Published on 25 Jan 2012 under category: cubism
Article written by Cubism Law commercial mediation consultant, Roger Levitt.
The goal of mediation is to settle all outstanding claims in a case through negotiation. Often, mediation is a successful method of resolving cases, both simple and complex. Over 80% of my mediation cases have settled or partially settled.
However, there are times when cases simply can’t, don’t or won’t settle. Either the issues are too complex and disputed, or one side or the other simply isn’t willing to budge. Sometimes unfortunately, one side chooses not to engage or seek a settlement just for “sport”. As it is critical to enter into the mediation process with an open mind and a willingness to negotiate in good faith, it is also important to know when you need to walk away and conserve your energy and evidence for your trial date, or just get on with your life!
There are two key elements to know when deciding whether to walk away from mediation:
Your failure cost
Your walk-away number.
Your failure cost is a complete estimate of what it will cost you to go to trial and have a judge hand you the worst-case scenario. This is calculated differently for claimants and defendants, but the principle is the same. Many times, the cost is higher for defending a case than it is to litigate one; however, claimants should always remember that the court is often requested to award certain costs against the losing party.
Your walk away number is the number beyond which it is most likely better to resume legal action, as your costs are likely to be lower than the bottom line settlement offer being proposed by the opposite side. If you reach your walk away number without achieving settlement with no good reason to change your number, then walk away from the mediation.
Notice, however, that I stated, “with no good reason to change your number”. Lawyers and clients often go into mediation with a high opinion of the merits of their case and evidence. After a few hours of a mediator picking holes in their evaluation, participants often find a reason to significantly adjust that walk-away number. For example, if a claimant is filmed digging in his garden when claiming disability, this would require case re-evaluation.
Along with the need to be flexible in determining your bottom line figure, there is also a time to stand firm. If your cost estimates demonstrate that a worst-case scenario at trial will take no more than £15,000 in costs and the claimant refuses to settle under £50,000, you do your client a huge disservice by continuing to try to negotiate beyond your walk-away number. Do not be afraid to stand on your principles and your thorough knowledge of your case, the law and the facts.
To read more about our Commercial mediation services click here.
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