I successfully represented my client at a mediation where I resolved a complicated lawsuit several days ago. I have fought for people injured in collisions at numerous mediations over the past 38 years and wanted to share some thoughts about how to make them work.
The tractor-trailer pictured here crashed into seven stopped vehicles at 60 miles per hour. Three caught on fire. The tractor ended up on top of the bridge’s guardrail. The collision shut down I-35 in Fort Worth for the rest of the day.
Seven people were hurt, one critically. My client seriously injured his low back. It was a miracle no one died.
There was a minimum commercial insurance policy of $750,000 available to settle the claims, and only through an endorsement that adds unlisted vehicles like the 18-wheeler here to the existing liability policy.
I was able to recover a favorable amount of money for my client (the exact figure is confidential) and substantially reduce his medical bills. I am now working to obtain more money for him from his underinsured motorists and another insurance policy.
The team at Berenson Injury Law specializes in these car, truck and tractor-trailer crash cases, but this post applies to all mediations.
What is mediation?
It is a voluntary settlement conference where the parties attempt to reach an agreement with the help of a mediator.
This valuable tool should be used if someone has been injured in a car collision and a lawsuit is filed, and occasionally before someone has to file suit.
Mediation has been used for decades and is now a required alternative dispute resolution device.
Almost all personal injury cases are resolved out of court. Our firm always explores settlement possibilities that will benefit our clients.
Abraham Lincoln (who was a well-known lawyer before he became president) observed that “a good settlement is better than a good lawsuit.”
After a lawsuit is filed, the plaintiff’s attorney has a general range of the case’s value. He may have already made a demand on the defendant’s lawyer. But the parties may be thousands — or hundreds of thousands of dollars — apart. Or no demand may have been made or no response filed yet.
The parties often are at a stalemate. A primary cause can be that it is difficult to know what the lawsuit is actually worth. A jury would first have to return a verdict. Before that happens, there is no simplistic formula used like “three X medical bills” (contrary to popular belief). Every case is different.
In order to be more accurate, we consider 62 variables to evaluate the value of our cases. To learn more, click on How much money is a car accident case worth?
How does mediation work?
The parties, their attorneys, and insurance company representatives meet at the mediator’s office. This neutral site is important so no side has “home field advantage.”
The parties are shown to conference rooms on opposite ends of the mediator’s office. A joint opening session uses up valuable time and creates a combative mood so is rarely used any more.
As the day progresses, the mediator conveys demands and offers back and forth between the rooms. He leaves and allows the party and his attorney to analyze the new number and respond.
The mediator has no vested interest in the outcome and is therefore able to see all positions without any preconceived ideas. He can help a party realize what he may be missing in his analysis and coax him (and his insurance company or the business that owns the truck and hired the driver) to pay more money or accept less compensation.
The plaintiff can gradually reduce his demand and the defendant and his insurance company can reciprocate. Each side tests the waters with a new move. It can be a little like selling or buying a car, with fair market value being what the insurance company is willing to pay and the injured person is willing to accept.
If an agreeable dollar figure is reached, other issues such as subrogation liens, indemnity, expenses, confidentiality, and payment are negotiated. A written agreement is signed and dismissal documents are filed with the court.
When does mediation take place?
The parties will have already exchanged evidence during an involved process called discovery. It is designed to allow each side to learn the other’s strengths and weaknesses.
The parties have entered into a scheduling order with the mediation deadline set a month or so before trial. The pressure of going to trial can act as a powerful incentive to bring the case to a close.
What are the pros and cons of mediation?
- Good chance of settlement. Some cases can’t seem to ever settle, at least not informally. The insurance company representatives may not have reviewed the evidence or have been forced to reach a decision yet. They may not have stopped to consider the risk of a large verdict. The adjuster and attorney can study the plaintiff’s case up close and consider his point of view.
- Less stress. The driver is not in a formal courtroom but in a lawyer’s office. The plaintiff has a lot of time to speak with his attorney when the mediator is in other rooms so he can ask questions and be more fully informed. He can also learn about any weaknesses in his case and consider their effect on the jury verdict.
- More control. The plaintiff’s lawyer helps select the mediator, date, and time. In the controlled environment he can make the opening demand and set the parameters. He can reject inadequate offers, end negotiations, and proceed to trial.
- Less expensive. It is much cheaper, quicker, and easier than going to trial or other alternatives like arbitrations.
Cons: None except possibly
- Time. Some cases need to go to trial or can never be settled. The parties often have different ways of seeing the evidence or predictions of the final outcome. Personality conflicts, financial goals and constraints, and emotional issues may also be clouding judgments.
- Money. The mediator is not free, but his fee is well worth it if the case settles.
How can the plaintiff get more money in a mediation?
Here are 10 rules the plaintiff’s attorney should follow.
Rule #1 Pick the best mediator
Selecting the right person for the case is essential. Different mediators have different styles and experiences. Some might work better with different clients, insurance companies, lawyers, and cases. Some are facilitators who gently guide the parties into resolving their differences, others are evaluators who are more aggressive and voice their opinions as to the value of the case, and still others use both techniques.
Rule #2 Pick the best date
Timing is also critical. Mediations usually won’t work if adequate discovery has not taken place. But there is no reason to wait until the eve of trial. Mediations have a higher success rate if the defense has already made an offer; otherwise it can take hours to make a paltry one and the plaintiff might stormsout.
Rule #3 Work with the client
- Explain what mediation is and why it is being scheduled. The decision to settle or go to trial is his.
- Answer all of his questions, especially the amount of money he is expecting to receive and what his other goals are.
- Tell him how you plan to negotiate and make sure you are in sync with his expectations.
Rule #4 Work with the defendant’s attorney
- Find out what unusual concerns he has.
- Consider asking opposing counsel if he wants a conference call with the mediator to hash out any problems in advance.
- Make sure that he has the entire file. For example, you cannot spring a new MRI on him that shows that the plaintiff has a herniated disc.
- Make sure an insurance company representative with decision-making authority will be in attendance or available by phone, even if the session goes after hours.
- Forward a proposed settlement agreement that can be signed at the mediation if the case is resolved.
Rule #5 Work with the mediator
- Forward any demand letter, key evidence, briefs on critical legal issues, the status of negotiations, sensitive issues, and the dynamics of the parties.
- Call or meet him to discuss the above.
Rule #6 Research the numbers
- Learn what similar lawsuits have yielded in local verdicts and settlements and bring them with you.
- Map out estimated demands and offers from all sides and calculate how he can arrive at the hoped for result.
- Get approval of A, B, and C goals (best case, good, and minimal amounts of money the client will accept).
- Have an Excel spreadsheet loaded on a laptop to show the client what his net recovery will be at different numbers.
- Update the “paid vs. incurred” chart showing which bills health insurance has paid and what liens exist.
Rule #7 Prepare the case
- Strategize. Consider all tactical advantages. Know the case inside out.
- Look at the case from the opponent’s point of view and consider what obstacles lie in the path of an agreement.
- Supply critical evidence, including photographs, video, excerpts from depositions, and damage proof.
- Focus on how to build consensus and close the deal.
Rule #8 Use the mediator
- He can help anticipate the expected reaction to a negotiating move.
- He can lean on both sides to arrive at a happy medium.
- He can tell the plaintiff if he has a serious problem in his case that is holding down case value.
- He can explain the other side’s position and barriers to settlement.
- He can create a “mediator’s proposal” to try to break an impasse at the end of the day.
Rule #9 Have a flexible strategy
- Track the percentage move and direction in the other side’s numbers.
- Hide the bottom line figure (C above).
- Reconsider strategy if appropriate.
Rule #10 Be patient
Mediations can be frustrating. Each side is dug in and believes they are right. This usually takes a lot of time to change, if it ever does. The session can drag on for hours and appear to be in slow motion. But as long as progress is being made, there is a chance the case can be amicably resolved. If it is scheduled to end at 5:00 o’clock, negotiations pick up at 4:00 o’clock.
If the case has substantial damages, the settlement authority of the adjuster in attendance is exceeded, or new issues are discovered, a second session may be necessary or the mediator can work to get an agreement hammered out on the phone.
Why are some mediations successful and others are not?
If the above tips are used, the plaintiff’s chances of resolving the case are greatly enhanced. He may end up with more money in his pocket that he would net from a jury award and the process is much easier.
Trials are combative. The goal is to win. The lawyer is sharpening his knives to kill the opposing side and rereading The Art of War.
Mediations are collaborative. The goal is to move on. The lawyer is cutting up fruit and highlighting Getting to Yes.
The informal and relaxed tone at the settlement conference can make them work. The participants are not as nervous as they would be at in the court room where they would have to testify under oath and be cross-examined.
Furthermore, everything that is said is confidential so that encourages candor. If the case does not settle, the other side is not allowed to reveal at trial any information that was disclosed.
And the process is voluntary and entered into in the spirit of compromise. There is an air of possibility.
But sometimes they don’t succeed. The plaintiff may have overestimated the size of his financial recovery and/or the defendant was confident that he could win the case or at least minimize damages.
But if the parties were closer in their evaluations of the case, their attorneys could presumably have already negotiated an agreement between themselves.
It is an axiom that a settlement is successful if neither side is happy with it. And that a bird in the hand is worth two in the bush.
Most car and truck wreck cases can and should be settled prior to trial. Using this advice can help get an injured person get the most money at a mediation.