Jan 1, 2019

Communicating During the Negotiation Process

Ehline Law Firm PC lead counsel for Dana Point Car accidents law firm.
Ehline Law Firm lead counsel for Dana Point Car accidents law firm.

One of the things that people think of when they think of personal injury mediation is recovering money for a seriously hurt or dead victim. Typically a traffic accident is what led to the negotiation in the first place. But now the parties are there; it affords each side to size each other up not just talk about money.

And it is not a clear-cut process what the first offer will be. So too, rarely will the defense know what the plaintiff deserves or should settle for? But instead, it is a starting point. A floor and not a ceiling.

In some cases, if it is not handled correctly, one party or the other can come away feeling insulted. Also, in some instances, they may even respond by saying they will not even entertain answering to a cheap offer. Further, the party may feel that they are bidding against themselves. So to them, it is a waste of their time since others are failing to act in good faith. Their issue is to have the other party make the first offer. Or they need to send them a dangerous message.

Is Mediation All About Money?

It is true that mediation in civil court litigation claims is generally about money. This mediation will discuss the facts, liability, and bargaining, with the mediator bringing the numbers to each of the parties. At the same time, the mediator will attempt to keep the parties at ease and confident that they will be able to reach an equitable settlement through negotiations.

In some cases, before reaching the bottom line one or both parties can become frustrated, tired and angry. So this results in them ending the negotiations. Mediation is not a fun or relaxing process. And the only real relief felt by either party is when a settlement is reached that is agreeable to both sides.

"How to Mediate Insurance Claims and Other Monetary Disputes by J. Anderson Little" and published by the American Bar Association in 2007 is an exciting read. In fact, any legal professional and mediator should read it since it focuses on how parties communicate in negotiations about money. In his book, Little discusses how individuals interact. And it tells the form of communication going back and forth between the parties.

Poker Face?

Poker face is the name of the game here. The goal is to show the range at which a settlement can be reached. So communication in mediation is indirect, Little says. And this means that neither side is going to tell the other side exactly what they will settle for. Also, this can result in each party being inadvertently being misled.

But deception is also how the frustration and anger can start during this process. So rather than the negotiations moving forward, it tells how they fall apart. The book was initially written for mediators. But it shows great insight for other legal experts who find themselves and their clients in the mediation process. Having a mediator who is insightful and resourceful is an advantage to all.

Plaintiff Starting Too High Kills Negotiations?

One scenario in Little’s book is when a plaintiff's case has been evaluated between $35,000 and $50,000. So $35,000 is the bottom line that the plaintiff should expect to settle for in mediation.  And $50,000 would be the top range that would be a settlement amount or court award.

So if the plaintiff goes into mediation starting high at $100,000, using the theory that unless they start high, they would not be able to settle for the amount they deserve. This process will usually not work as thought. After all, the other party that will feel this is a ridiculous demand. So they will counter exceptionally low with a figure such as a couple a thousand dollars. That will enrage most plaintiffs who will counter with a number that is a bit lower, such as $98,000.

This is not an uncommon situation during the negotiation process when money is involved. And it is also common for a plaintiff to ask for much more than their case supports when analyzed. When this happens, the defendant either feels they cannot afford this amount or will not settle the case at the increased amount.

Each party preparing to go into mediation will need to evaluate their case to get a rough idea of what they'll think is fair. That way they can determine a strategy for the negotiation process. Now they will be able to communicate with the other party. Then they can reach the range where it will be fair for both the plaintiff and the defendant.

How is the Evaluation Done?

Evaluation of the case is essential and starts by using the facts from the plaintiff’s side of the case and the defendant’s side. This evaluation includes using the laws of discovery. But it is up to each team to decide what other facts they should release to be evaluated by the other side. As Little explains, this information will need to be provided during mediation to prove out the legitimacy of the claim.

The information is prepared in a way that will be persuasive in the negotiations and applies the law. This evidence will allow the determination of what parts of the case have its weaknesses and strengths. And that will enable the value of the case to be determined.

  • But it isn’t possible to know what offers to accept or the amount to counter, without knowing the value of the case.
  • So going into negotiations, you need this number.
  • Little also discusses that the evaluation of the facts and the amount settle for is up to the parties involved and not up to the mediator.
  • But the mediator can be extremely helpful during the offers and counter amounts.
  • The one question that can be pondered when determining the value of a case is what it would settle for if the case went to trial instead of mediation.

What would the cost of trial be, and what would the possible outcome be? These are ways that can help the plaintiff and the defendant to be prepared for the case. Now they can go into mediation and have success without going to trial. But rather than reach a reasonable settlement they can arrive at a great one. I will be writing more on this subject, as I become more experienced in personal injury mediation.