The three fundamentals of settlement are preparation, evaluation and negotiation

By Nikki Tolt

In this year of the snake, the old Chinese curse, may you live in interesting times, seems to be particularly appropriate when assessing settlement options. With the budget crunch faced by the courts, one of the draconian measures that is in the process of being implemented is the closure of the Los Angeles Superior Court’s Alternative Dispute Resolution program, which includes mediation, and which annually processes thousands of cases. In addition, in all the judicial jurisdictions, at varying levels, access to the courts is being affected, resulting in longer times to process disputes and its attendant repercussions. Thus effective means of processing cases and getting them settled becomes a valued tool in a litigator’s arsenal.

When the parties chose mediation as the means of resolution, it has become even more important to make the process effective. Now is the time to hone and put to good use effective negotiating skills to maximize recovery for your clients.

The three fundamentals of settlement are preparation, evaluation and negotiation. Good preparation leads to accurate case evaluations and accurate case evaluations facilitate negotiation of prompt and fair settlements. Like so many other key stages of litigation, mediation lends itself to some of the finest advocacy on behalf of a client. Although not every case requires the same attention, every case deserves some attention, no matter how modest the evaluation. Your mediator can only help you maximize the settlement value of your client’s case if you know your case and you come to the mediation prepared with the evidence to support it.

If the goal is to get the case settled, right from the start, consider as part of your discovery plan, what do you need to know to be able to evaluate your case and what will the defense team need to know before making a recommendation to their clients about the value of your client’s claims. Defendants and their attorneys are simply not set up to absorb and react to significant new damages information in a mediation without time for reflection. Discovery responses that are devoid of facts to support liability and details to support damages set the wrong tone. This basic notion applies across the board to all genre of cases, be it automobile collision, employment, malpractice, etc. When an insurance carrier is involved, keep in mind that the more paper in the adjuster’s file to justify a settlement, the more likely you will get a good result for your client.

Effective discovery

Depending on the value of your case, costs must be taken into consideration. Plaintiff’s costs are more likely to control the outcome of a mediation than on the defense side. For plaintiff’s, all of the costs have to be recouped before a settlement figure can even be discussed. This makes a realistic evaluation of the case crucial. From time to time we see attorneys who over-litigate a case that does not have significant value relative to the costs incurred, making settlement far more difficult. On the other hand, doing no discovery sends the signal that your client’s case has nominal value. For example, the decision whether to video tape depositions or rely on declarations should be made early on commensurate with the case evaluation. One tool that lawyers can take advantage of at no cost at all is the "email declaration." Although lawyers take pride in crafting declarations that meet the legal requirements of admissibility (for purposes of motions, not trial), an amazingly effective and powerful tool is asking a witness to email his or her version of the facts. Usually written in the vernacular, email communications tend to be far more candid. Often, witnesses otherwise reluctant to sign declarations freely give out information in email format.

As obvious a this may seem, make sure your client’s written discovery responses are accurate! For that matter, make sure your pleadings and your discovery responses are in sync. Or if you discover an error in your operative complaint when you respond to discovery, be aware that this discrepancy needs to be addressed. And when preparing your client for deposition, make sure they know what their written discovery responses say on key issues such as liability and damages. In an amazing number of cases, the key ammunition used by the defense to reduce the value of a claim is the discrepancies between the pleadings, the written discovery and the deposition testimony.

In a recent survey of mediators, one of the top ten peeves identified by mediators is the failure of the parties to bring the evidence to the mediation! And for goodness sake, don’t forgo doing a mediation brief- no matter how brief! Presumably you have engaged a mediator who is conversant with the subject matter, so if time or resources are limited, skip the law and give them the facts. Don’t forget that your mediator doesn’t know anything about the facts or your client before the mediation, so if those key ingredients to a mediation remain a mystery until you arrive at the mediator’s office, an opportunity is lost. A mediator who is armed with the facts is a far better advocate for your client than one who starts the process in the dark. A mediator is only human, with all the attendant frailties. Most likely your mediator is a lawyer trained to analyze evidence. Don’t under estimate the power of persuasion that emanates from a mediator who is armed with evidence that supports your client’s case. If you submit nothing or the equivalent of nothing, the perspective the mediator will have coming into the mediation is the one presented by the defense. The defense rarely fails to present its side, in detail, before the mediation. Plus, your presentation to the mediator establishes your credibility as an advocate who is prepared to prosecute the action on behalf of your client.

 Issues at the mediation

 As basic as this sounds, read your own client’s records! Over and over again attorneys appear at mediations without having read their client’s medical records or employee personnel files. You need to know if there are factors in those records that will enhance or diminish the value of your client’s case. If the case value does not warrant getting a copy of the records the defense will surely subpoena, send your client down to the doctor’s office to get a copy of the records (generally free or a nominal copy charge) or have them ask for a copy of their personnel files (under the Labor Code, the employer must provide copies of all documents signed by the employee and they must allow the employee access to the entire file for review). If you are blind-sided by facts you learn about for the first time in mediation, not only will your evaluation of the case most likely be skewed, but your client’s expectations most likely will not be in line with the true value of the case. This can lead to having a very unhappy client. On the other hand, if you have read the records and you have a client who can’t or wont acknowledge the issues presented by those records, your mediator is there to aid you with client’s expectations. You should alert the mediator to the concern either in a pre-mediation telephone call or in a separate caucus at the commencement of the mediation so that the mediator is prepared to assist you.

Often neglected is a full presentation of the effect of the injury on the client. While the medical bills and records can tell part of the story, they are not designed to paint a picture about the effects of an injury on the daily life of your client. When your client tears up because she can’t bend down to pick up her toddler any more due to her back injury, or when your elderly client is depressed because he has had to give up the one activity he enjoyed in retirement- taking long walks, because of his broken hip, those details matter. Adjusters see hundreds of claims and insurance companies evaluate based averages culled from huge amounts of data from settlements and verdicts. The attorney who most convincingly distinguishes a client’s claim from the "average" will get the best result for that client. This requires searching out, identifying and communicating those factors in your client’s case that are unique and add value to the case.

In employment cases, particularly in this economy, jobs are hard to find, especially for older workers. The client is often depressed and may present with a flat affect. It may take a family member or close friend to describe the devastating effect of the termination on your client. Often the client has no insurance as a result of the termination and cannot afford to see a mental health professional- be prepared to counter the common defense argument that without evidence of treatment, the emotional distress damages cannot be significant.

Malpractice cases, be it medical or legal, at their core involve a breach of trust. These are often very emotional cases on both sides, with the defendant often also feeling betrayed, in addition to being convinced they did nothing wrong. Consent to settlement is often the key to resolving these claims- your mediator must be sensitive to these dynamics. Because these cases are often expert intensive, resolution may not be possible without this evidence available at the mediation.

 There is a delicate balance between the information shared before the mediation and during the mediation. The basic nuts and bolts of your case should always be shared with the defense well before you arrive at the mediation, particularly if there is an insurance carrier involved. Make sure the defense has all the medical reports, the property damage pictures, the lost earnings documentation and any other hard data that will be used by the defense to come to an initial evaluation. When basic data supporting your client’s claim is not provided in time to have the information evaluated, you practically guarantee the case will be mis-evaluated.

The most effective use of your mediator is in conferring with him or her about how to address the evidence. Use your mediator as a sounding board before you get to the mediation. In complex and/or high value cases, consult with the mediator about how best to present your evidence at the mediation. For example, should the evidence be addressed in a joint session or not. Some evidence is too inflammatory to be effectively discussed in joint session, such as in a sexual harassment case. On the other hand, in automobile accident cases, the adjuster has often not met their insured and sharing a video clip from the deposition of the defendant who comes across poorly may dramatically alter the evaluation (even if the defense attorney has candidly reported that the insured is a poor witness, that information may not have worked its way into the evaluation). Conversely, avoid the temptation to oversell weak or marginal items of claimed damages. It affects your credibility and undermines your negotiating position.

If there is evidence that you have not shared with the other side for tactical reasons, such as witness declarations or email declarations, confer with your mediator about when and whether to share that information. Most seasoned mediators want to control the flow of evidence from one party to another to maximize its effectiveness. Sometimes evidence is held back until the mediator gets a feel for how serious the defense is about settlement. Other times it is held back to use as an impasse breaker or to help with the push for the closing number. And sometimes, sensitive evidence is given to a mediator and never used because the mediator assesses the dynamics and determines that the information will stall discussions rather than advance them. For example, your client may be privy to an extra marital affair by her former boss, but her claim is based on her whistle blower status. While discussing the affair might have some tangential evidentiary value if the case continued being litigated, the mediator may determine that humiliating and embarrassing the defendant is not the most effective way to extract a maximum recovery and not address the issue with the defense. Likewise, if the defense attorney has made a tactical or legal error, how that information is used, if at all, can be very sensitive. It is rarely advantageous to undermine an attorney’s credibility in front of his or her client. If the issue is key to the resolution of the case, how and when the information is conveyed to the defense can be crucial.                    

Be polite, professional and candid

 Simple, but effective. Attorneys often forget the human factor in evaluating cases. Whether the defense team includes an adjuster or a CEO, how that person is treated can have an impact on what the defendant pays. It is understood that you will be your client’s advocate, but equally important, be prepared to listen. Most attorneys consider themselves to be good communicators and, therefore, good negotiators. Many attorneys believe that listening means simply maintaining a polite silence while rehearsing in their own minds the diatribe they want to deliver as soon as it is their turn to talk. Artful listening, on the other hand, can be a powerful negotiating tool. Whether in a joint caucus or perhaps in a meeting with only the attorneys and the mediator, really acknowledging what the other person has to say and trying to assess the issues from the other person’s perspective can be not only effective in terms of the response you will get from your adversary, but also in evaluating your client’s case and developing a strategy to maximize its value. Really listening to the other side helps identify what factors are important to the other side’s position and that information can provide areas of compromise to reach a satisfactory conclusion. Similarly, candor about a weakness in the case often garners respect from the other side and more importantly, calls for reciprocal behavior that can be the key to settlement. Keep in mind that all case evaluations are subjective. Each side has their opinion which ultimately can only be tested by a jury, which will have its own, collective opinion. However, seasoned lawyers understand that based on general probability parameters, there is a reasonable settlement range and the goal is to get as high a number in that range as possible.

 Document your agreement

 If your mediation is successful and agreement is reached, make sure the key terms are documented and signed off by the parties in a writing that has the magic words to make it admissible if it is necessary to enforce the agreement under Code of Civil Procedure §664.6:


"The parties herein agree that they have reached a full and final settlement of all claims. This Settlement Agreement contains the material terms of the agreement between the parties and is enforceable under Code of Civil Procedure §664.6. Pursuant to Evidence Code §1123(a), the parties agree that this Settlement Agreement is exempt from the confidentiality provisions of Evidence Code §1152, et seq. and is admissible in evidence to enforce the settlement."


 Never leave a mediation without a document signed by the parties. Ideally, the final settlement agreement will be brought to the mediation so all terms and conditions can be hashed out. In the alternative, at minimum, do make sure your term sheet has all the material terms. Don’t wait until the last minute to raise issues about secondary issues that can often be very contentious, such as terms of payment, payment plans, arbitration clauses, confidentiality, liquidated damages, letters of recommendation, whether or not the settlement contemplates a resignation, pension buy-ins, return of evidence, non-disparagement and a whole host of other issues aside from the actual amount of the settlement. If the defendant is a governmental entity, there are specific rules that apply to them too detailed for this article, but generally, each entity has a claims process that requires varying levels of scrutiny and review and often can take weeks and months to get a settlement finalized. It is important that you understand the process for the particular governmental agency you are dealing with or you may end up with an unhappy client when the closure process takes far longer than he or she anticipated. A mediator knowledgeable about the ins and outs of settling with governmental agencies can help with ferreting out this information and making sure that realistic expectations are set. Hopefully collection is not one of your worries!

Ultimately, mediation may be your client’s day in court. Take charge and make it an important day in your client’s case- the result will be satisfying for you and your client.


 Nikki Tolt has been a trial lawyer since 1983 when she graduated from Loyola Law School She founded ACT Mediation in 1996. Since that time, she has mediated thousands of cases in a wide variety of areas including personal injury, employment (including wage and hour), various forms of professional malpractice, contract disputes, real estate and insurance matters. A sustaining member of CAALA for almost 30 years, Ms. Tolt was named one of the top mediators in California in 2008 and 2012. Her office is in Beverly Hills where she maintains comfortable facilities for mediation.



Nikki Tolt Photo


Nikki Tolt, Esq.
2008 DJ Top Neutral

2012 DJ Top Neutral

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