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Mediation is a practical and cost-effective forum that is best used to help parties who might be willing to settle a case but need help closing the gap between their positions. It is a forum that courts strongly encourage.
Benefits to Mediation
Mediation is a powerful tool for dispute resolution because it gives parties a confidential, cost-effective way to solve their dispute. The parties also have more control over the outcome and can design their resolution, instead of risking a bad outcome at trial.
Even if the parties cannot come to a satisfactory agreement, the case simply goes back to litigation – and the parties lose little by trying mediation.
How Does the Mediation Process Work?
Mediation typically occurs after a court action has begun. After the plaintiff begins the case, both sides exchange relevant documents and take sworn testimony from witnesses at a deposition. This period in a lawsuit is called “discovery.” During discovery, each side uses the information obtained to determine the strengths and weaknesses of their case. With these strengths and weaknesses in mind, each party then encourages the other to reduce their demands and settle at mediation.
When the parties are ready to mediate, they typically ask the Court to pause the case to allow time to mediate. This usually happens during or at the end of the discovery process. Mediation can proceed in a few ways.
Settlement Conference
Sometimes, the judge that is hearing the case will make themselves available to conduct a settlement conference. This obviously depends on the judge’s schedule, but it can be a very effective tool to resolve a case. Not only does the judge know the facts of the case very well, but they can offer a preview of what the trial of that very case might be like in their courtroom. If, during a settlement conference, the judge indicates to one side that their case may have difficulty at trial, it is a clear message that that side should reduce their demand and settle.
Independent Mediator
More often than a settlement conference, the parties agree on an independent mediator. This is usually an experienced litigation attorney who has extensive experience with the type of case being mediated. It’s also helpful to select a mediator from the area where the case has been brought. That way, the mediator can use their experience to tell the parties “In this county, your type of dispute is typically worth x amount of dollars.”
Before mediation, each side submits a written statement of their case (with evidence) to the mediator so that the mediator can better understand both sides of the dispute. Mediation typically occurs at the mediator’s office, with each side placed in different rooms. The mediator goes back and forth between the rooms and talks with each side. The mediator does not have the authority to decide the case, but they can help each side understand the risks of proceeding to trial.
Typically, they will emphasize the weaknesses of each side’s case to encourage a resolution. This is because the alternative to mediation is usually trial. If each side is reminded of the weaknesses of their case, they become more aware of the risks of trial. They are therefore more likely to agree to a settlement that they can control instead of letting a judge or jury control the resolution of their case. In addition, if each side is reminded of the costs of taking a case to trial (which can run over $150,000), they will likely find it in their financial interest to mediate and settle.
Mediation Case Examples
The following are hypothetical examples that show how mediation can help resolve different kinds of cases.
Employment Dispute/Discrimination
In an employment case, the plaintiff employee claims non-payment of wages by their employer, as well as discrimination based on age. Discovery and depositions reveal weaknesses on both sides. The employer has trouble answering questions about the wage claim. The employee has trouble establishing their age discrimination claims.
The Judge encourages mediation and gives the parties time to mediate. The mediator has a strong background in employment litigation in the area where the case was venued and gives both sides a clear idea of how a trial might go in that county. The mediator explains to the plaintiff employee why the age discrimination claim may not succeed but leans on the employer to offer more money on the wage claim. The case settles.
The plaintiff walks away with some compensation for their lost income, as well as the sense that their employer faced some accountability. Both parties avoid the uncertainty and expense of trial.
Personal Injury
In a personal injury case, the plaintiff trips and falls on a cracked sidewalk, breaks several bones in their lower body, and is unable to resume their full life. Discovery reveals that the defendant’s fault is clear, but the plaintiff also had previous leg injuries from their days as a high school athlete.
At mediation, the mediator explains to the plaintiff that because of their prior injuries, it will be harder for them to blame all of their current struggles on the trip and fall, so they need to accept less money than they wanted. The mediator also explains to the defendant that because their fault is clear, they must be prepared to pay more than they initially wanted. The case settles. The plaintiff has some funds that they can use to make their day-to-day home life easier, and the defendant avoids the possibility that a trial would result in a much larger verdict.
Contract Disagreement
A small business has an ongoing arrangement with a cleaning company for janitorial services. One year, the janitorial company changes their fee structure, but does not alert the business to the new fee structure. The business contests a portion of the janitorial invoices issued under the new fee structure, and the janitorial company sues.
Because it is a low dollar value case, the parties do not want to pay a mediator and the Judge conducts a series of settlement conferences. At those conferences, the Judge encourages the business to understand that most of the janitorial charges would be difficult to contest. The Judge also indicates to the janitorial company that it should accept less than the full amount, because at trial, a jury might find that they were not up front about its changed fee structure.
The case settles, and the parties do not have to pay the costs of trial, which would exceed the amount of money at issue.
Summary
When facing a lawsuit, a party may feel that they are relenting when they agree to settle. However, in the long run, negotiating your own settlement gives you more control over the result of the dispute and may be the most realistic way to end your dispute and move on with your life.
Trials may cost more money and time than a case may be worth. Trials also include the very real risk that a jury may simply disagree with your position and decide entirely against you. Luckily, mediation is an option that allows parties to understand whether the case can be settled without taking on the high costs and high risks of trial.
At Bousquet Holstein, our Litigation Practice Group is experienced at advocating for clients and resolving cases in the arena of alternative dispute resolution. If you are involved in a lawsuit and uncertain about the pathway to resolution, please contact us with any questions you may have.
Gregory D. Eriksen
Gregg is a member of the firm and focuses his practice on commercial litigation. His experience as a litigator includes contract disputes, employment matters, government investigations, and legal and medical malpractice defense.