Mediation is a formal settlement conference that usually presents you with the best chance to settle your personal injury lawsuit before trial. This article will give you an overview of the mediation process and some advice on how to make the most of your mediation. Most plaintiffs are very nervous going into mediation — don’t be. There is no winner or loser at mediation. No issues affecting your lawsuit, aside from whether it settles, are decided at mediation. You will not have to “perform” at your mediation or answer questions, as you would in an IME or at a deposition. Your sole purpose at the mediation is to have the final word on whether your case settles.
Before Mediation – Meet With Your Lawyer
Most lawyers will have a face-to-face meeting with their clients prior to mediation to discuss what mediation entails and to get authority to settle your case for a certain amount. It is important that your attorney knows your “bottom line” settlement number before mediation. Sometimes he will have you sign a written authorization allowing him to accept any settlement offer at or above the amount you tell him. This is to avoid any miscommunication about how much money you will settle for before he begins negotiating at mediation.
When coming up with your settlement number, keep in mind that attorney’s fees, costs, and medical liens will have to be deducted from this amount. Your attorney should be able to provide you with fairly accurate numbers for all of these things to help you make your decision. Of course, if you just had an expensive medical treatment a day or two before your meeting, your attorney probably doesn’t have that bill yet. Keep your recent medical expenses in mind and always expect to get somewhat less than the number you project from your attorney’s calculations.
Mediation – Who Will Be There?
At a minimum in any personal injury mediation, the people who will attend will be you, your lawyer, the defendant’s lawyer, a representative from the defendant’s insurance company (called an “adjuster”), and the mediator. You may be asking, why didn’t you list the defendant? Well, in most personal injury cases, the defendant himself doesn’t control how much money is offered to settle your case. His insurance company does. The point of mediation is to get the people who hold the “final authority” to settle the case together. On the plaintiff’s side, that will always be you (yes, you, not your lawyer, hold the final authority to settle your case). On the defense side, the defendant’s insurance company almost always holds the final authority to settle by virtue of language in the insurance policy. There are some exceptions, such as medical malpractice cases, where doctors do not grant some insurance companies the ability to settle without the doctor’s consent (due to the effect that malpractice settlements can have on their medical licenses). However, in most ordinary negligence cases, such as car accidents and slip & fall incidents, the insurer has complete control over settlement negotiations.
The defendant himself has the right to attend the mediation, regardless of whether he holds the actual purse strings. It really depends on the personality of the defendant as to whether he will assist the mediation process or be an impediment. Basically, if the defendant wants the case to settle, he can help to put pressure on his insurance company to offer enough money to settle the case. If he does not want to settle, he can be a disruptive force who just serves to make mediation more difficult. Because you have no real control over whether the defendant shows up or not, there is no point worrying about it.
What is a Mediator?
A mediator is simply another lawyer who has no connection to either party in the lawsuit and no interest in the outcome of the lawsuit. The mediator must be agreed upon by both your attorney and opposing counsel (if the attorneys can’t agree on a mediator, the court will appoint one, which neither side wants). Some lawyers are full-time mediators and no longer represent clients. Some still represent clients and can be either a plaintiffs’ or defense attorney. Don’t worry if your mediator is also a defense attorney. He is not the defense attorney on your case, and he would not last long as a mediator if he showed bias towards the defense side. Some of the best mediators I have dealt with were also defense attorneys. The role of the mediator is primarily to act as a buffer between the two parties during negotiations.
Mediation – The Place
Usually, the mediation will be held at the office of the mediator. Be sure you know where this is so you don’t get lost on mediation day. You don’t want to be late. Write down the address and phone number of the mediator’s office somewhere safe so if you do get lost you can call the mediator and let him know.
Mediation – Before it Starts
If you arrive at the mediation before your attorney, it is o.k. to say hello and shake hands with the people from the defense side. Obviously, do not discuss your case. Limit your small talk as much as possible. It’s fine to talk about the weather, but don’t talk about what you did the past weekend or discuss any other activities that may come back to haunt you. The mediator’s office should have drinks (water, soda, coffeee, etc.) and some snacks. Feel free to ask for these while you wait.
Mediation – The Joint Session
After everyone arrives and is settled in, the mediation will start. The first step in a mediation is referred to as the “joint session” (or “joint caucus”). Everyone involved in the mediation will be in the same room, usually seated at a large table in a conference room. The plaintiff and plaintiff’s attorney will sit on one side of the table and the defendant’s representatives will be on the other side. The mediator will sit at the head of the table.
The mediator will open the mediation with some information about his background and qualifications and a description of the mediation process. He will usually direct most of his opening statement to you, as it is likely that you are the only person in the room who has not heard a mediator’s opening speech dozens of times. Here are the key points the mediator will likely discuss in his opening statement:
- Confidentiality: Everything that it said in the mediation is confidential and cannot be used in court. The defense attorney can’t cross-examine you at trial and ask “Didn’t you say at mediation . . .” However, should you reveal a new treating doctor or another witness at mediation, the defense can certainly find these people afterward and get information from them. A good rule of thumb is that while statements themselves can’t be used against you, the information in those statements may.
- Impartiality: The mediator does not takes sides and will not give either side legal advice about their case. The mediator’s job is not to determine a winner or loser, but merely to facilitate communication between the two sides and help the two sides reach a settlement. He may play devil’s advocate while alone with each side in an attempt to help them see the other’s point of view.
- Risk factors: The purpose of mediation is to allow each side to fully explore the risk factors that affect their case. This will be the only opportunity that each of the parties’ attorneys has to point out the risks facing the other side directly to the opposing party.
- Compromise: In order for your case to settle, each side will have to compromise. You will not get everything that you would get if you won at trial. The defendant does not expect you to walk out empty handed, either, as you would if you lost at trial. Somewhere between your “best day at trial” and your “worst day at trial” there hopefully lies a settlement figure both sides can live with. The point of mediation is to see if both sides can agree on that number. Side note: the mediator won’t tell you this, but it is often said that a good settlement is one where both sides leave unhappy.
- Closure: If you settle your case at mediation today, you will get your money in about a month or so, depending on medical liens which need to be resolved. If you don’t settle your case at mediation, you could wait years before you get paid, assuming that you win at all. The stress of the lawsuit will be over, and you can get on with your life.
- Control: At mediation, you control the outcome of your case. At trial, the jury will. Jury trials are uncertain affairs under the best of circumstances. The same case tried before two different juries can have two completely different outcomes. In fact, this has happened, when a jury verdict is overturned on appeal and a case is re-tried before a different jury. One case that I know of resulted in a multi-million dollar jury verdict at the first trial, a defense verdict in the second trial after appeal, and another multi-million dollar verdict (but not the same number as the first one) at a third trial after a second appeal. You never know what kind of jury you will get.
After the mediator is done with his opening statement, he will turn the floor over to the attorneys to give their statements, starting with the plaintiff’s attorney. Your attorney will argue your case directly to the insurance adjuster, telling him why you will win should the case go to trial and how much you expect to win. Do not think that what your attorney says during this statement is how he really feels about your case. He is painting the rosiest possible outcome to scare the defendant into offering more money. He won’t lie about your case, but he will spin it as favorably as possible. At the end of your attorney’s opening statement, he will frequently make the first settlement offer of the mediation. This number will be much higher than what you are willing to settle for, allowing plenty of room for negotiation during the mediation. Don’t get your hopes up based on his opening offer.
Next, the defense attorney will make his case to you (he will speak directly to you) as to why you will lose or at least why you won’t win as much as you think you will. You will disagree with most things the defense attorney says. Nevertheless, do not speak or interrupt during his opening statement. Try not to show any reactions to anything said. Keep a good poker face. It is important that you listen during defense counsel’s statement for anything that may be untrue. It may be helpful for you to have a pen and notepad ready to write anything down that jumps out at you as being false. You can discuss this later with your attorney. The mediation is just starting at this point — there is plenty of time to straighten out the facts later.
After each attorney has given their opening statement (and possibly a little rebuttal back and forth), you will move on to the next step of the mediation, the private sessions.
Mediation – The Private Sessions
After the joint session, the parties are placed in separate rooms, where they will remain for the duration of the mediation. If your side made the first offer at mediation (which will usually be the case), the mediator will first meet with the defense side to get a counter-offer. While you are alone with your own attorney, you can discuss anything you want about defense counsel’s opening statement. Your lawyer can then use this information when the time comes to make another settlement offer. I actually handled a case where the defense had obtained medical records for a woman with the same name as my client which led them to mistakenly believe that my client had lied about never having been in a prior automobile accident. My client had never even been in the same state as the facility which supposedly provided her medical care for this accident. Needless to say, this changed the defendant’s settlement posture in the case significantly when I informed them of this.
During the private sessions, the mediator will go back and forth between rooms, relaying settlement offers and other information between the parties. This process seems simple, but will often last a very long time. Most of your time at mediation will be spent waiting for the defendant’s next settlement offer. They will almost always take longer to come up with an offer than you and your attorney. This is partly due to insurance adjusters having to call their superiors during the mediation and get authorization for certain offers. Their side is more of a committee making decisions, and there will often be internal disagreements as to how to proceed. On your side, it’s just you and your attorney — and most of the time you two have worked out before the mediation what your “bottom line” settlement number is, and you leave the negotiating part to your lawyer to meet or exceed that number.
It may sound trivial, but one of the best pieces of advice I can offer personal injury plaintiffs before mediation is to bring something with them to do. Bring magazines, a book, a video game, something to occupy you for hours when you would otherwise be sitting around fidgeting. Also, bring your own snacks, just in case the mediator doesn’t have any you like. The same goes for drinks, if you don’t like coffee, water or soda. Bring your medications. If you smoke, bring enough cigarettes to last the day. If you are on a special diet, bring your own lunch. While the mediator will order lunch at long mediations, it will usually be from a sandwich shop. You could be at the mediation all day, and you do not want fatigue, hunger, nicotine withdrawal or anything else to be a major factor in your decision-making process. They will be a factor, as fatigue is one of the reasons mediations work. Both sides just get sick of going back and forth with numbers and want to cut to the chase eventually. If you keep yourself nourished, hydrated and amused during the mediation, you won’t be as fatigued as the other side, which is usually advantageous.
Mediation – The Defendant’s Initial Offer
Just as your attorney will make his opening offer much higher than what you really are willing to settle for, the defendant will always make his opening offer far lower than he is willing to pay. Do not be insulted by the defendant’s opening offer. Many plaintiffs think that they are wasting their time at mediation when they hear the defendant’s opening offer. Expect a lowball. It may be $1,000.00 or $500.00, or some other low number no one in their right mind would accept. The defense knows you won’t take it. They are really just sending a message that your number is far too high. Don’t get upset and don’t walk out regardless of how low the first few offers may be. Give it time. It usually takes hours to get into “real world” numbers during a mediation. Why? Gamesmanship.
Negotiating a settlement has become a game for most attorneys. Many attorneys do not like this aspect of mediation, as it is an enormous waste of time and energy. However, everyone feels compelled to play because it adds a level of predictability to the process. Ultimately, mediation is just a process of “moving the middle.” The “middle” I refer to is the number in between the plaintiff’s last settlement offer and the defendant’s last settlement offer. So, if the plaintiff offers $300,000.00 and the defendant offers $100,000.00, the middle is $200,000.00. This middle moves each time counter-offers are made. If the next round of offers was: Plaintiff – $280,000.00, Defendant – $110,000.00, the middle just moved from $200,000.00 to $195,000.00. Eventually, in a case that can settle, the numbers get close enough that the parties can agree to split the difference. The key for the plaintiff is to keep the middle at or above what he wants to settle for.
This explains why your attorney may open mediation demanding $300,000.00 even if your case is worth roughly $60,000.00. He is just leaving negotiating room for himself. The early offers in a mediation say less about where the case will settle than the difference between the last two offers from each side. For example, if you moved down $20,000.00 and in response the defendant moved up $10,000.00, the inference can be drawn that the defendant will keep moving up $10,000.00 for every $20,000.00 you come down. If that movement will not result in you meeting your settlement number, your next offer may come down only $15,000.00, to let the defendant know that you are willing to move down only $15,000.00 for every $10,000.00 he comes up. This goes back and forth many times, often in smaller increments, until each side gets a feel for where the other is truly headed. The main reason for the plaintiff starting way too high and the defendant starting way too low is to give each side enough room to move until they have determined where the other side wants to finish. At that point, if it looks like the numbers won’t meet, it becomes a battle of wills over who wants to settle more. This is also the perfect time to use my $10 settlement tip.
Mediation “Drop Dead” Offers
Often, mediation will eventually result in one side presenting a “drop dead” offer to the other side. The “drop dead” offer means “take it or leave it.” The offering side will let the other know when the offer is a “drop dead” offer. Making a drop dead offer means that you do not want to hear any more counter-offers. Either they accept your number or the mediation ends without a settlement (known as an “impasse”). Realistically, people do make counter-offers to drop dead offers if their counter is very close to the drop dead number. Whether the drop dead offer is really a final offer depends on the people making it.
Successful Mediation – Settlement
If you successfully settle you case at mediation, the mediator will prepare a settlement agreement for all parties to sign. You will get a copy to keep with you. You will likely have to sign a release and in many cases a confidentiality agreement prepared by the defendant. They may not have this at the mediation, but your attorney will review and approve of the documents before you sign them. Congratulations! Your case is now over and you will soon be paid.
Unsuccessful Mediation – Impasse
If your mediation results in an impasse, your lawsuit will just continue as if the mediation never occurred. However, all hope for settlement is not lost. I have had several cases that ultimately settled after a failed mediation (some within days). Both sides tend to want to revisit settlement possibilities when trial approaches. However, do not take mediation lightly because you expect the case to settle at some time down the road. Mediation is usually your best chance to settle.