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Personal Injury Mediation: A New Disturbing Trend or a Flawed Tactic?

March 12, 2014

“Not getting it done” is a description that no mediator wants to hear.  Aside from the implication that “the mediator didn’t get it done” (a full other subject for another day), professionally, the thought that the mediation process, in general, is losing its usefulness for final resolution, is much more disturbing.

Hopefully, this is limited to personal injury matters and is only a passing fad.

However, many mediators are observing a disturbing recent trend in personal injury matters:  defendants using mediation not as a true final resolution process, but only as a preliminary step to foreseeable (and thus highly predictable?)  later efforts at resolution after completing the formal mediation process.

This could be acceptable as an occasional strategic use of any mediation.  Particularly early ones.  You already know my feelings about the importance of timing of every mediation and the tradeoffs for early mediation.  See, Timing the Scheduling of Your Mediation“, January 28, 2012; “Early Mediation:  A Reminder of the Pros and Cons, January 12, 2014.

Many “failed” final  mediations can also be attributed solely that they were held well before one or both sides were simply fully prepared, physically or mentally, for any final resolution.  Frankly, (although seldom admitted by the participants) those cases simply “needed” their mediation in order to get ready to settle by later (and better) resolution efforts.

And there will always be those cases  which one side or the other simply believes that the best voluntary resolution “value” can only be achieved during the immediate or actual trial week.  A simple lack of trust in the other side is often the underlying reason.

However, increasingly, even in well-timed, fully prepared mediations, for reasons that are not always clear, this “not really the final offer” tactic by some defense representatives seems to be trending to predictable repetitive use, with a planned and later post-mediation offer always greater than the last one achieved at mediation.  Usually followed, by the way, by an always lower “demand” by the plaintiff side that allows resolution before trial (either of which moves, by the way, if made during mediation would likely have led to resolution at mediation).

Thus, also increasingly, the more knowledgeable plaintiff “side” is now assuming this tactic is in play in subsequent mediations and also stops lowering their mediation demands.  Thus, and predictably, always begins the inevitable “Fear of Failure” cycle that almost always dooms that mediation!  See, Is ‘Fear of Failure” Ruining Your Negotiations?”, December 10, 2011

The question:  Is this a latest trend being espoused in defense/insurance professional seminars or only a short-lived flawed tactic?

Everything has a cycle.

When mediation first was introduced, the finality percentage achieved in early mediations was astoundingly high.  Frankly, I attributed that to the fact that most early mediations involved matters in which much pre-mediation negotiation had already been achieved and early mediations simply capped their earlier efforts.

In later years, the tried and true pre-mediation negotiation practically disappeared.  The defense “side”, the ones writing the check, found that they were simply obtaining better final resolution results by waiting to make their first offers at mediation, rather than prior to it.  For the majority of most personal injury matters, that remains their posture and the status of mediation negotiation.

It now appears part of a new cycle to “use” mediation, even for well-prepared and well-timed ones, solely as a “first-step” of a more prolonged post-mediation negotiation.  In short, to give a “final offer” at mediation, but if not accepted, to then, predictably, post-mediation, continue to offer more until resolved. 

Is this a tactic to test the resolve of a claimant or their counsel?  Is it to reinforce that their final offer in mediation really is final (when in reality it isn’t) ?  Or, is it simply a percentage play; i.e,,  it doesn’t always work, but it works well and often enough to justify trying it?

Regardless, it may become the tactic that kills mediation.

The defense “side” CAN try this new tactic.  The defense side, assuming adequate insurance coverage,  has always been able to take risks and tactical positions that the claimant-plaintiff side simply cannot.  That is the entire basis of how insurance works; they have multiple choices of payment v. a roll of the dice and they can cover any bad decision in one claim by a good result in another.  Few claimants can transfer their risk in one claim to another.

But at what price?

Cases are still being settled before trial .

However, now they are being settled much later for more money, wasting the parties time and efforts in mediation and only after far more expenditure of litigation costs in expenses and fees and higher risks of the matter being tried, than prior to the better uses of mediation to achieve a final resolution.

The claimant-plaintiff “side” will always, eventually, adapt to such flawed “new” mediation tactics.  Many already have.   Offers that are “obviously” not even close to “fair” are easy to reject.  And, once trust is lost, even fair offers are starting to be rejected.

And, worse, some plaintiff counsel already have “adapted” even when such a tactic was NOT actually being used!  Premature rejections of fair negotiation efforts always lead to mediation failure.  (And, thus, the sides always fulfill their own prophecy!)

Meanwhile, the ultimate total loss will be to both sides (and their clients):  Finality, at a reasonable time and reasonable cost, is now rapidly returning to the “olden days” when such voluntary resolution without trial finality was only achieved at the last-minute, at much higher cost in expenses and fees and much higher risk of actually going to trial than is now afforded by well-prepared and well-timed mediations.

And, worse of all, lay-clients on both sides are increasingly losing confidence in mediation as the process to best save them time and money.

I truly hope this is not a trend or a turn in the cycle of mediation in personal injury matters.  If confidence in the process is ever totally lost, by either “side”, the loss to all of possibly the most popular client-choice of resolution opportunities of our tort-system, could be lost forever.

Confidence is like reputation.  It takes a very long time to achieve, but only a moment to lose.

Our tort system will suffer, dramatically,  if confidence in our highly successful mediation process, as a true alternative to trial, is lost.

Dan, from Gainesville, Florida.

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