News & Events

Jul 12, 2021

Pay Now or Pay Later: A Mediation Story

[Originally published in Orange County Lawyer, July 2021 Issue]

There are many reasons not to settle your case now. From the defendant or defense counsel’s perspective, numerous reasons to press on include: The time value of money. The plaintiff does not have the staying power. We can defend this. We should set an example. I’d rather pay my lawyer than pay that jerk anything. It’s a matter of principle! These are all good reasons.

And there are numerous reasons why the plaintiff or plaintiff’s counsel do not rush to settle their case: We can win this. I don’t want to discount my claim. We can’t let that jerk get away with this. We’re in no hurry, we can wait it out. We have to go to trial to maintain our credibility. It’s a matter of principle! Despite all these good reasons, in the Orange County Superior Court, almost all civil cases settle before trial. (There do not seem to be definitive statistics on the percentage of civil cases that settle before trial, but several judges have informed me that they think the percentage is greater than 98%.)

As a business trial lawyer for more than forty-five years, a mediator of more than 500 cases, and a settlement judge at more than 1,000 Mandatory Settlement Conferences (MSC), I have observed a phenomenon that occurs in many settlements. Usually early on, one party or the other makes a settlement demand or offer that is dismissively rejected by the other side; and three months, six months, one year, or even two years later, the case settles at or about the amount of that original demand or offer. In the interim, between the initial demand or offer and the settlement, the parties have collectively spent many thousands of dollars on legal fees, expert witnesses, and deposition reporters, only, as noted, to settle the case for about the same amount that they could have settled for before all that money was spent.

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