29 Apr 1992

Mediated Settlement Conferences: Solving Problems for Trial Lawyers

By J. Anderson Little

Trial lawyers love to try lawsuits —but only if they cannot be settled within a reasonable range of potential jury verdicts. Trial lawyers would prefer to settle those cases which have potential for pre-trial resolution.

This may come as a surprise to laymen. Many layman do not understand that lawyers view themselves as counselors and advisors as well as litigators. The role of the lawyers, even trial lawyers, is to assist their clients in formulating and achieving their goals and objectives.

The problem with trial practice, however, is that lawyers don’t know ahead of time which cases can be settled and which cases need to be tried.

This has led to an unfortunate development in trial practice — we spend a lot of time preparing cases for trial not knowing whether, or when, they will settle. We haven’t been able to determine our trial case load. As a result, we waste our time and our client’s money, and delay the resolution of their disputes.

The adversary system is a great trial system. It helps us minimize human prejudice and bias in an effort to achieve equal justice. But its great deficiency is that it does not help us settle cases. This deficiency has become particularly troublesome in a time when trial dockets have become almost unmanageable, and the courts are viewed as a forum of first, rather than last, resort.

My own interest in ADR , and mediation in particular, began to develop when I realized that it provided a tool for the management of my trial practice — when I realized that the “alternative” in ADR referred as much to non-binding (settlement) techniques as it did to binding (adjudicatory) procedures.

The Mediated Settlement Conference Pilot Program

This is the idea behind the Mediated Settlement Conference Pilot Program which began in 1991. The program, existing now in eight judicial districts, creates a settlement event by court order, in which the parties to superior court litigation, their counsel, and others with settlement authority attend a settlement conference conducted by a mediator.

1. The court order initiating the conference is a key element in the program. Without mandatory procedures, settlement occurs in lawsuits only with the extraordinary cooperation of everyone involved. There are so many roadblocks to that cooperation in our trial system that most of us need a judicial nudge to bring us to a negotiating table.

One of the most interesting statistics from the program thus far is the large number of cases which have settled after the conference was ordered but before the conference was held. It appears that the order requiring the parties to attend a settlement conference produced an opportunity and an incentive for the parties to settle their case. That opportunity does not now occur until the court issues an order of another kind, the order for trial.

Prior to being mandated by court order, mediated settlement conferences rarely occurred in litigated disputes in North Carolina. Now that lawyers have become familiar with this procedure and have discovered its benefits, they have begun using settlement conferences on a voluntary basis. Many lawyers use them regularly in their practice, before and after the filing of a law suit.

2. A second feature of the mediated settlement conference program is that everyone who has settlement authority must attend the conference. This includes counsel of record, the clients themselves, insurance representatives, and anyone else with settlement authority.

This is a critical feature of the program and an aspect of our traditional settlement discussions which has been missing. There simply is no substitute for the presence of decision makers at the conference.

On rare occasions, people are allowed to attend by phone or to be in telephone contact with the participants in the conference. However, discussions conducted in that manner are decidedly more difficult. The absent party cannot fully appreciate recommendations for settlement made by attorneys and others when they haven’t fully processed the issues with adverse and neutral parties.

Many people have resisted this attendance requirement, only to discover later at a conference how difficult the process becomes with absent parties.

3. In addition to attending the conference, the parties are required to select and pay for the services of a mediator.

The mediator is a facilitator of the parties’ negotiations. The mediator does not impose a solution upon the parties. The mediator helps them talk with each other, explore the strengths and weaknesses of their case, and create and communicate settlement options.

The presence of the mediator is important and enhances the chances of settlement. Great negotiators don’t need mediators all the time. More frequently than we care to admit, however, negotiations in the trial court context are stalled by the participants’ inability to negotiate effectively.

The mediator helps by breaking through the adversarial quality of negotiations, by exploring for the parties’ underlying needs and interests, and by creating new solutions with non-critical brainstorming. The mediator also helps the parties communicate offers to the other side without bidding against themselves.

The choice of a mediator is a critical one for the parties and their attorneys. The mediator should be someone who has a good reputation for creating a settlement atmosphere, has respect for the opinions and work of the parties and their attorneys, and is impartial.

We believe that the parties’ ability to choose their own mediator, as opposed to the court appointing one for them, is of fundamental importance to the success of the settlement conference program. The enabling legislation for the program (GS 7A-38) makes party choice of the mediator a statutory right.

Attorneys who have participated frequently in mediated settlement conferences have begun to choose their mediators regularly, instead of relying on court appointments. They see advantages to working with someone they know and trust and whose work they respect.

4. The mediated settlement conference program is unique in many respects in North Carolina, most notably in the fact that the parties are required to pay for the services of the mediator.

The rate of pay has been set by the court at $100 an hour plus $100 for an administrative fee in cases where the mediator is court appointed. Those fees are split equally by the parties unless they agree otherwise. In cases where the parties choose their own mediator, the rate is set by agreement between the mediator and the parties.

This method of funding will enable mediated settlement conferences to spread rapidly if the Legislature approves state-wide expansion in 1995. Other ADR programs authorized by the Legislature for the courts have become available across the state slowly, as the Legislature has struggled to fund them. Appropriations by the Legislature for this program will be minimal and may be recouped by mediator certification fees.

Benefits of Mediated Settlement Conferences

1. The benefits of a structured settlement process such as mediated settlement conferences are numerous. The first is that it provides an orderly way of discovering which cases in the lawyer’s office can be settled and which cases need to be prepared for trial.

What’s at stake here is the lawyer’s own satisfaction in his/her work. Who really enjoys last minute preparation for cases which eventually settle on the court house steps, or which we thought would settle but now appear in trial position? Who really enjoys billing clients for unnecessary work? Who would like to reclaim lost nights and weekends spent in trial preparation for cases that don’t get tried? Lawyers, like everyone else, want to do meaningful work and see the results of their labors.

Mediated settlement conferences solve a problem for lawyers. They provide a case management tool that produces greater predictability and certainty about trial preparation than has existed heretofore.

2. Mediated settlement conferences also solve problems for lawyers in a very literal sense — they sometimes produce solutions for our clients which cannot be obtained in a court of law.

One’s remedies in a lawsuit are limited by the causes of action alleged and by the corresponding legal or equitable remedies available to the court. Those remedies may not truly satisfy our clients’ interests.

In the appropriate cases, mediated settlement conferences offer an excellent opportunity for the parties to explore their goals and objectives in the lawsuit and craft a solution which satisfies the needs and interests of all parties.

I am reminded of a case settled last year involving a $7,000,000 breach of contract claim. After five days of mediation, the parties found a way to reformulate their contract and begin doing business with each other again. The parties’ long range interests were better served by a profitable business relationship than by the monetary relief theoretically available to only one of the parties after a long and expensive trial.

Mediators are trained to search for the needs and interests of the parties and to engage the parties in joint problem solving. Out of that process often comes a fresh perspective and multiple solutions for our clients to ponder. Literally, the mediator helps lawyers solve their clients’ problems.

3. Mediated settlement conferences also help the lawyer achieve a more productive and satisfying relationship with his/her clients.

Clients often feel neglected by attorneys during the course of litigation. The process leaves them out of the action. They have little, if any, role to play. It’s their case in name only. Most of the time they feel powerless. Only occasionally do they see the fine work lawyers do on behalf of their clients.

The settlement conference, and the work that goes into preparing for it, creates an opportunity for a working partnership between the attorney and client. Clients have an active role in the discussions and decision making. They like it.

This can only work to the benefit of attorneys who take the conferences seriously and prepare for them. Clients see the good work that lawyers do for them. They appreciate the lawyer’s grasp of the complexities of the case. And they seek and rely on the lawyers advice during the course of negotiations. It’s my observation that clients develop a strong appreciation for the work of their attorneys after they have participated with them in a settlement conference.

4. Occasionally, the conference solves a client relationship problem in another way. I refer to those times in which our clients are unrealistic in their expectations for litigation. We try to reason with them and bring them within a realistic range of potential jury verdicts. To persist beyond a certain point means risking the loss of a client.

Mediated settlement conferences solve this problem for the lawyer during the conference. Clients hear their case analyzed in much the same way they heard it in our offices. However, in the conference, they hear it from neutral and adverse parties.

Often, through this process, the unrealistic client begins to take a different view of the potential of his/her case, and settlement within a reasonable range becomes possible. Thus, the lawyer is able to salvage a difficult relationship and help the client resolve a meritorious, but troublesome, claim.

It is hard to substantiate claims that mediated settlement conferences produce a more profitable legal practice. My personal belief is that they will. For certain, the pilot program of mediated settlement conferences in North Carolina has produced many satisfied attorneys. They settle cases sooner and in more creative ways for their clients. And they produce a more predictable and satisfying practice for themselves. In North Carolina, mediated settlement conferences are solving problems for trial lawyers.

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