As an early settlement tool
In its beginning, mediation was viewed by most lawyers and insurance adjusters as a “last resort before trial”. People in dispute who could not reach settlement by any other means, often made a final attempt at resolution through mediation. We have all seen pictures of smoke-filled rooms with labor lawyers and union officials working through the night, negotiating labor & management contracts.
Today, mediation has become the single most sensible method of Alternative Dispute Resolution (ADR) in America, and is widely used in every major U.S. City, as well as in most industrial world markets. Mediation offers both sides in a dispute a cost effective and risk-free method of meeting informally, and under the guidance of an impartial Mediator, examining and discussing all the merits of a claim or dispute, and reaching resolution to the dispute while still maintaining full and personal control of the decision making process.
While liability may not be argued in each and every claim, damages are always argued, and are always subject to individual evaluation by one side versus the other, i.e. reasonability of fees or medical necessity. Mediation offers both sides the opportunity to examine and discuss each other’s personal evaluation of liability and damages, and to gain an understanding of each other’s position.
In private caucus with the Mediator, each side can engage in a thorough and honest analysis of the strength and weakness of the claim, in total candor and with complete confidentiality and without the posturing that often occurs when the parties are facing one another.
Only in mediation can both sides argue their position and not be subjected to rules of evidence, objections, and judicial restraints. Only through mediation can an impartial third-party be allowed the benefit of hearing each side’s honest and candid evaluation of the claim, and eliciting their real settlement expectations.
Without mediation, the claimant is never an active participant in the settlement process. Demands and offers made between the lawyers and adjusters, and later relayed to the claimant, become nothing more than “dollar figures” which the claimant must compare to their original expectation. If the offer is less than the claimant has been previously told the claim is worth, the offer is certain to be rejected, and both sides will continue to spend a great deal of time and effort trying to negotiate with settlement dialogue that never involves the claimant. If settlement efforts are fruitless, litigation will surely follow, and both sides will be forced to spend time and money, in discovery, and in preparation for trial.
Without the benefit of mediation, the claimant will never have the opportunity to hear the adjuster’s or Defense lawyer’s position, or reasoning behind the offer, and will seldom hear and perhaps never fully understand the ultimate risks and costs, versus the potential rewards of a jury verdict. If the case is never mediated, but eventually settles, before trial, “you can be certain that someone left money on the table”.