The ABCs of Your First Personal Injury Mediation: Sending a Message with the Counteroffer (Part 2)
By Eric Gillett
Last month we walked through the basic steps of preparing for and participating in your first personal injury mediation. I was encouraged to write that article after reviewing comments from a recent lecture I presented to a group of young lawyers. I was asked to focus on more practical advice for the young lawyer. Having been a young lawyer once, I remember some of those early experiences where I might have had to “fake it” before I really understood it. And while that works well enough in many situations because the mediator will essentially hold your hand as you work towards a solution, it is much more productive and better for your client if you know what you are getting into before you arrive at the mediation.
Last month I got as far as the first “offer.” And I promised to pick up the discussion with the “counteroffer.” But before I do, I would like to review the idea of the initial offer because it is so obviously related to the counteroffer. In Part 1, I encouraged the idea that the initial offer should be based in the evidence. As a mediator, I am happy to convey whatever number you wish but it is a hollow gesture and potentially counterproductive if I cannot tie it to the evidence that should be admissible at trial.
One way I suggest you go about formulating an initial offer is with an eye on where you would like to end the negotiation, either with a settlement or with your walking away from the mediation, ready to head for trial or at least not ready to continue negotiating more that day. Either may be a good strategy. But unless you look that far down the road, your starting point is less strategic than it should be.
Some lawyers choose to begin with a number which is likely to be a lead balloon in the other room. “I want to send a message,” is what I often hear. Every offer and counteroffer sends a message so maybe it would be better to say what that message is rather than simply reiterating the obvious. Maybe you want to let the other side know you think your case has a value they don’t yet appreciate. Maybe they don’t understand the facts the same way you do. Maybe you have new facts which will change their view and bring it closer in line with yours.
If that is what you mean when you say you want to send a message, then the message should include those new facts. But that’s not all. You should be able to explain why those facts have not been previously disclosed because “new facts,” like unexpected offers, make it very difficult to settle cases on the day of mediation. Bad surprises for the other side are not conducive to settlement negotiations.
Both lawyers to a case spend considerable time gathering evidence to prepare their case for mediation or trial. As they approach mediation, they try to digest that evidence and come to some conclusions about the outcome. What is the likely outcome on liability? What is the likely outcome on damages?
Sometimes you consider damage awards in terms of percentages. What is the outcome, high and low, ten percent of the time? What is the outcome fifty percent of the time? Both sides are engaged in some form of prognostication and, based on those calculations, prepare their respective clients for the desired outcome at mediation.
And at mediation, both sides like to see the other side has analyzed the case in a way which sees the universe of possibilities much the same. If each side can see the other side is in the same universe, then the mediation can proceed. Which leads me back to the idea of the first offer.
A good offer should not come as a surprise; if the other side is not prepared for the offer, then there is little chance they are prepared to accept it and may not even see a reason to make a reasonable counteroffer.
So here’s the rub. An offer perceived by your opponent as unreasonable, unrealistic, and unsupported by evidence is likely to beget a counteroffer which is equally unreasonable, unrealistic, and unsupported by evidence. I encourage both sides to avoid this stand-off. I find it much more productive to “send the message” you are ready to resolve the case and do so with a reasonable opening offer.
So now to the counteroffer. If the opening offer is so far out of the ballpark it is not supported by the evidence, then you have a choice. As discussed above, you can submit an equally unreasonable counteroffer. Or you can choose to change the dynamic and send a different message. Absent something unusual about the case, I advocate for changing the dynamic. Make the offer you intended to make in the first place, before you heard the other side’s opening offer. And if that first offer was made pre-mediation, still make your first offer based on what you view as a reasonable opening offer in light of your valuation of the case, not on the other side’s offer.
This may require you to take a leap of faith. But I suggest it is a leap worth taking. If you give your mediator the power to walk into the other room and show you are serious about settling the case, it demonstrates something I regularly advocate for: “credibility” in the other room. It sends the message you have the courage of your convictions; you can do what you believe is right, even though the other side may not believe what you believe. This will pay dividends.
When you make that counteroffer, your message is you want to get the case settled and you are ready for the other side to get in the game. Your mediator should spend time with you to appreciate fully what evidence there is to support your position. Arm your mediator with that evidence and any nuances that might allow the other side to open their mind to the idea you have provided them a new set of glasses which, when used, show the case in a different light. Maybe this allows the attorneys in the other room to reexamine their position with their client in a way which does not feel like they are giving up or giving in. Maybe it allows the other room to save face. It certainly becomes the job of your mediator to use that reasonable offer and the facts that support it to help those in the other room to open their minds to a new way of thinking. That can be the power behind your counteroffer. And you can be well on your way to a successful resolution.
There is another possibility of course: the first offer was reasonable from your perspective. If that is the case, it behooves you to reward that with a reasonable response. Avoid the temptation I see every so often to try to take advantage by countering with an unreasonable response. Build good will when you have a chance. Demonstrate your willingness to meet somewhere between.
When I began this multipart series, I thought I might include thoughts on the policy limits demand and its role in mediation with the discussion of the counteroffer. But as I began down this path, it became apparent to me that it deserves its own space. So we’ll save that for next month. Cheers and have a wonderful summer. See you in September.
Eric Gillett is a founding member and managing partner at Preg, O’Donnell & Gillett. Follow him on LinkedIn at https://www.linkedin.com/in/eric-gillett. He is licensed in Washington, Oregon, and Alaska. He has tried dozens of cases to verdict and mediated hundreds more. A navigator of resolutions, he is a commercial mediator and can be contacted through his legal assistant, Jasmine Reddy, at 206.287.1775 or jreddy@pregodonnell.com. You can also reach him through his website at www.gillettmediation.com and his email at eric@gillettmediation.com Mediations are available both in person and via Zoom.
