WHAT IS MEDIATION?
A mediation is a meeting where a mediator attempts to help the parties to a lawsuit to compromise and resolve their differences so that a lawsuit can be settled without going to trial. A mediation is not a hearing or an arbitration. The mediator does not decide the merits of the case. Rather, the mediator helps the parties to agree to a compromised settlement. The mediator is neutral and is not on anyone's side. The mediator points out issues in the case or areas of weakness and benefits of settling. However, no party can be forced to settle.
WHY IS THE CASE BEING MEDIATED?
Mediation is very common. Judges almost always order parties to a lawsuit to mediate the case before trial. Judges know that mediation works and many personal injury cases can be settled before trial. Even where a judge does not order mediation, parties often agree to mediate a case in order to resolve the dispute and save the expenses of going to trial.
WHAT ARE SOME OF THE BENEFITS OF MEDIATION?
Mediation is a less expensive way to resolve a lawsuit than a trial. Settlement at mediation often results in a higher net settlement to the injured party, even when a trial would result in a higher gross recovery. Consider the following examples:
Settlement at Mediation
Gross Amount: $30,000
Attorneys Fees: $10,000
Costs: $ 2,000
Subrogated Party: $ 5,000
Net to Plaintiff: $13,000
Verdict at Trial
Gross Amount: $50,000
Attorneys Fees: $16,666
Subrogated Party: $15,000
Net to Plaintiff: $ 8,334
Although the gross amount awarded at trial was bigger than the amount paid at mediation, the net result to the plaintiff is lower. Trials are expensive because of the costs for depositions, doctor testimony, other expert testimony, witness subpoenas, etc. that are necessary to present an effective case.
Subrogated parties are insurers who have made payment of medical bills or other expenses for the plaintiff. They are usually entitled to be reimbursed for amounts they paid if the plaintiff has a recovery. Subrogated parties will often reduce the amount of their reimbursement claim when cases are settled. However, if the case is taken to verdict at trial, the subrogation amount must often be paid in full.
Mediation offers a conclusion to the case. Within several weeks after a settlement at mediation, the plaintiff will receive a check. Whereas, even after a trial, the case may not be resolved because one or more parties may appeal. A settlement at mediation brings a sense of closure for the plaintiff who can move on with life and take the focus off litigation.
Mediation offers the plaintiff some degree of control and predictability. At mediation, the plaintiff is an active participant and has real power in effecting an acceptable outcome. At trial, the plaintiff will be subjected the cross-examination and judged by a panel of complete strangers whose verdict is impossible to predict. The plaintiff also retains the power to not settle the lawsuit at mediation.
WHO WILL BE AT THE MEDIATION?
You and your attorney will be there. If you feel that you will need to consult with your spouse, parent or another person before agreeing to settle your case, then you should also have that person present in person at the mediation rather than being available by phone. The defense attorney will also be at the mediation. The defendant driver or responsible party will usually not be present. However, a representative of the defendant's insurance company will either be present at the mediation or available by phone. The insurance company representative will probably be the person making the final decision on how much to pay to try to settle the case. He or she has handled your file for a long time and knows the details about the accident and your injuries. A representative from your health insurance company may be at the mediation or available by phone. His or her goal is to have the health insurance be reimbursed for the medical bills paid from the settlement.
WHAT WILL HAPPEN AT THE MEDIATION?
The opposing parties together with their attorneys will be separate rooms. If he or she has not already met you, the insurance company representative may wish to meet with you to size you up. Appearances are important, so you should dress neatly. The mediator will go back and forth between the separate rooms and talk with the parties and their attorneys. The attorneys will have previously submitted materials to the mediator for his or her review so that the mediator has the full background of the case. You may receive a copy of the confidential letter we send to the mediator. This represents our good faith estimate of the best result we are likely to obtain if we went to trial. The other side is also sending a letter to the mediator with their good faith estimate of the best result they are likely to obtain at trial. The case is likely to settle only if both sides are willing to compromise. Therefore, the case is likely to settle only if you agree to take less than the best you might do at trial. You should not hold out for the amount stated in our letter.
Everything you say to the mediator is confidential so you should be open and honest with him. The mediator has a great deal of experience in getting cases settled. The attorneys for both parties respect his opinions and skills as mediator and have asked him to serve in that capacity. You should listen carefully to what the mediator has to say. The mediator will probably point out potential weaknesses in your case. Do not be discouraged. He is also pointing out weaknesses in the other parties case to them. It is important that all parties understand the weaknesses in their case and the risks in going to trial. The mediator will talk with you about your case, the injuries you have received and how this has affected you. Eventually, the mediator will convey settlement offers back and forth. Do not be discouraged if the initial offer from the insurance company is quite low. Negotiation is a process and both sides typically begin with offers that are some distance from where they would eventually be willing to settle for.
Insurance companies are in the business of resolving claims. They keep statistics on various types of cases. They are not likely to offer you more to settle your case than what their statistics show the average case like yours should settle for. Since they have many cases, they know that even if they lose or do poorly on one, they will win or do well on another. As far as they are concerned, it all comes out in the wash. Do not expect them to agree to pay more than what they believe the average case like yours is worth. The attorneys, the mediator and insurance company will be talking about what a typical jury is likely to do based upon their experience. What you want or need is not the criteria for a settlement. Rather, you should listen to what those with experience have to say about what you are likely to net if you go to trial rather than settle the case. Often times, a lower settlement at mediation will result in more net recovery to you than a greater verdict at trial would.
Even though this is your case, you should not take personally much of what is said at mediation. The challenges of winning a case at trial sometimes have little to do with you; and judgments about the case are not typically judgments about you personally. You need to understand that cases are won and lost based on the facts and not always on what you believe is fair.
You should be patient and calm throughout the mediation. Mediation can be a long, tedious, tiresome, trying and unnerving process. You should be prepared for this frustration. Mediation typically takes at least half of day, although it can take a full day or sometimes even longer. You should bring with you whatever you need to make the day as comfortable as possible. You may wish bring with you knitting, snacks, a cell phone or a book - whatever would make you comfortable during "down time."
WHAT HELPS TO GET THE CASE SETTLED?
Perhaps the most important factor in having a case settle is a realist expectation regarding case value. Ultimately, if a case is not settled, a jury will decide the case value. Jurors are strangers. They have differing beliefs and attitudes. They are often suspicious of people who bring law suits. This is especially true where there is minimal property damage and soft tissue injuries that can not be verified objectively. Some people may have religious or moral beliefs against bringing law suits. Some may feel more in common with the defendant than with the plaintiff. Some may feel that insurance rates go up if they award money to the plaintiff. You should listen to your attorney and to mediator about what may be a realist case value.
The insurance company is not going to agree to pay more than what it feels the average case like yours is worth. What you want or need is not a criteria. This has nothing to do with personally. They are in the business of handling claims. They are making a business decision about whether or not is makes sense for them to settle.
No one has a crystal ball. No one knows for certain what a jury will do at trial. However, the attorneys, the mediator and the insurance company have a great deal of experience and have a pretty good idea of what is likely to happen. However, there are always risks for both sides in going to trial. If case is not settled, you may recover less after a trial. If you lose, you will have to pay costs to the other side. There will be additional expenses in going to trial rather than settling. You should take all of these factors into consideration in deciding upon what would be a reasonable settlement. Ultimately, both you and the insurance company must decide whether is makes more sense to settle or take your chances and go to trial.
HOW CAN I PREPARE FOR THE MEDIATION?
The mediator will probably ask you how you are currently doing. You should be prepared to tell the mediator what pain, discomfort and physical problems you still have. You should be prepared to explain how your current work, household, family and recreation activities are affected, if at all, by the injuries you received in the accident. Above all, you should think realistically about what a group of strangers are likely to determine your damages to be if you go to trial rather than thinking about what you hope or desire to obtain.
Neither mediation nor a trial can make the accident go away and never happen. In that sense, the ultimate result is never going to be fair. You can usually negotiate a reasonable settlement. However, you do not want to "leave any money on the table." In another words, part of the negotiation process is to determine the maximum amount that the insurance company is willing to pay. Only then, do you need to decide whether it makes more sense to accept that amount, even if it lower than you would like, or it makes more sense to take your chances and incur the additional expenses of going to trial.
WHAT IF THE CASE DOES NOT SETTLE?
You should look upon the mediation as an opportunity. Hopefully, the case will settle. But even if it does not, the time will not be wasted. You will learn what concerns the insurance company has with your claim and how they are likely to defend against it. You will receive a neutral evaluation of your case from an outsider, the mediator, which will give you some insight into how a jury is likely to perceive your claim.
At times, a case will settle after the mediation because of the groundwork laid at the mediation. Remember, keep an open mind, listen to the mediator and appreciate that both you and the insurance company must compromise if the case is going to settle.