Based on the many, many mediations I have conducted, I have found that one of the biggest obstacles to resolving a lawsuit is the lack of preparation. The attorney representing the party and/or the party have not given any real thought to what it will take to settle the case or even if or why they want to settle the case!
The presentation given by Ms. Long resonated with me because she discussed asking the hard questions- both from the business viewpoint and the emotional viewpoint: What is the moving force both in terms of the business decision and the emotional decision behind the decision to settle or try the case? (As much as one might protest, our decisions ARE 95% emotional!)
In one of her power point slides, Ms. Long asks the hypothetical attorney, how well does she know what her individual client wants to do? Is the client willing to settle “at any cost”? Are there issues of financial drain, emotional drain or other issues involving family that must be considered? Are there “good reasons NOT to settle the case?” For example, is the client out to prove a point? Or, will any settlement offered always be below what a judge or jury would render as a verdict; is the case REALLY that good that no settlement can match what a verdict will award ?
Her next slide asks the attorney the REALLY hard questions: what has the attorney told the individual client to be the most likely outcome of trial? What has the attorney told the individual client to be the costs of going forward to the trial? If the client does win, how easy or hard will it be to collect, i.e. what is the cost of enforcing the judgment, and is it even enforceable or collectible? If the client does not settle at mediation, but rather at the trial, how much more will be spent between now and then such that the amount being offered today actually equals a greater net gain than settling at trial?
And then there is the question that none of us like to think about: What is the cost of losing at trial? Both in terms of the loss of recovery to the plaintiff and the loss of attorney’s fees to counsel, as well as the payment to defendant of the defense costs. Many clients may not realize that if they lose, they may have a judgment entered against them for thousands and thousands of dollars representing the costs that the defendant has expended in the litigation.
Corporate clients have equally difficult but different issues: Will there be ramifications- positive or negative- to the corporate representative for the decision she makes regarding any possible settlement? (Will she be demoted? Lose her job?) What are the ramifications to the corporation itself if it settles? Is the lawsuit more than just a lawsuit either to the corporate representative or to the corporation itself? Is there some hidden motive or agenda such as personal or economic gain that is driving the decision making? Is reputation or goodwill at stake?
As this presentation did deal with emotions, Ms. Long also discussed the emotionally laden questions that the client must address: How does she feel about trying the case? Has opposing counsel and/or the opposing client been uncivil to the client or her attorney and is this affecting the decision to settle or to try the case? How does the client feel about settling the case? What is her reaction to going to trial? Or, to settling? Are either of these emotions strongly negative? Strongly positive?
And then counsel must ask these same questions to herself: How does she feel about trying the case? Settling the case? What is her emotional reaction to each scenario? Has opposing counsel been uncivil and is this coloring her advice to her client about resolving the case? Is the litigation more than just a lawsuit to counsel: are there ulterior motives such as relying on the fees to pay her bills? Has she been uncivil to opposing counsel and if so, has it helped her gain any advantage or has it actually been detrimental to reaching a resolution? Has opposing counsel been uncivil to her and is this coloring her decision whether to settle or try the case? Does counsel want to settle because the client has been difficult? Or because the case has been emotionally draining, or financially draining or counsel has family or personal issues that are requiring immediate attention?
In short, the questions to be asked are those that “go below the line”; what IS really going on here? What REALLY is the underlying business reasons and emotional reasons for the decisions being made?
Once these questions are asked, pondered and answered, both the parties and counsel should have a clear picture of what to do next!
… Just something to think about!