By Brian R. Wilson, Esq.
Only the most hard core Neil Young fans (that would include me) have heard of his obscure tune "Walk On" (from his mid 70's album "On The Beach"--a commercial flop but an album that more recent critics have hailed as genius). Unbeknownst to Neil, it offers a great strategy at certain mediation conferences.
For those unfamiliar, mediation is the process where parties meet informally with a mediator to try to settle a lawsuit or dispute short of a trial.
Most sane people would rather forego going through a trial and "settle it out of court" if at all possible. In cases of private mediation (where both sides agree voluntarily to mediation and agree upon a mediator), almost all mediators are highly skilled and like the bullpen closer, they successfully close the overwhelming majority of the cases they mediate.
What is the recipe for a successful mediation? From the plaintiff's standpoint, her attorney's stock in trade is twofold: (1) placing a realistic settlement value on the client's case after the due diligence of fact gathering, depositions, hiring experts, etc. is complete; and (2) managing the client's expectations. There's a LOT more to this, but suffice it to say the client and her attorney need to be on the same page at mediation as to what the settlement demand will be, and what is a realistic, acceptable final offer.
The defendant/insurance company's mediation metrics consist of "risk evaluation." Definition: what is our risk of getting tagged with a verdict we won't like at trial, what are the limits of our worst case scenario verdict, and what are the remaining litigation costs and expenses going forward? In theory, the combination of all these considerations should translate into some sort of realistic mediation settlement.
This is how it's supposed to work. But not all personal injury cases settle at mediation, for many reasons, even when the plaintiff and her attorney have made a realistic settlement demand. Sometimes, insurance companies come to the mediation table with no real desire to resolve the case.
In my experience there are a few tactics that increase the chance that a case won't settle at mediation.
MARCHING ORDERS
Many insurance companies have invested billions in fancy software programs that input all of a personal injury plaintiff's accident data (injuries, medical bills, lost wages, pain and suffering, future care needs and future pain and suffering). The program spits out a settlement figure, and that's about it.
No deviation from the algorithm. The claims representative shows up at mediation with the insurance company attorney and, marching orders in hand, convey "take it or leave it" offer with little to no deviation from that number.
Certain insurance companies (Allstate and American Family, to name a few), are famous for this. Their message: take the case to trial and beat our offer. Makes for a short and time wasted mediation. You can't negotiate with a robot.
TAKE THE BAIT
This tactic often surfaces in catastrophic injury cases, where the potential for a huge jury verdict is substantial. Occasionally, the insurance company will suggest "early mediation" before the lawsuit gets bogged down with too many depositions and experts.
This olive branch approach sounds good in theory, and there are times when the insurance company is sincere in the mediation offer. But it is often offered with another purpose in mind.
Take for example a young, married wage earner with children, who is killed due to a truck driver's negligence. The effects of the loss of a spouse and parent can be devastating, both emotionally and financially. The grieving family is vulnerable and must withstand this tsunami for years to come, and insurance companies realize this.
Let's assume that, internally, the insurance company has evaluated its risk of an adverse jury verdict in this scenario at $3-5 million. Early mediation may offer it the opportunity to make an offer of $1-1.3 million at the end of a long mediation, well below its own evaluation of risk. There is one purpose for doing so: to dangle enough money on the table to make the family think long and hard about turning down the money out of economic necessity and vulnerability.
THE FOUR CORNERS STALL GAME
Dean Smith, the late great North Carolina basketball coach, was the architect of the "four corners stall." The idea is to hold the ball for as long as possible while ahead on the scoreboard in order to run out the clock, or force the opponent to gamble on defense and make a mistake. Insurance companies and certain institutional defendants, like nursing homes, will occasionally employ this tactic, with mediation acting as camouflage.
Recently, I litigated a case against a long term care facility. Numerous depositions had been taken, and the trial was close at hand. The timing of the mediation was perfect in that enough information (known as "discovery") had been exchanged that the parties had a good idea of the probable jury verdict outcome.
Yet, at mediation, the facility showed up with a realistically low settlement offer, claiming it needed "more time" to evaluate the case. Truthfully, it needed no more time, and the offer was designed to weaken my clients and make us spend more money on trial preparation. It had the opposite effect of hardening my clients' resolve to see the case through to the end.
Less than one week before the trial, the facility made an offer it should have made three months prior, and the case settled.
When any of these scenarios rear their ugly heads, often the best tactic is to invoke Neil's advice and "walk on." In the right case, it can send a powerful message to the other side that you are prepared to take the case to trial and a verdict.
But it is important to walk on in a professional, emotionless manner without burning any bridges with the other side, for one reason: good mediators will not consider the case closed when one side leaves the mediation table. Many mediators will not view walking on as a failure, but an opportunity to keep the lines of communication and negotiation open, and this will often result in a settlement days or weeks after the "face to face" mediation has concluded.
Hopefully now my parents understand why I blasted all of those Neil Young albums in the house or the car. Educational purposes only....
