There are a whole host of reasons why cases don’t settle at mediation. This article explores seven of those reasons: lack of preparation; unrealistic expectations; clients not appearing at the mediation; lack of settlement authority; poor timing; approaching mediation as a win/lose proposition; and failure to properly document and sign the settlement agreement, and suggests ways you can avoid them to improve your mediation success rate.
1. Lack of Preparation
Perhaps the most common and easily avoided reason cases don’t settle at mediation is lack of preparation.
Too many lawyers approach mediation cavalierly, perhaps because a mediation hearing is less formal than a court proceeding. But this mistake can be costly. Not only will you have wasted time and money on the mediation, but you may weaken your position with your adversary and damage your client’s confidence in you.
Know Your Case Inside and Out
Before you go into a mediation hearing, you should know your case inside and out:
Know the value of the case and your best arguments, both on liability and on damages, and where your weak spots are.
Anticipate the best arguments your adversary is likely to make and determine how you will counter them.
Prepare Your Mediation Statement in Advance
Prepare your mediation statement well in advance of the mediation so that the mediator has time to review it. Make it succinct, but include the most persuasive evidence to back up your arguments. Don’t make the mediator hunt for it!
If you don’t want your adversary to see your mediation statement because you’re afraid of “giving something away”, you can ask the mediator to keep it confidential.
Providing the mediator with a quality mediation submission gives the mediator a head start on understanding your case and the strength of your position. Providing a strong, succinct submission can be a big factor in your mediations’ success.
For more tips on mediation submissions, check out these posts: Do’s and Don’ts of Mediation Submissions, and What to Include in Your Mediation Submission
Prepare Your Client
Make sure your client is available to attend the mediation and prepare them for what to expect. Explain how the process works. Review what they will tell the mediator if they have an opportunity to speak. Discuss your settlement position and what the client is willing to offer or accept to settle the case.
To learn more about preparing your client for mediation, check out our detailed post here, and pick up a copy of our Preparing Your Client for Mediation checklist.
Advise the Mediator of Past Negotiations
Let the mediator know in advance what settlement discussions have taken place already. What demands and offers have been made? What are the policy limits that apply? Tell the mediator why you have taken this settlement position. Include this information in your submission so that the mediator has time to review it before the mediation hearing. As always, you can request that the mediator keep this information confidential.
Meet with Co-defendants in Advance
If you represent the defendant in a case involving multiple defendants, speak with counsel for the other defendants in advance of the mediation and see if you can decide on how you will divide up the settlement amount. Will each defendant pay an equal share, or can you agree that one defendant bears more responsibility and should pay a larger share? Hashing this out in advance can make the mediation much more likely to succeed.
If you aren’t in full agreement before the mediation, having this conversation in advance can help you formulate your arguments to support what you think the split should be to help the mediator help you come to an agreement.
For more on preparing for mediation, check out this post.
2. Unrealistic Expectations
Are Your Clients’ Unrealistic Expectations Derailing Your Mediation?
One thing that can quickly derail your mediation is your client’s unrealistic expectations. For example, the plaintiff believes that their case is worth much more than the sustainable value, or the defendant believes that their “small mistake” shouldn’t result in being largely responsible for the plaintiff’s damages.
Clients may also have unrealistic expectations about how the mediation is going to progress. They may believe that the mediator is going to “take their side” and fight for them to get what they want. Or they may think that the mediator’s role is akin to a judge and that the mediator is going to decide for them or to force the other side to accept the settlement number they want.
To avoid this problem and improve your chances of mediation success, talk to your client in advance about the possible pitfalls and weaknesses of their case. Make sure they are aware of the sustained verdicts in cases with similar facts and damages in your jurisdiction.
Emphasize that mediation is different from litigation or arbitration. Explain that the neutral is neither a judge nor an advocate. The role of the neutral is to help the parties to come to a mutual settlement agreement, not to take anyone’s side or to decide the case for them. They are going to have to make their own decisions.
Unreasonably High Demands (or Low Offers) Can Wreck Your Mediation
Clients aren’t the only ones who can derail a mediation. Lawyers sometimes come in to the mediation with an absurdly high demand or absurdly low offer, thinking that this tactic will get them closer to the real number they want to settle for.
But this tactic frequently backfires.
An overly high demand or low offer can signal that the lawyer cannot control their client, that they are desperate, or that they aren’t serious about settling the case.
This approach can come across as insulting, or as unwillingness to negotiate in good faith, and can end a mediation prematurely. The other party may decide to disengage, or to become more firmly entrenched in their position. Why should they negotiate when it seems clear that the other side is unwilling to do so?
Starting with an unrealistically high or low number wastes precious time with futile back and forth negotiations that don’t come close to settlement. It can exhaust both parties and their counsel, making them less likely to negotiate in the future. This can result in costly and unnecessary litigation, especially if the case is already close to trial.
3. Not Bringing Your Client to the Mediation
If you are a lawyer bringing your case to mediation, whether it’s a personal injury case like a motor vehicle accident, slip and fall, or a medical malpractice action, or a commercial case, such as a contract dispute or a dispute with a vendor, it is important to have your client present at the mediation if you want that mediation to be successful.
If your client is the injured party, attending the mediation provides them with an opportunity to tell their story. Ask the mediator in advance if they will allow your client to speak at the mediation during the opening session when all parties are present. Some clients just want an opportunity to ‘vent’ before they can seriously consider settling their case.
If the defendant is also present, they will get to hear first-hand how the incident has affected the plaintiff’s life, their health, or their business. They will be able to present their side of the story as well. This conversation may make them more open to settlement or may spark some creative alternative ideas about how to resolve the case.
Having your client present at the mediation also allows the mediator to speak directly and privately to the client. Based on their experience with similar cases, the mediator can provide their opinion about how a jury might decide the case. While you can convey this information to your client, it often carries a different weight when they hear it directly from the mediator.
Having your client present during the mediation affords them an opportunity to hear both sides, assess the strength of their case and the demeanor and credibility of the other side. This may provide them with a more realistic picture of the case and their chances at trial, even if the case doesn’t settle at mediation.
4. Lack of Settlement Authority
Something closely related to having your client present at the mediation is the issue of settlement authority. If the person who has the ultimate authority to settle the case isn’t present at the mediation, you might be wasting your time and killing your chances of mediation success.
Negotiations can stall, for example, when the insurance claims adjuster is not present at the mediation and the lawyer hasn’t received sufficient settlement authority before the mediation. In those cases, it is advisable to have the adjuster available by phone so the lawyer can call for additional authority if necessary.
Another way this can happen is if the claims adjuster’s authority is limited, and they need to obtain further authority from a claims supervisor for higher settlement amounts. This often takes time since the claims supervisor will probably have to familiarize themselves with the case.
And on the plaintiff’s side, if the plaintiff themselves is not present at the mediation to accept or approve the offer, you may not be able to come to an agreement.
Before you schedule your case for mediation, find out who has the ultimate authority to settle, make sure they are familiar with the case, that you’ve discussed settlement value. Get settlement authority in advance or have them either present at the mediation or available by phone.
5. Poor Timing
Another obstacle to mediation success is poor timing.
Mediating your case early can have benefits for both sides. The plaintiff receives their compensation early and can use that money to help them make up for lost wages or to aid in their recovery. Defendants save significant legal fees, and both sides save money on discovery, experts and trial preparation.
In a commercial case, early mediation can help the damaged party get back to business quicker and can help repair business relationships.
But early mediation isn’t always the answer. For example, if the plaintiff hasn’t completed their treatment or might require future surgery, it may be difficult to come to an agreement on settlement value. The same is true in a commercial case if the full extent of the damages isn’t yet known.
On the other hand, waiting too long to mediate your case may not leave enough time for negotiations. If the case is too close to trial and multiple mediation sessions are needed, you may run out of time before the trial date. If trial expenses have already been paid for experts and trial preparation, those expenses may hinder the negotiation.
Evaluate your case at each stage to determine when is the best time to mediate for that particular case or client.
Treating Mediation as a Win/Lose Proposition
If you’re entering into mediation thinking your aim is to “win” you’re probably missing the point of mediation.
In mediation, the goal is for the parties to come to a mutually acceptable resolution to the case, with the aid of the mediator. As we mentioned when discussing expectations, you can’t expect the mediator to take sides during the mediation; mediators are called neutrals for a reason. They are there to provide an objective perspective and to help the parties reach an agreement.
Parties that come to a mediation with the expectation of a “win” likely aren’t committed to getting the case resolved. They are more likely to have blind spots when it comes to the weaknesses of their case, or to devising creative solutions to resolve it.
Approaching mediation with a win/lose attitude is an obstacle to real negotiation and can lead quickly to an impasse. If the real goal is resolution, one way to make the mediation more successful is to consider ways to get beyond an impasse. For example, if the whole case cannot be resolved at the mediation, are there areas that the party can come to agreement on? Are there issues that can be resolved or eliminated to narrow down the issues in controversy?
Building small agreements or eliminating unnecessary arguments or issues can bring the parties closer to a resolution. Even if the case doesn’t settle at mediation, the issues for trial will be much more focused, saving the parties time and money.
7. Failure to Properly Document and Sign the Settlement Agreement
Finally, your mediation can fail even if you succeed in coming to an agreement if you fail to properly document the settlement and have it signed by all parties.
This is another reason why it is important to have your client present at the mediation hearing. Once you have come to an agreement, it is best to put that agreement in writing immediately and to get it signed by all parties.
Once you walk out of the mediation session, clients may begin having second thoughts. They may start talking to other people who were not present at the mediation who think they know better. Those people will not have heard all of the arguments or might not understand what the mediator has explained to the parties during the session.
Once this second-guessing starts, clients may balk at signing the settlement agreement or releases that are required to fully and finally settle the case, undoing all of the good work of the mediation.
A handwritten stipulation of settlement signed by the parties at the time of the mediation can be turned into a more formal document with general releases, if necessary, by the attorneys after the completion of the mediation is preferable to walking away with only an oral understanding that can be misconstrued or second-guessed later.
If your client is not physically present, but is available by telephone or virtual meeting, you may wish to send a digital copy of the document to them for their signature before the mediation concludes.
Keeping these 7 mediation pitfalls in mind when preparing your case for mediation can greatly improve your chances of mediation success.
For more mediation tips, see the links below:
How to Prepare Your Client for Mediation
Preparing Your Client for Mediation checklist.
Preparing For and Appearing at a Mediation Hearing
Is Your Case Right for Mediation or Arbitration?