How to avoid impasse in settlement negotiations


Mediation is a facilitated negotiation that enables parties to explore settlement in a confidential setting. A successful mediation requires preparation and an understanding of the process so as to avoid impasse, the breakdown of the process. No matter how careful and prepared the mediator, attorneys and parties are, impasses can still happen. It is helpful to understand why they occur and ways to resolve them so as to reach a successful settlement.

The consequences of impasse in mediation can be significant and severe. If a case does not settle, the result of any one trial is anecdotal information. There is, however, a study of more than 9,000 settlement decisions that found that 61 percent of the time plaintiffs recovered less than the last pre-trial offer and 24 percent of the time defendants paid more. Plaintiffs' errors cost on average $43,100 and defendants' $1,140,000. Errors increased in contingent fee cases and where insurance was not available, factors consistent with the established finding that parties take greater risks when they have something to lose.

Originally published in the Daily Journal on October 25, 2013.

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Topics:  Mediation, Negotiations, Settlement

Published In: Alternative Dispute Resolution (ADR) Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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