Studies conclusively show that Mediation lowers costs. Then, why isn’t it used more often? Misunderstanding of the process or outcomes, emotions and attitudes, “the need to say my piece” – all contribute to continuation of unnecessary litigation.

Financial Costs

• Fees & Court Costs
• Higher Settlement Costs
• Lost Sales From Potential Clients Upon Learning Of Conflict

Wasted Time

• Executive Hours
• Month or Years In Court Waiting For A “Win”

Loss Of Reputation

• Media & Market Place Chatter
• Executive’s Own Stature
• Potential Employee’s Knowledge Of The Company
• Supplier’s Uncertainty

Eroded Morale

• Management & Staff Attitudes Of Uncertainty

Another Study Shows How Settling Cases Early Saves Money

Posted on June 15th, 2008 by Marvin Schuldiner
The National Law Journal reports that a study of court settlements in personal injury lawsuits against businesses estimated companies could save an average total of $114,000 per claim and $670,000 for severe injuries by promptly settling cases instead of battling them in court.
The study (published this month in the Columbia Business Law Review) also projected $32,000 in savings from lower legal expenses, or about $211,000 for cases involving severe injuries.

Why It Is Better to Settle a Lawsuit Early

Posted on August 3rd, 2009 by Marvin Schuldiner
I tell all my civil mediation clients the same thing:  If you’re going to settle, settle early.  Why?  That gets to why a litigant should settle a lawsuit in the first place.
When a litigant settles a case, they are essentially “buying off” two costs.  The first is the risk of losing the case.  This applies whether you are the plaintiff or defendant.  As you know from an earlier post, statistically winning and losing in state courts are a roughly 50-50 crap shoot.
The second are transactional costs.  These are the costs for the attorney, court costs and fees (filings, motions, etc.), experts costs, costs for a court reporter in depositions, etc.  In most cases, these are cost that you do not get back regardless of the outcome of the litigation.  80% of the costs to try a case come in the discovery phase. The discovery phase is the pre-trial period when documents are exchanged, depositions are taken, experts are engaged to do studies, etc.  Discovery is essentially the phase where you learn what the other side knows (and vice versa) to be able to value a case.  Settling on the court house steps just before or during trial does not eliminate these costs.