Top Reasons Cases Don’t Settle During Mediation
Dallas, TX, United States
Your case is set for mediation… now what? Here are some of the biggest (but often preventable) barriers to successful negotiations during the mediation process according to Dallas employment law mediator Keith Clouse:
Crucial decision-makers not in attendance
For the best chances of settlement, the individuals with authority to settle the case need to be present. Typically these will be the named individuals in the case. However, this becomes more difficult when a corporation or company is involved. While it may be impossible for corporations to have the designated decision-maker in the room on the day of mediation, the corporate representative who is sent should have some authority (even if not unlimited) to make decisions on behalf of the corporation or company. This avoids the hassle and waste of time involved with constantly relaying updates to the decision-maker on the phone.
There is no set timeframe for when mediation should occur in the life of a case. The timing aspect of mediation is highly variable depending on the circumstances of each case. However, a mediation which occurs before much discovery has taken place may preclude settlement because a party does not have sufficient access to information for their attorney to be able to fully analyze the case. Lack of full knowledge of the evidence and facts supporting the claims and/or defenses for each side can lead to unreasonable settlement proposals and unrealistic expectations of clients. However, early mediation may be advantageous in cases with a corporation or company party who wants to avoid publicity or those where there is a high risk of liability but minimal damages which can be proven.
On the other hand, a mediation which takes place too late may not result in a settlement because by that time the client has already expended so much time and money on the case that they are willing to take the risks of a trial over a less than favorable compromise.
One great benefit of mediation is that it can result in unique settlement agreements that would not otherwise be achieved at trial. Because of this, parties should go into mediation with an open mind and be encouraged to come up with creative bargaining positions to satisfy the needs of each side. If either party begins mediation with a fixed bottom line or is unwilling to negotiate, the case will likely not settle. Successful mediation requires compromise and flexibility – each party must be willing to give up something in order to arrive at a mutual resolution.
Attorneys and clients need to be fully prepared for mediation. This means bringing all documents and evidence which support your side’s claims and/or defenses. Attorneys should explain the process of mediation to their client so they know what to expect. Clients should understand that although the attorney will be there to advise, the ultimate decision on whether or not to accept a settlement offer falls on their shoulders.
Prior to mediation, each side should take some time to sit down with their attorney to set realistic expectations. This means analyzing both the potential best and worst case scenarios and prioritizing the objectives that the client hopes to achieve. Additionally, clients should be informed of the hurdles they will still have to jump over before a final resolution could be achieved. These may include any remaining discovery, motions (both pre- and post- trial), and potential appeals. Setting realistic expectations also means taking the time to calculate a client’s financial exposure if they were to be on the hook for any damages, attorneys fees or costs at trial. Clients must often weigh the risks of going to trial against the alternative of accepting a less than desirable settlement offer at mediation. Therefore, those clients who fully understand the risks and unpredictability associated with trials are often more willing to settle beforehand.
Even if all of these common pitfalls are avoided, some cases will nonetheless fail to settle. However, going through the process of mediation is still valuable because it allows clients and attorneys to explore and evaluate their case on a deeper level.
This article is presented by the Dallas employment lawyers at Clouse Dunn LLP. To speak to an employment law attorney about mediation or an employment law matter send an email to [email protected] or call (214) 239-2705.
About Keith Clouse / Dallas Employment Attorney Keith Clouse
Keith Clouse is an employment law specialist with over 25 years of experience representing senior executives, business owners, physicians, and corporations in complex employment litigation, arbitration, and negotiations. Senior executives, physicians, and other professionals consistently rely on Mr. Clouse for employment law expertise and advice on employment contracts, covenants not to compete, severance agreements, equity awards, trade secret disputes, and breach of fiduciary duty claims. Source CDKLawyers.com
Dallas Employment Lawyer – Attorney Keith Clouse
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