Proposing pre-suit or early mediation in commercial cases is good for the client, good for the attorney and not a sign of weakness.
Most attorneys are aware that pre-suit mediation is becoming mandatory, by either contract or law, in commercial disputes. More good attorneys and sophisticated clients are recognizing the advantages of pre-suit and early mediation.
In more than 30 years as a trial attorney and now 14-plus years as a mediator, I have observed that in almost all cases the clients appreciated the case coming to an end more than the outcome.
Most lawsuits occur because something went wrong and people want to do something about it. Most attorneys now recognize that lawsuits rarely go to trial. Statistics vary depending on jurisdiction, venue and type, but most reflect that more than 95 percent of suits are not resolved by verdict or judgment, but rather by settlement. In most cases, the earlier a settlement is reached, the better for both sides. Mediation is the best way to get to the end of the case sooner rather than later.
Mediation gives both sides in the dispute the opportunity to address with their lawyers the realities and risks of litigation. Attorneys understand that litigation takes time, money and energy. Most clients do not fully realize how much of their time, money and energy will be required. More sophisticated clients (corporations, insurance companies) do understand, and they are increasingly insisting on greater value for their legal dollars. Most trial attorneys will acknowledge that their time is more financially productive out of court than in court, so it is usually good for the attorney if the case is resolved as quickly and inexpensively as possible.
It is important to remember a settlement agreement is simply a deal that all sides agree is a better choice than continuing the dispute. The further the litigation goes, the more invested financially and emotionally the parties become. So the earlier they can explore settlement options, the more open they are to appreciating the control, certainty and closure settlement provides, and the more flexible they will be in regards to what they want and what they need.
For the client, mediation offers the opportunity to achieve a less expensive, swifter, private and more flexible resolution to a dispute. Perhaps most importantly, clients have a say in the outcome.
In most cases, the litigation process does little to change the parties’ settlement perspectives. Some will argue they cannot evaluate their case without discovering all the facts and the validity of their opponent’s legal theories and evidence. Certainly, those cases occur. However, usually both sides already know enough about the facts and issues to be able to evaluate their strengths and weaknesses and the potential outcomes of litigation.
For the attorneys, particularly in commercial litigation, early mediation offers a special opportunity. Contingency fee attorneys can consider the time and money they must invest in the case to achieve an outcome that puts more money in the client’s pocket than the settlement offer. Most commercial litigation attorneys will agree it is better in the long run to have a client who feels they received an acceptable outcome and good value for their legal dollar. Although the hourly lawyer might miss additional billing if the case settles, the client who feels they received good value will bring repeat business and referrals. Remembering most cases will not go to trial, commercial lawyers need to consider how likely they are to achieve an outcome for the client later in the case that the client will feel was worth the additional expense and aggravation of further litigation.
Finally, early mediation enables the clients to consider other, and usually better, ways to get to the end of the case than letting a judge or jury decide how it ends.