ADR Systems’ neutrals settle substantially all personal injury disputes before them; however, sometimes, parties simply cannot see eye to eye. Despite our neutrals’ warnings, parties take their cases to trial and assume numerous risks.

Losing, of course, is the most obvious risk. It means no recovery for the plaintiff or a judgment for the defendant.

Besides having no control over how a court resolves your dispute, there are other risks in litigation as well: a bar on recovery because of comparative negligence, greater exposure because of joint and several liability, difficulty enforcing a judgment after trial, the total publicity of trial and ruined relationships from the whole palaver. In this article, we will explore how these risks expose parties to personal injury disputes to various forms of harm in ways that a mediated settlement agreement simply does not.

Risk for Plaintiffs: Recovery Bars via Comparative Negligence

Plaintiffs in negligence disputes risk recovering nothing despite the court finding the defendant liable. This is because of Illinois’ modified comparative negligence rule, 735 ILCS 5/2-1116.

Under this statute, a plaintiff cannot recover damages if the trier of fact finds them more than fifty percent at fault for their injuries. Where they are less than fifty percent at fault, their damages will be reduced in proportion to the amount of fault assigned to them.

Our neutrals have seen parties dispute and argue comparative negligence to leverage a higher and lower settlement sum during mediation; however, comparative negligence arguments during negotiations can be vastly different from how a jury will apportion fault at trial. As Hon. Joseph N. Casciato, (Ret.), senior mediator and arbitrator at ADR Systems, often notes, “Juries often do things even experienced judges and attorneys don’t expect.”

Trial presents numerous unknowns, including two very real ways that a plaintiff may recover nothing. But a mediated settlement provides contractual certainty, obviating all that risk before trial even starts.

Risk for Defendants: Joint and Several Liability

Non-settling defendants in multi-defendant negligence and products liability disputes place themselves at significant risk of greater exposure at trial. This is because of Illinois’ joint and several liability statute, 735 ILCS 5/2-1117.

Under this statute, defendants who are found liable for negligence or products liability “are jointly and severally liable for plaintiff’s past and future medical and medically related expenses.” Any defendant whose fault is 25% or greater of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and third-party defendants (except the plaintiff’s employer) shall be jointly and severally liable for all other damages.

The risk comes from this fact: Defendants who settle in good faith are not considered when apportioning liability among defendants under § 2-1117. Ready v. United/Goedecke Servs., Inc., 905 N.E.2d 725, 734 (Ill. 2008). As such, an unsettled defendant who may only have been “minimally responsible” in a case and severally liable for “all other damages” could, because an otherwise more-liable defendant settled, be liable for the whole judgment.[1] Likewise, a defendant who would have been primarily liable but is found more liable because they did not settle like other defendants will be required to pay even more than they otherwise would.

Critics argue Ready contravenes § 2-1117’s legislative intent, which is to prevent minimally liable defendants from overpaying damage awards.[2] But that criticism brings with it an incentive: The incentive to settle before trial in mediation — especially because under 740 ILCS 100/2(d), a tortfeasor who settles is “discharged from all liability for any contribution to any other tortfeasor,” like one who does not settle and is saddled with a weighty damages award at trial. When parties settle during mediation, they avoid all the risk that this complicated fault-apportionment statute brings.

Risk for Plaintiffs: Difficulty Enforcing a Judgment

If plaintiff wins at trial, they are not automatically paid what the court awards them. Very often, plaintiffs must enforce the judgment. While Illinois plaintiffs have ample time to enforce one in an action for money damages (twenty-seven years in all per 735 ILCS 5/12-108), they must enter a whole additional arena of discovery and procedures (primarily governed by state law, Fed. R. Civ. P. 69(a)) to do so after an arduous trial process. This often includes citations to discover assets, execution of the judgment in another jurisdiction and a judgment creditor’s garnishment of money owed to a judgment debtor by a third-party debtor.

The collection of a settlement, however, is not so hampered by an interminable process like judgment collection. Illinois’ Prompt Payment Settlement Act, 735 ILCS 5/2-2301, requires a settling defendant to tender a release to the plaintiff in a personal injury, property damage, wrongful death or tort action involving money damages within 14 days of written confirmation of the settlement. Moreover, a settling defendant must pay all sums due to the plaintiff within 30 days of tendering the executed release.[3]

Moreover, a settlement is a contract. K4 Enterprises, Inc. v. Grater, Inc., 914 N.E.2d 617, 624 (Ill. App. Ct. 2009). It is a voluntary, bargained-for meeting of the minds, and the entire point of a contract is the voluntary exchange of promises[4]: plaintiff promises to dismiss the claims, and defendant agrees to pay the plaintiff a certain sum. So, parties to a mediated settlement agreement are predisposed to comply because they willingly agreed to the agreement. This is a far better situation to be in than judgment enforcement, where bitter post-trial-outcome resentments can naturally complicate collection.

Risk for Defendants: Total Publicity

In most circumstances, litigation is public. Fillings are publicly available, and anybody can observe the trial. Defendants in particular risk reputational harm from litigation, regardless of the trial’s outcome. This, for example, is partly why federal courts require heightened pleading standards under Fed. R. Civ. P. 9(b) for fraud claims, inter alia.[5] Moreover, a public trial brings other ramifications for both sides, such as embarrassment from the exposure of vulnerable, private information and worsened feelings of animosity and resentment.

But under the Illinois Uniform Mediation Act, mediation is confidential to the extent agreed by the parties or provided by other law. 710 ILCS 35/8. Additionally, mediation communications (as broadly defined in § 2 of the Act) are privileged against disclosure and not discoverable or admissible in evidence (unless waived or precluded under § 5). 710 ILCS 35/4(a). In other words, what stays in mediation remains in mediation.

Lastly, parties are free to include confidentiality provisions in their settlement agreement, making adherence to confidentiality enforceable under contract law. The contrast between those legal protections in mediation and those risks from the public nature of trial are stark, wide and deserving of careful contemplation.

Risk for Plaintiffs and Defendants: Ruined Relationships

Trial is civil combat, and personal injury disputes can involve real, heavy experiences of physical and psychological pain. Fighting over the fault that caused it may ruin the relationship between plaintiff and a physician, an employer, a neighbor or even a friend. In short, for both sides, despite the formalities of the courtroom, trial is personal and can rend additional, unhealable wounds on both sides.

But mediation is collaborative, informal, and flexible. The task is not to fight for total victory but mend the rift — at least in part — between the parties by coming to an agreement. Yes, the bedrock of any settlement is the sum of money, and parties must undertake a modicum of discovery, which is adversarial, to adequately assess the value of the claims. But mediation allows them to work toward settlement by satisfying noneconomic, human needs: to tell one’s story, to gather information, to give and receive an apology and to find closure.

“Satisfying these needs can, at times, make all the difference to settlement,” said Hon. Larry G. Axelrood, senior mediator and arbitrator at ADR Systems. “And it can salvage relationships.”

Is Trial Worth the Risks?

Trial poses numerous risks, and our neutrals have presided over many where the outcome was not what the parties expected. A mediated settlement agreement, however, mitigates risk and keeps control of a dispute’s resolution in the parties’ hands. That makes all the difference. Learn more about mediation at adrsystems.com.

……………

Hon. Larry G. Axelrood, (Ret.) has extensive experience with medical malpractice, nursing home, railroad, legal malpractice, premises liability, construction and personal injury matters. Having served on the Evanston Police Pension Board and the Illinois Judges Association Pension and Benefits Committee, Judge Axelrood also has in-depth experience with pensions and their impact on various types of cases. He is known for his ability to easily connect with and understand the interests of all parties.

View Judge Axelrood’s Full Bio

Request Judge Axelrood’s Availability

Hon. Joseph N. Casciato, (Ret.) has trademarked his ability to guide even the most recalcitrant parties to settlement in his career with ADR Systems. Judge Casciato followed his 10-year legal career with a 22-year judicial career in the Circuit Court of Cook County Law Division and Law Jury. As a mediator and arbitrator with ADR Systems, Judge Casciato combines knowledge and efficiency with his energy and enthusiasm to keep parties engaged throughout the resolution process.

View Judge Casciato’s Full Bio

Request Judge Casciato’s Availability

ADR Systems, It’s Settled. ®

[1] Jason Meares, Note, Getting Ready to Settle: The Exclusion of Settled Defendants and Ready v. United/Goedecke Services, Inc.’s Impact upon Statutory Interpretation in Illinois, 30 N. Ill. U. L. Rev. 607. 627 (2010).

[2] Id., citing Unzicker v. Kraft Food Ingredients Corp., 783 N.E.2d 1024, 1033 (Ill. 2002).

[3] These timelines, along with other obligations of the Act can be altered by agreement of the parties. 735 ILCS 5/2-2301(g).

[4] Restatement (Second) of Contracts, § 71.

[5] See Vicom, Inc. v. Harbridge Merchant Services, Inc., 20 F.3d 771, 777 (7th Cir. 1994); Ackerman v. Northwestern Mutual Life Insurance Co., 172 F.3d 467, 469 (7th Cir. 1999).