ADR: Do Trials Still Matter?
Even with the increased use of ADR in personal
injury litigation, trial practice still plays a significant and major
role in all PI cases, because answering the question "What are juries
doing with this case?" is still the most frequently used yardstick for
determining what a case is worth. This article looks at the ADR
experience in Milwaukee County; however, other Wisconsin counties likely
exhibit similar trends.
by Richard L. Zaffiro
As a plaintiff's personal injury attorney for seven years before
beginning my current defense practice in 1988, this author has seen a
definite change in how the personal injury (PI) world works since
alternative dispute resolution (ADR) has caught on in Wisconsin PI
practice.
In the "dark days" before mandatory mediation, settlement discussions
generally died once a case went into suit, only to be resurrected on the
courthouse steps. Once in suit, the parties would conduct all discovery
and pretrial preparation, and would settle in the eleventh hour only if
the possibility of losing dawned on them as they made final trial
preparations.
The problem was compounded by the slow workings of the court system.
It was not uncommon for courts to schedule PI trials as much as two or
three years after the filing of suit, and then to bump that date several
more times or years into the future due to the pressure of other court
business.
Perhaps ADR would have come about anyhow, even if courts had not
created such an expensive and unpredictable timeline from suit to trial.
But the expense of preparing for several adjourned trial dates on any
one case created at least some of the cry for a cost-effective way to
resolve disputes - leading to mandatory ADR in Wisconsin.
This article presents the ADR experience in Milwaukee County from
several groups involved in the process: plaintiff's counsel, defense
counsel, ADR providers, and judges. It is hoped that the insights and
ideas described below will be thought-provoking and practice-improving
for those who experience mediation and arbitration as part of their
professional lives.
Plaintiff's Perspective
![Richard L. Zaffiro](/SiteCollectionImages/WisconsinLawyer/2001/05/zafiro.jpg) |
Richard L. Zaffiro, Rutgers 1981, is a senior attorney
with American Family Mutual Insurance Co., Milwaukee. He is a member of
the Defense Research Institute. |
© 2000 Defense Research Institute, adapted with permission.
|
Atty. James C. Mentkowski has practiced plaintiff's personal injury
law in the Milwaukee area for virtually all of his career. As with any
solo practitioner, keeping old clients and attracting new clients is the
key to survival, and Mentkowski believes that mandatory ADR has helped
his practice grow. While the percentage of his cases being settled has
not increased, they do settle more quickly.
Mediation provides much that trials do not by involving clients in
resolving their own cases. Plaintiffs have the chance to "say their
piece" to a mediator, which often proves more cathartic than trial.
Mentkowski says that parties actually have apologized to each other as
part of the mediated settlement, an act that has on occasion been more
valuable to the client than the settlement amount itself. In
Mentkowski's experience, clients tend to be more satisfied with the
results of mediation because they are more directly involved and feel
they have more control over the result.
Satisfaction with the mediation results generally also leads to more
satisfaction with the lawyer. Clients seem happier accepting a figure
that was recommended by a "judge" (that is, the ADR provider, whether or
not actually a former judge) than one that came only from their lawyer,
even if the settlement figure is lower than the clients originally
wanted.
On what could be viewed as the downside to ADR, Mentkowski has seen
less informal negotiation between lawyers. Negotiations have become more
formalized, because lawyers have come to rely upon the mediation process
instead of picking up the phone and calling their opponent as they used
to do.
As with any professional service, ADR comes with a cost. In the
Milwaukee area, costs typically range from $100 per hour regardless of
the number of parties involved to more than $200 per hour per party.
Depending upon the size of the case, Mentkowski finds that the cost of
ADR is not a large concern. In a small case where every dollar may be
significant as to whether settlement can be achieved, however, a
lower-cost mediator is preferred. Sometimes shifting the mediator's bill
to the opposing side may facilitate settlement.
Atty. Jeffrey P. Zarzynski, a partner in the firm of Schiro &
Zarzynski in Milwaukee, exclusively practices plaintiff's personal
injury law. Zarzynski's approach to selecting a mediator is to not
select one, preferring to let the insurance company select someone to
whom they will listen. He finds that the most effective mediators are
not tough arm-twisters, but rather more likeable individuals who can
effect the parties' expectations without appearing to force their views
on anyone.
Zarzynski agrees with Mentkowski's assessment of mediation benefits.
Mediation gives his clients a chance to participate in resolving their
own cases, rather than being told by a judge or jury what they are
entitled to. It also allows them to "say their piece," which increases
their willingness to settle.
From a business development standpoint, Zarzynski finds the mediation
process gives him a chance to impress his clients because he talks with
the mediator in front of them. His clients see him in action, which in
turn results in happier clients and more business for his firm in the
future.
The vast majority of mediated cases do settle. Zarzynski's biggest
disappointment occurs when the defense comes to the mediation with no
more authority than that which was extended prior to mediation, or with
no authority to settle at all, or fails to bring the person with
authority to the mediation. The latter insults those parties who made
the effort to attend in person.
Zarzynski also has seen attorneys become reluctant to discuss
settlement figures prior to the formal mediation session. Practitioners
are nervous about giving a settlement figure in informal discussions
which may be used against them as a floor or ceiling figure at
mediation.
Defense Perspective
Atty. Emile H. Banks Jr., founding partner of Emile H. Banks &
Associates LLC, Milwaukee, practices primarily defense work, but handles
about 15 percent plaintiff's personal injury cases.
Banks prefers a mediator who gets to the heart of the problem without
long dissertations of the law and who offers both sides a realistic
evaluative view of what a jury will do based upon the mediator's own
experiences when the plaintiff is ready to hear it.
Banks finds that his trial calendar has dropped from an average of
six to seven jury trials per year to about three or four per year since
mandatory ADR was enacted in Wisconsin. He finds that not only are many
cases being settled earlier than they did before Wisconsin's mandatory
ADR statute, but that many more cases are settling than did
previously.
Like most practitioners, Banks finds there is nothing more
disappointing than "close but no cigar" settlement discussions,
especially when he has paid for them. However, he acknowledges that even
in cases where settlement did not happen at the mediation session
itself, the process may have laid the groundwork for later settlement.
Banks, too, has seen a reduction in informal settlement discussions.
Banks says most defense lawyers still perform full discovery and
independent medical examinations before going to mediation (except in
more obvious medical malpractice liability situations where liability is
clear); thus, the idea that mediation saves defense costs may not always
apply.
This author still tries to settle those cases where the presuit offer
and demand were close, or where value is small compared to the likely
cost of preparing for trial or mediation. However, many mediators want
to know the status of settlement discussions. I do not want to be tied
to a number before mediation begins; though that number may well be
fair, it may be viewed by some mediators as my "starting point." For
this reason, my discussions before mediation are in a range of figures I
perceive to be reasonable. However, during ADR I may leave myself some
"wiggle room" over and above the top of the figure range to settle the
case if a few more dollars are needed to get the job done.
Getting the job done - that is, settling the claim - also may involve
other factors beyond the likely jury verdict in such a case. Other
factors may include negotiating reductions with subrogated carriers or
unpaid health care providers, who will pay the mediator's fees, or
whether the plaintiff's attorney can reduce her fees. Mediation only
magnifies the importance of such factors; for instance, I have seen a
mediator pressure a nonparty chiropractor with huge bills not only to
attend the mediation but to cut his bill in order to make settlement
happen. Such pressure has been applied to others whose stake in the
outcome got in the way of settlement.
The best mediator for a difficult plaintiff may well be a plaintiff's
attorney (and a high profile one, at that) who the plaintiff will
respect at least as much, if not more, than his own lawyer for
settlement advice. Former judges and practicing attorneys with good
people skills, personal experience with what many juries have done in
similar cases, and good legal knowledge on relevant issues make the best
mediators.
The cost of ADR has become an issue to many parties and may become
increasingly more so over time. The days when a mediator could boast of
his status as a former judge and then charge per hour per party are
numbered; some providers are offering flat-fee contracts to frequent
customers.
Judicial Perspective
The Hon. Charles F. Kahn, a Milwaukee County circuit court judge
since 1992, was engaged in the private practice of law for 17 years
before taking the bench. Judge Kahn is aware of no statistics on the
effect of mandatory ADR in Wisconsin, but believes it has helped bring
the parties and lawyers together to work towards resolution and to limit
the issues.
Instead of fear that aggressively pursuing settlement will be
perceived as weakness by opposing counsel, the parties now recognize
that settlement discussions are required and thus are less hesitant to
make the opening offer or demand. Settlement discussions tend to happen
earlier since the advent of mandatory ADR in Wisconsin.
With few exceptions, mediation has not been a source of problems for
the hundreds of cases assigned to Judge Kahn's court. One problem
occurred when, at the end of a long day of mediation, the plaintiff's
lawyer signed a settlement document that contained language different
from what his client thought he had agreed to, and later came before the
court seeking to set aside the document due to the several hundred
thousand dollars that were lost between what the client thought he'd
agreed to and the written settlement document. Judge Kahn upheld the
written settlement document, suggesting the party's recourse may be with
the attorney who advised him to sign the written agreement. The party
could not ask the court to break the statutory confidentiality of the
mediation process in order to prove the "true" settlement.
The issue of "good faith" participation by a party in a mediation
also has been the subject of motions before Judge Kahn. In a few
instances, plaintiff's attorneys have sought to require the insurance
carrier or defense counsel to pay for the entire cost of mediation for
failure to participate in good faith.
Judge Kahn, in an interview with this author, said he may have denied
such requests for sanctions even if there was a demonstrated lack of
good faith by a party or lawyer, because he is not convinced the ADR
statute in Wisconsin creates a duty of good faith participation.
However, he felt his court has the inherent power to assess costs in
such a situation as a matter of equity.
Judge Kahn sometimes receives requests from parties that they be
excused from mediating a case. If he is convinced a good reason exists
to do so, he will order to mediation even a party who has indicated that
he or she will not move from a number.
The Hon. Janine Geske has been a distinguished professor of law at
Marquette University Law School since 1998, an associate justice of the
Wisconsin Supreme Court from 1993 to 1998, and a Milwaukee County
circuit court trial judge from 1981 to 1993. She now has a successful
mediation practice.
Unlike most ADR practitioners, Justice Geske practices a mixture of
facilitative/evaluative mediation. Her philosophy is that in this
high-stress life of litigation, there often are missed communications
and misunderstandings. She uses mediation as a forum to overcome this
situation and to give the parties an opportunity to hear each other and
perhaps consider an apology or recognition of hurt as part of the
settlement process.
Her approach may be a little unsettling at first to litigators who
are used to thinking in terms of winning or losing cases: She encourages
the attorneys to convince the other side why they should settle instead
of convincing her why they should win.
Typically, Justice Geske uses a premediation questionnaire, and then
enters into a written contract with the parties. The questionnaire is an
attempt to identify the impediments to settlement and to see if the
parties are correctly evaluating the case. The contract clarifies what
she will and will not do as a mediator.
Justice Geske's mediation practice often involves more complex cases
where liability may be an issue as well as damages. She finds that the
lawyers want mediation in order to avoid the high costs of discovery for
their clients in such litigation, and often come to her for mediation
services even without a court order for ADR.
While she does not see her mediator role as being one to educate a
lawyer about the good or bad of a case, Justice Geske may raise a point
missed by an attorney by asking "What would be your response if the
other side did X? What do you think of that approach?" She also may
evaluate the arguments, telling each side which she believes is the
strongest argument.
Justice Geske spends time with each mediating party in private
caucuses. She often speaks directly to the plaintiff, to see what the
plaintiff perceives are the problems associated with the case or injury.
For instance: has the plaintiff been losing sleep, suffering from
increased stress? She does similar work with the defendants, trying to
help the parties reach their own numbers and ultimately their own
settlement.
Even in cases in which the parties know where they will end up, the
process still takes time. Justice Geske will not walk out on a case in
which the parties are miles apart on the numbers; she will persist for
as long as it takes.
Justice Geske does not recommend specific dollar figures to the
parties. She recalls only one case in which she recommended a dollar
figure to the parties, a particularly complex case with several suits
filed and numerous attorneys whose permission she first sought and
obtained to do so. Her rationale for not giving numbers to the parties
is that she fears becoming an advocate for a settlement number and
prefers that the parties reach their own figure.
Justice Geske observes that more cases are being mediated before suit
is even filed. Although more than 95 percent of filed civil actions
always have settled short of trial, Justice Geske sees more cases
settling earlier and fewer big cases going to trial. Informal
negotiations are decreasing, being replaced by formal ADR
proceedings.
Mediator's Perspective
Hon. Willis Zick practiced law for 22 years and was a Waukesha
County
circuit court judge before becoming a full-time mediator and
arbitrator. Judge Zick's unique blend of a great sense of humor and
superb legal knowledge have made him a most effective ADR provider.
While a judge, Zick mediated every civil and divorce case assigned to
him as judge. He always had the parties and the lawyers come into
chambers to try to work out a settlement. At first he experienced some
opposition to this practice, but over time most attorneys got used to it
and came to see it as a normal part of civil litigation in his
court.
Judge Zick saw settlement facilitation as part of what a judge was
supposed to do, and believed the system was deficient for presuming
everything would be tried and for not offering a structured way to
settle suits.
Although some mediators will break up the parties into separate rooms
right away, Judge Zick initially keeps the parties and the lawyers
together to analyze the issues, find out what facts are agreed or
disagreed to exist, and learn what offers and demands have been made. He
believes this approach is more efficient and productive, because it
allows each side to hear the other's version of the events.
Judge Zick believes it is his job to point out case weaknesses to
both sides so they are aware of the risks. Although his ADR practice
initially was more facilitative, he has become progressively more
evaluative. He attempts to raise issues and arguments to each side in
such a way as to encourage the party to evaluate the risks and/or the
significance of the issue or argument rather than to tell a side he or
she is "wrong."
Atty. Joe McDevitt came to the business of mediation out of a 30-year
defense attorney background with the same firm. McDevitt got into
mediation almost on a lark about three years ago when a plaintiff's
attorney asked him if he would do a mediation and he was able to settle
the case. That same lawyer called him again with work, more and more
plaintiff's attorneys began to call him with work and, when he realized
that 50 to 75 percent of his time was being spent doing mediation work,
his full-time mediation practice was born.
McDevitt's usual approach to mediation does not evaluate the numbers
per se; rather, he may tell a plaintiff she may get less or a defendant
that he may pay more than the number that is on the table if the case
goes to trial. He may tell the attorney proposing the number whether he
believes it to be fair, but generally will not share this opinion with
the other side. Usually he will discuss only his own position within a
range of numbers he believes to be reasonable.
In his use of the evaluative approach to mediation, McDevitt feels
very strongly about separating the parties immediately. He does not
permit opening statements or anything else between the parties unless
mediation is done before suit is filed. He has found that allowing the
parties to talk with each other created problems with attorneys
"puffing" for the benefit of their client. He separates the parties and
asks the questions himself so that they are not framed in an
argumentative way, conveys the other side's opening statement in a way
that is not puffing, and lets each side "vent" only to him in order to
avoid the parties making faces or otherwise antagonizing the other
side.
McDevitt never tells the two sides what the other side's number is
until the sides have agreed on a number. He just talks about the
strengths and weaknesses of cases, perhaps only discussing numbers in
vague and general terms, and then moves them together to obtain a
settlement with "horror stories" of unfavorable outcomes in similar
cases.
As a mediator, McDevitt helps bring about settlement by working with
plaintiff's counsel to help reduce the balance outstanding to a health
care provider or a subrogated health insurance carrier, and on occasion
even will call a health care provider. He even may suggest a plaintiff's
attorney reduce his fee in order to bring about settlement, although
never in the presence of the plaintiff.
As a means of ensuring that his evaluations continue to ring true,
McDevitt tries to follow up with lawyers on cases that do not settle (75
to 80 percent do settle with him). He asks the attorneys to let him know
what happened at trial, and so is able to stay current with trends in
the local courts that would be of interest to his mediation clients.
Conclusion
Although there is no study establishing cause and effect, the numbers
in Milwaukee County show that the number of civil trials has steadily
dropped from 263 in 1995 to 190 in 1999, and overall litigation has
dropped from 11,352 large claims and 37,352 small claims filings in 1995
to 10,349 large claims filings and 37,897 small claims filings in 1999.
Other counties probably exhibit similar trends.
Those few cases that are tried have significance far beyond their
numbers, because all of those involved in the ADR process need to cite
what real-world juries are doing with similar cases in order to help
determine what is fair in a given mediated case.
Anecdotally, everyone interviewed for this article believes that the
number of trials are down, and that mandatory ADR has moved settlement
discussions from the courthouse steps on the eve of trial to a
mediator's office, where lawyers can save some expenses of litigation
without losing face with their clients. And that sounds like a win-win
proposition for everyone.
Wisconsin
Lawyer