At some point, most, if not all, of my clients participate
in mediation. Mediation is a meeting
with a neutral party, often a retired judge, who attempts to facilitate
settlement discussions. The majority of
cases settle as a result of mediation.
Some do not. In many ways, it is
like a trip to the used car sales lot where both sides have the opportunity to
kick the tires, look under the hood, and share their opinions as to what the
car, in this case, the claim, is worth. Even if unsuccessful, I believe mediation is
important because it gives the client a clear choice as to whether it is wise
to go to trial or not. Some choices are
easy. Some are not.
While I
encourage clients to participate in mediation, I discourage optimism that mediation
will lead to settlement. Otherwise, the
client is set up for disappointment and a belief that, regardless of the
fairness of the offer, the case must settle even for an unsatisfactory low
amount. I always point out the unlimited
number of reasons why cases do not settle, including:
1.
The insurance representative does not have sufficient
information to value the case.
2.
The defense lawyer has not done the work necessary to
value the case.
3.
Either the insurance representative or the defense
lawyer has an unrealistic view of the case and the other person is unwilling to
change that view.
4.
The insurer recognizes the potential value of the case
but, if a jury finds a certain way, the case could be worth much less.
Like any trip to the sales car sales lot, sometimes an
insurer may agree to a mediation just to test a client’s willingness to go to
trial. This happened to clients of mine
recently when an insurer stuck to an unreasonable valuation position for most
of a day.
At the same
time, I emphasize that my clients must know their case in order to decide
whether settlement offers are sufficiently fair to justify not going to trial.
This includes knowing:
1.
The strong parts of the case.
2.
The weak parts of the case (I call this “understanding
how your case can be lost.”)
3.
The unknowns in a case, e.g., how a jury determines non-economic
loss.
4.
The maximum amounts of losses that the evidence will support
in a jury verdict.
5.
How a jury can award less than the amount of losses
requested.
6.
The possibility that recovery can be reduced by fault
on the part of the client.
7.
The risk of attorneys’ fees if recovery is less than
what was offered in settlement.
8.
The costs and fees in the case so that the net recovery
can be calculated.
9.
The pressure on the client to settle their case that is
in all mediations. They must be
psychologically prepared to leave if the offers are unfairly low.
In the end, it is my goal to have the important decision of
settlement made in the same way other important decisions, like buying a house, are made, i.e., with thought
and the maximum possible information.
In the case mentioned above, my clients did their analysis and decided
to leave the used car sales lot without settling their case.
You have to
play your cards smartly. See www.Junelawyer.com
