In disputes involving money, the usual scenario is that the plaintiff wants more money than the defendant is willing to pay. So, they go to a mediator who nudges the plaintiff to accept a little less and the defendant to pay a little more. The adage is that a settlement is a good one in which the defendant believes she paid too much and the plaintiff believes she agreed to accept too little. Neither side is happy with the agreed upon sum.
Every once in awhile, (and it truly is in a very long once in awhile), the defendant is actually willing to pay morethan what the plaintiff demands. So, the question arises: what does the mediator do in that situation? And, suppose the mediator was the one who suggested to defendant to pay more? Has she committed an ethical sin?
Such was one of my recent mediations. It was another lemon law matter in which the plaintiff requested that her vehicle be repurchased because the battery would not hold a charge. She had brought it in for repairs several times. After the second visit the repair shop determined that the reason was that plaintiff had installed some after-market equipment that was causing a parasitic draw on the battery, thereby draining it and thus causing the vehicle to either stall or not start. The repair shop also thought that perhaps plaintiff was driving the vehicle too few miles; she was not giving the battery a chance to charge. Plaintiff took the vehicle to three different repair shops; each reached the same conclusion that the after-market equipment was causing the battery to drain. In fact, the third repair shop, with plaintiff’s permission, had the after-market equipment removed, then tested the battery and found it to be fine.
Still, Plaintiff sued and her expert claimed that there was something within the engine preventing the battery from acting properly so that intermittently, it would drain without reason.
At mediation, plaintiff demanded a repurchase, and her attorney’s fees. By way of illustration only and not the true amounts, the value of the vehicle was $20,000 and the attorney’s fees and costs were another $15,000 meaning plaintiff’s counsel demanded $35,000. Defense counsel responded with an offer of $1,500, asking me to discuss at length with plaintiff’s counsel what the evidence showed and did not show. That is ,that both the repair orders from three different repair facilities plus Defendant’s own inspection by two different persons confirmed that the aftermarket equipment was the cause in contrast to plaintiff’s expert who opined differently.
Previously, plaintiff’s co-counsel had warned me that she knew this would be a difficult matter to win at trial but had had trouble convincing lead counsel of this fact. So, I met privately with plaintiff’s counsel and co-counsel.
After my lengthy conversation with them (in which plaintiff’s co-counsel acknowledged that winning at trial would be an uphill battle), plaintiff’s counsel acknowledged that she had her work cut out for her because now she had to speak with her clients and lower their expectations.
That conversation took awhile. Plaintiff’s lead counsel came out of the conference room with a new demand of $20,000. Defense counsel countered at $2,000.
At this point, Plaintiff’s lead counsel asked if I thought whether Defendant would be willing to pay about $12, 000. She had put pen to paper and after determining her costs and money for her client, this is what she believed was needed to settle. I advised that I got the feeling that Defendant was willing to pay far less than that as it viewed the issue as caused by plaintiff’s installation of after-market equipment and perhaps not driving the vehicle enough to charge the battery.
So, lead counsel again spoke with her client and came out with an even lower demand of $6,000 advising that this amount would essentially cover costs only and provide only a little to plaintiff.
I went to speak with defense counsel and was advised that her authority was $5,700. From previous experience with this counsel, I knew that getting the additional $300.00 would not be an issue; she would be able to do so.
But, then I did something I do not normally do, and a lot of mediators would probably say was not in my province to do: I asked defense counsel if she could ask her client for $6500 so that plaintiff could get a little more than was sought. I did explain that the amount that plaintiff was willing to settle for was less, but that I believed (and defense counsel later agreed) that plaintiff’s lead counsel had been beaten up very badly, that the amount they sought would not really cover all of the costs involved and as importantly, this defendant would be working with the co-counsel again and again. Defense counsel agreed that as a gesture of good will towards co-counsel with whom she continually worked, she would request more money than plaintiff demanded. And… she obtained it so that the matter settled for $6500. Needless to say, plaintiff’s lead counsel was thrilled.
Did I do the right thing? I was candid with defense counsel that I was the one asking for the extra money and that the matter could settle for less. Was it my province to even suggest it?
I welcome your comments.
By Phyllis G. Pollack