2 Approaches To Early Resolution And Cost Savings For Litigation Guidelines

By Nancy Hudgins – September 19, 2011

Let’s State The Obvious: Early Mediation Can Lead to Lower Costs of Defense

Most insurance and claims adjusting companies have Defense Counsel Guidelines.  I’ve seen many of them.  It’s hard to remember, though, seeing one in which a contingency plan for early settlement was addressed.

Most guidelines I’ve seen are focused on having a case evaluated for settlement at 6 months.  By that time, your defense counsel will have interviewed the client, propounded initial discovery, received and reviewed the medical records and taken the plaintiff(s)’ deposition(s).

Perhaps you could reduce your ALAE significantly by including early mediation in your guidelines. (Transparency caveat:  I’m a mediator and I have a bias.  I mediate cases nationwide.)

2 Ways To Include Mediation In Attorney Guidelines

Here are two suggestions.  One is fast-tracking that process to 3 months.  The second is requiring your lawyer to approach plaintiff’s counsel about mediation within the first 6 months.

• Fast tracking settlement.  In three months, it’s unlikely you’ll be able to get all of the medical records and receive responses to discovery and take the plaintiff’s deposition.  Ask yourself, though, if you really need all of that information to settle the case.  In some cases, particularly cases of clear liability, the answer is:  probably not.  Yes, you may settle some cases for a little more than having all of the usual discovery would suggest.  On the other hand, plaintiff’s counsel may be willing to take less money in return for not having to work the case up.  You will also be saving attorneys’ fees and litigation costs and closing files.
• Mediation date within 6 months. There seems to be an institutional bias against the defense being the first side to suggest a mediation.  The underlying fear is that plaintiff or her counsel will conclude your case is weak and their settlement aspirations will zoom skyward and their bargaining posture will harden.  Do you have any data to support that bias?  I haven’t seen any.  Try it out, then calculate your overall savings.

I applaud all sides when they come to me to mediate a case either pre-suit or very early on in the litigation.  I try to set the expectation that the exploration of settlement at an early stage is an opportunity for both sides to be realistic, not only about the value of the case, but also about saving litigation costs.