Dallas Bar Association

Mediation Success: 3 Tips from the Client’s Perspective

by John DeGroote

As we all know, the best way to spend less on litigation is to have less litigation, and mediation can be a great way to get there. But mediation doesn’t always work. Occasionally the other side isn’t ready, willing or able to settle on mediation day. This article provides a few tips on how you might get the most out of your next mediation, whether you settle that day or not.

Tip Number One: Manage Expectations Before You Get There. Not so long ago I had my public-company client ready to settle a case as we walked into mediation. Unlikely as it may seem, my client had assessed the case, understood its position and formulated a settlement plan that would resolve our aging case before trial. Ten minutes into our mediation the other side handed me a newly-filed pleading, adding antitrust claims to our garden-variety commercial dispute. As fun as that short meeting might have been for opposing counsel, do you think our case settled that day?

How is satisfaction judged, whether you’re in litigation or watching your team in the playoffs or driving to Telluride? Clients, sports fans, and kids in the third row judge success against their expectations, and how you prepare them for the journey will have an impact on the process. Does your client think the case is the rare $100,000 soft-tissue injury case? Does your opposing counsel think your client will pay more for the claim than other similar claims? Does your mediator think next week’s mediation will end before sundown? If they’re wrong—way wrong—isn’t it easier to begin moving their position before mediation day?

Tip Number Two: Settle Halfway if You Can’t Settle It All. If you don’t settle today, is the only alternative to return to full-scale litigation? No. As your case heads toward impasse, begin thinking of how to make your big case a small case if you can’t settle.

As it turns out, some stones can go unturned. What do you really need for this dispute? Do you really need that laches defense, or that deposition in Columbus or that customer’s deposition? What will the other side give up if you waive it? Since neither will be successful, can you trade your laches defense for the other side’s gross negligence claim? Or better yet, can both sides combine a few of their less promising positions, claims and discovery requests to streamline what’s left?

If you can’t narrow the dispute, can each of you have less at risk? One way to achieve this is through a high-low agreement, which is a form of settlement agreement where the case continues toward traditional resolution through trial or arbitration, but the parties agree that, no matter the outcome in the proceedings, the plaintiff will recover at least x dollars but the defendant will pay no more than y dollars.

Under this arrangement the plaintiff is certain he will recover at least the number at the low end of the range, and the defendant caps her losses at a number she can deal with. High-low agreements can eliminate the defendant’s fear of a runaway result while ensuring the plaintiff recovers something. Just as importantly, they can make the case smaller and easier to resolve when it’s time to get serious about settlement.

Tip Number Three: Exploit Nonsettlers’ Remorse If You Can. Not all parties who refuse to settle are happy with their decisions. “No” sounds tough on mediation day, but spouses and colleagues and bill collectors and insurers occasionally have their own ideas. Unfortunately, the moment has passed. Or has it? Texas Rule of Civil Procedure 167 and Federal Rule of Civil Procedure 68 provide mechanisms for defendants to make written offers of judgment, with stated consequences if the offer is rejected and not bettered at trial. These rules give political cover to a defendant who wants to test whether the plaintiff who rejects an offer at mediation really wants the case to go the distance.

Importantly, these three tips are far from an exhaustive list. Clients and their counsel who focus on reducing the gap between the parties’ positions—before, during and after mediation—can be in a position to settle their dispute when it’s ready.

John DeGroote is a former general counsel currently serving as the Liquidating Trustee to the BearingPoint, Inc. Liquidating Trust through John DeGroote Services, LLC. He can be reached at jd@johndegroote.com.    

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