Determining when to mediate can make all the difference in achieving a successful settlement. Most attorneys think that mediation is only effective after some discovery, but mediation can be effective during three key stages in the life of a case: pre-suit, after initial discovery and after more extensive discovery. This article provides insight into how to make the right mediation decision at each stage.

Pre-Suit Mediation

Mediation before litigation is appropriate when the remedy sought involves limited money and is a relatively straight-forward matter.[1] Many employment and commercial law cases are suitable for early mediation, including basic Family and Medical Leave Act (FMLA) or Americans with Disabilities Act (ADA) matters, or single party claims under the Fair Labor Standards Act (FLSA).[2] It’s also beneficial to mediate pre-suit when one or both parties want to stay out of the public eye or seek to maintain a business relationship and move past the dispute quickly.

In matters involving limited or eroding insurance policies, early mediation can offer the strongest opportunity for a favorable outcome. When coverage is low, depleting or shared among multiple claims, every month of litigation reduces the funds available. This can occur in nursing home and professional malpractice cases where policy erosion is a serious concern. For defense counsel, early mediation can provide valuable insight for reserving and aligning expectations with carriers and insureds before significant defense costs accrue.

Attorneys may wonder whether they are mediating too early or if they have all the information necessary to mediate. As ADR Systems’ senior mediator and arbitrator, Hon. Larry G. Axelrood, (Ret.) finds from his experience, “The best time for personal injury cases to mediate is when both sides have enough information to evaluate risk. That typically means clarity on three core factors: liability, damages and coverage. When you have the information needed to make offers or demands, you generally have enough to mediate.”

Pre-suit mediation is also preferred when counsel perceive weaknesses in their case, must rely on less than stellar witnesses or when their client has limited funds or the patience needed to go to trial. There can be an emotional toll on clients with litigation, and pre-suit mediation offers plaintiffs the ability to have their “day in court” — and a resolution without the time, expense and stress of going through the court system. Moreover, pre-suit settlements may also benefit the defense. Prolonged litigation consumes staff resources, disrupts business operations and increases reputational and financial uncertainty for defendants.

Some cases, however, need to be prepared properly and cannot be mediated early. The efficiency and control available in pre-suit mediation must be weighed against whether true movement in the case is possible at this stage and whether there is enough information to make informed, intelligent pre-suit settlement decisions.

Initial Discovery

For some personal injury matters and commercial disputes involving contracts, mediation during the early phase of discovery can be especially effective. Early discovery typically reveals the broad contours of exposure: the facts of the case, how liability is shaping up and the likely range for damages. Rather than investing in costly next steps — such as expert opinions or depositions — parties may determine they have sufficient information to negotiate productively.

During this phase, parties exchange limited information such as documents, videos or photographs and other relevant case information. They may also provide witness lists and disclosures of what the witnesses would testify at trial.

“After initial discovery, everyone has a rudimentary understanding of the strengths and weaknesses of their case,” notes Judge Axelrood. “Mediation becomes an opportunity for plaintiffs to minimize risk and preserve resources – both time and money. Early discovery also allows defense counsel to evaluate the credibility of the plaintiff’s case presentation.”

This stage is often referred to as the ‘sweet spot’ for mediation, and it’s when most attorneys first consider using mediation. It is true that it might be a good time to mediate, but the decision regarding when to mediate is case dependent. Some matters may benefit from mediation at this point; others are best settled pre-suit and others only after extensive discovery. It comes down to this: mediation is appropriate when the parties have enough information and have done sufficient analysis to recognize a reasonable and acceptable settlement offer.

Extensive Discovery

Typically, for more complex cases, the ideal mediation window arrives once substantial discovery has been completed but before trial preparation intensifies. “Cases that would benefit the most from mediation after extensive discovery are cases where the outcome will likely be decided by expert testimony,” according to Hon. Mitchell L. Hoffman, (Ret.), senior mediator and arbitrator at ADR Systems. “Medical malpractice, products liability and cases requiring complicated accident reconstruction are good examples.” With thorough discovery, the mediator and parties are better able to appreciate and understand the ultimate issues as well as fully assess the strengths and weaknesses of each side’s case.

On the commercial side, business disputes can be ripe for mediation after more extensive discovery. Hon. Margaret A. Brennan, (Ret.), senior mediator and arbitrator at ADR Systems, explains “Mediating after significant discovery is often preferred in business disputes because parties do not trust the accuracy of early information. After enough information has been exchanged, a clearer picture emerges, and parties may feel more comfortable mediating and resolving the dispute.”

Construction defect cases also benefit from later stage mediation with more discovery. “Exchanging contract documents, insurance policies and construction notes often provides clarity as to which party would be responsible for the bulk of any settlement,” added Judge Brennan.

While formal, large-scale discovery provides more comprehensive case information, with that comes the potential for extensive delays and more significant costs for the client. As discovery progresses, positions can become hardened, making settlement negotiations difficult. Nevertheless, some cases need time for risk to be properly assessed, for parties to come to terms with the strengths and weaknesses of their case and for sufficient evidence and information to be produced to prevent surprises during mediation negotiations.

Making the Decision

There is no single “right moment to mediate.” Deciding when to mediate involves understanding your case, learning your client’s interests and needs and then forming a strategy to get to settlement.

Attorneys may seek advice on when to mediate from ADR Systems’ case managers. They handle a wide array of disputes and have years of experience with mediation. Case managers are uniquely positioned to help attorneys consider their options regarding mediation timing and answer other questions.

Another avenue to gain more perspective on your case is ADR Systems’ Neutral Evaluation Program, which allows parties to engage a neutral for focused feedback on discrete issues or the case as a whole. This program gives the requesting party objective insight into their case, helping them determine next steps.

Mediation is a proven tool to achieve resolution. Attorneys should consider whether an opportunity for a mediated settlement occurs at each stage in the life of a case – pre-suit, after some discovery and after more extensive discovery.

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Hon. Larry G. Axelrood, (Ret.) has extensive experience with medical malpractice, nursing home, railroad, legal malpractice, premises liability, construction and personal injury matters. Judge Axelrood is known for his ability to easily connect with and understand the interests of all parties.

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Hon. Mitchell L. Hoffman, (Ret.) has cultivated over 38 years of experience as a legal practitioner, having spent 21 of those years as a judge and 17 as an attorney. On the bench, he handled both Chancery and Law Division calls, settling many commercial and personal injury cases. Those who have appeared before Judge Hoffman describe him as sharp and analytical, fair and even-tempered.

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Hon. Margaret A. Brennan, (Ret.) served for 19 years in the Circuit Court of Cook County Chancery and Law Divisions and cultivated expansive knowledge of commercial cases such as employment matters involving discrimination and retaliatory discharge, construction and legal malpractice disputes. Colleagues commend her intelligence, persuasiveness, remarkable patience, careful case preparation and boundless energy.

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[1] Mediating Before Litigation or Discovery: When Does it Work? Employer Law Report

[2] Id.