In 1999 there were approximately 2,500 civil jury trials across all Virginia courts. Last year there were less than 500, a more than 80% decline. Over the same time period the use of a resolution process called mediation has skyrocketed. Why? The answer lies in two major factors:
- the cost and uncertainty of jury trials
- the involvement of the litigants themselves in determining the outcome.
For both sides, mediation tends to involve less cost and less risk. Today, a typical personal injury case that goes to trial includes $15,000 or more in costs that ultimately come out of the client’s pocket. These costs include expert witness fees, court reporter charges, exhibit preparation, subpoenas, investigators, etc.
Cost differences. Assuming a client does not have to reimburse any health care plan for accident related costs (see our blog on subrogation in Virginia), a $60,000 jury verdict will net just $21,000 for the client (40% attorney fee of $24,000 plus $15,000 in costs total $39,000 to be deducted from the verdict amount thus yielding $21,000). In mediation, the attorney’s percentage and the expenses are lower. So, if a case is settled for the same $60,000 with a 33 1/3% attorney fee and costs of $2,000, the client nets $38,000, almost twice as much as obtained through trial. Because insurance companies pay their attorneys by the hour and incur similar costs, they too are open to alternate methods of case resolution.
Maintaining Control. Most parties first attempt to negotiate a settlement without the involvement of courts or any other third party, but frequently, polarized views prevent resolution. Even when both parties really want to settle, agreement can be elusive without the intervention of a neutral third party. In these cases, mediation is a low-risk option that doesn’t cede legal control on either side. Perhaps because of this, it is successful nearly 90% of the time. Either side could spend a full day in mediation, not be satisfied, and return to the litigation track. The voluntary participation of the parties and the ability to walk away at any time empowers the litigants to be their own decision makers. Unlike a jury trial, they decide their own fate and avoid putting it in the hands of 7 jurors.
The Process. Mediations are usually facilitated by a retired judge with extensive training in dispute resolution. These judges are paid by the hour and the cost is split by the parties. While the mediator never takes sides, he or she can be remarkably effective by helping each side see strengths and weaknesses of their respective positions. When resolution does come, typically there are no big winners and no big losers. An acceptable result for both sides is achieved and both sides avoid expensive, time consuming, and unpredictable litigation.
We’ve had mediation efforts that yielded multi-million dollar settlements, and we’ve had others that failed and ended up in trial. But virtually of all of our personal injury clients who have been through the mediation process say they are glad they tried that route. Most of them cite their ability to decide whether to accept or reject any given settlement as a major contributing factor to feeling it was the right way to go.