Continued from Part 1.

Between self-help and trial

In between the two ends of the continuum lie most of the processes that are primarily designed to get cases settled. The parties absolutely need these intermediate steps before engaging in mediation. (1.) Communication – This is the part where lawyers are supposed to talk to the other side to gauge their desire for resolution. It might be a friendly exchange of data, a simple question about how their client feels about early resolution, or a firm “this case is going all the way.” In any event, some type of communication is warranted before taking the bait and going to mediation where bad news is expensive. (2.) Negotiation – More often than not I am told by parties to mediation that there is no demand to settle and they have no sense of where the other party is coming from. Instead of pre-qualifying the case in advance, they use their best instincts and knowledge of the other lawyer’s leanings to surmise expectations. When they hear the first demand at the mediation, that same hunter and gatherer instinct kicks in and they threaten to leave. We begin flailing to keep parties at the negotiation table. To say it is exhausting is an understatement. (3.) Vetting a case for mediation – Trials are vetted way in advance because parties have exchanged substantial information about their case; the jury is now ready to hear the entire story and can make an informed decision on the outcome.  Mediation, particularly early mediation, is often not vetted in this manner which is why it sometimes fails. That is not to say that early mediation is not useful for settling cases. It’s just that our hunter and gatherer instinct forces us to ask for value that might not be present, or have more optimism in our position than we should if our case was fully vetted. How to properly appraise a case for mediation is similar to how you might vet a case for trial, but you have compressed all the time and expense into a smaller arena.

Checklist to vet your case for mediation

Here is a simple checklist for vetting a case for mediation.

• Insurance – No matter the type of case, knowing the identity of the insurer, their policy limits, the deductible, whether there is a reservation of rights and their position on coverage is a basic first step. This applies across the board and could include class actions, business disputes and routine tort cases. Gathering intelligence about the insurer and it’s propensity to resolve cases early, who they use as counsel, whether they will attend a settlement conference in person or handle via phone are all critical considerations.

• Ability to pay – In the employment litigation arena, particularly wage-and-hour class actions, having a great case with large penalties is not enough to save the day. Understanding the nature of the employer and their business, and whether they can respond to a “reasonable” settlement proposal is just as important.

• Company on the market to be sold – How often do we read in the business section of the newspaper that certain companies are merging or being bought by other companies? This information is readily available on the internet, particularly when dealing with public companies. This information creates a dynamic that is sometimes useful for settlement, depending on the timing of the negotiation.

• Claims administrator needs to move files – Surprisingly, many lines of disputes involve insurers who have plenty of funds in reserve but are literally backed up in their claims department with files. These files are waiting to be settled but we often don’t know it. If a defense lawyer reaches out on a case, it might not be a bad idea to find out if the carrier is in a “run off ” type business or simply needs to move files.

• Mood of the marketplace – With the exchange of electronic information via listserv and other electronic bulletin boards, lawyers are able to gauge which lines of disputes are settling and the range of value. That being the case, consider where your case stands in the marketplace. It might be that your case is such a unique outlier that you would not want to negotiate early because the value will only come after certain damage depositions are taken. On the other hand, you might need to move the case quickly because of the many minefields it has such that you are more than willing to settle for market value or less.

• Current state of legal defense – This is really a question of uncertainty in the law. In wage and hour class action litigation there are usually a number of areas where an employer simply can’t rely on a clear rule or approach in paying wages. The uncertainty opens the door to settlement opportunities, particularly where the plaintiff is reasonable. It does not give rise to settlement opportunities for hunters and gatherers who want to eat all the vegetables they find in the garden.

• Opposing counsel – Reasonable counsel usually means reasonable clients. Follow the cues when counsel opens the door to discussions about the case. It is hardly a sign of weakness to want to discuss settlement.

• Case facts – Some facts speak for themselves and others require a lot of explanation. Most cases fall into the latter category. If your case speaks for itself, offer up transparency in providing whatever information your opposition requires to fully evaluate the merits.

• Information needed to evaluate – Put yourself in the shoes of your opponent. What would they need to advise their client about the case? Imagine they are drafting a formal report that goes through the strengths and weaknesses, and provides a financial quantification of your dispute. It would certainly be in your best interest to arm your adversary with whatever information might lead to a fair evaluation that opens the door to a reasonable negotiation. In other words, tee it up for the other side so that they can be your champion with their client.

• Future cases with adversary – Are you a frequent flyer with this defendant or law firm? If so, make sure they know that the case at hand is either an outlier or falls within the scope of what they are accustomed to getting from your firm. Failure to do so will result in an evaluation that is mediocre.

• Symbols matter – The Confederate flag became a symbol of hate in our country. It stood in several government buildings in the south until people used “self help” to eliminate the symbol. Your Confederate flag consists of nasty emails, defamatory statements about lawyers and their clients on electronic bulletin boards and so on. These symbols inevitably get into the hands of your adversary, so be forewarned. Communicating in a respectful and principled manner in writing is the only way to properly vet a case for mediation

Jeffrey Krivis has been recognized by the Daily Journal, the leading legal newspaper in California, as one of the 'top 20 mediators in the state,' and 'top 50 neutrals in the state,' (Daily Journal). Since 2004 he has been honored as one of the 'Super Lawyers' in California by Los Angeles Magazine and Law and Politics Media.