Our recent blog post focused on why clients should still seek out experienced trial lawyers even though most cases settle before trial. This entry is focused on how cases settle pre-trial and what special advantages come from having experienced trial counsel at your side during the alternative dispute resolution (ADR) process.
What is ADR?
ADR refers to the process of resolving a litigation matter without resort to trial. It can involve formal mechanisms such as arbitrations, which very closely resemble trials in many ways, and mediation, using a third-party neutral who helps the parties reach a negotiated outcome. It can also involve direct negotiations between the parties and/or their attorneys, and it can involve the courts themselves, as with California’s mandatory settlement conference process. In many cases, the parties use a combination of these methods (for example, a mandatory settlement conference or mediation session, followed by direct negotiations between the parties or their counsel) to achieve resolution,
Different Types of ADR
Arbitration is the ADR method which most closely resembles the traditional trial process. Parties may agree to binding arbitration as part of a contract. If a lawsuit is then brought on that contract, either party may invoke the arbitration clause to remove the case from the traditional legal system to arbitration. In that case, the matter will be filed with an arbitration body (often specified in the contract), and the parties will agree on a third-party arbitrator or panel of arbitrators to hear the case.
Arbitrators are often retired judges or very experienced attorneys who have specific types of cases they hear. The parties will take discovery (though it is typically more limited than discovery permitted in civil litigation) and call witnesses, then have their case decided by the arbitrator. There is no jury, but the result is still binding on the parties, typically not-appealable, and will be enforced by the courts, if necessary.
The arbitration process is typically faster than litigating in civil court, with most cases resolving in under a year, compared to two or more years for civil litigation. The proceedings are binding on the parties, but they are private, meaning the records of the arbitration will not become publicly available the way such records are in civil cases and the arbitration hearings will be closed to the public. The streamlining of discovery in arbitration often results in lower costs than civil litigation, but that is not always the case.
While arbitration typically moves faster than civil litigation, it requires essentially the same legal skills as civil litigation (with the important exception that attorneys in an arbitration do not need to worry about selecting a jury or tailoring their arguments and evidence to be compelling to a lay jury). In the arbitration context, experienced trial attorneys who are accustomed to targeting their discovery efforts to only those tasks that will position the client for victory have a major advantage over civil litigators whose habit is to churn billable hours and try to bury the other side in marginally relevant discovery. Great trial lawyers experienced in preparing for trial on a short timeframe can be the difference between victory and defeat in the fast-paced environment of arbitration.
Mediation is a non-binding form of dispute resolution, where a third-party neutral (often from the same ADR firms that provide arbitrators) assists the parties in trying to reach a compromise. As with arbitrators, the parties agree on a mediator who is acceptable to all of them. During the mediation, the parties typically meet with the mediator individually and present their case to the mediator, as well as their positions on potential resolution. By going back and forth between the parties, the mediator looks for opportunities to bring the parties closer together to find potential common ground for settlement. A good mediator helps the parties understand the strengths and weaknesses in their own case as well as in their adversaries’ cases, so they can obtain a clear-eyed understanding of the risks of trial and the potential value of the case.
If mediation is successful, the parties will enter into a binding settlement agreement and dismiss the case in civil court. If it is not, the case will proceed through the civil litigation process. Sometimes, parties will have multiple meetings with the mediator if the efforts seem to be bringing the parties closer to resolution.
Mediation is confidential and in California, absolutely privileged, meaning no materials created for or used in mediation and no communications made in connection with mediation can be used in a trial or compelled in discovery in another matter. California Evidence Code Sections 1119, 1121, 1123.
Mediation can be an especially effective form of ADR for parties that have a continuing relationship as it can lead to a negotiated outcome with less acrimony than other forms of dispute resolution. Particularly when parties are not in a position to have a productive dialogue face-to-face, the use of a mediator as a go-between can be highly effective. And if you find yourself up against an adversary with an unrealistic assessment of their case, the mediator can help them see the problems in their case.
Successful mediation requires counsel that can boil down your case into its key themes and evidence and present them clearly and concisely. Typically, you only have a short mediation brief and the first hour of your time with the mediator to frame your case for him or her. Your attorneys need to know how to most effectively present your case within those constrained parameters in order to make mediation productive.
Mandatory Settlement Conferences
Courts in California typically refer cases to Mandatory Settlement Conferences (MSCs) before trial. MSCs function much like mediations, except they are part of the formal civil litigation process and instead of a private mediator, a settlement judge (typically not your trial judge) will be the third-party neutral. The parties do not get to choose the settlement judge. Parties may seek leave of the court to use private mediation in lieu of an MSC. Experienced trial counsel can assist their clients in determining whether an MSC or private mediation is more likely to bear fruit.
Sometimes, sophisticated parties will negotiate face-to-face and only bring in their outside counsel to discuss the proposed terms of settlement and then draft the settlement agreement. Other times, the parties’ relationship is so acrimonious that having counsel negotiate directly is more likely to be productive. Regardless of who is doing the negotiating, the parties or their attorneys, direct negotiations can save time and money and dramatically reduce uncertainty for the parties. If direct negotiations succeed early in litigation, they can go a long way to preserving the continuing relationship (if any) between the parties.
For all the reasons discussed in our blog on why you need a good trial lawyer even if your case never goes to trial, direct negotiations (as well as mediations and MSCs) are more likely to go in your favor if your adversary knows you are prepared for trial and are more than willing to take your case to the jury. Having a team of great trial lawyers on your case communicates to the other side that you will not accept an unfavorable settlement just to avoid the risks and uncertainty of trial. Your position will be greatly strengthened in any negotiation if you can project confidence about the case you will bring in court, should you need to do so.
Our attorneys achieve fantastic results, whether in traditional trials, arbitrations, mediations, MSCs, and direct negotiations. Our lead trial attorneys have tried hundreds of jury trials to verdict and bring that same skill and experience to the ADR process. Bring us your toughest problem to solve, whatever the venue, and we’ll get the job done.