Mediation—Top 10 List

Mediation is a facilitated settlement negotiation.  Most courts require that cases be mediated before they are tried.

Mediation doesn’t happen in every case.  But it happens in most.

Here’s our Mediation Top 10 list:

 

10. The first offer doesn’t matter.  The answer is always “no.”  What matters is the last offer.

 

9. Don’t get excited if the first offer is $100,000.  The next four moves may be $101,000, $102,000, $103,000, 104,000 and $105,000.

 

8. Don’t get mad if the first offer is $5,000.  We settled a case—where the first offer was $5,000–for $1,000,000.

 

7. Offers made by the defense don’t necessarily represent what it thinks the case is worth—it can be totally responsive to what’s being demanded.  If we ask for $50M in a case that’s worth $50,000 the defense may offer $1.  Not because it thinks the case is worth $1. But because we’ve demanded 1,000 times more than fair market value.

 

6. The “truth” in mediation is spoken by money.  The risk perceived by the other side is reflected by its last, best and final offer.

 

5. As a rule of thumb you have to do at least 50 percent better at trial to net the same amount of money that is offered at mediation.  If you’re offered $100,000 at a mediation you have to get at least $150,000 at trial to break even.

 

4. There are some fringe benefits associated with getting to write your own settlement agreement.  (That’s what happens at mediation; that’s not what happens at trial.). In lots of cases it’s possible to draft them so that you don’t have to pay back your insurance company for the medical benefits you’ve received.

 

3. If the case doesn’t settle, the jury never hears about the offers and demands.  Just because the defense offered $100,000 at mediation doesn’t mean that’s a starting point at trial.  The defense can offer $100,000 at mediation and ask the jury to award $0.

 

2. The mediator is described as “neutral.”  That means he or she doesn’t favor either side.  But it’s not really accurate to describe the mediator as neutral.  The mediator has his or her own agenda.  That’s getting the case settled.  That’s a win for the mediator (and makes it more likely that he or she will be hired again).  Despite what the mediator says, he or she doesn’t care whether the case settles for $1 or $1M.

 

1. Mediators do a lot of talking.  But that’s only one way of gathering information.  Another way to gather information is to float ideas and assess body language from the participants. “I don’t think we can get defendant to $X but we may be able to settle for $Y.”  I have a strict “no reaction” policy.  It doesn’t matter whether $Y is great or horrible.  We don’t react to it while the mediator is in the room.  We can kick the mediator out any time we want and discuss privately.  (And, like all rules, I sometimes break this one and tell the arbitrator exactly what I think of $Y.  That’s okay for me to do.  But clients should keep on their poker face.)