What is Mediation?
Ask any trial lawyer, and he or she will tell you that of the thousands of cases filed each year, on a small percentage go to trial. That’s different from the “good old days” of lawyering, when an attorney could count on a number of trials every year. So why the difference?
One of the main reasons is that mediation has become commonplace and, in most states, required. This is true in South Carolina – with only a few exceptions, any case filed in the Court of Common Pleas – the forum for civil litigation – is required to be mediated within a certain period of time after being filed. A failure to engage in mediation within that time period can mean sanctions and a case cannot proceed to trial until mediation takes place.
So what is mediation? In short, mediation is a set date and time at which the parties to a lawsuit must meet and try to settle a case. The process is voluntary and, as long as the parties attend in good faith, no one can force you to do anything, other than attend.
A mediation usually takes place at a lawyer’s office – often that of the mediator. The mediation is run by the mediator, which is a third-party lawyer whose job it is to try to settle the case. I usually tell clients that the mediator has no “dog in the fight” – his client is the settlement. And – if he or she is a good mediator – then he will spend the day pushing and pulling on both sides to try to bring them to a resolution that both are content (not thrilled) with.
There are different styles of mediators. Some mediators are very passive and what I call “numbers couriers” – they simple shuffle from room to room, never really challenging any party and simply conveying settlement offers. In my view, these sort of mediators are almost never successful. A good mediator is aggressive with both parties – pointing out weaknesses in the case, noting the costs of trial, and emphasizing the uncertainty of a jury trial. In this way, each party is forced to make a true evaluation of the case and come to a realistic valuation, likely to be more in line with the other party (who is making a similar analysis).
The mediation typically begins with all parties in one large conference room. The mediator begins the session by talking about how the mediation will work and discussing the rules of mediation. One rule is that the mediation continues until the mediator declares an impasse. Another rule is that what happens at mediation stays at mediation – the moves of the parties, and everything said at mediation, is confidential and cannot be brought up at trial. The parties also sign a mediation agreement agreeing to the rules, and to the payment terms (the mediator is paid by the hour, split equally between the parties).
Once the mediator completes the opening, the plaintiff then gets the chance to speak. The plaintiff’s attorney usually then presents the plaintiff’s side of the case – arguing why the plaintiff believes that it will be successful at trial. Sometimes, this is simply done by speaking to the other side. Other times, the plaintiff’s attorney presents a Power Point.
It is worth noting here that, in a typical case – particularly personal injury – a plaintiff’s attorney who waits to present his or her case at mediation is wasting everyone’s time. This is because the defendant almost always evaluates a case well before mediation. This is particularly true if the defendant is an insurance company, in which case the adjuster who will attend the mediation will have “round-tabled” the case with the supervisors at the insurance company and decided upon the authority to be given to that adjuster to settle the case. For this reason, it is important for the plaintiff to present his or her case, not at the mediation, but well before. I have seen mediations where the plaintiff presented compelling evidence in the opening, only to have the adjuster immediately declare that the mediation must be adjourned, because the adjuster did not come with sufficient authorization to pay what the case is plainly worth. Had the plaintiff’s attorney presented that evidence a week or two earlier, there would have been no need for a delay. For this reason, I make it a habit to present my case well in advance of the mediation, whether by phone call, a video presentation e-mailed to the parties, or – in some serious cases – I have created a website about the case, which I have shared with the parties.
After the plaintiff presents its case, the defendant then gets the chance to speak. Defense attorneys almost always speak directly to the plaintiff at this point, and I always warn my clients about this. This is the only chance in the litigation where the defense attorney gets to make his case directly to the plaintiff, and it is an effective tactic. I always caution clients to listen politely, do not interrupt, and do not react.
To this point, all of the talking has been done by lawyers. However, once the defendant speaks, the mediator sometimes offers the plaintiff or defendant the chance to speak. If a party chooses to do so, my advice is to be short-and-sweet. While this rarely makes an impact, it can be effective in unique matters.
This concludes the opening session, and the parties then go into separate rooms. The mediator typically speaks with the plaintiff first, asking some additional background questions, and talking generally about the case. If the plaintiff has not already done so, he or she makes a demand – an opening number to settle the case.
There are different strategies to settlement negotiations. However, one tactic that always makes me crazy is unrealistic demands and offers. Some plaintiff attorneys like to start with crazy numbers, which everyone knows to be entirely unrealistic. Similarly, some defense attorneys (often, but not always, in response to such absurd demands) start with ridiculously low numbers. In my view, this is all a waste of time and actually lessens the chance of a successful mediation.
After getting the plaintiff’s demand, the mediator speaks with the defendants and then comes back to the plaintiff with a counter-offer. The plaintiff then makes a new offer, and the process continues until the parties either reach a resolution, or the mediator calls an impasse.
Going into a mediation, your attorney should be intimately familiar with the facts of the case, your damages, and (in an injury case) the applicable medical liens, so that you know what is going into your pocket with any settlement number. The defense will value the case based on the presentation from your lawyer and what they think of the risk of going to trial. If your lawyer seems unfamiliar with the case, this is a red flag to the insurer that he or she doesn’t take your case seriously and will not be prepared to try the case. If your lawyer is one who is known for just settling cases, then the defense will see little risk. If your lawyer does not even handle the mediation, and refers your case to another lawyer for this process, then you can’t fire him quickly enough.
Take mediation seriously and hire a lawyer who does too, and it can be the best day of your litigation.