For those of you who have seen my presentations or articles you know I am very dedicated to (and cynics might say almost rabid about) trying cases and not settling them. Despite trial being my preferred dispute resolution device, last fall I settled three cases in mediation that are instructive examples of creative techniques for settling high risk/exposure cases. Two were approved for trial by the client and had relatively imminent trial dates. The third involved a second mediation after a dismal failure at the first mediation (done by prior counsel). One settled virtually on our case evaluation number, approximately 10% of the multi-million-dollar demand. Another settled for half of what would have been the costs of final preparation and going to trial.
The First Technique: Anchoring Expectations
One of the major decisions for a trial lawyer defending a personal injury case is whether to give a proposed dollar damages figure to the jury and if so how to present it. Many defense lawyers cannot bring themselves to present a damage "number" and when they do, they do so clumsily because of being uncomfortable about talking about claims of damages. However, the psychological research on the effect of giving numbers to the jury is clear. If one side "gives a number" and the other side doesn't the jury's verdict number will be near the number given to the jury because of the anchoring effect.
When both sides give damages numbers the verdict number will be between and tend toward the number with the most persuasive impact. That is the second part of the "giving a number" psychology that is more important than what the dollar number is: giving the rationale for the number.
So what does this have to do with mediation? The same psychological principles can apply in mediation. The case that settled for half the potential costs of going to trial was a wrongful death case of a 4-year-old girl in a pool at a resort. The mother had asked a family friend to look after her daughter while the mother went to a store for food for the family reunion taking place at the resort. The friend and her boyfriend allowed the child to go with them and other children to the pool despite the mother's admonition not to allow her daughter to go to the pool because she didn't know how to swim. Once at the pool the friend & boyfriend paid little attention to the child, she jumped in to retrieve a floating pool toy and drowned. The resort met all the Florida pool regulations and had all the appropriate signage and rescue equipment. The core accusation against the resort was that the pool was supposed to be closed, by an administrative regulation, 30 minutes prior to sunset. The accident happened a few minutes after the "administrative closing time" and with supposedly less light, she could not be seen to be in distress and thus was not rescued. However, the pool was under surveillance cameras and the video showed the young girl was visible at all times so the "violation" of the closing time was demonstrably not causal. [The video might have caused me to characterize opposing counsel's argument being the essence of the old saying: "Who are you going to believe: me or your lying eyes?"] We had tested the case with focus groups and the unanimously found the girlfriend and her boyfriend were the sole fault of the death for inadequate supervision and that the lighting at time of the incident had nothing to do with the death.
At the joint mediation session, we made a very minimal offer and offered our rationale: not that it was just our opinion that the plaintiff could not prevail but that we had tested the case in a jury simulation with 3 mock juries and they all returned defense verdicts. The rationale was difficult for the mediator to argue against as we also offered to provide the simulation script and report to him so he could confirm the accuracy. Intellectual honesty was hard to argue against. The offer plus the rationale provided the anchor number that the plaintiff and her counsel eventually came to.
The Second Technique: Getting Rid of the Best Experts and Trial Lawyers and the Power of a Rigorous Evaluation
The second case was the defense of an ER doctor who allegedly allowed an improper drug to be used by a resident under his supervision and failed to properly diagnose the patient's heart condition. The plaintiff ended up with both quadriplegia and cognitive damage. There were three defendants. Our team was the only one that developed both liability and damages experts and the liability experts were the best of all the defense experts.
Two techniques were used in the mediation to reach a successful settlement. The first was making the point with plaintiff's counsel that a settlement with our client would not only take our trial team out of the trial but also our liability and damages experts. That largely drove the day of negotiation.
The other technique though that was of equal importance was a rigorous evaluation of both liability and damages to establish a valid evaluation. Too frequently clients are given vague wide ranging estimates like "We have a good chance of 60-80% winning on liability and damages might be $5-10 million." A much more rigorous approach applying a Bell Curve analysis to both the liability and damages that identifies the confluence of both in a diagram as below, especially if combined with a decision tree analysis of exposure by specific issues again can demonstrate intellectual honesty that allows a party to take a stand on their offer or demand. The first diagram is a decision tree analysis from a case that involved an allegation of a school nurse missing a possible traumatic head injury occurring in school as opposed to the brain injury being caused by a rare genetic blood disease ITP. The analysis had to combine the relative risks of not only negligence, cause and magnitude of damages factors but also with the possibility of immunity under the New Jersey Tort Claims Act. And then the possibility that the cause might have been a combination of both trauma and the ITP.
The second diagram (from the ER heart ER case) has the Bell Curve analysis of likely damages awards across the horizontal axis and the liability Bell Curve analysis of likely negligence and cause findings on the vertical axis. The Bell Curve distribution of possible results demonstrates an intellectually honest recognition of differences of opinion and risk assessment. The intersection of the greatest probabilities of a damages award and liability findings is presented as the number we will settle for.
Sharing the evaluation analysis with the mediator gave the mediator the strength & confidence to advocate that number to plaintiff's counsel and to settle within the evaluation.
The Third Technique: Bringing an expert to mediation and doing a joint trial-like presentation with them
This case was an emergency room case involving an alleged failure to diagnosis a sepsis condition that eventually led to amputations of parts of all four extremities on a four-year-old boy. The plaintiff's demand as expected was "ginormous" and driven by a microscopic focus only on damages and not consistent with the recent changes in the science and medicine relative to the difficulty of diagnosing and identifying sepsis especially in its early stages. The latest medical conferences and treatises have even stated there is "no gold standard" for the diagnosis of sepsis. What had to occur to make this case settle was to educate the mediator and plaintiff's counsel on the new science of sepsis medicine and the difficulty of a plaintiff showing a deviation from the standard of care in diagnosing a syndrome that "hides in plain sight".
The way we did it was to bring the chief medical officer of our client and the defendant doctor to the mediation. I wanted the mediator to see how well our doctor presented herself and I wanted plaintiff's counsel to see she was comfortable defending her diagnosis. The expert and I jointly presented both the medicine and how the defense would set up with the recent publications and change in scientific consensus on the diagnosis of sepsis.
We made the presentation after the mediation seemed at impasse mid-way through the second day of mediation and the effect was almost immediate with the case moving to settlement within an hour or so after the presentation. The effect of using a very good expert who can present well and combining that substance with good learned treatise information in a trial like presentation can have a substantial effect on the mediation process.
While mediation has many benefits, it frequently deteriorates into concessions and demands not supported by the true strengths and weaknesses of a case. Many things the trial lawyer does to prepare for trial and to accurately evaluate risk and exposure can be brought to bear on mediation and allow clients and their trial lawyers to "win" at mediation and not just haggle in the market place of litigation but rather bring enlighten to the mediation process through demonstrable rigorous intellectual analysis and jury focus group testing.
Wisconsin Senior Fellow J. Ric Gass is a shareholder of the firm Gass Weber Mullins LLC, in Milwaukee. Mr. Gass was the 2012 President of the Litigation Counsel of America and is the Lifetime Dean of the Trial Law Institute. He is a Fellow of both the American College of Trial Lawyers and the International Society of Barristers and a Diplomat in the ABOTA. He is a Past President of both the Federation of Defense & Corporate Counsel and Lawyers for Civil Justice. He has been described in Chambers USA as "A personality the jury wants to listen to", and has also been described as "one of the few lawyers who can beat you with his facts or can trade facts with you and beat you with your facts."