MEDIATION TIP #2 – CHANGING PRE-MEDIATION DEMANDS AND OFFERS
By Glenn Loewenthal
Mediation Tip #1 dealt with knowing what offers and demands have been made prior to the mediation session. Another problem I frequently see that will derail the beginning of a mediation session is when the plaintiff makes an opening demand that is higher than their last pre-mediation demand, or when the defense makes an opening offer lower than their last pre-mediation offer.
However, the former is more common and the latter is very rare, so we will focus this tip on the plaintiff’s opening demand. There are multiple reasons why a plaintiff may want to make an opening demand that is higher than their last pre-mediation demand.
For example, the plaintiff may have made a pre-suit demand for the policy limits, giving the insurer and opportunity to settle the case for an amount that was within the limits where the case value might exceed the policy limits. If the demand is rejected, and suit has to be filed, the plaintiff will then want to make an opening demand for more than the policy limits.
Another example is where the damages have increased since the last demand. For example, the plaintiff may have incurred more medical bills or incurred more lost income. In those circumstances, it is common for the plaintiff to demand more to settle the case than the last pre-mediation demand. There is nothing wrong with increasing a demand under the scenarios described above. HOWEVER, if you are going to increase your demand at the mediation, you MUST let the other side know that well in advance of the mediation.
I can promise you that if you do not tell the other side in advance, and then spring a higher demand on them at the mediation, your chances of settling the case decrease significantly.
Going into a mediation, the plaintiff will expect that that the defense’s first offer will be higher than their last offer, and the defense will expect that the plaintiff’s first demand will be lower than their last demand. Only if you let the other side know well in advance that the demand will be higher or the offer will be lower will you be able to set the expectations of the other side coming into the mediation session.
A successful mediation session is all about sending the message to the other side that you are there in a conciliatory good faith effort to resolve the differences between the two sides. Starting the mediation off with a higher demand or lower offer without advance warning is sure not to send those signals to the other side.