BEST PRACTICES: Preparing Your Case for Mediation
On October 2, 2013, I had the pleasure of speaking to the Beverly Hills Bar Association about doing mediations in Los Angeles now that the LASC court ADR program has closed. As part of a panel of distibguished neutrals that was put together by the Southern California Mediation Association, I was tasked with presenting “How to Pepare Your Case for Mediation.” The article below was the hand-out I prepared for the presentation. I hope you find it helpful.
HOW TO PREPARE YOUR CASE FOR MEDIATION by Terri Lubaroff, Esq.
You have the most terrible nightmare…
You show up for trial in your underwear, completely unprepared to argue your case. The judge asks you a very pointed question, and if you give the wrong answer, your case is dead. You start to sweat because you don’t even know the answer. All you can do is stammer and stutter until the embarrassment becomes too much and you run out of the courtroom in shame.
Many litigators have this nightmare before a big trial. It is a reminder that preparation is paramount. But do lawyers ever have the same nightmare about mediation?
In mediation, the best lawyers know that being fully prepared will give their case the best chance of success. Because mediation is just as much about timing, strategy, information gathering and client management as it is about negotiation, preparation takes time, research and effort.
Because mediation is not a “get out of trial free” card or a license to be lazy, below are some helpful “best practices” for preparing your case for an effective mediation.
1.) INFORMATION EXCHANGE
The first step in preparing your case for mediation is to exchange as much information as you can with the opposing party prior to mediation. Your goal is to make certain each party has enough information to make fully informed decisions regarding settlement. Because a large percentage of cases fail to settle due to crucial missing information, this is one of the most important elements of preparing your case.
Exchanging information with opposing counsel can cost time and money. If you are working within a budget, discuss with opposing counsel the idea of limiting discovery to what is absolutely necessary to facilitate settlement. Keep in mind that some cases benefit from extensive discovery, while others do well with more limited discovery. Know your case well enough to know which category into which yours fits.
One month prior to mediation, call opposing counsel and ask what information they still need in order to ensure a productive settlement discussion. Also consider sending a formal demand letter at this juncture, or if you’re defense, ask for one from the plaintiff so you can work with your clients to formulate a well thought out response.
2.) FILE REVIEW
The best lawyers prepare for mediation with the same thoroughness that one prepares for trial. Although it can be demanding and time consuming, you must remember that very few cases actually make it to trial; thus, mediation may be your client’s only “day in court.”
Review your file from top to bottom, inside and out. Take time to reread contracts, medical records, deposition transcripts, key documents and interrogatory answers. Because it is impossible to remember all the important details, make notes as you review. Be sure to note every little victory, concession, evasion and retort, as well as any holes you find in your case. You can also use this time to write down what needs to be included in your mediation brief.
3.) CASE ANALYSIS
As you are reviewing your file, you should be analyzing the strengths and weaknesses of your case. Make a written list. Keep in mind that no case is perfect. You need to take the time to realistically identify and develop strategies to deal with potential problems.
Think of how to approach your strengths and weaknesses in the context of a negotiation. Doing this at least 30 days prior to mediation will give you time to research unclear case law, develop counter arguments, and work with your client to determine if further information is needed.
Also take the time to analyze the strengths and weaknesses of your opponent’s case. Put yourself in opposing counsel’s shoes and try to anticipate their moves, their defenses and weaknesses. Anticipate opposing counsel’s arguments, and have answers and counter-arguments ready. Remember that forming persuasive answers to tough questions is more difficult under pressure at the table. If you have thoroughly analyzed your case, not much will surprise you or throw you off your game.
4.) ESTABLISH A RANGE FOR THE VALUE OF YOUR CASE
You can’t negotiate a settlement if you don’t understand the true value of your case. To do this, you must make an objective risk analysis and case valuation. First, perform jury verdict research. Compare your case to other similar cases. Discount outliers and be realistic about unknown variables, such as how your witnesses will perform under the pressure of cross examination or how well your facts support your cause of action. Second, perform a thorough risk analysis. Establish a protocol of how to change your evaluation based on each identified risk. Consider creating a list of the assumptions and calculations that underlie your value decision. This will be helpful as you begin negotiation. If risks are brought forth by opposing counsel, you will immediately know how to discount your demand or raise your offers based on those risks. Third, apply what you’ve learned above within your damages analysis. Come up with a number you feel represents the overall damages of the case, and then discount backwards for liability, costs, present value and trial uncertainties, such as how your particular judge might apply the law, which facts are likely or unlikely to come in, how well the experts testify, how well the other side’s lawyer tries the case and how the jury will react to your client’s countenance.
Experienced lawyers know in their gut what their case is worth. They have years of experience from which to draw, but for lawyers just starting out, they might find it helpful to consult with a more seasoned attorney to develop a reasonable settlement value. For any lawyer, it is often helpful to get a second opinion on case valuation because sometimes it is hard to see the forest through the trees. Remember that as an advocate, you might have a more optimistic view of your client’s damages than what is possible in reality.
To properly evaluate your case, you also need to determine your client’s goals. Are they interested in “winning” or are they willing to compromise? Does your client need anything other than money, such as an apology or a letter of recommendation? These factors might not add directly to your monetary valuation, but their intrinsic value should not be ignored. For example, how much would your client be willing to give up in financial gain if she gets a letter of recommendation in return? You need to know.
Finally, you must determine the settlement value of your case versus its litigation value. These numbers may be vastly different, and will depend on many factors. Some factors to consider include the percentage or cost of your fee, expert costs, whether a CCP 998 might be proffered, and how desperate your client is for an immediate payout rather than waiting for trial. Often, a settlement value for $100,000 today is more than your client would get a year from now after a $200,000 jury verdict. Run the numbers so you can rely on hard facts, and make sure you have a gentle method of letting your client know about these realities.
5.) DEVELOP A NEGOTIATING PLAN
Once you understand how much your case is worth, you must develop a negotiation plan. To do this, determine what you could win on your “best day in court,” as well as your “walk away” number. Your “best day in court” number represents what your case is worth “soaking wet.” This is the best possible scenario your client might obtain. Your “walk away” number can only be determined by you and your client, and it should represent the number that makes your decision to settle or not to settle very easy. In other words, if you have to debate about whether to take the number on the table, it’s probably a number you should seriously consider. If you don’t even have to think about it, then it’s an easy decision. The easy decision is the “walk away” number. In determining this number, be sure to factor in whether your client needs money now or can wait, whether the same number will net your client the same amount at trial and whether there are other costs to consider, such as any time your client might have to take off work for a lengthy trial or risks of a large judgment.
Make a plan for your negotiation. Leave yourself enough wiggle room for unexpected responses from opposing counsel, but be careful that your numbers are grounded in reality. One of the worst mistakes lawyers make in a negotiation is to ask for the moon when their clients are only entitled to a piece of cheese. Be sure you can justify your demands or offers, as this will earn you respect and credibility with both the mediator and opposing counsel.
Finally, don’t back yourself into any corners. Negotiation is about compromise and problem solving. If you come out swinging, you might overplay your hand, leaving you little room to move. Remember that mediation is about compromise; but in compromising, many of the most successful negotiations end with every side walking away equally unhappy about what they gave up, but equally happy about what they accomplished.
6.) MEET WITH YOUR CLIENT AND REACH AGREEMENT ON YOUR GOAL.
Evaluating the case for a legal perspective is, of course, only half the battle. Equally important is determining what your client needs and wants. Meet early and often with your client to help make this determination, and make sure your client understands that mediation can be a creative process, allowing for creative solutions.
Check in with your client early and often about their needs, goals, thought and feelings. Determine whether they need anything other than the declared relief in the lawsuit. This will help with client control issues that tend to pop up later in the process.
Keep in mind that client control is a big reason mediations fail to result in settlement. Often, the client’s lawyer failed to adequately prepare their client for the ups and downs of the negotiation process, or the lawyer over-evaluated the case from the outset. To prevent this, you should explain to your client the strengths and weaknesses of their cause of action before mediation. Educate them about how you evaluate the case and about how the legal process and the mediation process works – and how they are different. Include your client in developing the negotiating plan as much as you can. Working with your client before mediation to arrive at an agreement about how to resolve the lawsuit might prevent client control issues in the future.
7.) ENSURE ALL DECISION-MAKERS WILL BE PRESENT
When scheduling your mediation, ensure that all relevant decision-makers will be present. If scheduling the mediation months in advance, confirm with the decision-makers at 30 days, 14 days, and 7 days prior to the mediation. Use these confirmations as opportunities to exchange further information and any initial demands or offers. Don’t waste time and money by not ensuring they’ll be there.
8.) PREPARE A MEDIATION BRIEF
Many mediators ask for briefs so they can hit the ground running and not waste valuable negotiation time getting up to speed. The act of writing the mediation brief itself will help you prepare for mediation.
Consider whether you want to submit a confidential brief to the mediator alone, or if it would be helpful to submit a brief to all parties. There are advantages to each. A confidential brief allows you to candidly discuss the strengths and weaknesses of your case with the mediator, who will need this information to determine how to best position your case for negotiation. On the other hand, a brief sent to all parties can quickly narrow down issues and present a starting point for negotiations, allowing all parties to start on the same page.
As you write your brief, be aware of your audience. A brief that calls the opposing party a liar and a cheat is not going to position your case for resolution; rather, it will inflame passion and cause the other side to dig into their position. However, a brief that succinctly and professionally outlines your cause of action and why you feel your client will prevail might diffuse an otherwise contentious situation. You can use your mediation brief as an opening salvo to commence negotiation, and if exchanged between parties, its tone may set the tone for the entire negotiation.
9.) CALL THE MEDIATOR TO DISCUSS WHAT YOU CAN’T PUT IN A BRIEF.
You never know what information might help the mediator settle the case. It is especially important to speak to the mediator prior to the mediation for this reason.
My favorite example was when a plaintiff’s attorney called me to mediate a very contentious intentional tort case between a huge military guy and a short, nerdy businessman. The military guy got the snot beat out of him by the nerd. He filed suit, wanting to make the nerd pay for the humiliation he endured.
Unfortunately, military guy’s lawyer was convinced that a jury would never get past the picture of the jock getting beat up by the nerd as highly unlikely. He needed to settle the case, but his client was adamant about taking it to trial. I asked the attorney why I was chosen as the mediator, and he told me that military guy doesn’t love or respect anyone in the world except for his mother. It just so happened that I looked like a young version of his mother. He was sure if anyone could settle the case, I could… not because of my skill or knowledge, but because of who I looked like. This was valuable information which caused me to dress, behave and speak to the plaintiff differently than I might have in the ordinary course of business. I settled that case in 90 minutes.
There is a lot you can’t put in your brief. That doesn’t mean it’s not important information to give to your mediator. The week before the mediation, call you mediator and tell them everything they need to know about your client, your case, opposing counsel, the opposing client and their case, and your true concerns about how the mediation might or might not go. Let your mediator know about the intangibles. These are the currency with which the mediator will be able to work towards settlement. Remember that your mediator’s purpose is to settle cases. The more information they have about the problems, the more likely they are to solve them.
Entire books could be written about preparing your case most effectively for mediation. Although the above steps seem simple and obvious, many lawyers fail to follow them, thinking mediation is a free pass from the hard work of trial. Remember that a successful mediation requires just as much preparation as trial, even if the preparation is wholly different.
I hope these simple tips position you and your case for success in your next mediation.
© 2013 Terri Lubaroff