By: Alfred A. LaSorte, Jr.
Published: April 2022
Litigation is stressful, risky and expensive. A form of civilized combat. Understandably, parties often view litigation, and form expectations as to its outcome, through an emotional lens. They bring all sorts of unhelpful motivations into the mediation room – a desire for revenge perhaps, or a need to prove they were right, or that the other side was wrong, or to prevail as a matter of principle.
Objective compromise, so crucial to successful mediation, requires a different analysis on both sides – one focusing on numbers, not feelings.
An auto accident case about compensation for serious physical injury. A suit between former business partners over profits. A manufacturer’s suit over an unpaid invoice. These cases have one thing in common – the only relief a court can grant is an award of money, not an apology.
At mediation, the plaintiff will rarely ever see an offer as high as their “best day” in court, and a defendant won’t likely see a plaintiff agree to just go away. Mediation is not about “best day” results – it’s about compromise. Objectively analyzing the numbers, on both sides, facilitates this compromise and gets cases settled.
Here’s a simplified example: A plaintiff suing a defendant for $100,000, with a more or less 50% chance of winning. Doing the math, a settlement in the $50,000 range (i.e., 50% of $100,000) should make sense, since that equates to the plaintiff’s odds of winning, and defendant’s odds of losing. (If the odds of winning were 30%, then the $30,000 range would be more realistic.)
I can already hear your objections. “Where’s your crystal ball? Nobody can predict result percentages with any accuracy” and “What about fees and costs? You forgot to factor them in.”
Hey, I did say “simplified” example, remember? And you’re right. Anything can happen at trial. But a case that survives to the point that it’s now in court-ordered mediation has some chance of winning. And no case is such a slam dunk that its chances are 100%. The hard part is reliably determining the range.
After some discovery, most trial lawyers develop a general feel for a case’s chances. Is it 50/50? Better than that? Worse? Do your best to come up with a range.
In my nearly forty years trying cases I had many client conversations where “better than 50/50” or “less than 50/50” chances were discussed. Whatever you conclude, discuss it with your client, whether plaintiff or defendant. And be candid that slam dunks in court don’t exist. Ever.
If your plaintiff/client isn’t willing to discount their “best day” number for the risk of loss, it’s time for a serious discussion about the things that can go wrong in a trial. Let’s face it – few cases have a 90% chance to win or to lose. Or 80%, or even 70%. But clients don’t know this unless you tell them. They all think they’re going to win!
If your defendant/client refuses to pay a single dollar “on principle,” it’s time to explain to them that moral victories are few and far between, and that they are expensive.
Which leads to your other objection – factoring legal fees and costs into the equation. This factor actually makes settlement easier. We commonly mediate cases where the fees on both sides will exceed the amount in dispute if the case doesn’t settle. In my $100,000 example, if the fees will exceed $50,000 on each side, wouldn’t it be crazy not to settle before both sides spend all that money? Everybody “wins” when these $100,000 in extra fees are avoided. (Okay, everybody but the lawyers.)
Even in contingency cases, with a law firm advancing the costs, a well-placed defense settlement proposal exposes the plaintiff to the risk of owing defense fees if they lose. A mediation settlement avoids this risk entirely.
I submit that, as your client’s counsellor, it’s your job to make sure they understand all of this before the mediation begins. How do you persuade them to realistically factor in the risk of loss and their inevitable out-of-pocket costs? It’s not that difficult if you are willing to frankly discuss the case with them.
So talk about risk of losing. About how witnesses forget, or don’t show up. How judges and juries can make mistakes. How there are a hundred things that can go wrong and hurt their case.
Talk about the costs of litigation. Give a frank estimate of the costs through trial. And appeal. Put pencil to paper with your plaintiff/client and estimate the net “dollars in their pocket” from a trial. Or with your defendant/client estimate what a loss will cost them. And do it before mediation starts.
The mediator can help you with this. But it must start with frank discussions with your clients well in advance. A client with unrealistic expectations may not suddenly get realistic once mediation commences.
So do the math with your clients. You will do them a tremendous service if you help them become objective, thereby helping them reach a fair settlement.
For additional ADR tips and resources, go to https://www.palmbeachbar.org/alternative-dispute-resolution-committee/
After a long career at Shutts & Bowen LLP as a commercial litigator specializing in real estate and general business cases, Mr. LaSorte now acts exclusively as mediator and expert witness through his own firm, Alfred A. LaSorte, Jr., P.A. d/b/a LaSorte Mediation. (www.LaSorteMediation.com). Mr. LaSorte can be reached at (561) 286-7994 and Al@LaSorteMediation.com.