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. Randall L. Kiser, Martin A. Asher, and Blakeley B. McShane, Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations, Journal of Empirical Legal Studies, Volume 5, Issue 3, 551–591, September 2008.
Plaintiffs who reject a final offer before trial were awarded on average $43,000 less than the last offer given before 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.
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.
Think twice before you give up and walk out, thinking you are certain to fare better at trial. 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, 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.
Hon. Jay Young (Ret.) is a retired judicial officer with decades of experience presiding over complex civil litigation matters. Following a distinguished career on the bench, Judge Young now serves as a mediator, arbitrator, and court‑appointed special master, and discovery referee. Judge Young brings a disciplined, impartial, and results‑oriented approach to dispute resolution. Judge Young is based in Nevada and accepts appointments statewide and nationally, subject to agreement or court order. He can be reached at 855.777.4557 or info@armadr.com
Known for judicial temperament, analytical rigor, and practical problem‑solving, Judge Young assists litigants and counsel in resolving high‑stakes disputes efficiently and with integrity and employing best practices. He is recognized by U.S. News and World Report’s publication Best Lawyers as Arbitration Lawyer of the Year.