Thoughts on Mediation

Mediation is an important part of personal injury and wrongful death litigation.  Indeed, my only significant quarrel with mediation is that defendants often refuse to engage in any settlement negotiations in significant cases without a formal mediation.  I still remember the days where lawyers could actually engage in settlement negotiations without having to pay for the services of a mediator.

Karen Koehler, a personal injury lawyer in Seattle, writes a blog called "The Velvet Hammer."  Here is an interesting post she has written about mediation:  "Tips for Attorneys:  Mediation Meanderings."

An excerpt:

All personal injury attorneys are not equal in mediation.   Insurance companies settle cases based upon a risk analysis.  The risk they’re looking at is what might a jury do if they believe in the plaintiff.  How big might a verdict be.    They really don’t care how much it will cost to take the case to trial – that expense is built into their business model.  They don’t really care about the feelings of the plaintiff.  It is a bottom line decision.  The unfair but true reality is that two different attorneys could be negotiating on the same case and the insurance company would offer different sums of money.  They are looking at  what risk the attorney presents.  If the attorney does not ever try cases, the insurance company knows they can lowball the offer and the attorney will always accept rather than go to court.  If the attorney tries plenty of cases, this changes the equation and the risk upwards.

I have one caveat to this statement,  and I am sure that Karen would agree with it.   Insurance companies look not just to the willingness to try a case and the number of cases tried but also the lawyer’s ability to successfully try a case.   There is a potential  relationship between number of trials and the ability of the trial lawyer, but we all know lawyer who have had a significant number of trials who simply aren’t any good at it. Thus, the insurance company looks to the plaintiff lawyer’s willingness to try a case (demonstrated in part by past trials) as well as the lawyer’s ability to try a case with enough expertise to pose a risk of loss to the insurance company over-and-above what it would like to pay to settle the case.  If this factor is present, the settlement value of the case goes up.  However, it the insurance company knows that the lawyer will not or cannot try a case, the settlement value goes down.