From Conflict to Resolution:<br>When to Negotiate the Litigated Case

There are two eternal truths about litigated cases: 1) There is a tremendous likelihood the case
will be settled without trial; 2) The settlement could occur any time from the moment the case is
filed until the eve of trial. That vacuum of time provides many favorable and unfavorable
opportunities to negotiate a resolution to a case that is satisfactory to your client. It’s how you
use the time that counts.

Picture a Continuum of Conflict in which we start at one end with the filing of a litigated case.
At the other end of the continuum is trial. In between are various opportunities available to come
to the table and negotiate a deal. Determining when to come to the table depends on your
confidence in the case and overcoming the fear that the other side will misinterpret a suggestion
of negotiation or mediation as a sign of weakness. Figuring out how to inquire about settlement,
either through direct negotiation or mediation, also requires strategic choices.

In order to understand the current options available to a litigator who wants to settle a case, let’s
first go back in history and look at the context in which cases have traditionally resolved.

What is the context in which all of this is going to happen?

Assume for a moment that you were retained to process a typical tort dispute in the 1950s. What
were the obvious dispute resolution choices available to the typical litigator at that time? One
option would be to contact general counsel for the defendant and offer the idea of trial or
propose some kind of negotiated settlement. Generally there were not many choices in between.

Another possibility was to advise the client that the easiest approach is to make a telephone call
to the other side to see if the matter can be worked out. If that was unsuccessful, the client
would have been to be informed that trial was the only other alternative. The client would be
reminded that our civil justice system has been successfully resolving disputes for hundreds of
years, and that the courthouse is a nice place to spend some time. After all, it has beautiful
cement columns on the outside, large rooms with plenty of spectator seats and of course, each
room proudly displays the American flag. Most importantly, though, it is free to use almost any
time. So, if the telephone call did not work, the client would be informed that s/he could go over
to the courthouse with some sense of confidence that lawyers would be able to do their work,
that there would be a judge there ready to hear the case, and that it could happen in a relatively
timely fashion. In 1950, the system of resolving disputes would have been perceived as relatively
efficient.

The Early Years of Dispute Resolution

The first generation of dispute resolution that evolved over 150 or 160 years in this country was
one that said, “Look, we try to settle things, and if we can’t, we file these papers in court, and we
have a forum that will take care of it.”

Connection between Negotiation and Litigation

In the early years of this continuum of conflict, litigators knew that there was some connection
between the process of negotiation and litigation. Whenever a litigated case was filed, like a
rubber band, we would snap back and try to negotiate the case. In so doing, we would send a
message that required the other side to take us seriously. After receiving the summons and
complaint, the other party would realize that s/he must appear in court. This inconvenience made
it a little bit easier to talk. As a result, the parties would then get on the phone and settle a huge
number of cases simply by negotiating directly with the other side. One commentator has
indicated that often times we file papers in court for the primary purpose of getting the attention
of the other side so we can negotiate. This has been cleverly referred to as “litigotiation.”

Litigators in the 1970s and 1980s faced an increasingly over burdened court system. At one
point in our history, the court system in Los Angeles took over 60 months to get a civil case to
trial. Attorneys realized that juries, when we finally get them, are unpredictable. Moreover, the
cost to prove even the most simple case made some trials economically prohibitive.

Options Borrowed from the Labor Field

Litigators began to observe that perhaps there were other choices available that managed costs,
were more efficient and clearly more timely than trial. We looked at other cultures, borrowed
ideas from the labor field, and realized that some clients would be better served if their cases
were resolved in something other than a court room. We then started using arbitration for
smaller civil disputes since that process worked for years in labor contracts, was more informal,
less costly and seemed to be successful.

While mediation was also used in the labor field, it didn’t catch on as quickly in the 1970s while
arbitration was making its way up the ladder. Yet litigators were still looking for a way to
negotiate, but possibly with the help of a third party, similar to an arbitrator, but who could not
make a decision on the case.

Early mediation programs grew out of the family law courts that observed which there might be
a more humane way to solve these problems than to present them in a public forum. Family law
litigators started to move in the direction of mediation since the issues they had, like child
visitation and custody, probably didn’t make sense to put in a courtroom environment. Indeed
the early mediation programs in family law courts envisioned using neutral third parties who
were not necessarily members of the bar to serve as mediators. As the process began to emerge,
some felt that working through a negotiation of a family dispute was something a therapist could
do better than a lawyer. That process continued to evolve and now we have applications of the
mediation process all over the map.

The Next Generation of Dispute Resolution

Following the lead of the family law arena, civil litigators began to see the value of bringing in a
neutral third party to assist or facilitate in the negotiation process. While it took about 15-20
years to institutionalize the mediation system into our civil justice system, it appears that it is
here to stay as a viable option for litigators who want to settle their cases without going to court.

Following this second generation of dispute resolution options available to litigators, we move
forward until about ten years ago, when another generation of options became available to settle
cases out of court. This third generation resulted from people wanting to tailor their mediation
or arbitration process to match the particular dispute. Now we have at least 25 other hybrid
processes available, ranging from baseball arbitration to mini-maxi arbitration, with various
things in between, including summary jury trials, med-arb and much more.

The current Continuum of Conflict takes on a dimension that is far broader than we saw 40-50
years ago. The world has changed. We are now beginning to reframe our choices so that the
strategies we select to intervene in a dispute give us the best possible chance of achieving
resolution at the least possible emotional and financial cost to our clients.

Negotiation is at the heart of the many choices we have to resolve cases. Whether we use
negotiation to actually settle a case or parlay a matter into another procedure which is less
intrusive than court, litigators must fundamentally rely on the negotiation process for everything
they do.

Negotiation Defined

Negotiation is generally defined as “a communication process we use to put deals together or
resolve conflict.” In negotiation, litigators have control over both the outcome and the process of
a dispute. Procedurally, the parties in negotiation are responsible for designing the process.
Similarly, by definition, the parties have control over the outcome.

This is in sharp contrast to arbitration or trial where power is clearly delegated. In traditional
litigated cases, a litigator relinquishes the power over the outcome because decision making
process is given to someone else. All procedural decisions are taken from parties. Like a
cafeteria, litigated cases require you put down a tray and select things from a menu such as
which discovery processes or motions you might utilize to get an advantage over the other side.

Since it is a communication process, like most things which require communication, sometimes
problems occur that end up causing the dispute to reach an impasse. This is where civil litigators
and even the court system have chosen to introduce Mediation as a preferred option for resolving
disputes.

The reason that mediation has worked so well for litigators is that it is basically a facilitated
negotiation. While we have evolved beyond the years when family law practitioners preferred
non-lawyers to mediate their cases, the current crop of litigators can choose from well respected
retired judges and established trial lawyers to serve as mediators. This gives the litigators a sense
of comfort because the neutral has more than likely been in their shoes before and can speak the
same language. The neutral knows that the goal of the facilitated negotiation is to get the case
closed, which is something the litigator was unable to accomplish.

Top Ten Factors For Getting The Other Side To The Table

The key to a successful facilitated negotiation is getting the other side to agree to mediate in the
first place. In order to set yourself up for success, there are several factors to consider when
convening a mediation:

1. Never request mediation within two weeks after you’ve lost any motion, no matter how
insignificant.

2. The most profitable mediation on a great case generally occurs before expert discovery,
although it can happen closer to the trial date.

3. The most profitable mediation on a so-so case occurs close to the trial date, assuming your
experts have not betrayed you.

4. The most profitable mediation on a bad case occurs before you file the lawsuit, or as soon
thereafter as you can manage with a straight face.

5. Ask for mediation in a letter which accompanies a motion to compel discovery. Offer to
postpone the motion if the other party agrees to mediation.

6. Where you have a belief in the merits of your case, send out a letter demanding mediation,
and specify your good faith estimate of the value of the case. Indicate that you will only agree to
mediation if the other party fully understands and acknowledges your approximated value. If you
then show up at the mediation and the other party comes in substantially below that
approximated value, leave promptly.

7. Allow the judge to propose mediation at the initial status conference.

8. Mediation often works best for a defendant after a summary judgment motion has been filed,
but before the hearing and before plaintiff’s opposition is due. Mediations often work best for
plaintiffs just after the summary judgment motion has been denied. Schedule accordingly.

9. Consider a cost basis analysis. This means that for every month you have the case open, the
time you have committed to the case increases, yet there is no guarantee that the value of the
case goes up.

10. Many provider organizations will take on the responsibility of contacting the other side about
the prospect of mediating. This can be effective since these organizations usually have people
trained to sell the process in a way that doesn’t make you look vulnerable.

Now That You’re Coming To The Table, What’s Next?

Negotiating a litigated case depends upon the style of the mediator and the approach of the
advocate. Before beginning the mediation session, ask the mediator to define his/her style. Some
mediators choose an approach much like a messenger, where they exchange numbers back and
forth and actively make recommendations on the number. Others might use a more facilitated
evaluation which tends to encourage the parties to come up with their own understanding of risk
that might also be more interest based. Whatever the approach, a litigator must be aware of the
direction the mediation might go before it begins.

Dealing With The Competitive Negotiator

Many litigators approach mediation in a competitive manner. They view the session as an
extension of the litigation battlefield and make negotiations difficult. On the other hand, the
cooperative litigator is hopeful that the negotiation will achieve their ultimate goal — to settle the
case — and assume that the other side is at the bargaining table for the same purpose. Because of
these aspirations, it is not unusual for cooperative litigators to put all their cards face up on the
table and hope toward a cooperative solution. Unfortunately, the competitive litigator might
view this willingness to cooperate as a sign of weakness and attempt to take advantage of the
negotiation.

Studies have been conducted demonstrating that cooperation as an affirmative strategy will more
likely than not achieve the objectives of mutual gains for all parties.(1) However, litigators in a
mediation sometimes must be mindful of the possibility of losing opportunities for the client by
maintaining a cooperative attitude throughout a negotiation with a competitive player.

Under these conditions, an advocate in a mediation must be aware of strategic options that can
be used in order to avoid becoming exploited in the negotiation. Fortunately, those options have
been studied extensively by educators through such game theories as the well known “Prisoner’s
Dilemma.”(2)

Following extensive computer testing of the Prisoner’s Dilemma, Professor Robert Axelrod
came to the conclusion that the best strategy for achieving goals through cooperation is a simple
process he calls “tit for tat.” This strategy proposes that during a negotiation, a party must match
the opponent’s move either competitively or cooperatively. If your opponent chooses to whack
you over the head, you must hit back. If your opponent offers an olive branch, you must offer
one back, and so on. Axelrod developed five basic rules to follow in achieving cooperative
solutions:

(1) begin cooperatively

(2) retaliate if the other side is competitive

(3) forgive if the other side becomes cooperative

(4) be clear and consistent in the approach

(5) be flexible

Those litigators who come to the negotiating table assuming they are still at war sometimes
create an imbalance in power with the advocate who choose to be cooperative.

One approach to disarming a competitive negotiator is to use the mediators to get your adversary
to commit to the principle that they might have more liability and/or damage exposure than they
originally thought. Once that occurs, be prepared with additional information demonstrating that
you are capable of continued retaliation. At the same time, have the mediator extend a signal
that you are prepared toforgive, i.e., work cooperatively, provided they acknowledge that
exposure exists.

This must be done slowly and strategically, without giving away too much information until you
have verified with the mediator that your adversary is beginning to be a believer in your position.
This will require a delicate balance by the mediator and, of course, your full and complete trust
in the mediator’s representations.

The goal of this technique is to lull your adversary into a state of vulnerability. After considering
possible downside scenarios, the mediator can provide your adversary with a face saving pretext
to either pay out more or take less than they brought to the table.

A Case Example

Suppose you represent a person who has undergone a hip replacement due to a slip and fall at a
department store. During your investigation, you learn through inside information that the store
has had other similar falls in the same area, and that the company was well aware of the need to
correct the condition that caused the falls. In fact, you have actually talked to several people who
have sustained injury in the same area and they are prepared to testify if necessary. The company
doesn’t know that you have this information, and they take the position that there was no
“notice” of the problem and therefore no liability.

During the mediation, you begin cooperatively by offering to openly discuss the issues. In
response you receive a lecture in front of your client by your opponent’s counsel about what a
bad case you have. You ask the mediator to check with the store’s lawyer to see whether there
have been any other falls in the area where people sustained injury. Immediately that sparks
some interest from the other side, wondering what you are fishing for. They initially resist, but it
gets them talking about potential mine fields which they don’t want unearthed. The mediator
tells you she hasn’t learned anything new so you send her back in to force the issue. You also
float the name of another claimant who sustained injuries and ask the store’s lawyer if they
would like to discuss the situation further. In essence, you are using the power of the mediator
to make statements about the strength of your case without throwing it in the other side’s face.

After several rounds of private meetings, you finally tell the mediator to ask the company if they
feel there might be some exposure in this case. You ask the question because you know there
really have been similar incidents, and you suspect the company doesn’t want it to get out in the
public. You are prepared to negotiate a confidentiality agreement in exchange for a reasonable
settlement. When you get a positive signal from the mediator, you start asking for money, while
at the same time being “flexible” with your response so that they know the retaliation has worn
off.

Conclusion

The time to negotiate a litigated case can occur anywhere from filing the case until trial.
Selecting the most strategic time to engage the other side is the key to a successful outcome. The
menu of dispute resolution options available to litigators has expanded over the last 50 years
such that settlement opportunities are available to the creative practitioner at almost every stage
of a litigation.

1. Robert Axelrod, “The Evolution of Cooperation.”

2. In the Prisoner’s Dilemma game, there are two players. Each has two choices, namely
cooperate or defect. Each must make the choice without knowing what the other will do. It is a
dilemma because if both defect, both do worse than if both had cooperated.

                        author

Jeffrey Krivis

Improvisational Negotiation. This phrase summarizes Krivis’ philosophy for a successful and dynamic mediated negotiation. A successful mediation needs both keen legal insight gained from years of litigation experience and cannot be scripted. Exploring this idea with further study led Krivis to venture on the stage as a stand-up comedian. Ultimately,… MORE >

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