Mediation Dynamics: What We’ve Learned
Updated: Apr 18
The pandemic has done a number on the legal profession and has deeply curtailed legal proceedings. Here are a few observations from our Pacific ADR mediators about mediation and recent trends.
Is it more difficult to settle cases today than in the past?
Yes and no. The reasons are many. Society has become increasingly polarized and uncivil amid the ongoing pandemic. Since the recent economic downturn, many individuals are embittered and haven’t recovered economically, so their verve to fight for what financial stability is great . This is particularly true of business disputes, personal injury claims, contract disputes, and construction claims. More and more litigation attorneys are competing for a shrinking number of litigated cases, yet the number of cases going into mediation are on the rise. These realities have combined to increase the ambient level of stress that is present in most mediations regardless of their subject matter even though mediation is becoming more popular.
Name the three biggest challenges that are faced in mediation?
1.) In the past, and often today, frequent failure of claims professionals to personally attend mediation. Recently at Pacific ADR though, and particularly through the use of video software, we have had a great success in getting claims professionals to attend mediations.
2) Hostility between plaintiffs and their own attorneys. Possibly due to a lack of communication between a client and their counsel. Frequently, attorneys do not educate their client as to what to expect in mediation, and to their detriment. If a client was better informed both of procedure and expectations, more cases would settle.
3) In multi defense cases, there is a chronic failure of defendants to negotiate an agreed apportionment scheme prior to mediation. This may hinder the ability to reach settlement in multi-party disputes, oftentimes resulting in a second mediation.
How many of those skeptical about mediation become convinced of its benefit?
To Plaintiffs attorneys: Think about probability. What is the probability of beating the best settlement offer in mediation, at trial? It’s interesting how the use of statistics and probability is not a driving factor in negotiations. Pacific ADR plans on creating a live webinar on this subject matter.
To Defendants: If you happen to “win” at trial, what are the costs of of proceeding to trial? And, if you lose, again, statistics show that the losses are greater than at mediation. Knowing this before “trying your luck” in the courtroom may yield more favorable results.
To the Skeptics who claim not much happens in mediation until the last hour or so, so why schedule a full day mediation? While there are many cases where a half day is sufficient, in many more cases, the time it takes to open the channels of communication between parties requires more hours. This holds true in matters with high emotional content such as personal injury disputes, factually complex cases such as construction, or multi party cases.
Is mediation REALLY more cost effective?
Mediation cost remains a bargain in the United States, even if a superstar mediator is charging tens of thousand of dollars in fees. In 2021 the median hourly fee for file review/preparation for all experts responding is $400/hour.
The median hourly fee for depositions for all experts responding is $475/hour.
The median hourly fee for testifying in court for all experts responding is $500/hour.
66% of experts responding require retaining counsel to sign a retention agreement.
57% of experts responding raised their rates in the last five years.
With just the basics taken into account, one day of document review, and one day of depositions, your expert witness is already costing you $7000. Math does not lie.
When should mediation occur?
Any time is a great opportunity to mediate and settle.
Early mediation often brings many opportunities to settle reasonably at relatively low litigation expense and before parties become emotionally committed to their litigation positions. Many cases do not require extensive discovery in order to properly evaluate them. More importantly, delayed mediation or mediating close to trial allows parties to become fatalistic and are willing to let the chips fall where they may.
How Do You Handle an Insulting first Offer?
With gritted teeth. Just because the plaintiff’s demand is astronomical, a correspondingly unrealistic offer isn’t obligatory. Many, if not most, plaintiffs need money. Presenting a first offer at the low end of reasonable often has a transformative and positive effect upon the negotiations. Such a strategy is often especially effective in half day cases.
Does the mediator prepare a settlement agreement?
The mediator is not responsible for the written settlement agreement. They are essential, but should always be prepared by the parties’ attorneys. Ideally, template settlement agreements should be brought to the mediation by counsel. If they are not, a mediation should continue until both parties have signed the settlement agreement. This ensures that there is no oversight or lapses in communication.
What happens if a case does not settle at mediation?
Pacific ADR mediators follow up persistently. Follow up has been shown to demonstrate good faith in settlement efforts, and the continued engagement of parties typically results in a settlement after the mediation ends.
What are the most common challenges at mediation?
There are a few:
Unwillingness to be flexible
Lack of communication between parties, or attorneys and their clients.
Lack of participation from claims adjusters/ insurers.
Court ordered mediation. At times one or more parties use the process for strategic purposes and have no intention of settling.
Hopefully, the above observations are of some value for legal practitioners and clients alike. If you have any ADR related questions, please email (firstname.lastname@example.org) or call us at Pacific ADR at any time. We will be happy to assist you.