Saturday, February 9, 2013

Always Clarify the History of Negotiations

It happened again last week.  Plaintiff's brief indicated he had made a Statutory offer to compromise at $100,000 in November.  The mediator takes him at his word, though I check to make sure that he is willing to begin the negotiations at that number, and not, as sometimes happens, at a number higher than that since the offer to compromise has already lapsed and expired.  Then at the mediation, it comes out that the previous offer was never served on the other side.  Those high stakes that are presented when a party makes a written demand, which may serve to either open the insurance policy if there is a verdict beyond it's limits or give the offeror the right to collect fees and costs if the verdict comes in above that amount are all off.  This error in both communication to the mediator and to the Defense counsel cost the Plaintiff plenty.  After two and a half hours, the parties' stalemated because Plaintiff's counsel wasn't prepared to negotiate in a range that could have settled the case based upon his mistaken belief that he had already communicated the $100,000 demand.  The liens on the case were simply too high, and for the defendants, the stakes too low to worry about a real risk.  Even where there are assertions made that one offered something and one demanded something else, it's critical that these communications are clarified in advance of the mediation whereever possible. 
     In another example, which I discuss in the Chapter I call:  "Who Are you Calling Old?" in my upcoming book, "View from the Middle of the Road:  A Mediator's Perspective on Life, Conflict and Human Interaction", the Plaintiff's attorney told the Defense Counsel he thought his case was worth "mid-six figures".  Believing he meant $150,000., Defense Counsel invited Plaintiff to participate in a mediation.  When the first demand was made at $1 million, Defense Counsel was incensed.  But did Plaintiff's counsel mean mid-six figures was $500,000.?  Both cases eventually settled at what was probably a fair value, but clarifying these pre-mediation settlement discussions at the outset or before the hearing begins can save hours of anguish for parties and counsel.