The vast majority of civil legal disputes settle before trial and professional mediators are commonly employed to facilitate the settlement process. Every successful settlement requires both parties to make significant compromises, including the party that legally deserves to win. That outcome ends the dispute and allows the parties to move on, but does it promote confidence that our civil justice system will lead to appropriate outcomes? Justice is hardly promoted when the party that should prevail must make large concessions instead.
How Do Mediators Resolve Cases?
Mediators rarely settle cases by educating the parties on the likely legal outcome based upon the merits of the dispute because doing so involves a complicated and difficult mediation process. Instead, they persuade the parties that the extraordinary cost and delay of continued litigation, and the significant possibility of an unjust result, make the continued pursuit of justice an economically foolish endeavor, regardless of which party deserves to win. For most mediators, the path of least resistance is to show the parties that the cost of pursuing a legally proper outcome will approach or exceed the benefit of obtaining it.
As a consequence, unjustly accused defendants pay large sums of money to settle unfounded lawsuits and deserving plaintiffs accept grossly inadequate payments to resolve legitimate claims. That is a far cry from a just system for legal dispute resolution, but it does effectively resolve cases and get them off the court’s calendar.
Wouldn’t it be better to reduce the cost of obtaining a just decision so the parties can afford to pursue a proper outcome? That is the primary benefit of an emerging form of dispute resolution called Comprehensive Adjudication. When parties have the option to obtain a just and enforceable decision at a reasonable cost, any settlement will better reflect the legal merits of each party’s position instead of the exorbitant expense of pursuing a proper outcome.
An Illustrative Example: Attempting to Mediate Divorce Settlements
The motivation of mediators to use the cost of the court battle to force a compromise instead of discussing the legal merits of each party’s position is understandable. Imagine an emotionally charged divorce battle where husband and wife are fiercely contesting whether the family home is worth $600,000 or $700,000. Both parties are certain that they legally deserve to prevail but the most that one of them will gain from a total victory is $100,000 — and neither can preclude the possibility of what they would consider an unjust outcome. The only thing that is certain is that each will have to pay their lawyers $100,000 to litigate the case through trial.
If the case is tried, one of these divorcees will win and the other will lose. The mediator may know which party has the better argument for valuing the home, but it would be difficult to convince the other party of the weakness of that party’s position because the legal and economic issues are complicated, and the dispute is emotionally charged. The easier course is to persuade both parties that it makes no sense to spend $100,000 on attorneys’ fees for the mere possibility of gaining $100,000. Both sides are better off compromising their valuation claim by $50,000 which guarantees them both a savings of $100,000 In attorneys’ fees. But how is that justice? The party that legally deserved to win was economically coerced to give up $50,000 of the more appropriate valuation the party deserved by the cost of pursuing it. It is no wonder that parties come away from mediated settlements with a distaste for a justice system that produces outcomes driven more by the system’s economic inefficiency than the legal merits of each party’s position.
Now imagine instead, the same mediation if the cost of obtaining a just and enforceable decision were $40,000, instead of $100,000. The prospect of investing $40,000 to obtain a valuation that is $100,000 more desirable makes economic sense so the mediation will no longer be driven by the economic impracticability of obtaining a more appropriate outcome. And when the option of a just result remains economically feasible, any settlement will have to be driven by the legal merits of each party’s position.
Comprehensive Adjudication dramatically cuts the expense of pursuing a proper legal decision, and it provides mediators with the tools that will facilitate their ability to settle disputes on their merits. Instead of each party shouldering the exorbitant expense of paying separate counsel to each research the same legal authorities, review the same evidence and examine the same witnesses, they jointly interview, select, and split the cost of hiring a single, neutral Adjudicator who possesses the skills to expertly perform all that same work just once. That alone cuts the cost of pursuing a just outcome by at least fifty percent, and probably much more.
The neutral Adjudicator zealously searches for all the law and evidence supporting the legal position of the claimant and, just as zealously, searches for all the law and evidence supporting the legal position of the defendant. The Adjudicator then provides both sides with a written report that identifies all the evidence that is relevant to deciding the dispute and gives the parties a short period to settle their dispute before the Adjudicator decides it with an enforceable written decision.
A mediator can use the Adjudicator’s compendium of the relevant evidence to competently assess each side’s probability of prevailing in the Adjudicator’s upcoming decision. The mediator’s analysis facilitates the parties’ ability to settle the dispute based upon the legal merits of the dispute. If the parties remain unreasonable in their settlement positions, the party that is likely to prevail still has an economically viable option to obtain a favorable, final decision from the Adjudicator. Under those circumstances, the pressure on everyone to resolve the dispute based on the merits will dramatically increase.