As a litigating attorney, I have gleaned certain important insights into the benefits of settlement and mediation. First, let me explain the benefits of settling a claim in advance of full litigation by informal settlement negotiations and then I will discuss the benefits of attempting mediation.
- Litigation Costs— One major benefit is reducing litigation costs. In my blog article I’m Considering Hiring an Attorney and Entering Litigation, How do I Get Started and What Should I Expect Along the Way?: A Guide to the Typical Litigation Process in Texas, I discuss the general process of litigation and its attendant costs. Many of these costs are dictated by decisions that the opposing party or the court make which are out of your control. The full cost of litigation through trial can be astounding. By considering settlement or mediated settlement early, one can take control of the current costs associated with litigation.
- Control Over Payment–A second major benefit is control over payment. If opposing parties reach an agreement they can make provision for how payment will be made. This is much more valuable than many realize. If litigation goes through trial and judgment is made, even if it is just a default judgment, the winning party is then required to execute that judgment which is a costly and time-consuming process. For a Plaintiff the benefit is getting paid quicker and not having to force payment by expending additional funds for execution of a judgment. For the Defendant the benefit is having control over how and when to pay the Plaintiff. If a defendant leaves it up to the collection process when a judgment is being executed, the Plaintiff might take property that the Defendant would have chosen to keep.
- General Control Over the Details—A third major benefit is general control over the details of the end result. If the parties decide to go through full litigation, the discretion as to what the judgment will be will lie with the judge or judge and jury. This often means that a winning party will get a result that does not work for its particular circumstances because someone else is charged with determining the details of the judgment or verdict.
The previous three benefits derived from settlement are also benefits that come from entering into mediated settlement agreements brought forth through mediation. Thus, when informal settlement agreements cannot be reached, mediation is often the next step to attempt to procure those same benefits.
So, the question then begs itself, why will mediation be beneficial if informal settlement negotiations have broken down?
- Informal settlement negotiations are typically conducted by attorneys whose duty is to zealously advocate for their client and to be somewhat less objective about the strength of one’s case. Some mediators will give both sides a more realistic assessment of the strengths and weaknesses of each case. In addition, sometimes an objective third party telling a client that he/she is making unreasonable demands has greater impact than his/her attorney telling him/her.
- A mediator can help the parties move closer to a resolution because the mediator hears both sides in separate rooms and can help the sides understand how close they are to resolution.
- Often, having a deadline for an agreement to come together helps the sides to prioritize making an agreement happen. The deadline itself usually helps the settlement process.
- Mediation can be a cathartic experience in which parties are able to voice their grievances in a similar way to doing so at their day in court. Many times, getting that opportunity allows parties to be more ready to come to an agreement.
Altogether, these are important benefits to consider whenever one finds oneself in litigation or even in pre-litigation. It is also important to understand why mediation can foster an environment where a settlement can more easily be negotiated. While an agreement that you might come to in mediation might not be what you could potentially, possibly get in a courtroom, that agreement might still be worth way more in terms of practicality of resolution than you would have gotten by continuing the litigation.
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