ADR CORNER
To Succeed in Mediation , Focus on the Numbers
ALFRED A . LASORTE , JR .
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 .
PBCBA BAR BULLETIN 6
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 outof-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 / alternativedispute-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 .