Philip E. Cook | JAMS
Many cases can benefit from early mediation.
Parties often reject the notion of early mediation because they believe they need more information to resolve the dispute. In some cases, more information is necessary. In other cases, however, parties can assess litigation outcomes—based upon what they know, can reasonably anticipate and are willing to exchange in connection with the mediation—and meaningfully value the case without further litigation.
Benefits of early mediation
It can set the tone. Early mediation can help set a productive tone for the litigation. Early in my career, a senior attorney instructed me never to bring up settlement with the other side, believing it would be taken as a sign of weakness. When I later became responsible for cases, I began to raise settlement options early, expressing this premise: “We are on two parallel tracks, one to settle the case, one to try it.” And I proposed not letting one interfere with the other.
It lets you learn about the case. Whether representing plaintiffs or defendants, busy litigation counsel tend to advance their preparation of a case for the next deadline. In some firms, lead counsel may rely upon others initially to analyze and prepare a case. In these instances, early mediation can be a catalyst to prompt a more comprehensive and candid consideration of a party’s claims or defenses. Exchanged briefs may clarify or provide additional information about the other side’s position. And early mediation offers an opportunity to learn about the opposing party and their counsel.
It gives you a chance to settle the case. The benefits of an early resolution can be significant. Of course, ongoing litigation efforts cease and resources are preserved. Removing the stress (or at least the distraction) of a case allows parties to move on and turn their attention to other matters. An early mediation provides a forum for parties with intensely personal connections to a dispute to “have their day in court” sooner rather than later. For a defendant, risk becomes certain. And for a plaintiff, funds become available immediately.
It provides information. Without settlement, one primary value of early mediation is information—about both the other side’s case and yours. Early mediation is an opportunity to develop your narrative and analyze how it will play out with a competing narrative. It requires a focus on damages and clarity about the range of potential recovery or risk. It may prompt you to revisit your expectations about case outcome (and thus case value)—whether because of new information or perhaps a mediator’s reaction to your case.
When you properly prepare, early mediation should prompt parties and their counsel to consider litigation objectives—both in terms of what a litigant wants from the case and the associated costs (whether personal or financial). For a party funding their own legal expenses, a litigation budget delivered in advance of mediation will allow the party and their counsel to conduct a cost/benefit analysis of further litigation.
Finally, early mediation—when approached with transparency, with reciprocity and in good faith—can create a path forward to revisit settlement as the litigation progresses.
Downsides of early mediation
It can be frustrating. A mediation that does not result in settlement often results in frustration or annoyance, usually directed at the other side:
- “This was just a waste of time and money.”
- “They just wanted free discovery.”
- “They didn’t come here in good faith.”
Some frustration when early mediation leaves the parties far apart is certainly understandable. But a disappointing outcome does not negate the value of early mediation, especially when counsel work together to ensure the process is designed to be productive.
It can be counterproductive. An early mediation can be proposed to send a message. It may be a defendant who wants to make sure the plaintiff personally understands the strength of the defense—not just plaintiff’s counsel. It may be a plaintiff who wants the defendant and their insurer to know the demand exceeds the deductible or self-insured retention. Or it may be a party that wants to show their resolve, perhaps refusing to negotiate or moving very little, and letting the other side know they intend to try the case in order to obtain a better settlement. In my experience, these tactics rarely have the intended effect; they instead just prolong the process of getting parties back to the table to focus on a reasonable settlement value.
What kinds of cases might be suited to early mediation?
Those involving ongoing relationships. Early mediation can be crucial where preserving business or family relationships is a priority, despite the dispute. It can also be helpful to preserve a business operation or other asset that provides resources to parties, despite their conflict.
Those involving pre-filing mediation requirements. Some contracts, such as real property leases or purchases, often include a pre-filing mediation requirement. Failing to fulfill a mediation requirement before heading to court can strip a party of the right to recover attorneys’ fees if they prevail. In other instances, breaching this contractual obligation can result in a motion to dismiss or stay pending mediation.
Those for which early case valuation is possible. Early mediation is a good option in any case where the parties can assess litigation outcomes—based upon what they know, can reasonably anticipate and can obtain by right or in connection with the mediation. For instance,
- For early mediation in an intellectual property case, the defendant typically discloses revenue and units sold for accused products, together with financial statements covering the relevant period.
- For early mediation in a class or representative wage and hour case, the parties usually work from a common dataset covering the relevant period of time, including the number of current and former employees involved, the total number of workweeks (in a class action) or total number of wage statements (in a PAGA case) and where relevant company policies, samples of time records or wage statements, and time clock data.
Could early mediation be effective for your case? Consider the following questions:
- What do you know about the potential recovery or risk in the case?
- What more would you like to know about the case to more confidently or accurately assess its value?
- Is the information available by right (e.g., Cal. Labor Code, 1198.5; Cal. Corp. Code, § 1601) or in a voluntary pre-mediation exchange between the parties?
- If not, what sources of information exist besides formal discovery or expert opinions?
- What range of uncertainty exists without that information?
- Can you meaningfully assess the case’s value by analyzing that range of uncertainty instead of waiting for certainty?
- Do you know enough about the case to explain your position, with at least some degree of detail, in an exchanged brief?
Balanced against the cost of litigation, both personal and financial, clients and their lawyers should make sure they are not overlooking an opportunity to mediate early.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.