|Oregon State Bar Bulletin FEBRUARY/MARCH 2012|
Over the last 10 years, mediation has become an almost universal step in the civil litigation process. My view is that mediation is by and large oversold. What started out as a useful tool in the litigator’s toolbox has infected the entire litigation system, creating costs and consequences that civil trial lawyers have become habituated to — costs and consequences that need to be examined.
I know that my views on mediation are controversial, not publicly shared by many of my colleagues. But 40 years of litigation and trial work give me a perspective on how mediation has impacted litigation and litigators. I offer my personal observations and views in the hope that there will be a rethinking of how civil lawsuits are resolved in the coming years.
A Brief Historical Perspective
My dad drummed into me that in order to understand a problem, it is necessary to have an historical perspective of the issues involved. I have no empirical statistics or research projects to support my observations, only my personal experience, corroborated by discussions with fellow trial lawyers.
I started practicing law in the early 1970s. There was no mediation at that time. Although a settlement conference presided over by a judge would sometimes occur, that was the exception, not the rule. Rather than settling cases in a mediation setting, plaintiffs’ lawyers would sit down with defense counsel, sometimes with insurance adjustors, and negotiate face to face. These negotiations usually took place close to the trial date. Similar to the current practice, the plaintiff’s lawyer would usually initiate the process by making a demand, often in writing. When defense counsel was ready to talk, a face-to-face meeting would be arranged. An offer would be made, and negotiations would ensue. Face-to-face negotiations would usually be completed within an hour and telephone negotiations would ensue over the following days. It was not uncommon to settle a case at the beginning of trial, at times with the encouragement of the trial judge. This was how both small and big cases were resolved.
Mediation seemed to burst into the litigation process approximately 30 years ago. At first, a few retired judges and senior trial lawyers began to offer their services to aid in the negotiation process. Early mediations that I recall were efficient and successful. The parties would arrive, be congratulated on their willingness to attempt to settle the case, and the mediator would shuttle between the parties with offers and counter-offers. When an impasse was reached the mediator would suggest to the parties how the case could be settled. I do not recall any failed mediations for the first 10 years or so that I was involved in the process. My explanation for this 100 percent successful mediation rate is that the parties came to mediation voluntarily, ready to settle the case.
By the 1990s, however, changes in the practice of mediation were rapidly occurring. Mediators were becoming more diverse, including lawyers who were neither experienced trial lawyers nor retired trial judges. Mediations began to take longer. What began as a few-hour process would take a full day, at times multiple days. Mediation sessions began to occur without the physical presence of the ultimate decision-maker for a defendant (i.e., a senior insurance adjustor with significant authority to okay a settlement or, in the case of an uninsured defendant, a company president). Mediations would at times progress with no meaningful movement occurring by either the plaintiff or the defendant. I recall a mediation I was involved in with a large national corporation where no offer was made by the defendant after a full day of discussions. Mediators began to schedule mediations as multiple-day events.
Despite the problems that were beginning to appear, by the mid-1990s, mediation advocates were significantly impacting the litigation process. Insurance adjustors began to insist on mediation as a way to negotiate cases. Courts began to “compel” mediation. “Alternative dispute resolution” became a powerful buzz phrase that no rational lawyer could oppose.
Why Did Mediation Become
It is certainly easy to understand why judges embraced the idea of mediation. As criminal dockets and the number of civil cases being filed swelled in the 1980s and 1990s, judges began facing larger and larger caseloads. In both the federal and state systems, judges were assigned to travel to districts with backlogs and “clean up the docket.” Mediation appeared to be a successful tool for clearing off docket backlogs.
It is interesting to speculate why trial lawyers accepted the role of mediators so quickly and completely. My hypothesis is that civil litigators began to doubt their ability to evaluate their own cases, and their skill at negotiating settlements. The onset of mediation roughly coincided with the growing role of jury consultants, “storytellers” and “communication specialists” into the trial process. The seeming importance of these adjuncts to trial preparation perhaps began to erode the confidence of trial lawyers that they could evaluate and negotiate cases on their own. Another factor at work was the increasing competition for clients. Did lawyers begin to doubt their ability to retain their clients if they weren’t tougher than the other side? Did toughness not equate to compromise? Finally, it is undeniable that mediation can be less anxiety producing than face to face negotiations. Mediation provides a comfortable setting for arguing a case to a friendly neutral person who will then take on the task of confronting the other side. Why deal directly with a capable opponent when that difficult task can be hired out?
Why insurance companies and their adjustors so quickly adopted the mediation model is harder to understand. The change was so sudden — and so significantly changed the traditional relationship between adjustors and lawyers — that one wonders what the underlying motivations really were. Did insurance adjustors suddenly lose confidence in their own lawyers’ negotiation skills? Did insurance adjustors resent the power disparity between themselves and the lawyers handling “their” cases, and find mediation to be personally empowering and satisfying? Did mediation provide a cover for adjustors who lacked the experience and confidence to evaluate a case?
Whatever the explanation, by the mid to late 1990s, plaintiffs’ lawyers began to rely on mediators to evaluate and negotiate settlements of their cases, and defense lawyers were often instructed by insurance carriers not to negotiate directly with plaintiffs’ counsel. Mediation became the accepted — often the only — way to negotiate a settlement of a filed case.
Does Mediation Achieve Its Goals?
Mediation advocates have successfully convinced us that mediation is a necessary addition to the litigation process. As proof they point to statistics that unequivocally show fewer civil cases than ever before result in jury trials, and that an extraordinary percentage of cases that are submitted into mediation result in a successful settlement. Mediation advocates also argue that there are significant cost savings produced by cases settling, savings that benefit the parties as well as the judicial system. And they point out that eliminating the uncertainty attendant upon a jury trial benefits all concerned.
But are mediation advocates correct in their claims? Are they ignoring significant unintended consequences?
Let’s begin by considering the undeniable fact that fewer cases are being tried to juries. I submit that the decline of the civil jury trial is the result of myriad causes, the foremost being the increased cost of litigation. The cost to both plaintiffs and defendants of simply putting on a case has skyrocketed. Both plaintiffs and defendants face ever higher charges from filing fees to expert witnesses. With the advent of videotaping, deposition costs have more than doubled. On major cases, both sides will often employ trial consultants and focus groups or mock juries. Standard contingency fees have increased, as have the hourly rate of established defense firms. The cost of going to trial and winning, as well as the cost and risk of losing, push parties to try to find a way out of going to the courthouse.
A second factor discouraging civil jury trials is the judiciary’s attitude toward jury trials. From the U.S. Supreme Court restricting access to the federal court system,1 to judges agreeing with the notion that if a case does not settle the system has failed,2 the judiciary’s attitude plays a role in discouraging jury trials. Court pundits as well as mediators stress that juries are unpredictable, further discouraging litigants from taking their cases to court.
A third major change in litigation is the time required to prosecute an appeal. The prospect of lengthy delays to resolve appeals discourages jury trials. Appeals in the Ninth Circuit routinely take two years to complete. The Oregon appellate system takes just as long. The last case from my office decided by the Oregon appellate courts took 23.5 months from the time the notice of appeal was filed until the Oregon Supreme Court rejected a petition for review. And that appeal occurred from a stipulated set of facts, i.e., there was no delay caused by preparation of a trial transcript.
Can mediation advocates take “credit” for the precipitous decline in civil jury trials? Although there are certainly cases that a skilled mediator can assist in bringing to resolution, it is almost impossible to determine on a case-by-case basis whether, in the absence of mediation, the parties would have settled their differences on their own. Prior to the advent of mediation, roughly 90 percent of civil cases settled. Recent statistics suggest that the percentage of civil cases that are tried has dropped to between 1 percent and 2 percent of civil cases filed.3 A similar decline in the rate of cases tried has been documented in the criminal arena, where there is no mediation practice to “take the credit.”4
Has mediation caused the drop in the rate of civil trials? We are talking about an increase in non-trial dispositions of approximately 10 percent. Some percentage of this increase can be accounted for by changes that have occurred in summary judgment practice. Although I have no empirical statistics to support my belief, personal experience leads me to conclude that the increase in settlement attributable to mediation is relatively small. The role that the rapidly increasing cost of litigation plays is certainly substantially greater.
In short, mediation advocates cannot make a credible claim that mediation settles cases that would not otherwise settle. The factors that pressure parties to compromise are present and known to the parties whether or not a mediation occurs. Yes, mediators preside over successful settlement conferences. But most of those cases would settle just as successfully if no mediators were involved.
Mediation advocates, as mentioned above, often claim that successful mediations reduce the cost of conflict resolution and take the uncertainty out of litigation. In a sense they are correct. Clearly, settlements cost the litigants less in case expenses and attorney fees than jury trials, and clearly settlements reduce uncertainty. But these same advantages are inherent in any settlement, whether or not mediators are involved. The arguments depend upon the unproven premise that mediated cases would not otherwise settle.
The Unintended Consequences of Mediation
Understandably, mediation advocates do not mention the unintended consequences, and the costs, of a mediation-driven litigation system. These unintended consequences include deterioration in relationships between opposing counsel, a tendency to favor “Rambo-style” litigation and an ever-increasing tendency for lawyers to not shoulder the responsibility of talking realistically with their clients.
During the first 10 to 15 years of my career, I always was aware that as a case approached trial I would be called upon to sit down, face to face, with defense counsel and discuss the strengths and weaknesses of my case. If I could not do that, if I could not have an honest conversation with opposing counsel, I would not be able to negotiate a settlement. This reality had the beneficial consequence of fostering a professional relationship between trial lawyers. It is extremely difficult, on a personal emotional level, to posture unreasonably about a case for 11 months, and then suddenly “cave in” during a face to face negotiation with opposing counsel. This human dynamic is not present when a mediator becomes the central focus of settlement discussions. Lawyers can “allow” a mediator to persuade their clients to settle, never having to look opposing counsel in the eye and say “You have a winnable case, I understand your client’s position.”
This breakdown in meaningful communication between trial lawyers leads inevitably toward overly aggressive litigation ploys and stratagems, toward unnecessary discovery and the filing of unwinnable motions. Most disturbingly, it leads to demonizing our opponent. Ask any lawyer who has been around 30 or more years and you will hear the same thing said: “Lawyers don’t get along with each other the way we used to.”
I remember as a young lawyer having a case against a senior partner in a major law firm who was an ex-Marine, who had a gruff voice and overall was an imposing fellow. With some trepidation I sat down in his office shortly before a scheduled trial to discuss the case. To my surprise we had a reasonable discussion and in a half hour reached a settlement. As I left his office, I thought to myself, “He’s not such a bad guy.” In today’s world I never would have come to that conclusion. We would have gone to mediation and negotiated that case through a mediator, making incremental moves over a period of many hours. We would never talk face to face. I would leave the mediation irked and angry at why the process took so long, upset that the process extracted such an emotional toll on my client and convinced that the opposing lawyer was unpleasant through and through.
In addition to reducing professional collegiality and fostering overly aggressive litigation strategies, current mediation practices have the unintended consequence of increasing the cost of litigation. Consider a routine automobile injury case with a 60 to 70 percent likelihood of a plaintiff’s verdict, with damages that a jury would assess between $50,000 and $100,000. Everyone involved in the process knows that this case should settle for somewhere between $30,000 and $70,000, i.e. for approximately $50,000. Two reasonable lawyers can accomplish this result in 20 minutes of frank conversation. In today’s litigation environment, however, the plaintiff will demand $200,000, and the defense will consider the demand outrageous and refuse to make an offer. The parties will agree to a mediation that will end up costing $1,500 to $3,500 in mediation fees (depending on the mediator’s billing practice), which will take anywhere from half a day to an entire day to resolve. On the plaintiff side, additional costs may include an increase in the contingency fee, and the cost to the plaintiff of missing a day of work. On the defense side, additional costs will include the defense hourly charge for preparing for the mediation, the defense adjustor’s time at the mediation and the defense hourly rate for attending the mediation. Are these costs less than the cost of a trial? Of course. But face to face, lawyer to lawyer, negotiation would accomplish the same result at a fraction of the cost.
Mediation advocates might argue that lawyers are not skilled enough to negotiate cases on their own, that mediators bring special skills to bear that allow the parties to reach a compromise. This argument, however, is self-fulfilling prophecy. If lawyers did not rely on mediators, they would be forced to rediscover the skills and temperament to negotiate successfully. After all, lawyers are hired to achieve results. Those who cannot achieve results will lose their clients.
Putting Mediation in Proper Perspective
I propose that trial lawyers take the steps needed to roll back the mediation mentality that grips the litigation system. The most effective step is to simply say, “No, I will not mediate with you unless we first share a cup of coffee — maybe I will even buy you lunch — and we can discuss the case and attempt to negotiate this case ourselves. Only if that process is unsuccessful will I consider mediation.” If the opposing side refuses this approach, then agree to mediation only if the other side agrees to pay the entire cost of the mediation.
Also, trial lawyers should lobby the courts against court-compelled mediation. All parties should be encouraged to negotiate, and if appropriate, to mediate. But no one should ever be compelled to mediate. And if courts still insist on court-compelled mediation, we should refuse to spend our clients’ money on the process. We should insist on having a free mediator appointed.
In cases that we cannot settle ourselves, trial lawyers should approach mediation warily. We should agree ahead of time that mediation in the usual situation will take no longer than a half day in duration. If litigators (and mediators) are thoroughly prepared everyone knows what the case is about, what the pros and cons are of the parties’ legal and factual positions.
The purpose of mediation is not to resolve legal or evidentiary conflicts. The purpose of mediation is not to give our clients a chance to vent. The purpose of mediation is to elicit the best offer the other side is willing to make, and then to accept or reject the offer. Of course there will be a little dancing around the point, but it should not take all day, or two days. If we are going to pay a mediator to run offers back and forth, let’s agree that the mediation will take three hours, and then move on.
There are certainly skilled mediators who produce breakthroughs in complex multiparty cases. There are certainly situations where our clients will not take our advice, and it is helpful to bring a neutral party into the discussion. But the majority of our cases can be resolved without the costs of mediation and without the attendant loss of professional relationships that seem to be the price we pay for mediating all our cases. We can do our clients, and ourselves, a service by rethinking the process we use to resolve cases.
With apologies to President Eisenhower, there is an Alternative Dispute Resolution Complex that has its own agenda and its own costs. The civil litigation system managed to resolve disputes without universal mediation for hundreds of years. The criminal justice system still resolves cases, from drunk driving charges to capital murder prosecutions, by face to face, lawyer-to-lawyer negotiations. If criminal lawyers can effectively resolve cases where what is at stake is a long prison term, why do civil litigators need mediators to resolve $50,000 personal injury claims?
As civil litigators and trial lawyers we can settle cases on our own. All we need to do is recognize our own skills and abilities.
1. Chemerinsky, “The Supreme Court Closes the Door to Justice,” Los Angeles Times, July 24, 2011 (http://articles.latimes.com/2011/jul/06/opinion/la-oe-chemerinsky-scotus-20110706).
2. LaMar, “Are Trials Passe?”, Oregon State Bar Bulletin (January 2007).
3. Refo, “The Vanishing Trial,” Litigation Online (Winter 2004, American Bar Association) (http://www.americanbar.org/content/dam/aba/ publishing/litigation_journal/04winter_openingstatement. authcheckdam.pdf).
4. Ellis, “A Lawyer’s Lament,”The American Interest (Jan/Feb 2008) (www.the-american-interest.com/article.cfm?piece=384).
ABOUT THE AUTHOR
Portland trial lawyer Elden Rosenthal practices personal injury and civil rights law in the state and federal courts of Oregon and, with associated local counsel, in other states across the country. He has won substantial verdicts and settlements for clients injured in automobile accidents, by defective products, by medical and nursing home malpractice, by sexual misconduct, and in numerous other ways. He has also successfully represented clients who have been injured or had their civil rights violated by government officials and private citizens in cases ranging from wrongful death to sexual abuse to wrongful prosecution.
© 2012 Elden Rosenthal