A few months ago, in a wrongful death case I have against one of the biggest companies in America, the company’s lawyer asked: will you agree to a mediation?
My prior firm’s founder, Jim Beasley, Sr., had a simple method to mediation: he told the representative to call and figure out what their highest number was. Then he told them if it was settled or not and left the mediation.
I haven’t tried that one yet, but maybe I should.
I’m not a fan of mediation. Mediation is useful where the parties have some shared interest in mutually resolving their dispute but disagree on the terms of the deal, like with, say, unions and employers. The workers want to work and the company wants to keep on running. As the jargon of negotiation theory puts it, for both of them, their ‘best alternative to a negotiated agreement’ (“BATNA”) would likely leave them both worse off than reaching almost any deal. In the jargon of game theory, their negotiation is a “non zero-sum game.” If they reach an agreement, they both do better than if they didn’t.
But that’s not the situation in catastrophic injury litigation. My client’s “best alternative” to settlement is a jury verdict that holds the defendant accountable for the full extent of my client’s injuries. The defendant / insurer’s “best alternative” is a jury verdict absolving them of responsibility. My client and the defendant don’t have any shared interests. Rather, they each have the similar interest in ending the litigation and avoiding the risk of losing, but it isn’t a “shared” interest. Civil litigation is a “zero-sum game.”
Thus, when it comes to serious injury lawsuits against a single defendant — where the only issue is the amount the defendant is willing to pay to settle the case — it’s hard to articulate what, exactly, the mediator can accomplish. Assuming the clients and lawyers aren’t irrational, there’s little for a mediator to work with, there’s just a number on one side and a number on the other. I don’t need a mediator for that. I know the numbers I’ve recommended to my client. I know what my client has told me. If a defendant actually wants to settle something, they know how to find me to convey an offer to my client.
But I try to keep an open mind, so I told the lawyer for the big company that I’d mediate so long as a few ground rules ensured that it wasn’t a complete waste of time (for which, by the way, the defendant’s lawyer is getting paid). They agreed to most of the preliminary conditions.
Then my client and I wasted half a day on a completely bogus “mediation.” It wasn’t the mediator’s fault; they did as well as they could, and candidly admitted by lunchtime that the whole process had been fruitless. To this day, I don’t quite understand what the purpose was of the mediation. To run up some extra billable hours for the defense lawyers? To see if I might lower the demand if they just wasted enough of my time? Who knows.
I’ve read plenty on negotiation theory, and, frankly, it has never given me much of use. Consider this recent article from Harvard’s Program on Negotiation about dealing with insulting offers in litigation negotiation. Here’s their first suggestion:
Novice negotiators often feel obligated to immediately respond with a counteroffer. Savvy bargainers don’t; instead, they change the subject, asking about facts or principles—such as the full impact of not settling a lawsuit—or about nonmonetary issues.
Next, they give their own perspective on what should drive the discussion. Keep in mind that choosing not to answer an unreasonable offer is an implied rejection. Talking about relevant facts, principles, and interests will expose the offer’s flaws and often lead to progress.
Problem is, there are no “nonmonetary issues,” and giving “[my] own perspective” on the case won’t accomplish anything. If we’re sitting down, then by that point the defendant knows all about my “perspective” on the case, from the complaint to the motions to the questions I ask at deposition to the content of the expert reports. Talking about it more won’t help.
But I don’t want to give up on mediation entirely for single-defendant injury cases. So what, then, can help? I have three suggestions, many of adapted from excellent suggestions made by other plaintiff’s lawyers on listservs.
Suggestion #1: Do not mediate unless the defendant has both (a) made a reasonable offer in writing and (b) has agreed to bring a representative with authority to settle at your current demand.
This isn’t a matter of game theory. It’s a matter of making sure you’re playing on the right field.
For (a), why bother wasting all morning watching a defense lawyer or insurance representative hem and haw over insultingly low numbers? If they have a genuine interest in settling it, they should have no problem walking in with an offer.
For (b), if you agree to “mediate” with someone who can’t pay you what you’re asking, you’re admitting to the defendant that you’re not really asking that much. Either you shouldn’t be willing to do that — because it undermines you from the start — or you need to do a better job at figuring out your demand.
Suggestion #2: Let the defendant both pick the mediator and pay for them.
What good is a mediator with no influence over the defendant? You should be confident enough in your assessment of the case to be open to a dialogue with anyone — indeed, you should welcome criticism of your case — and you should be focused on ensuring the process is helpful to the other side.
All that said, don’t waste your money on being told you’re going to lose. If the defendant is serious about settling, they should be willing to pay for it.
Suggestion #3: Don’t let a defendant control how the “value” of the case is calculated.
Since law school, I’ve heard over and over that the “settlement value” of a case is “what the plaintiff might get at trial” multiplied by “how likely the plaintiff is to win.”
It’s wrong for two reasons.
First, it’s wrong as a matter of statistics and game theory. That’s the math we use to calculate the “expected value” of events that have occurred a bunch of times in the past and which will occur over and over again in the future, like throwing dice on a craps table. How many times are you going to try your case? Rare is the case tried at all, and even more rare is the case remanded and tried more than once, and even rarer the case tried more than twice.
Second, it’s wrong because it depends entirely on lawyers’ inflated perceptions of their ability to predict how trials will go and what juries will do. “What the plaintiff might get at trial” is a big range, a range over which lawyers will disagree sharply. “How likely the plaintiff is to win” is at best guesswork. Anyone who claims they know the difference between a case that is, say, 55% likely to win versus 73% likely to win, is just fooling themselves.
No, the settlement value is how much your client is willing to take in lieu of trial. Period. There’s no dubious trial prophecy math to it. There are the harms and losses your client suffered and the amount they’d accept to resolve it all. Adding “trial math” to it just turns the whole process into a negotiation against your client’s rights.
Don’t play that game.