The Value of Pre-litigation Mediation: What Every California Lawer Should Know

• Jurisdiction: California,United States
• Author: By Jan Frankel Schau
• Citation: Vol. 31 No. 1
• Publication year: 2018

The Value Of Pre-Litigation Mediation: What Every California Lawer Should Know

By Jan Frankel Schau

In its infancy, mediation was not well understood. While some attorneys viewed it as a sign of weakness to recommend an early mediation, others shied away from it because they believed that mediation would allow for "free discovery" of the most pressing evidence in the case. As the process matured, that concept largely disappeared and today most attorneys agree to mediate because they are truly interested in achieving a settlement. And, indeed, while the great majority of mediations result in a resolution of the dispute, the settlement often occurs after the parties have spent a lot of money on discovery, motion practice, and other litigation costs. Until there is significant formal discovery and until the key legal claims have been tested through motion practice in court, many attorneys believe that the true settlement value of their case can't be determined.

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This article argues that conducting a mediation before the suit is even filed is a very good idea. Yes, a mediation that occurs so early in the game may give the parties a "free look" at their adversaries' cases if there is no settlement. But it also could result in a settlement that avoids the cost, time, and aggravation that comes with preparing for and conducting a trial. Furthermore, even if the dispute does not settle at an early mediation, the parties may spend less time and money in the course of litigation because of the insight gained from the early mediation.

Consider the following scenario: Four young women complain to an employment lawyer about being terminated from their job at a health clinic within weeks of a heated meeting between staff and the new CEO regarding policy changes that included potential violations of patient's rights to privacy, billing discrepancies, and paying kickbacks to pharmaceutical companies and then overcharging patients for discounted pharmaceuticals. The lawyer decides to take the case and sends notice to the clinic with a demand for payment of damages of $100,000 each, together with a draft complaint to be filed within 30 days. After the clinic's lawyer tells the chairman of the board what it will cost to defend the case, even if the clinic wins at trial, the chairman agrees that an attempt at early resolution through mediation should occur before litigation is filed, in the hope that the costs of litigation, the potential disruption to the business, and the publicity of an unwanted lawsuit could be avoided.

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Should the plaintiffs' lawyer accept the defendant's offer to mediate at this early stage? Here are ten reasons for considering pre-litigation mediation.

Reason 1

By engaging in early mediation, the parties will quickly learn what discovery is needed to prove or defend the case if it doesn't settle. They may learn, through briefs and arguments throughout the day, what evidence their adversaries are relying on to substantiate their claims or defenses. If there are...