Time was, a lawyer looked forward to each new lawsuit as promising “enticing vistas of endless litigation.” More recently, however, the mantra has become “how soon can we resolve this?” The benefits of mediation – cost effectiveness, certainty of outcome and the parties’ ultimate control over the process – are well recognized. The focus has recently shifted from whether to mediate to when.
There are a number of reasons to consider mediating a dispute early on in the proceeding. Most clients today, especially sophisticated business entities, are increasingly cost-conscious, and less willing to engage in long, drawn-out court battles involving discovery of facts and documents which, in most instances, are already known. Litigation costs are often upper-most in the minds of clients, whose first question is no longer “can we win?”, but rather “what’s it going to cost me?” Many large business clients, chief among them insurance companies, are dictating litigation budgets and even billable rates they are willing to pay their lawyers.
Most sophisticated clients, including individuals as well as business entities, also recognize that protracted litigation can create barriers to a successful mediation later in the case. Once certain witnesses are required to testify, and once key factual and legal positions have become “fixed”, parties become less willing to back off a given position in settlement negotiations; this is often seen (even by the client) as a sign of weakness. If the real issues involved can be aired before lines are “drawn in the sand”, the parties are often more willing to take an open position in settlement discussions.
Most lawsuits, whether business-related (e.g. corporate, commercial, employment, intellectual property, etc.) or personal (bodily injury, landlord-tenant, property rights, wills and trusts, etc.) are focused on recovering money damages. Often, however, the real dispute lies deeper, and a successful resolution requires peeling away the layers of contention to get to the real concerns of the parties. Those concerns may not involve money primarily, if at all.
Commercial disputes may actually concern the parties’ ability to retrench and continue doing business, sometimes with each other. Early mediation provides the opportunity to delve deeper into why a dispute arose in the first place, and to structure a creative resolution to put the parties back on their desired paths, occasionally not involving the mere exchange of money but addressing the ways in which business partners can continue to deal with each other and conduct business in the future.
Even personal injury claims, where money is viewed as the only way to make a party “whole,” can call up deeper issues.
If the parties are able to meet face-to-face, and openly discuss their feelings in a non-threatening neutral setting, underlying personal and emotional concerns may be exposed which might otherwise not come to light in the court room or deposition setting. A prime example is a case where the plaintiff’s immediate concern was that the defendant corporation had never apologized for the happening of an accident – which was impossible due to the pending lawsuit. Once the defendant’s representative expressed regret directly to the plaintiff that the accident had occurred (without accepting liability for it) the matter was able to be settled quickly and reasonably in mediation. Another significant death claim was settled, prior to suit, without any monetary payment, on the defendant’s agreement to establish a fund to address safety concerns in hopes of preventing further similar incidents.
If mediating disputes focuses solely on the reasonable dollar value of the claim, without deeper inquiry into the issues behind the dispute, early resolution may be unlikely. If the opportunity to discover and address the real issue is lost, and litigation is allowed to proceed, the likelihood of a realistic settlement which addresses the parties’ real concerns is greatly diminished . While a later resolution is always possible, success is likely, with more fixed and rigid expectations, and often at greater expense to all parties.
Even when early mediation does not result in a global settlement of all claims, the actual issues in dispute can be identified, and further litigation can be more narrowly focused, and perhaps more cost effective for the parties. In such instances, the chance of a later settlement is increased. Even if settlement is not reached, the issues in dispute can be redrawn and limited at trial to the benefit of the parties and the court.
Mediation of disputes is possible, and can be highly successful, at any stage of the proceeding, from before litigation to immediately prior to trial. The issues raised during mediation change during the course of the proceeding, however, often to the detriment of a successful resolution. The benefits of an early mediation should not be overlooked, as the “first, best chance” to identify the real issues in dispute, and work towards a satisfactory resolution before committing the time energy and resources of the lawyers, the courts and the parties.