Despite the fact that more than 90 percent of litigation is resolved through an alternative to trial -- mainly though mediation --there is still a prevailing myth that proposing mediation is a sign of weakness. In this view, either the defendant sees the risk of liability or the plaintiff recognizes the risk in establishing liability, so mediation is proposed out of fear.
The reality is that there is always risk, on both sides and in all cases. Positioning a case for a resolution in mediation where the parties are in control over the outcome is a sign of strength and empowered advocacy. The only people who benefit from litigation are the litigators themselves. The parties to a dispute, on the other hand, must endure the financial and emotional toll of litigation. For parties litigation is at the very least a distracting process and at worst destructive and all-consuming. Working to get a case into mediation as early as possible increases the chances of an early resolution and an early end to litigation and all of its costs.
Over the past couple of months, I've had several very early mediations. They occurred pre-filing or after very limited paper discovery. All but one settled. The outcome of those cases seemed satisfying for all parties and made more financial sense for the plaintiff and defense -- regardless of the settlement amount. Some cases were significant 6-figure settlements and others modest 5-figure settlements. Other terms to the agreements (e.g. converting a termination to a resignation, a positive reference letter, an apology, a revision of a non-compete clause) also afforded both sides the opportunity to come to closure on issues that provide more value early in the life of a dispute and would be generally unavailable in litigation.
An attorney for an insurance carrier explained that this particular carrier recognized a 40 percent reduction in costs after they instituted their early mediation program. The program involves targeting cases for early resolution, working to get them into mediation before accruing significant defense costs and offering a reasonable monetary amount to settle. Thus, he was willing to pay significantly more to resolve this particular case than either the employer or its attorney.
In addition to the savings of legal fees on both sides, a well-structured early mediation provides emotional closure and efficient resolution. Financial benefits aside, engaging parties in an early mediation process puts all players in an empowered position where each party starts from a place of control. The ultimate outcome is that, when settlement is reached, everyone has a sense of closure that is rarely possible in litigation.
Over the course of this year I've also had several mediations that were held after many months and at times after years of litigation. The attorney fees overshadowed the damages in some cases. The parties had already been through the ringer of litigation -- the delay, depositions and discovery disputes; the emotional toll, the adverse publicity and the distraction. In these later mediations, much of the litigation costs had already been incurred. At the same time, much of the benefit of mediation as a preferable alternative to litigation had been lost.
A resolution that allows your client to avoid the many costs of litigation is a better resolution for your client regardless of the settlement amount. I recognize that not all cases or parties are amenable to early mediation and some cases must be litigated. In guiding your clients, help them understand the big picture, provide them a thorough explanation of what a late-term mediation would look like compared to an early one. Explain that it is not only the financial costs incurred in the litigation process, but the emotional toll that is almost inevitable for all parties. A productive, early mediation offers the possibility of financial settlement and peace of mind.
