Legal disputes often bring stress, uncertainty, and the risk of costly court battles. While those who have not spent significant time in litigation often see it as a path to vindication and justice, the reality is that it is seldom an effective tool for that purpose and even more rarely an efficient one. Thus, it is not surprising that around 95% of cases settle before trial. Embracing this reality early can significantly impact the ultimate outcome of a dispute. We have previously written about the importance of thoughtfully timing settlement efforts to maximize leverage in litigation. This article focuses on why it is often wise for parties to attempt early mediation to resolve their legal conflicts.
What Is Early Mediation, and Why May It Be Appropriate for Your Case?
Early mediation is exactly what it sounds like: hiring a mediator to help facilitate a mutually-agreeable settlement shortly after a case is initiated, or even before formally filing a lawsuit. Like mediating at any other point, early mediation offers parties an opportunity to avoid litigation costs and create certainty with regard to their respective outcomes, as well as potentially preserve what remains of personal or professional relationships. Mediating at the outset of a case, however, can amplify these benefits.
1. Preserving Valuable Relationships
While parties to litigation are, by definition, already in conflict, the process of litigation frequently exacerbates this conflict and feelings of ill-will. Whether the dispute in question is among business partners, neighbors, or companies that have done business together, there are frequently real consequences to the relationships among parties deteriorating completely. The longer a dispute lingers, the more damage it can do to these important connections. When disputes are resolved quickly, there's less time for tensions to escalate, making it easier to move forward positively.
2. Avoiding Parties Becoming “Pot-Committed” Through the Cost of Litigation
One of the primary advantages of early mediation is the substantial reduction of legal fees and costs. As litigation progresses, these expenses skyrocket. So, an obvious benefit of mediating at the outset of a case is that the sooner a case can be settled, the less they have to pay their lawyers.
Perhaps less obvious, however, is early mediation can make settlements both more likely and more beneficial for both parties to a dispute, specifically because it can occur before the parties have expended significant resources doing battle with each other. For most parties, money is a finite resource. Simply put, money spent on legal fees is money that a defendant cannot spend to settle a case, and, frequently, it is money that raises plaintiffs’ bottom line for settling their claims. For this reason, the parties are financially in the best position to settle a matter at the very beginning.
3. Avoiding the “Litigation Mindset”
Once litigation begins in earnest, parties can become entrenched in their positions, making compromise difficult. Litigants often take aggressive positions, look for tactical advantages, and engage each other in ways that cannot help but to create a focus on beating your adversary. Early mediation has the potential to focus parties on finding fair resolutions to their disputes before “winning” becomes as important to the litigants as achieving the best net result.
- The Joy of Certainty
It is incredibly common for the outcome of a lawsuit to turn entirely on one or more “coin flip” legal or factual issues. In such circumstances, cases become “all-or-nothing” propositions. Mediating early can allow parties to share the risk of being “wrong” on those critical issues and obtain certainty, rather than making an expensive bet that they come out on top.
- The Value of Not Litigating
Take it from a litigator: Litigation is not a pleasant experience. Whether you are an individual having problems with a neighbor or a business owner in a contract dispute with a vendor, an active lawsuit will steal time from critical tasks and add dramatically to your underlying stress levels. It requires more of your time than you think it will, and it requires you to deal with your adversaries at their worst, often while you, yourself, are at your worst. At times, litigation is nonetheless the only viable path forward. If, however, there is a chance that this unpleasantness can reasonably be avoided, it is almost always worth exploring.
If you have questions about whether early mediation is right for your dispute, reach out to Horst Legal Counsel at admin@horstcounsel.com to set up a free consultation.