Early Mediation in Your Civil Litigation Case: A Time and Cost Saver, or a Waste of Time and Money?

September 19, 2022  |  Joan M. Quade

The short answer is that it depends. But there are many cases where, with hindsight, we can say that it would have been beneficial to try early mediation. There are some cases where we tried early mediation and they settled before the parties spent a lot of money and time. These are usually the happiest litigants. In my 35 years as a lawyer and advocate for litigants, in many different types of civil litigation cases, and my years as a mediator and an arbitrator, I can tell you that there are many cases that would, and many that did, do well in early mediation. There are also many more cases, especially in the last years, that should have tried early mediation and settled. Litigation should be a last resort for dispute resolution. It costs too much, and it takes too long. Good lawyers, who have a thorough understanding of the law and experience in the litigation process, and who are representing reasonable clients, should be able to negotiate a settlement with the help of a skilled mediator. More and more the parties wish, as they slog through the litigation process, that they would have settled earlier in the process, instead of spending the money and time it takes to litigate.

96% of all cases settle before they get to trial. Many settle on what we call “the courthouse steps,” which is right before trial. It takes a year and a half to get to trial in most district courts and sometimes two years in federal court. COVID really delayed those timelines even more. By then, the parties have spent a year or more through the litigation process, which is stressful and expensive. It makes economic sense to resolve the business or individual dispute through settlement, sooner rather than later. It also saves the stress and distraction created by being a litigant. Businesses want to focus on doing business, not gathering documents and attending depositions and court hearings. All those things take away from actually doing your business.

A challenge with early mediation is that some parties are not in the right head space, early in the dispute to really understand that resolving the dispute early will save them significant time and money. They don’t comprehend that each party spends, sometimes hundreds of thousands of dollars on litigation and years of fighting as they are focused more on a “win,” as opposed to problem solving and a reasonable outcome for all. They do not comprehend that settlement is in fact a win/win for all parties and most often a superior outcome. They don’t realize or don’t want to believe that even after spending hundreds of thousands of dollars on litigation and the stress and distraction from their business caused by litigation, most cases settle anyway before trial. So, what is the purpose of the discovery process and the years spent on litigation, only to later settle anyway, after the money is gone and the stress is overwhelming. By the time the discovery is done, everyone knows every detail and fact and has had a chance to analyze the case from all angles and realizes that most disputes are not overwhelmingly one sided, as they thought in the beginning, when they could only blindly see their side of the issue. Experienced lawyers try their best to explain these challenges to clients, but are sometimes then faced with a client who thinks the lawyer does not have the aggressiveness to fight for them or they think the lawyer is being weak or does not “believe in their case” or is afraid to go to trial. Trial lawyers are not afraid to go to trial, they just know the costs associated with trial and the risks of getting verdicts that are not expected. All good and experienced litigators will tell you that they have won cases they should have lost and lost cases they should have won. We have seen it all over the years. Also beware of the litigator who says they have never lost a case. If that is true, then they have either not tried many cases or are not trying any difficult cases. So if what your lawyer is telling you about trying to resolve the case in mediation comes across as discouraging you from fully pursing your case to trial, you probably have a very good lawyer who has your best interests in mind and not just their own self-interest in billing hours and making money off of your dispute.

So, what do the parties need to really know, early on, to make good decisions about how to resolve the dispute. There are some cases where the parties just don’t have enough information about the claims and defenses to feel comfortable going to early mediation. So, problem solve. What is it that each party needs, to have a comfort level, to try to resolve the case early?  Is it documents or to know what a particular witness will say? Documents, by agreement, can be exchanged early on, before discovery, and affidavits of a witnesses can be obtained to assist with early mediation. The cost to exchange this kind of information, early in the process, is miniscule compared to the costs of full discovery and litigation. 

Keep in mind that mediation is a voluntary and confidential process, so the parties only settle, if they can reach an acceptable agreement to both. If no settlement is reached, the downside is minimal. It is the cost to attend mediation and the cost of the mediator. If there is no settlement the parties still have all the same options that they had before early mediation, to go forward with discovery and to go to trial or settle at a later date. The early exchange of information, if that was done, is also not a downside to ligation. There is no hiding the ball in litigation under the discovery rules, so the same information would be exchanged in discovery anyway. Also, the process is confidential, so even if offers are exchanged to settle and no settlement is reached, neither party can use that information later in court, to show that either party is liable or at fault.

However, to give early mediation the best chance for success, having an experienced attorney and more importantly, having an experienced mediator, who has litigated many cases themselves, is very important. Experienced lawyers and mediators can more quickly assess issues and the evidence available and have a thorough understanding of the law and how it would be applied. They also know too well the costs that will be incurred for their clients in litigation, and they know the uncertainty that comes in a courtroom. The mediator can also articulate how a future third party will look at the case if it does not settle, like a judge or arbitrator. Experienced lawyers and mediators want a good outcome for the parties. They should be outcome focused for the parties not self-interest.

The mediator is a neutral party who can help bring the parties to an agreement that works for all. A good, experienced mediator can assess what the parties need to get to a resolution. Sometimes that takes thinking outside of the box of just dollars and cents. Some parties need something other than money to get to a resolution. Maybe an apology or an affirmation about something that has occurred, maybe it is just the satisfaction that they are doing the right thing financially or that things going forward between the parties or within their company will proceed differently to prevent a future dispute. Mediation should be problem solving, reading the parties to see what they really want and need at the end of the day, and building of relationships to get to that resolution.   

Is early mediation right for all cases? Certainly not, but it is worth a try in many cases to try to avoid the time and expense that it takes to litigate the dispute. There is no significant downside, and the potential upside is enormous if the company or party can avoid the expense of litigation. For early mediation to have the greatest success rate, choose a mediator that has extensive experience in both mediation and litigation. Make sure that the parties are properly prepared for the mediation with an initial exchange of information ahead of time, if needed. If experts or the company accountant are needed for specific questions, make sure they are available by phone. Ensure that the decision makers for the parties are in the room and everyone is prepared with the information they think they need, to properly assess their positions and change their positions as needed to reach an agreement. A good mediator will coach everyone to keep an open mind and to look at the process as problem solving. Early mediation should be considered in all types of cases and pursued as a viable option to provide for an efficient and cost-effective way to resolve a dispute.