I tell all my civil mediation clients the same thing:  If you’re going to settle, settle early.  Why?  That gets to why a litigant should settle a lawsuit in the first place.

When a litigant settles a case, they are essentially “buying off” two costs.  The first is the risk of losing the case.  This applies whether you are the plaintiff or defendant.  As you know from an earlier post, statistically winning and losing in state courts are a roughly 50-50 crap shoot.

The second are transactional costs.  These are the costs for the attorney, court costs and fees (filings, motions, etc.), experts costs, costs for a court reporter in depositions, etc.  In most cases, these are cost that you do not get back regardless of the outcome of the litigation.  80% of the costs to try a case come in the discovery phase. The discovery phase is the pre-trial period when documents are exchanged, depositions are taken, experts are engaged to do studies, etc.  Discovery is essentially the phase where you learn what the other side knows (and vice versa) to be able to value a case.  Settling on the court house steps just before or during trial does not eliminate these costs.

The further litigants get into the discovery process, something call “escalation of conflict” occurs.  In essence, the more you’ve spent, the more you want to spend to get the outcome you want.  Thus, settlements become harder to reach (and most people tell me the later settlements were the same as what they could have had earlier in the process).

How does mediation help?  Mediation gets the parties talking to each other in a structured environment, which accelerates the discovery process by getting the information exchange going early.  If parties need to verify claims made in the mediation, they can do so before the settlement is finalized.

Feel free to contact me if you would like to discuss further how mediation can help you save money and resolve your lawsuits.