Protecting the Client in Mediations

Protecting the Client in Mediation

By Illece Buckley Weber

As a civil litigator who has been involved in over 300 mediations, VSCs and MSCs, on three occasions, I was thrown for a loop when my clients suddenly changed their minds on continuing down the litigation path contrary to my recommendation.  The following cases taught me some good lessons.

Mediation #1:

This was a case against a real estate broker for failure to disclose material facts about a commercial property.  I represented the plaintiff who continually expressed his outrage at the defendant and repeatedly told me that he wanted his day in court.  My client, along with his son and daughter, attended the mediation.  After several hours of going back and forth, not making much progress, all of a sudden out of nowhere, my client exclaimed, “Fine, I’ll accept the settlement.”

Mediation #2:

In an auto versus auto accident case, my client was rear ended and suffered a serious back injury requiring surgery.  Several defendants were involved and for reasons beyond the scope of this article, the litigation became complicated with respondent superior issues and a reservation of rights by the key insurer.  The first time we mediated, little was achieved so the parties made a second attempt.  At the end of a long day, my client suddenly decided he did not want to go to trial and instructed me to settle the case for whatever I could negotiate.  He and his girlfriend, also a plaintiff in the case who had already settled her claims, had recently broken up and he no longer wanted to participate.

In both of these situations, after recovering from the shock of the moment, I asked myself, what do I do with a client that abruptly changes his/her mind and is now willing to accept a settlement that 24 hours earlier would not have been accepted?

Protect the client.  In both mediations, I began a long discussion with the client confirming that the sudden change in direction was not due to something physical, i.e. hungry or tired or whether s/he had a pressing engagement that was causing anxiety or stress.  I explained that we could take a break or continue the mediation another day.  I then went back through the damages and created a breakdown of the settlement proceeds should the client accept the lower than expected settlement amount.  Fortunately, I learned early on to bring with me a note setting forth the costs to date, the fee terms of the Retainer Agreement, and any medical lien amounts so the client knows and understands what to expect in terms of the net recovery.

In both situations, I asked the client to indulge me with one more negotiation to which they agreed.  I then had conversations with the mediator, outside the presence of my clients and explained my surprise and dismay that my clients suddenly wanted to accept less than I believed we could negotiate.  Fortunately, both of the mediators were well seasoned and confirmed with the clients what I had expressed.  In both cases, the mediators agreed to go back to the defendants with one last final demand.

Protect myself. After being convinced that the clients were sure of their decisions to settle, I prepared a handwritten document confirming the settlement breakdown and the estimated net recovery.  I set forth in this document that I did not recommend the settlement and had advised the client accordingly.  Both the client and I signed the document and at my request, the mediators signed as well, acknowledging that I had advised my clients against the settlement.

The third scenario was different:

Mediation #3

This case was for legal malpractice and the parties all agreed to a pre-litigation mediation.  We had agreed with opposing counsel that to have a meaningful mediation, the exchange of briefs was necessary.  A holiday weekend was approaching and I forwarded our brief to the client.  Several hours later, she called me.  My client didn’t like the accusatory tone of the brief and decided she no longer wanted to pursue a cause of action for legal malpractice.  She only wanted the money back that she had paid the lawyer and wanted the brief to be couched as if it were a fee dispute.  My first inclination was to withdraw as counsel since I knew that opposing counsel would not recommend settlement to his client unless we set forth a strong case.  Since the mediation was only days away, however, I could not withdraw and canceling the mediation would be a complete forfeiture of the mediator’s fee.  I immediately set forth, in writing, the strengths of the malpractice case and the significant diminution of damages by only seeking reimbursement of the fees.  I also confirmed in writing that if the case did not settle, I would not move forward with the litigation (there was not a statute of limitations issue) and requested the client to acknowledge my position which she did.

Ultimately, our clients have the final say and for reasons we don’t always understand, they decide against the risk and stress of taking their cases to trial.  Nevertheless, as their attorneys, we need to act quickly to confirm that the client knowingly has agreed to a settlement that was not recommended and to provide them with an accurate settlement breakdown, in writing, of their projected net recovery.  Even when we, as attorneys, know we can obtain a better result for our clients, we need to respect their decisions and work to achieve a level of confidence that the clients are making an informed decision.

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