The uncertainty of a litigated outcome alone justifies considering alternatives to a litigated result. Every experienced litigator can point to cases they won when they didn’t think they had a chance winning. They can also point to times when if there was any justice, they would have won, but lost. There simply is no way to accurately predict with certainty the outcome of a litigated case whether decided by a judge, a jury, or an arbitrator. A mediated result gives you certainty without the risk of litigation.
The Randall Kiser Study, released in the Journal of Empirical Legal Studies, found that parties who reject the last and best offer at mediation overwhelmingly regret the decision. The study surveyed thousands of cases in California and New York over a five year period. It found that plaintiffs who rejected the last settlement offer and proceeded to trial do worse a whopping 61% of the time, while defendants did worse than their last offer 24% of the time. In only 15% of the cases did both sides obtain a better result at trial.
All is not good news for defendants, however. Although they seem to do better at predicting outcomes, the 24% of the time they are wrong ends up being much more costly to them. Defendants who fared worse at trial than the last demand, ended up with a verdict that was on average $1.1 Million more than the Plaintiff’s last demand. On the other hand, plaintiffs who fared worse than the last offer, received on average $43,000 less than the last offer given before trial. Some studies suggest that 95% or more of lawsuits settle rather than go to trial. Assuming that is true, your case seems destined to settle; therefore, why not resolve it now rather than later? Doing so will save time, aggravation, stress, and money. That said, mediation will not be an easy process. At times, you may feel uncomfortable, pressured, and perhaps even emotional. If the process were easy, the parties wouldn’t need a mediator’s assistance to settle the matter.
There may come a time during mediation when you may feel like giving up and you might feel like settlement is impossible. It is likely that in order to settle, both parties will be urged to step beyond the original “bottom line” limit they determined for themselves before the process started, in order to make a deal. Once the parties have come this close to a settlement, the last thing they should do is to give up. The easy answer will be to walk out the door in frustration. But remember what awaits you if you choose to leave: more attorney fees, stress, frustration, and an uncertain result through litigation. If you are inclined to say, “I offered my last dollar and they rejected it,” I would also urge you to avoid drawing a line in the sand. Instead, explore if there is something of non-monetary value that you can give or get that might make the deal more palatable. If not, I would recommend that instead of walking out the door, you tell the mediator that you are ready to quit, and allow the mediator a chance to give you a reason to stay. If you give the process a chance, you may walk away with a settlement you can live with, rather than an uncertain future where the decision will be made by someone else.