The landscape in civil litigation was changed forever when the mediated settlement conference became a mandatory part of civil superior court cases in North Carolina. Most lawyers share the sentiment that the change was for the better, although not all of them thought it would turn out that way. Given the cost to appropriately litigate (or arbitrate) a civil case, should the landscape be changed again by increasing the use of the pre-litigation mediation tool? Whether required by contractual clauses, or encouraged by the General Assembly for homeowners associations in North Carolina, or proposed by lawyers who know their clients can benefit from trying to resolve disputes before they incur the time, expense, emotion and distraction of litigation, pre-litigation mediations are becoming much more of a “norm” than ever before. Mediation is a reality once you are involved in most civil superior court cases, so is it worth taking a shot to resolve a dispute before the parties dig deeper into their positions?
Some of the advantages to pre-litigation mediation are obvious and some are not. The obvious advantages include the relatively small amount of time invested, with the potential of a prompt resolution, the limited attorney fees and costs incurred, and the possibility of avoiding the uncertainty of a judge, jury or arbitrator. One less obvious advantage is the confidential nature of the proceedings as opposed to the public record of court proceedings. The parties may not want to air their dirty laundry, or may not want their competitors, customers or employees to find out about the issues. Another less obvious advantage is the possibility of protecting a business or personal relationship between the parties that a contested lawsuit could destroy. A skillful mediator can facilitate communication designed to resolve the dispute, without creating on-going ill will that typically accompanies our adversary system in litigation. It allows a problem to be solved without assigning a “win” or “loss” label. And perhaps what should be obvious but is not always, the advantage of the parties fashioning their own remedy and being allowed to be creative in doing so. There may be more ways to solve the issues than the exchange of money, if the parties’ interests and “hot buttons” in the dispute can be addressed. Many business disputes can be better resolved without relying on an expert witness to determine the “value” of a claim.
Of course, the form and rules used in mediation matter. Mediation is generally an informal process that encourages parties to reach a settlement agreement of a dispute through the use of a third party neutral. The parties generally control the decision making as the mediator attempts to provide open lines of communication and understanding to resolve the dispute. The Mediated Settlement Conference Rules under N.C. Gen. Stat. §7A-38.1 and the local rules establish the selection of the mediator, the timing, attendance, fees, the mediator’s duties and confidentiality, among other things. It would be wise for the parties to adopt those Rules or to agree on the applicable rules prior to undertaking the mediation, particularly as to confidentiality and the memorialization and enforcement of any settlement that is achieved.
Preparation for a pre-litigation mediation is required. In the usual Mediated Settlement Conference, the lawyers have often conducted discovery and usually know their cases well. With pre-litigation mediations, the lawyers may need to flesh out the key facts and legal precedent in preparation for the mediation and share their positions. Mediation is the best chance to help each side understand that there are two sides to every story. The preparation for a pre-litigation mediation is also the time to manage the client’s expectations so that valuable communication and understanding can take place. A bonus is that if the pre-litigation fails, the lawyer is prepared to draft a complaint or answer without extensive additional investigation.
Of course, for any mediation to be successful, the parties must want to resolve the issues between them and believe that mediation is a possible vehicle to do so. Lawyers should be more open to the alternative dispute resolution available in pre-litigation mediation, without any preconception that it is a showing of weakness or strength, but rather embrace it as an opportunity.
Experienced Litigation Attorneys
At Miller Monroe & Plyler, our attorneys have helped many clients resolve their disputes throughout alternative dispute resolution before a lawsuit is ever filed. We recommend engaging experienced counsel if you are involved a dispute that may lead to litigation, so that you can effectively navigate the process. Contact us today for a consultation, or click here to learn more about our practice areas.
This article does not establish an attorney-client relationship and must not be construed as legal advice.