to trial; this is referred to as the “fifty percent implication”;

• Gross/Syverud (1985-1986): 529 cases from June 1985 to June 1986 were studied; they questioned the validity of this type of research because the context of the negotiations and relationship of the parties and counsel affected the behavior of the parties;

• Gross/Syverud (1990-1991): Here, 359 cases were studied, and the results conflicted with the 50% distribution of “mistakes”; they found plaintiffs were more likely than defendants to reject a settlement opportunity that was more favorable than the result;

• Rachlinski (1996): He compared final settlement offers with jury awards in 656 cases. His findings were that plaintiff had a higher percentage of error (56.1% of the cases), but the average cost was $27,687, while defendants had a lower error rate (23%) but a greater risk of a bad result, with an average cost of $354,000. He concluded that plaintiffs were risk averse while defendants were risk seeking; that is, the risk of trial in these scenarios benefitted plaintiffs but it cost the defendants significantly.

Here is what the researchers found in the most recent study:

• Comparing the actual trial results to rejected settlement offers, the study found that 61% of the plaintiffs obtained a result that was not economically better than the settlement offer, i.e., it was either the same or worse than what was offered;

• In contrast, 24% of the defendants obtained a result that was not economically better;

• However, although the plaintiffs experienced more results that were not as economically good as the last offer, the risk of defendants rejecting the last settlement demand was higher.

• When the plaintiffs rejected an offer and went to trial, and did better, it was not that much better – an average of $43,100 over the last offer;

• However, when the defendants rejected the last demand and went to trial, and did worse, it was much worse – an average of $1,140,000 worse!

The study also found that the cost of “decision errors” in failing to accept the opportunities to settle increased between 1964 and 2004. In 1964, plaintiffs obtained worse results at trial than were available through settlement in 54% of the cases, while in 2004 it rose to 64% of the cases. During that same period, the range for defendants went from 19% in 1964 to 26% in 1984 and then declining to 20% in 2004. And, the cases in which neither party committed a decision error decreased from 27% in 1964 to 14% in 2004. Adjusted for inflation, the researchers found that a plaintiff’s decision errors increased 3 times, but a defendant’s errors were much more costly – increasing 14 fold.

Another interesting aspect of the study is the effect that statutory offers and cost shifting procedures had on the eventual results in cases going to a final decision making process. In California, under Code of Civil Procedure section 998, either party may make an offer of settlement which, if rejected by the other, can shift certain costs, including those of experts to the other if the result is less favorable than the statutory offer of judgment. The researchers found that instead of encouraging parties to consider settlement because of the cost shifting consequences of statutory offers, these offers had an opposite effect – instead, the parties were more likely to take aggressive settlement positions, resulting in “financially adverse outcomes,” than the other parties in the study. The “decision errors” for plaintiffs who rejected these statutory offers was 83% compared to the 61% plaintiffs who were not subject to such. Defendants made “decision errors” in 46% of the cases when facing a statutory offer, whereas the rate was 22% who were not faced with such.

Another finding that may not be surprising is that in cases in which litigants were represented by attorneys who had mediation training and experience, the parties experienced lower rates of “decision error.” Indeed, plaintiffs in these cases had a “decision error” of 21%. The authors suggested more research in this area.

It is quite apparent that the most recent study has dispelled the notion that the “fifty percent implication” rules applies. It has established a new dimension of risks for both plaintiffs and defendants in rejecting opportunities to settle. Plaintiffs risk the further costs of litigation and a result that is not that much better, which likely does not justify the investment of time and money in taking a case “to the mat.” Defendants, on the other hand, have a huge downside by risking large verdicts against them if they do not appreciate the opportunity they have by a negotiated closure.

The 40 page review of the study’s results is worth careful reading. It may also be important in reviewing the advantages of settlement versus trial with our clients.

The New Lawyer - How Settlement Strategies and Opportunities Have Affected the Responsibilities and Functions of Litigation Counsel

Anyone who has been involved in the dispute-resolution mechanism knows what a laborious and often mysterious process it can be. Mediation allows the parties involved in the dispute to sidestep the litigation process, while also getting results. Because of the mediator’s neutrality, the settlement resolution is more likely to be perceived as just. Mediation is a defined process that is recognized by attorneys and judges. It is a voluntary, non-binding forum in which the parties agree to conduct negotiations using a neutral intermediary who guides the parties through the legal process. The mediator has no decision-making authority. Rather, it is the mediator’s duty to work with the parties to agree on the terms for conflict resolution.

During mediation, the attorney’s responsibility is both as an advocate and counselor to the client. When advocating an issue, the skills used by an attorney are different than the approach used in a courtroom. An attorney also counsels the client on issues during the mediation.

Mediation helps litigants achieve settlement. When compared to the expense of prolonged litigation, mediation may be the best deal. The client has present use of funds, rather than the hope of financial recovery later, while also saving money on pre-trial and trial costs, as well as possible appeal. Litigation costs often surprise clients, particularly if expert testimony is needed. The fees for experts are quite high, usually involving several hundred dollars per hour. During the amount of time experts need to prepare, testify at deposition and appear in court, several thousands of dollars in costs may be incurred quickly. Thus, at an early mediation, a major factor in considering whether to settle is the future expense of proceeding without settling.

If possible, it is important to work toward mediation as early as possible so that the client may reach his or her goals. Bear in mind that the client is not going to push early mediation. It is the attorney’s responsibility to recognize the advantages of an early mediation and resolution for the client. Most courts, however, distributed alternate dispute resolution materials shortly after a case is filed and either urge counsel to pass the materials on to the client or require them to do so. However, unless the attorney couples this will some counseling on the availability and value of mediation, it is questionable if receiving this material has much impact on the client.

Research shows that a key factor in litigants’ willingness to use mediation is the recommendation and encouragement of their attorneys. For example, “a majority of parties in domestic relations cases (68 percent men and 72 percent women) who chose to use mediation said their attorneys had encouraged them to try it, whereas less than one-third (32 percent men and 18 percent women) of those who rejected mediation had been encouraged by their attorneys to use it.” (R. Wisler, When Does Familiarity Breed Content? A Study of the Role of Different Forms of ADR Education and Experience in Attorneys’ ADR Recommendations, 2 Pepp. Disp. Resol. L.J. 199, 204.)

Mediation involves an objective intermediary who negotiates with the parties to avoid or end the highly confrontational and tension-filled process of litigation. From the plaintiff’s perspective, it is a means of essentially selling the lawsuit to a defendant, who buys off the expensive and exposure of ongoing litigation. It involves an exchange of offers and counteroffers made in more of an informal business environment, rather than a formal courtroom.

Hostility, anger, finger pointing and accusations are not part of the mediation process. Diplomacy, salesmanship and patience are the bywords. The parties and their lawyers may be firm, tough and even hard-nosed at times, but they need to do it politely and diplomatically. The parties need to be prepared for mediation by having the appropriate attitude before attending the mediation. Unlike a deposition, this is where the client enters the business process of resolving disputes and essentially steps outside of the courtroom.

It is advisable to have a pre-mediation conference several days before the mediation occurs. This is two fold process: The mediator may conference (by phone usually) with counsel for the parties, either one on one or together to discuss the mediation, insure that the parties are ready, and that mediator has what he or she needs to make the process work. Counsel should also meet with the client to discuss the process, cover important aspects and get the client ready for the negotiation and decision making process of attempting to reach a resolution of the dispute.

Three aspects are important to stress; First of all the client needs to know that this is not a binding process; there is no third party who is going to decide the case and impose that decision on the client. It is client’s decision to settle. Second, the client should understand that this is not a confrontation. No one is going to testify. It involves an exchange of information so that the parties can be informed and negotiate. Third, the client must understand that what takes place at the mediation is confidential. It may not be brought up during a court trial.

The client should also be encouraged to keep an open mind as the process takes place. Many times, the client’s perspective on settlement will change as the mediation progresses. That is good because the client hears what the other side has to say and can consider the points and counter-points of the case and factor those into the decision making process. It is important for both counsel and the client to listen to what the other side says and also to the mediator’s comments. The mediator will often comment on issues and give his or her views on each side’s case. The mediator may offer the pros and cons of settlement versus proceeding further. This provides an objective, third-party view of the matter, which may be very valuable.

As the future unfolds, more and more courts will be creating ways for litigants to enter the mediation process at an early stage. The San Francisco Superior Court recently instituted an early mediation program. The San Francisco Bar Association also has a program for early mediation. The federal court has a program of early mediation and “early neutral evaluation” for several years. The future litigation process will rely more on courts and counsel directing litigants to a mediation alternative to litigation – and the earlier the better.

One concern I have is that I am seeing some reluctance of counsel to guide a case toward the mediation process because of the economic motive of being able to continue to bill a case and earn revenues. Frankly, I have seen evidence of this with opposing counsel in some of our cases. I have also heard this concern expressed by my trial lawyer colleagues and some mediators. It is indeed troublesome when counsel will not communicate with me about mediation even after I have offered to work together to get a discovery plan, or an exchange of information so that we can each have access to what we need to evaluate the case before we discuss resolution. In these troubled economic times, when law firms are folding or letting staff go, there is a concern that the motivation for economic survival will override the professional obligations to work towards a timely and efficient resolution of a dispute.

There is nothing to lose by mediation and only much to gain, and it is our duty as lawyers to see that a case is tested in that process. Who knows, a good result on both sides may mean more business rather than less.

The Lawyer's Role in Preparing the Mediator for Mediation

Let’s not forget that as our client’s advocate at mediation we have a job to do in preparing the mediator. Before the Mediation starts, the mediator knows only what he learns from the submissions of the parties beforehand. He can learn more about the parties’ respective positions during the mediation, but it is important to give the mediator as much information about the facts of the case, the opinions of experts, the legal issues, and your client’s position in advance so that the mediation day can progress without the mediator having to probe counsel for more information that was not provided initially.

Mediation Statements

I am frequently surprised at the skimpy mediation statements that my adversaries submit. Often they submit just a few pages which outline not much more than the answer to the complaint, or they misstate or mislead the mediator as to the facts or law.

Seldom are out mediation statements less than 30 pages. They contain a detailed factual recitation that is usually in a chronological order with headnotes broken down by date range, event or some description. We try to make the factual recitation interesting so that it tells a story. In short, we tell the mediator: “This is what the court and jury are going to hear about our client’s case!”

We also include summaries of what our experts are going to say about liability and damages, often in a separate section of the mediation statement with a separate topic heading devoted to “Expert Opinions.”

Then we outline the law focusing on key cases (often attaching one or two cases with key parts highlighted for the mediator). Most often our discussion of the law is based on the jury instructions that we believe will be given by the court. If we are mediating either before a dispositive motion is filed or after it has been filed and before any hearing, we will use a separate section of the brief to advise the court why our motion will be granted or a defense motion will be denied. If our brief has been filed, we will submit a copy of key moving papers to the mediator.

The opening of our mediation statements is usually entitled, “What is This Case About?” In two or three paragraphs we try to outline the essence of the case and the claims of our client – how our client has been irreparably injured by the conduct of the defendant.

We construct our mediation statement so that after the mediator reads this introduction and the first new pages, he/she will say: “I got it.”

Exhibits

The proof of the pudding is in the eating. That is what exhibits are all about. They not only establish facts buy verify the statements in a mediation statement. We include exhibits, which are organized as they are referenced in the mediation statement. Again, we highlight key portions which verify our story about the case. While we do not want to overwhelm the mediator with more than can be absorbed in a reasonable amount of preparation for his/her role as mediator, we also don’t hold back if we need to verify the facts or expert opinions that support our client’s case.

Videos

Seldom do we attend a mediation without a mediation video. I have written a column on these (August/September 2008, Volume II, Issue 8).

These videos can include family photos (in a death or serious injury case), videos of locations where an accident takes place, a series of photos of damaged vehicles or products that are the subject of the case, reenactments and computer simulations, news segments from television reports, interviews of witnesses (such as family members about the value of the lost relationships in death or serious injury cases), key documents with important portions highlighted or enhanced, and event interviews of expert witnesses.

Material that is specially prepared for the mediation and that is not otherwise available to the parties may be labeled as confidential. We always put an admonition at the beginning and ending of our video that it has been specially prepared for the mediation and is deemed a confidential mediation submission. We cannot protect inclusions which are otherwise discoverable or admissible, but we can protect our work product from being used at trial. (Cal. Evid. Code § 1119(b); Stewart v. Preston Pipeline Inc., 134 Cal.App.4th 1565, 1576 (2005)[“videotapes…were…covered by the mediation-confidentiality provisions of section 1119 to extent that they were prepared for the purpose of, in the course of, or pursuant to, the mediation in the underlying action.”].

Private Letters

The confidential, private letter to the mediator is an effective tool in preparing the mediator before the mediation. We use this letter as a means of:

· Advising the mediator who will attend the mediation on our client’s behalf, giving a brief description of their role (client’s family, consultants/experts and our attorneys);

· Providing the mediator with additional information about our experts and consultants (e.g.. medical reports from consultants who have evaluated a part of the case and advised that their opinions would not support a particular damage claim);

· Demonstrating structured proposals;

· Submitting written statements from witnesses that the other side has not obtained in discovery;

· Providing information on insurance and our comments regarding the carrier’s position and approach;

· Providing comments on apportionment of liability among several defendants;

· Providing comments on prior dealings with defense counsel and/or the parties or carriers involved;

· Relaying thoughts on how the negotiations might progress.

The private letter assumes that the formal mediation statement will be exchanged. I am an advocate of exchanging mediation statements. Maybe it will not tell the other side everything, but it will put your case before your adversary. Unless the adversary knows that case, how can its counsel evaluate your position?

Pre-Mediation Conference

I am also a fan of a pre-mediation conference with the mediator. This serves several purposes. First of all, the mediator can outline what is important to him/her (i.e. what information is deemed important for the neutral). Second, the mediator can advise the parties of the date for a timely submission of the written submissions. Third, the parties can exchange ideas on how the mediation should be approached. And, if the parties need additional information before the mediation, they can request such.

Timing of the Mediation Submission

I also believe that any mediation submissions should be provided at least week before the mediation. In fact, weeks before is not too early. It is not effective to submit a several page statement a day or two beforehand. If counsel cannot do better, then the mediation should be continued to a date that will allow the parties to have a full and timely exchange of information, and the mediator will have what he/she needs to give them the best chance for resolution.

What Type of Negotiation Personality Are You

Before representing your client in negotiations, particularly in the more formalized environment of a mediation, it is important to assess what type of negotiator you are. You, your client, and any mediator who is used, must work together to seek a voluntary resolution. That takes a different persona than the advocate at trial. You are indeed still an advocate, but one with a different presence.

Recently I attended a mediation in which we represented a local auto retailer that made available rental cars for its customers and also to employees. An employee rented a car and was involved in an accident in which he was killed and his passenger was seriously injured. Both sued. Our client was named in the lawsuit even though there was a separate subsidiary handling the rental operation. There was a CGL policy which sought to exclude rental cars. The client’s broker had not obtained proper coverage for our client. Faced with a limits demand, the CGL carrier settled and sought reimbursement from our client. We sued the broker as well.

The broker’s attorney was difficult. At a mediation of the cases, he exhibited an antagonist and hostile attitude that interfered with the process. He just did not “get it.” It made the process difficult because my client and the carrier wanted to settle the case. I just did not understand why the broker’s lawyer had to be so difficult. Fortunately, there was a more responsive claims representative from the broker’s carrier present, and based on some excellent skills by our mediator, the whole case was resolved.

Negotiating a case is an active and dynamic process which inserts your personality into the case as an advocate for your client, just as it does at trial. The advocacy, however, is different. Instead of simple persuasion, you are using your skills to cause your adversary and his or her client to recognize the vulnerability of their case, and to voluntarily enter into the process of trying to find a point of resolution before trial. Your adversary must be motivated to seek that resolution, and your approach and personality are parts of the process of that motivation.

Each of us presents a personality in negotiations. There are some lawyers I know who are excellent in most all respects but have a hard time switching hats from pure advocacy to negotiation advocacy, which is a much different process. They are tough, hard-hitting lawyers who can push a case, work it up for trial, handle the motion practice, and try the case. However, when it comes to changing gears to a “negotiator,” they just don’t seem to understand the process well enough to be very effective. As a result, they end up with cases that do not produce good economic results: verdicts between offers and demands, or simply cases where the necessary expense of trial is not warranted, i.e., cases where liability may be strong but the damages or collection of the judgment does not justify a full-blown trial.

My sense of the personality types – generalizing of course – is as follows. Bear in mind that some present a combination of these, or in rare cases, all of these:

· The Aggressive Type – no mater what the discussion, this type tries to take over and control everyone by being very aggressive.

· The Angry Type – everything seems to evoke an angry response, sometimes raising the temperature of the negotiations. Not good, obviously.

· The Hostile/Confrontational Type – wants to give an opening statement in the first caucus to show his or her clients what a great advocate he or she is and how he or she can get in the face of the other side.

· The “I Cannot Work in this Process” Type – just does not understand the process and how one must engage in the “give-and-take” of negotiations. It is a compromise, but this type does not understand that.

· The “Close to the Vest” Type – wants to keep everything confidential; will not exchange mediation statements. For some reason, believes that exploring the issues is harmful.

· The “Unprepared” Type – just is not ready, and may simply be looking for a way to resolve the case and earn a fee, rather than work the case up.

· The “Unrealistic” Type – for many reasons, including lack of preparation or ability to evaluate a case, does not understand the issues or damages; or simply has an highly inflated view of the value or a very low deflated view of the exposure of the client.

· The “Doesn’t Understand the Case” Type – here there is a lack of legal analytical skills and an understanding of what the case is about – legally and not emotionally, usually is the problem.

· The “I Get Frustrated with the Process” Type – has a hard time with the process of “give-and-take” because of impatience, and also lacks a sense of how to move through the process and engage the other side in the negotiation process.

· The “I am Trying to Get the Case Cheap” Type – this applies to the insurance company that believes if it goes to mediation, it will get a “good deal,” and that its representatives are attending a “fire sale,” not a real supervised negotiation. Carriers often approach early mediation this way, rather than taking a serious look at the carriers “down the line” costs plus exposure. Often an insurer will not spend the money to allow its counsel, panel counsel, or coverage counsel to evaluate the case in the real light of day.

You probably can describe others, but each of these represents an impediment to the process, frustrates the other parties and mediator, and simply stands in the way of resolution. For the most part these are “negative” personality types that make it difficult to resolve a case. Those who are not successful in either the negotiation or mediation process most likely exhibit traits of one or more of these types of lawyers in the negotiation setting.

The more positive personality types include:

· The “I Understand the Process and Can Work in It” Type – they know how it all works. Their clients are ready to make decisions and they have provided both the mediator and other side with a solid, well organized statement of the case.

· The “Diplomatic” Type – can present the case forcefully in the calm environment of negotiation process.

· The “I Will be Up Front” Type – “Candor are a lovely virtue.”

· The “Well Prepared” Type – refreshingly well versed in all phases of the case. Could start trial shortly because he or she knows the case.

· The “I Understand the Value of My Client’s Case” Type – realistic about the cost of going to trial vs. settlement; knows the verdict ranges; understands the “present value” of money; has let the client know what the financial benefits are of settlement at this time.

The successful negotiators present a combination of these positive traits. There may be occasional lapses where each of us exhibits one or more of the negative traits during the negotiation process. However, the successful negotiators are aware when these lapses occur, recognize them, and return to exhibiting the positive ones that improve the chances for resolution.

A major problem is presented when we have an adversary who truly falls into the negative personality types and is stuck there. My experience is that usually this type is reluctant to go to mediation; but if it happens, then you need to have a very candid discussion with the mediator beforehand to discuss how to approach the mediation. It may be that the mediator has to exercise some strong influence on your adversary and his or her client to assess how to approach the mediation process.

Using Videos at Mediation

Using videos at a mediation can be an excellent supplement to a mediation statement. It is a great way to provide the visual information that your adversaries and the mediator need to evaluate the case. Over the past several years, I have submitted a confidential mediation video in at least 75% of the cases I have taken to mediation. Personal injury cases are especially susceptible to the use of a video. It is an excellent way to tell your client’s story. We seldom go to mediation without a video in serious injury or wrongful death cases.

We have had two highway wrongful death cases go to mediation in the last few months. We used videos in both, and they both settled for top value. Both involved defendants who were governmental entities. Here is how we approached each with video.

Case No. 1: This was a case by a 42 year-old widow with no children whose husband, a law firm accounting employee, was killed when a teenager driving his parents’ Mercedes was speeding down a roadway that had a history of cross-over accidents. Because of infighting between a County and City, separate governmental entities, a four lane expressway running for about 2.5 miles between two main streets in San Mateo County, California had no raised median barrier. After a death case a few years ago, a partial six foot raised median barrier was installed but only over about 25% of the roadway. Then our client’s husband was killed when the recently licensed teenager missed a curve on an unlighted section of the road. Fortunately his parents had liability coverage of $1.5 Million, but the case was worth more.

After a period of aggressive discovery during which we uncovered more details about the infighting over who was going to pay for the remainder of the barrier, we scheduled a mediation. Our video contained:

· An introduction to our client and her husband with compelling photos of them at their wedding, on vacation, with family and friends;

· A segment from a news broadcast showing the accident scene;

· Photos of the cars in position after the accident;

· A computer reenactment of the accident demonstrating the speed of the teenager’s car, and also providing evidence that a raised median barrier would have still prevented the head-on collision;

· A video of the roadway before the accident;

· Photos of the barrier being completed over the entire segment of the roadway a few months after our client’s husband was killed; and

· More compelling photos of our client, her husband and family.

We were careful not to oversell the message here: Could this accident have been prevented? Should it have been prevented? The video told the story. The case settled with the County, who essentially controlled whether the barrier would be built and was the impediment to it not being fully completed before our client’s husband was killed, paying a significant amount to complete the global settlement.

Case No. 2: The second death case was more difficult. An errant driver who was likely having difficulties from insulin insufficiency crossed over on the upward side of a hill trying to pass two vehicles. Clearly he was negligent. He struck a vehicle being driven by the 25 year-old Filipino daughter of our clients. The decedent lived at home with her parents and her sister, who was younger and a student at the University of California at Davis. She was beautiful inside and out, as was her sister. The family was extremely close following the cultural pattern of her heritage.

The problem was the driver had 15/30 coverage. The State of California maintained the road which was an old farm road that had been repaved and redone in a patchwork manner. Over the years it became a major thoroughfare between Interstate 80 and Central California. Despite the heavy increase in traffic, and some major accidents, it was not improved the way it should have been. The stretch where our clients’ daughter was killed was particularly dangerous because of a series of hills that impeded drivers going in her direction from having a line of sight for oncoming vehicles, and also because of raised areas along her right that prevented her from escaping safely off the roadway should a car come as the driver’s car did. The decedent was essentially trapped in this area, with no way to see far enough ahead and no where to go if she could see a vehicle coming toward in the wrong lane of traffic.

But there was another problem. We had little in the way of economic damages. Under the California rules (resulting from Proposition 51 passed in 1986; Cal. Civ. Code sec. 1431.2), a defendant at fault is responsible jointly for all economic damages. However, for non-economic damages, a defendant is responsible only for that portion of these damages that is equivalent to its percentage of fault. The State argued for either no liability or a small percentage fault, which would keep the verdict low.

Our video contained segments showing:

· The heavy flow of traffic on the segment of road where the decedent was killed (at 7 a.m. in the morning during “commute” hours);

· Photos of the accident area, and the vehicles (we chose the less grizzly ones; indeed there were some that were gruesome);

· A series of videos showing the path of each vehicle which clearly demonstrate the lack of visibility on the approach to four hills in sequence, and the high bank on the driver’s right preventing any exit of the roadway even if she saw a vehicle in time to try to avoid it; the “trap” was clear;

· An interview of the decedent’s cousin about the family relationship and the close knit family unit that this Filipino family enjoyed;

· An interview of the decedent’s sister showing again the close family relationship; and

· Various family photos from vacations and holidays.

I should add here that the interviews of the family members were outstanding. Both the cousin and sister were compelling – genuine, intelligent, completely credible, and appropriately emotional at the right time. They would have been outstanding witnesses at trial. Even the State’s counsel openly conceded at mediation that we had an excellent non-economic case after he saw the video. He had taken the depositions of the parents, but he had not really touched on the relationship issues as much as we had hoped. We had to bring the evidence on this issue to him.

This case also settled on the strength of the video, plus one our of experts on highway design attended the mediation with outstanding drawings showing the configuration of this old farm road and how it had only been paved but not altered to avoid the dangerous condition that was created by the grades and configuration of the hills in the area where our clients’ daughter was killed.

I have other examples of how video has supplemented our mediation statements and other parts of our mediation presentation. Personal injury and death cases are good cases for visual information. Medical cases often lend themselves to video presentations. I often get a treating physician to do an overview of the medical issues with charts, models or other illustrations to supplement the written medical presentation. Strong visual stimuli will assist in supporting your written presentation.

I usually try to keep them no more than 60 minutes. In fact, I often tell my attorneys and staff to keep it to a “classroom hour,” if they can.

We also always put appropriate titles on the video and put a statement such as the following at the beginning and end: “This video presentation has been prepared for this mediation and is intended to be a confidential mediation video for the negotiations under the supervision of [mediator] on [date].” Sometimes I cite to the statutory or court rules protecting this information.

Pictures are definitely worth many words here, and are a great supplement to a well organized and comprehensive mediation statement.

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Mediation as a Discovery Tool

So the case does not settle at mediation! Disappointment perhaps, but there are other benefits to going to a mediation. One of them is the exchange of information that takes place between or among the parties. This is particularly true of a mediation that takes place early in the case, or at a certain point in time after the parties have exchanged limited information. Even though a mediation takes place, it is sometimes the case that the parties simply do not know enough about the other side’s position or the facts of the case; therefore, productive negotiations just don’t happen. Or, it may be that the perception of the parties is just quite different and more information needs to be exchanged before settlement can be reached.

We had an employment discrimination case recently that I thought had some real merit. It was different from other employment discrimination cases in that the employee was still being paid in full; however, he had been reassigned, and had not been allowed to pursue some job opportunities that had been posted by the company. He had documented a series of events that looked as if he had an actionable case, and some very large damages since he was only 55 and had several years of employment left. It appeared he was being shunted aside primarily because of his age, although he was African American and believed race was also an issue.

The employer – a major national corporation that advertised highly its emphasis on non-discriminatory practices – really wanted to mediate the case before any litigation was to commence. The employer had a program in place for pre-litigation mediation, and offered to pay the cost. A free looksee at their defenses.

We huddled and decided to accept, and I am very glad we did. We found out a lot about our case, and what damages we might claim, and the other side was able to hear from us. As a result, we have all agreed to give the matter a month or so (no statute problems) to contemplate a possible resolution that might avoid litigation and potentially lead to continued employment – a real positive for our client. The early exchange of information allowed us to find out more about the case and assess its merits. Likewise the employer had the opportunity to do so. We all gained by the early exchange of information and could each reassess our position and possibly avoid a costly and very unpredictable fight.

So, mediation can be very productive as a discovery tool and opportunity to learn more about your client’s case, and what the other side has to say IF the parties come in good faith, with a view towards getting the important facts on the table. But if one side is attending simply to demonstrate that it is playing hardball and merely wants the other side to capitulate for reasons that are not meritorious, then a mediation is not worth the time or money.

One issue that you face is how much you tell the other side. For example, what if you have significant negative information on the other party, or impeachment potential; do you share that? Maybe not. Maybe it has to be saved to avoid the adverse party being able to defuse this potential damaging evidence. Or, it might be that you can disclose the essence of this information in a private letter to the mediator, and can go over its substance and level of importance in your case in a private caucus. That is a judgment call that you as counsel need to make. If you follow this approach and hold it back or disclose it only to the mediator, the mediator might use it if he or she believes it may result in closure. Again, that is something you and the mediator need to discuss to put together a strategy.

My experience is that an early mediation is a valuable tool if the parties are really interested in obtaining a resolution without protracted litigation. Even if the case does not settle, there can be an exchange of information that allows the parties to re-evaluate the case. If necessary, they might fashion out a limited discovery plan, complete that part of the discovery process, and reconvene for a later session at a time when they are more ready to talk about a solution.

If the parties come in good faith, settlement or not, a mediation can be a good means of obtaining more information about the merits of your client’s case. A good faith exchange of documents and facts can lead to an early evaluation of the case so that a resolution can be achieved.

A Successful Mediation of a Wrongful Death Case

This week we had the privilege of representing a mother, father, and sister who lost their beautiful 25-year-old daughter/sister in a tragic head-on collision on Highway 12 in Solano County. It was 7 a.m. on a very hilly stretch of SR 12 just east of its intersection with SR 113. She was traveling Eastbound. A vehicle driven by a male who apparently was in a state of hypoglycemic shock from insulin deficiency was driving erratically at about 85 mph (55 mph limit) in the far right hand lane (left hand to him) on the wrong side of the road (passing lane and driving lane to traffic in the opposite direction). Witnesses had him driving as if he was trying to kill himself. Our clients' daughter/sister had no chance. There was no shoulder to her right; instead there was an embankment. The accident history in this stretch was allegedly less than the average for similar other roads, but the line of sight and lack of a shoulder was significant. While the State contended that a raised median or Jersey barrier was not proper for a two-lane roadway, such had been installed in other areas of SR 12. The State further contended that it had taken reasonable precautions given the less than average accident statistics by putting in thermoplastic "bumps" or reminders down the center and lengthening the passing lanes.

The driver carried 15/30 insurance. Our client had no available UIM coverage. The State was the only source for obtaining an award. But there was another problem: The economic damages were not significant. What was significant was the loss of the relationship with the decedent's parents. This was a very close Filipino family, whose two daughters lived with the parents. There is a strong tradition in the Filipino community to take care of the parents. The decedent was a loving, dedicated, and committed eldest child. It was that relationship that had value.

But under California law, the State was only liable for "its share" of the value of the relationship. Thus, if the State was only 20% negligent and the relationship was valued at $1 Million by a jury, the State would only be responsible for $200,000 plus any economic loss. So we argued that the absence of a recognition of the special dangers at this point in SR 12, where our decedent could not see an oncoming car in her lane in time to avoid the accident, and had no where to go, was negligence.

The case settled at the end of a one-day mediation. The total value of the settlement was over a $1 Million dollars, which was paid for by the State and a modest addition from the driver's insurer. Further, we settled the case 10 months from our date of filing the Complaint. While the costs were high, they were 1/3rd of what it would have cost to try the case.

We submitted a 40-page mediation statement, plus 30 exhibits, two private letters, a DVD of the road, photos of the accident, and family videos, interviews and photos. It was a compelling video about the family’s relationship. We had three consultants/experts at the mediation, including a cultural anthropologist, a consultant on the roadway and accident mechanics, and a structured settlement adviser.

An excellent result, early in the case, with monies in a structured annuity program for the mother, father, and sister, whose financial future is more secure.

The client was well served.

In words: Pressure on the defendants, preparation of the mediator and the clients for the mediation day, and a sound economical evaluation of the case.

What is a "Resolution Advocate"?

This is our byline, motto or working description of how we are committed to our clients' cases. We are experienced and trained to manage our cases for our clients to gain the advantage and find the best and most effective path to resolution -- whether through a mediated settlement, trial or arbitration.

We use our skills and experience as trial advocates to provide the vision to see how the case can be best managed for an early and effective evaluation, and prepare it for mediation (a non-binding, voluntary process for resolving disputes).

Our goal is to persuade our adversaries that direct negotiation or mediation is preferable to challenging our client's cause at trial.

Of course, it is your choice as our client to decide whether a settlement is in your best interest. But we know how to get you to that point at which you can make that decision.

We provide the litigation expertise through excellent consultants and experts who assist in that process, whether it is evaluating fault or damages, or the financial impact a settlement will have on you personally from a view of planning your future and getting life and your family's life back together and on a positive course.

We know how to seek a resolution of your case that is in your best interest.

That is what we do, and we do it well.

It would be a privilege for us to be YOUR RESOLUTION ADVOCATE!

Do Lawyers Really Understand What They Need to do to Prepare for Mediation

Recently I was invited by our local legal publication to be one of five persons on a Mediation Roundtable to discuss mediation techniques. We were interviewed by a moderator on various topics about mediation. I was the only lawyer in private practice on the panel. The others were all mediators; three were lawyers who are now doing full time mediation and the other was a retired trial court judge who for the last seven years has been mediating privately with a local service.

What I heard shocked me: Lawyers don’t know how to prepare for a mediation, and most of the lawyers who attend mediations just are not doing a very good job. The mediators all explained the hurdles they had to overcome. Their chief complaints could be listed as follows:

• There is no strategy or plan by the lawyers for their clients;

• The briefs submitted are “too brief,” and cursory;

• The lawyers have not prepared the client for the process; the clients have little understanding of how a mediation works and what can be accomplished;
• The parties are hostile to each other, or the lawyers are, which detracts substantially from the need to candidly communicate;

• The clients are not prepared to discuss “the numbers”; the client has no idea what the value of the case is;

• The lawyers have not discussed mediation as an alternative to trial – i.e., the “present value” of money (i.e., a settlement) versus the uncertainty of a recovery in the future;

• The client believes that the mediator is going to decide something and does not understand the role that the mediator plays as a neutral.

• The mediators spend too much time (one said 30%) of the initial time doing what the lawyers should have done to educate the clients;

• The lawyer is impatient with the process, so the client is as well.
  

So there you have it. The perception of at least these mediators was that we are not doing a good job for our clients by taking advantage of the mediation process, participating in it and educating our clients so that they have a real opportunity to resolve their cases. They seemed to uniformly agree that the “mediation process” begins with education by us of the client about that process and how the client can gain from the dialogue about the case and perhaps achieve a resolution of the dispute.

In my experience, the “mediation process” begins when the client first meets with our lawyers and staff to discuss the case. It is important for us to factor in mediation as part of the Litigation Management Plan, and make it an event in the process of representing the client just like a deposition or hearing on a key motion. We discuss mediation as a way of testing the case, as well as posturing it for resolution. We also advise the client how a mediation works, what its advantages are, and alert the client to mediation as part of the evolution of the case – a main event for which we will prepare just like we prepare for trial. I also stress that our advocacy is not comprised by our participating in a mediation. Indeed, I tell clients (after I agree to take the case) that offering to mediate is a show of confidence and strength in our position, BUT mediation involves looking realistically at the issues – liability, damages and collection of any judgment – and the costs of going to trial in comparison to the value of a settlement.

Since courts are sending many cases to mediation and parties seem more interested in participating, we need to be more mindful that clients need to be educated from day one about this important part of the litigation mechanism. While many courts require lawyers to inform their clients about this process at the outset, it seems that at least my mediator colleagues believe we need to pay more attention to, involve and educate our clients, and make this a part of the ongoing discussion of the case.

Listening to the Story as a Tool in Mediating

Being able to listen is an important trait in our profession. We need to hear what our clients recite as "their story" and develop a plan around that story for resolving their dispute or obtaining compensation for the wrong done to them. From the day we first meet our clients, we must open our ears to their plight; a tragic injury, a loss of a loved one, a business or investment that has been stymied by wrongdoers. Whatever the matter, it is important that we understand what happened, how it happened, and what relief is available to bring the clients back to where they were before.

Listening is an important part of negotiations. We must listen to our opposition to understand the other side’s views as to the facts or story of the case. Without a clear understanding of their position, we cannot fashion responses, nor put together a plan for representing our clients. What is their story? Who are the story tellers in the “theater of the real” (i.e. the trial court)? How will the sides be viewed by the trier of fact – court or jury? How will the story tellers be perceived? Will the trier of fact hear our story or theirs? Thus, we have to anticipate these questions and answers to the questions in planning the case and managing it for our client.

I often talk about the “laser beam to resolution,” i.e. the shortest line to a fair ending of the dispute in obtaining rightful compensation for our clients. That first test of this plan is in direct negotiations. Generally, I try to engage the other side in an early dialogue about the case, but at that point I am trying to listen to their story. I need to hear their version as soon as I can. I don’t just rely on the pleadings or discovery. I want to hear it from them or their counsel.

If direct negotiations don’t work, then mediation is next. By that time I may have listened to witnesses in deposition, or heard the oral argument of counsel at a motion or listened to counsel during a deposition with objections that may reveal the other side’s thinking. All along the way I am listening to what is being said by those participating, including the judge’s comments at case management conferences or hearings.

A mediation provides another opportunity to listen and hear – this time from a neutral whose views are important because they should provide an objective assessment of the stories being told by the parties in their briefs and sessions with the mediator. But it is important to the process for you as counsel for your client to listen and hear what is being said. Then, you need to discuss what has been heard with your clients and, again, listen to how they respond. Are they rational? Do they understand the issues? Are the responses purely emotional? Do they understand the litigation process and how they can lose as well as prevail? What is a “win” in their minds? How does that track with a realistic appraisal of the case and the probable results? Do they understand the value of the opportunity, logic and rationality of resolution by mediation, and how that process can work for them?

All of this requires you, as counsel for your client, to be a good listener, and to hear what is being said. Then you must translate that into a dialogue with your clients, and a mediator if that is the process you are involved in, so that a course can be fashioned which leads to a positive resolution of your clients’ case.

Listening, hearing – important qualities of counsel in providing high quality representation for your clients in the dispute resolution process!

The Three C's of Negotiation

Three basic principles are at the heart of settlement negotiations, whether they are direct or supervised in the more formal setting of a mediation: candor, communication , and confidentiality.

The level of candor required depends on the parties, their relationship and the forum. That is, the parties may be more guarded in direct negotiations, whereas in a supervised mediation, the presence of the mediator and the use of such as an intermediary may persuade the parties to be more candid about their case during the negotiations.

Communication is critical to the process. Once the parties stop talking, then there is no chance of a settlement even with a mediator. As long as the parties are talking to each other, even if through a third party, there is a chance for a negotiated resolution.

Confidentiality is also critical to the process. It encourages both communication and candor. The parties must understand that they will not be prejudiced by their exchanges, and that such will not be used against them in subsequent proceedings in the litigation. This assurance of confidentiality is at the heart of negotiations, whether direct or supervised.

These are the three essential underlying principles which allow the parties to reach a point where they together decide if the matter can be resolved. It is the policy that the decision making rests with the parties that requires that the three “C’s” underlie and support the process of negotiation.

Without an assurance of confidentiality, the parties are not going to candidly exchange information. Without confidentiality and communication, open discussion are stymied, as the parties will believe that whatever is said may end up being part of the other sides’ case at trial. The integrity of the process of negotiation in any format can only be assured if the parties are confident that their exchanges, disclosures, and bargaining will be protected from being used against them in subsequent proceedings. The parties must believe that they will not be prejudiced if they engage in any settlement exchanges.

As the Preface the Uniform Mediation Act states, “. . .[T]he law has the unique capacity to assure that the reasonable expectations of participants regarding the confidentiality of the mediation process are met, rather than frustrated. For this reason a central thrust of the Act is to provide a privilege that assures confidentiality in legal proceedings.”

The Federal Rules of Evidence do not contain any specific provision relating to communications during mediation. Rule 408 protects some communications during negotiations, but does not address mediation itself. District courts have specific rules adopted to protect what takes place during mediation and serve the purpose of carrying out the policies of encouraging candor and communication in supervised negotiations.

The protection of rules and statutes relating to direct negotiations is narrower than the confidentiality which attaches to the mediation process. For example, California Evidence Code section 1152 applies to an offer for compromise or to furnish something of value to another person who has sustained, or claims to have sustained, loss or damage, and also applies to “conduct or statements made in negotiation thereof…”

Despite the legal niceties, the parties should approach any negotiations with the understanding that they will all cooperate in implementing a principle of confidentiality so that the negotiations can progress towards an agreed upon resolution of the case.

A Look Back at the Process of Dispute Resolution

I am privileged to do a column for the LCA, and have been asked to contribute quarterly. My focus will be on the negotiation and settlement of cases, which is a subject near and dear to my heart for many reasons.

I grew up in the Midwest; the son of a lawyer who specialized in defending tort and insurance cases. My Dad, also Guy, was also General Counsel for one of the first regional insurance brokerage houses that handled claims for its insureds locally. It was innovative for a brokerage to have that authority, but it worked. My Dad ran that claims operation for several decades until he “retired” in his late 70’s. He was an excellent negotiator and stressed the importance of resolution before trial as usually the best solution. Oh, he knew some cases had to be tried, but he subscribed to the line from the Kenny Rogers song, “You got to know when to hold ‘em, know when to fold ‘em,” a phrase that is occasionally heard from my colleagues when talking to a client about settlement.

When I started law practice in the mid 1960's, the word “mediation” was not commonly used. I am not sure I had heard the word more than a couple of times while in law school.

As a young trial lawyer, the common practice was that settlement was not really discussed until a mandatory settlement conference right before trial. Before that, if a case settled it was because the attorneys did so, or the insurance adjuster jumped in and negotiated “the file” directly with the plaintiff’s lawyer. Often, the first real opportunity to negotiate a case was the “Mandatory Settlement Conference,” which later became part of the court rules, and which ordinarily was held quite close to trial. Other than direct negotiations, there was little involvement by the court in settlement talks before then. At that time, there were no Case Management Conferences. Courts were ordinarily not very active in the case until a Pre-trial Conference was held, at which time the court might inquire about what settlement talks have taken place, and if the parties were interested in a judge, other than the trial judge, meeting with them to see if some settlement efforts could result in a resolution.

The federal courts were required to provide for ADR procedures in civil actions in the Alternative Dispute Resolution Act of 1988 (28 U.S.C. sec 651 et seq.). Prior to that in 1985, California provided for Mandatory Settlement Conferences in Rule 222, California Rules of Court.

The words “alternate dispute resolution” or “ADR” were not in our vocabularies. Private dispute resolution services did not exist. Judges were elected or appointed to the bench and stayed to retirement. They did not leave these careers until that time. There were no jobs as private mediators to lure them away or provide employment after retiring. Frankly, as I look back on this, we were wasting a valuable resource in good settlement judges leaving the bench and essentially retiring from the profession altogether.

Now, the situation is much different. Private dispute resolution services and full time mediators abound. There are excellent training courses for mediators and new rules for governing that practice. Certification for mediators will soon be common, if not required. Standards have been set for mediators in the conduct of a mediation. (See, e.g., Cal. Rules Court 3.850 et seq.) While it seems that there are more mediators than lawyers, the litigation process seems to demand this resource for dispute resolution as an alternative to plodding through the litigation machinery at the courthouse.

Also, lawyers are doing a better job of managing litigation, at least in the more complex cases, so that resolution and settlement are part of the planning mechanism. That is good because it forces the parties to think about where they are going, what the results might be, and how much it will cost. That is, a “cost/benefit” analysis is part of the initial planning process and evaluation of the case.

One of the very important skills of a true trial lawyer or “litigator” is to know how to leverage a case to the point at which the parties are motivated to discuss settlement. I describe this point as a “plateau for resolution.” That is, it is a point where the parties have an opportunity to see what has occurred, evaluate the results for motions and discovery, and then look down the line at what will be done as the case progresses towards trial and a “forced resolution.” Does your client want to proceed? Does it know the risks? Is it aware of the significant costs involved? What is the potential settlement range versus the “net” that is likely to result if the case is tried?

Recognition of this plateau and then communicating with the client about the case – both past and future – is an essential ingredient of qualified trial counsel. It is our duty to explore the out of court resolution and advise the client about the several alternatives for direct negotiation, mediation, or other alternatives to dispute resolution, such as non-binding arbitration, submission of the case to a neutral evaluator (or panel) to get a read on the merits and value, or even focus groups to gain information as to how a jury might perceive a case which can contribute to a client’s willingness to negotiate or mediate the matter.

In future columns, I will give you my thoughts on various topics regarding negotiating and settling cases, including how to recognize the “plateaus,” guidelines for improving your chances of resolution in direct negotiations and mediation, what you need to do to prepare your client and the mediator for the mediation day, and other topics designed to assist you in getting the best out of court results for your clients.

Preparing Your Client for Mediation

Martin Peterson, Ph.D., is a long time colleague of mine. He is a litigation consultant who has been providing these services for 30 years. He tells this story:

In a recent case, our 25 year old female client had been sexually harassed on a work site by having a work elevator dropped on her while working underneath it. This was intended to teach her a lesson! The elevator crushed her spine. The other side continued to discount her, offering a low settlement. We went to mediation. She waited in another room until everyone had assembled for the start of the mediation. She then wheeled into the room, directly approaching the defendants’ attorney. She leaned forward out of the wheelchair, extended her hand and said, "Thank you so much for coming here today. I appreciate your concern and efforts." She then wheeled around the room, shaking everyone's hand and thanking each person for taking time to come to the mediation. When she got beside her lawyer, she said, "Time to get to work" and wheeled herself out of the room. Her demeanor and behavior added another $1Million to the settlement.

Winners help their attorney win; whiners hinder their attorneys.

Well, my good friend and professional colleague is very correct. The client is a key to a successful mediation in many ways. While the story that Dr. Peterson relates is unique in my experience because of the ability of this client to impact the mediation environment, it is important that our clients be well prepared for the mediation process. This does not mean preparing them to make a presentation, or influence the other side in the way that Dr. Peterson relates, but it does mean making sure the client is ready to participate in the process. This means also making sure the client understands what the process is designed to do, and how it works.

In some cases, the other side may have already seen and heard from the client in deposition. I would be reluctant to participate in a mediation as a defendant unless I had some insight into who the plaintiff is and what impression that plaintiff will have on the fact finder, court or jury. Whether a deposition is the proper means of assessing that depends on the case. I have often offered up the client for a limited deposition to the defendant for this purpose, or even an informal interview.

In some cases, like wrongful death for example, where you have a surviving widow and children, or parents in a case involving a death of a child, an interview may be all that is needed – a “looksee” is enough. The same may be true with a catastrophically injured plaintiff. These are highly emotional cases, and it is just a matter of assessing that level of emotionality and its influence on the outcome. So, I welcome a brief deposition session or interview of my plaintiff client for this purpose.

But there are other aspects where preparation of the client is required. It is just as important to prepare the client for the mediation as to do the other preparation. A prepared client will be able to make decisions as the mediation progresses on what terms and conditions of a settlement are to be considered and acceptable. Often, the client’s perspective on settlement will change as the mediation progresses. That is good because the client hears what the other side has to say and can consider the points and counter-points of the case and factor those into the decision-making process.

Here are some thoughts:

· Prepare for the Process: Your client needs to be prepared for the process by having the appropriate attitude before attending the mediation. I usually have a pre-mediation conference several days before the mediation. During this conference I describe the informality of a mediation, that it is not a trial as the mediator has no power to decide anything, and that the mediator’s role is to facilitate negotiations and resolution. I also describe the “give” and “take” of the process, and tell the client not to be discouraged by this bargaining process, nor be offended by it.

· Understand Confidentiality and What that Means: I also make sure the client understands that what takes place at the mediation is confidential. I stress that nothing which is said or done during a mediation can be brought up in court during the trial of the client’s case. Clients often are surprised at this. They need to know that they will not be prejudiced by the process.

· Get Down to Business: This is where the client enters the business process of resolving disputes and essentially steps outside the courtroom. I stress that it is the client’s decision whether to settle, and I make sure the client has all necessary information to make an informed decision about whether or not to settle.

· A Chance for an Objective View of the Case: I explain that the mediation is a chance for us to get an objective view of our case, so we should listen carefully to what the mediator says. The mediator will often comment on the issues and give his or her views on each side’s case and the pros and cons of settlement versus proceeding further. This provides an objective, third-party’s view of the matter, which can be very valuable.

· Using the Proper Words: The proper words should be used in getting the client ready for a mediation (or for settlement for that matter). Words like “victory,” “doing battle,” “defeating the other side,” or words of war and combat have no place in getting a client ready for mediation and setting the right tone for the negotiation process. This is not war; this is negotiation and compromise, so words appropriate to that process should be used. I prefer words like, “educating the other side about our case,” “working with the mediator [and the other side] to resolve the dispute,” “resolution,” “settlement,” and “compromise.” I also stress that we are not giving in, and these words don’t mean that. I remind the client that it takes all parties having the same attitude to get a settlement that works for all.

· Settlement is Voluntary; There is No Decision Unless All Agree: Some clients think a mediation is an arbitration and the neutral will decide the case. I stress that no one is forcing the parties to settle. A deal will be done only if all agree to all terms and conditions. No one is going to shove a settlement down a party’s throat; they should not even try, although sometimes a little persuasive effort may be used to make clear what a settlement means in the client’s case and how the client can benefit from this process.

Here are some more thoughts:

· Do you give the client your views on the settlement value of the case, or do you reserve that for discussion during the mediation?

· What do you tell the client about the expectations at the mediation?

· Clients will often ask: What is my case worth? What will the other side offer? How much should I expect to get? What should I be prepared to settle for? Why should I take anything less than full value? I try to avoid giving the client a predicted range, although sometimes it is necessary to get a client to think in terms of a realistic figure for settlement.

There are three ways to approach this:

· Don’t give the client a number at all, but tell the client that a “demand” should be made first (if you are the plaintiff), and you and the client need to see how the defense responds and what the mediator says before you line up any numbers;

· Give the client a reasonable but fairly wide range for settlement, suggesting that the ultimate number will be affected by how the defense postures during the mediation and how effective the mediator is at moving to the higher number;

· Just set a rock bottom “walk away” number and work from there.

One of the major tasks in preparing for mediation, and any settlement negotiations for that matter, is to inquire about a client’s expectations of how a settlement will benefit them. This involves advising the client of the pros and cons of a settlement, whether directly negotiated or resulting from a mediation:

· The costs of further proceeding;

· The certainty of a settlement versus the uncertainty of a result by trial or arbitration;

· The emotional drain on the client and family or business partners;

· Adverse publicity that might result;

· Public “airing” of personal life and issues, particularly sensitive medical or psychological problems;

· The present value of money in hand versus the chance of a greater gain at trial [which can very much effect, and in fact lower, a client’s unrealistic expectations];

· The positive impact on life planning of having money now rather than the long wait through trial and appeal.

I try to go over the major points in favor of a mediated resolution. I point out that a mediated result is a business-like way of resolving a dispute through a third party neutral who may comment on the issues in the case. The client should be ready to engage in this process and understand that this can be a productive, positive way for resolution. And, the client has control over the outcome! That is not true if the case is left to a jury’s discretion.