Pre-suit or Early Mediation in Commercial Cases – Good for Clients, Good for Attorneys and Not a Sign of Weakness

Published: December 2015
By: Theodore A. Deckert

Pre-suit mediation is becoming mandatory, by either contract or law, in many types of commercial disputes.  More and more attorneys and sophisticated clients are recognizing the advantages of pre-suit and early mediation and no longer believe proposing early mediation is a sign of weakness.

In over 30 years as a trial attorney and now 15-plus years as a mediator, I have observed that in almost all cases I litigated or mediated what the clients appreciated most when the case ended was not the outcome, but that it was “the end of the case.”  For clients, mediation offers the opportunity to achieve a less expensive, swifter, private and more flexible resolution to a dispute. Perhaps most importantly, clients have a say in the outcome.

Most litigation occurs because something went wrong and people want to do something about it. Most attorneys now recognize that lawsuits rarely go to trial. Statistics vary depending on jurisdiction, venue and type of case, but most reflect that more than 95% of suits are not resolved by verdict or judgment, but rather by settlement. In most cases, the earlier a settlement is reached, the better for both sides. Mediation is the best way to get to “the end of the case” sooner rather than later.

Mediation gives both sides in the dispute the opportunity to address with their lawyers the realities and risks of litigation. Attorneys understand that litigation takes time, money and energy. Most clients do not fully realize how much of their time, money and energy will be required. More sophisticated clients (corporations, insurance companies) do understand, and they are increasingly insisting on greater value for their legal dollars. Most trial attorneys will acknowledge that their time is more “financially productive” out of court than in court, so it is usually good for the attorney if the case is resolved as quickly and inexpensively as possible.

It is important to remember a settlement agreement is simply a deal that all sides agree is a better choice than continuing the dispute. The further the litigation goes, the more invested financially and emotionally the clients become. The earlier clients can explore settlement options, the more open they are to appreciating the control, certainty and closure settlement provides, and the more flexible they will be regarding the difference between what they want and what they need.

In most cases, the litigation process does little to change the parties’ settlement perspectives. Some will argue they cannot “evaluate” their case without discovering all the facts and the validity of their opponent’s legal theories and evidence. Certainly, those cases occur. However, both sides in commercial disputes often already know enough about the facts and issues to be able to evaluate their strengths, weaknesses and potential outcomes of litigation.

For attorneys, particularly in commercial litigation, early mediation offers a special opportunity. Contingency fee attorneys can consider the time and money they must invest in the case to achieve an outcome that puts more money in the client’s pocket than the settlement offer. Most commercial litigation attorneys will agree it is better in the long run to have a client who feels they received an acceptable outcome and good value for their legal dollar. Although the hourly lawyer might miss “additional billing” if the case settles early, the client who feels they received good value will bring repeat business and referrals. Remembering most cases will not go to trial, commercial lawyers need to consider how likely they are to achieve an outcome for the client later in the case which the client will feel was worth the additional expense and aggravation of further litigation.

Finally, litigation is one way to end a dispute, but not the only way.  Pre-suit and early mediation enable clients to consider other and usually better ways to “end the case” than letting a judge or jury decide how it ends.

 

Theodore A. Deckert, Esq. is a full time Mediator and Third Party Neutral affiliated with Matrix Mediation LLC since 2008.  A civil trial attorney since 1976, he was a Florida Bar Board Certified Civil Trial Lawyer for 25 years.  He has been a Florida Supreme Court Certified Circuit Civil & Family Mediator since 2000 and has focused his practice on mediation since 2004.  For more information email him at ted@matrixmediation.com  Copyright © 2015, Theodore A. Deckert, all rights reserved.