[0:07] Welcome back to Limits Exhausted, Texas Injury Litigation Podcasts with attorney Kiernan
[0:12] McAlpen, founder of McAlpen Law firm and a board certified specialist in personal injury
[0:17] trial law by the Texas Board of Legal Specialization.
[0:21] Kiernan has tried more than 40 cases to verdict and is frequently brought in by other attorneys
[0:26] to handle complex, high exposure litigation involving 18-wheelers, catastrophic injuries,
[0:32] and wrongful death.
[0:33] I'm Shmiqa Rhymes and today we're talking about mediation.
[0:37] What it is, what it isn't, and how trial lawyers can use it effectively to build leverage, evaluate
[0:42] cases, and drive better outcomes.
[0:45] Hi Kiernan.
[0:46] Hi Shmiqa, thanks for having me.
[0:47] When you think about mediation, how often do cases actually settle there or shortly after?
[0:53] It's a great question.
[0:54] I'm really excited to talk about this today because I was talking to one of my referral
[0:58] partners this week, and I was expressing some optimism about one of our cases that was
[1:04] going to go to mediation soon, and he's like, why all I ever hear is about lawyers talking
[1:11] about how much they hate mediation, how mediation is a waste of time, this guy who doesn't do a
[1:17] lot of personal injury historically, but he's seen a lot of CLEs where lawyers might be
[1:23] talking about mediation and expressing their angst and frustration with the process.
[1:28] I just wanted to talk about mediation just in a more general sense, in terms of my firms
[1:34] approach to mediation.
[1:37] One of the things that I'm fond of doing is whenever I'm working with a mediator, I often
[1:41] ask them, what percentage of cases that you mediate, do you ultimately settle at mediation
[1:48] or in the weeks or month or so thereafter?
[1:53] Different mediators will give different answers, but when I mediate with mediators that specialize
[1:59] in high value cases or bigger cases, the number that I've heard most often is 75%.
[2:10] Mediators that are mediating cases where there's a lot of money on the line have told me 75%
[2:17] of the time the mediation process is effective at getting the case settled.
[2:24] Wow.
[2:25] Well, one, I had no idea that they would have different answers for that, but that's interesting
[2:30] to know that, because yes, I'm glad we're talking about this today to get that legal perspective.
[2:37] Given that most cases settle anyway, where does mediation fit into the overall settlement
[2:43] landscape?
[2:44] Right.
[2:45] So the statistic that I hear quoted the most often by trial attorneys is that 95% of cases
[2:52] settle.
[2:53] So if 75% of cases are settling at mediation and 95% of cases are settling period, there
[3:01] is some significant number of cases that are not settling at mediation, but it still means
[3:08] that more often than not, it is effective, and mediators that focus more on the don't focus
[3:16] or that have more smaller cases that they mediate may have a higher percentage of success.
[3:23] So the way that I see mediation functioning within the overall settlement landscape is,
[3:30] first of all, if you're interested in settling a case, mediation is a good opportunity to do
[3:36] it.
[3:37] Now, if it's a case where you kind of don't want to settle it because it's a really
[3:42] significant case, and you're looking to get the maximum amount for the case, the landscape
[3:49] changes a little bit, but mediation is always a good opportunity to settle a case depending
[3:55] on what your clients risk appetite is and what their interests are.
[4:00] So I see mediation is kind of an integral part of the process, even if the case settles,
[4:07] even if the case doesn't settle.
[4:08] So mediation, I think we're going to talk about it today, kind of where it fits into all
[4:13] this.
[4:14] Okay.
[4:15] So I was just thinking about this, so when there's no settlement in mediation, does it automatically
[4:21] go to trial?
[4:22] No, not automatically.
[4:24] In fact, what is most commonly the case is that for a case to get the absolute last dollar
[4:35] out of a defendant or insurance company for a defendant, when that case will typically
[4:41] settle, will be either in trial after the case has already gone to verdict and the plaintiffs
[4:47] got an adjudgment or in the week before trial, right up to the point where the case is
[4:55] in trial or it's in trial or it's right afterwards.
[4:58] That's typically where the biggest settlements happen.
[5:01] I've had seven figure cases settled during mediation, I've had seven and a figure cases
[5:06] settle after having been mediated three times unsuccessfully.
[5:12] So mediation, if the case doesn't settle at mediation, that doesn't mean that it's
[5:17] going to go to trial per se.
[5:19] It just is more information about where the parties are and it tells the lawyers a lot about
[5:26] what the party's positions are and what will ultimately take to get a case done, even if
[5:31] it doesn't get done at mediation.
[5:32] Okay.
[5:33] Thank you for that explanation.
[5:34] Well, do you biggest and highest value cases tend to settle at mediation or do they usually
[5:41] resolve a little bit later?
[5:42] Yeah, typically not and I think this is why a lot of lawyers that are doing
[5:47] CLEs that are talking about their big fish where they got, you know, a phenomenal result
[5:53] are often talking about how mediation was pointless or didn't advance the ball the way
[5:59] that they wanted it to is that, you know, the biggest case that your firm has may very
[6:05] well be the one that is least likely to settle for a satisfactory number in mediation or
[6:11] certainly in like the first mediation.
[6:13] Because when we're talking about significant cases that are worth like a considerable amount
[6:18] of money where there's a lot of insurance or the, you know, defendant or defendants have,
[6:23] you know, significant financial, you know, stature where, you know, there's a lot of injuries
[6:29] and a lot of money is needed to settle the case.
[6:32] It just takes longer to get a case done, the more money that it takes to get the case done.
[6:38] So, you know, I talk to clients all the time where they're eager to settle and what I
[6:44] tell them is, you know, if you really wanted to, we could probably get this case done this
[6:48] week.
[6:49] But to get the amount of money that would be fair is going to take longer than that and
[6:53] to get the maximum is going to take even longer.
[6:56] So the biggest of the big cases are the ones that may not settle at mediation, but mediation
[7:03] is still a valuable exercise to kind of set the case up to the point where it could
[7:09] settle later on potentially.
[7:11] Well, if that's the case, then what's the real value of mediation in those larger cases?
[7:17] Well, I mean, one of the most important things about mediation is that like, I'm an addict
[7:23] for information in my cases.
[7:25] I want to know as much about my cases as I can possibly find out.
[7:31] In a bigger case, it's very likely that when you show up at the first mediation, the
[7:37] defendant hasn't even offered $1 to settle the case.
[7:41] You will show up and there will be, you know, less transparency than a brick wall about
[7:48] how they have the case evaluated and what they're willing to offer.
[7:51] So to minimum, what you're going to learn is you're going to learn how they have the case
[7:57] evaluated, what kind of authority they brought, and you're going to have some idea of what
[8:02] they feel like they might be able to stretch to to get it done in the short term.
[8:07] So you're going to learn where the case is from the other side's perspective, which is something
[8:12] that we typically don't have any access to outside of a mediation.
[8:16] So at least we're going to discover where the other side puts the case.
[8:22] And sometimes cases will be valued way less than what we're expecting and way more than
[8:29] what we're expecting.
[8:30] So it's a chance for us to kind of find out what they're not telling us and what we can't
[8:36] find out otherwise.
[8:37] So at a minimum, we're going to learn where they're at.
[8:40] And if it's a case where they've significantly undervalued it based on how we're looking
[8:44] at it, it's a reason to kind of go back to the drawing board and see if there's anything
[8:49] that we could have missed or just try to find out where they could possibly be coming
[8:52] from.
[8:53] Are they just delaying?
[8:55] Are they looking at evidence that we're not looking at is closely like are things important
[9:00] to them that didn't seem important to us?
[9:03] It's kind of a mystery that we get to unravel when we find out kind of what money they're
[9:09] really willing to put on it.
[9:10] That sounds like there's that's a definite reason why it's valuable to go to mediation.
[9:16] Now you mentioned a few things, but from your perspective, what kind of information do
[9:20] you gain at mediation that you really can't get elsewhere?
[9:24] Well number one, we find out where they're starting.
[9:28] So where a party starts in a mediation kind of presages where they're going to end up
[9:34] in a certain way, they're typically not going to increase what they're offering 100 times
[9:41] over during the course of a day's mediation.
[9:45] So when we hear their first offer, we find out a lot about sort of what their attitude
[9:50] is.
[9:51] They send us a signal with what they put on the table is their first move.
[9:55] We find out kind of what is the most authority that they brought?
[9:59] Is the authority that they brought close to getting the case done?
[10:03] Is it not even close to getting the case done?
[10:07] It's vital information because potentially it sets the case up later on.
[10:12] Even if the parties don't get anywhere close to settling at mediation, we still kind of
[10:17] have more information than we did at the end than we had when we started because we started
[10:22] out at a certain point, we've come down, they started out at a certain point, they came
[10:26] up.
[10:27] Even if there's a lot of daylight between where things wind up, we still have kind of narrowed
[10:33] it down and we've started to send the other side of signal and we started to receive signals
[10:38] from the other side about kind of where things need to end up in order for us to be able
[10:42] to get this done, which can ultimately set the stage for negotiations later on in the case,
[10:49] where we can ultimately get it done potentially right before trial during trial if we need to.
[10:56] So we find out a lot.
[10:59] Sometimes they'll be very analytical in their approach to negotiation where they'll
[11:03] say this is what we're offering for these reasons and the reasons that they emphasize will
[11:08] tell us about how they're planning on trying the case and that can be valuable information
[11:12] as well.
[11:13] Well, how does mediation affect your ability to push a case toward trial or hold on to a trial
[11:18] setting?
[11:19] Yeah, so this is the reason why I believe that mediation is never a waste of time because
[11:27] if you need to hold on to a trial setting and you're planning on opposing continuances,
[11:32] you're pushing for trial, you want to get the case in front of a jury.
[11:38] Using the case, even if it's totally unsuccessful and goes nowhere, is going to be important to
[11:44] the judge because if I'm a trial judge and I'm deciding, there's multiple cases that are
[11:50] trying to go within this particular time frame, which case do I want to put in trial?
[11:56] I'm probably not, if I'm a judge, going to give somebody a whole week of courtroom time
[12:02] if they haven't been in mediation.
[12:03] If the other side is saying, look, judge, we need to continue in, so we haven't mediated
[12:06] the case from the judge.
[12:07] I'm probably like, all right, give it the old college try before I give you a whole week
[12:12] of my time.
[12:14] It's one of those things where it can be very useful to hold on to a trial setting and some judges
[12:19] will even require it, like not every judge is going to require a mediation.
[12:23] Some judges trust lawyers to know whether or not it's going to be productive or not, but
[12:28] sometimes judges will order it.
[12:30] Sometimes judges will not hold on to trial settings if the parties haven't mediated.
[12:33] And I understand where judges are coming from on that, it's like, give it a shot, if
[12:37] it doesn't work, okay, then you need meat, then we can try the case.
[12:41] So I never think it's a waste of time simply because at a minimum, it removes lack of mediation
[12:48] as a reason to continue a case that needs to go to trial.
[12:51] What should clients understand going into mediation so that they don't misinterpret how
[12:55] the process works?
[12:56] Because I think a lot of times we tend to think, oh, mediation, this is how it's going
[13:01] to go and that's not at all how it's going to go.
[13:04] Yeah, I have a lot to say about this one.
[13:06] So I think that one thing I'd like to say is that the parties that do the worst in mediation
[13:13] that wind up being the most dissatisfied with the process are the parties that really want
[13:21] to settle, really want to be done, really want it over, but want a result that is like
[13:29] significantly in their favor.
[13:31] In other words, they want to show up, have the other side pay their asking price and be
[13:38] done.
[13:39] Right?
[13:40] So those are the people that I think end up the most frustrated and dissatisfied with the
[13:44] process.
[13:45] So they have to understand, like everybody kind of has to understand that some amount of compromise
[13:52] is necessary to get a case done.
[13:56] The plaintiff's ceiling at trial, like the most money that a jury could award based
[14:01] on legally sufficient evidence, that's not going to be what they're going to pay you to settle
[14:04] a case.
[14:05] Similarly, we're never going to accept our worst day in court.
[14:08] So there's some amount of compromise that has to happen.
[14:12] And the next thing that I would say is that oftentimes the first two thirds of the mediation
[14:18] will feel like a waste of time to the client, if not outright insulting, right?
[14:25] So what I tell clients oftentimes is you may have negotiated before, if you're buying
[14:30] a chair on Facebook marketplace, somebody's trying to sell a chair for $300.
[14:34] You might offer them $250 to buy the chair to see if you can give you a better deal.
[14:41] What happens in a personal injury case is the party start way further apart than that.
[14:46] If you're trying to sell a chair for $300 on Facebook marketplace and somebody offers
[14:49] you $10, you're going to be angry and you're not going to continue to talk to that person.
[14:55] That might very well be what happens in one of these personal injury mediations where we
[15:02] start with a number that makes the other side unhappy and they start with a number that makes
[15:08] our client unhappy.
[15:09] And it can take us two thirds of the allocated time and the mediation or more to even get
[15:15] the mediation to really start going where they're actually getting a little bit more real
[15:20] and realistic about what they're willing to offer.
[15:22] So some amount of patience and not taking things personally and not reacting emotionally
[15:29] is very important in order to stick with the process to get to the point where you can
[15:35] make an informed decision about whether or not to settle the case or whether to continue
[15:39] with the lawsuit because it really doesn't matter where they start.
[15:45] It matters where they end up.
[15:48] Some amount of not getting angry and agitated at what might seem like disrespect if you
[15:55] weren't familiar with the process is vital, I think.
[15:59] And I think the example you gave with Facebook marketplace, that really drives it home because
[16:06] I have no idea what happens in mediation but now I can visually picture this and so if
[16:11] I ever have to go in a mediation, I definitely feel more comfortable now that you've explained
[16:16] like how it works.
[16:17] So thank you for that.
[16:18] Right.
[16:19] Yeah.
[16:20] At least that's how it works in personal injury cases.
[16:22] The parties start way far apart.
[16:24] It's not where they're coming in just under to try to get a deal.
[16:30] It's like you're there's oceans between you to begin and that's normal.
[16:35] Thank you, Kiernan, for breaking this down for us today.
[16:37] Thanks for having me.
[16:38] That's it for today's episode of Limits Exhausted, Texas Injury Litigation Podcast.
[16:43] To learn more about Attorney Kiernan McAlpen and his work at McAlpen law firm, visit
[16:48] McAlpenLaw.com.
[16:50] Thanks for listening and don't forget to like, subscribe and share the show so more attorneys
[16:54] can access these discussions on complex injury litigation.