What Is Mediation?
Mediation is when a neutral third party called a mediator works with each party in a lawsuit to reach a compromise before going to trial. The mediator helps the parties to reach a compromise. 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 should the case be mediated?
Mediation is very common. Judges almost always order parties to a lawsuit to mediate the case before trial. Mediation is very effective and can help resolve cases out of court. Even where a judge does not order mediation, parties often agree to mediate a case to resolve the dispute and save the expenses of going to trial.
What are the benefits of mediation?
Mediation is usually less expensive than 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 fast resolution. 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. Settling brings closure to the plaintiff, allowing them to move past this legal difficulty.
In mediation, the plaintiff also has more control over the outcome. The plaintiff can participate in negotiations and has the power to effect a satisfactory outcome. In a trial, the plaintiff must undergo cross-examination and is powerless as to the outcome. The plaintiff also has the choice not to settle in mediation but proceed to trial.
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 at-fault 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.
A representative from the insurance provider will probably decide how much to pay in a settlement. Someone from your health insurance provider will also attend the mediation in person or via phone. His or her goal will be to obtain reimbursement from the settlement for your hospital bills.
What will happen at the mediation?
The opposing parties along with their attorneys will be in 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 will also send 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 get 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 them. The mediator has a great deal of experience in getting cases settled. The attorneys for both parties respect his or her opinions and skills as mediator and have so asked them 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. They will also point out weaknesses in the other parties’ case to them. It is important that all parties understand the weaknesses in their case and the risks of going to trial. The mediator will talk with you about your case, the injuries you have received and how they have 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 than what their statistics show for a case like yours should settle for. Since they have many cases to deal with, 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 your case 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 settlement at mediation will result in more net recovery to you than a verdict at trial would.
Although this case involves you, do not take the comments in mediation personally. Winning a case usually has little do with you. Court cases depend on the facts at hand, not your personal judgments regarding what is fair or unfair.
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 a day, although it can take a full day or sometimes even longer. You should bring a snack, a book or anything else that may make the day pass faster.
What helps to get the case settled?
Perhaps the most important factor in having a case settle is a realistic 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 lawsuits. 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 lawsuits. 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 the mediator about what may be a realistic case value.
The insurance company is not going to agree to pay more than what it feels your case is worth. What you want or need is not a criterion. This is nothing personal. They are in the business of handling claims. They are making a business decision about whether or not it 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 the 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 it makes more sense to settle or take your chances and go to trial.
How can I prepare for 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 recreational 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 is likely to determine as your damages 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 as if it never happened. 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 other 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 is lower than what 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 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 them. 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 during mediation. Remember, keep your mind open, listen to the mediator and appreciate that both you and the insurance company must compromise if the case is going to settle.
Is Mediation Right For You? Ask A Lawyer.
You can discuss mediation with an attorney to determine whether it is best for you. At our office in Hudson, we will discuss your options, including litigation. To schedule a consultation, call 888-365-5389, toll-free at 888-365-5389 or send us an email.