Pre-Litigation Mediation, Is it For You?
Posted on February 19, 2025 by Harman Bual
In today’s complex litigation landscape, many individuals and businesses are turning to alternative methods to resolve disputes as a way to avoid the time, expense, and unpredictability of traditional lawsuit. Pre-litigation mediation has emerged as one method to resolve disputes before initiating a lawsuit. Engaging in pre-litigation mediation involves working with a neutral third-party mediator to try and resolve the dispute before filing a lawsuit. The goal of pre-litigation mediation is to reach a binding settlement agreement outside the courtroom and prior to initialing a lawsuit. While pre-litigation mediation offers a range of benefits, it also has certain drawbacks that should be considered by those exploring this option.
Benefits of Pre-Litigation Mediation
- Cost-Effectiveness
One of the primary benefits of pre-litigation mediation is the potential for significant cost savings. Litigation is an expensive and lengthy process, with costs accumulating from court fees, attorney fees, expert witnesses, and other litigation related expenses for discovery, motion practice, and trial preparation. Mediation, on the other hand, tends to be cost efficient because it brings the parties together with the opportunity to resolve the case without spending the time and money on litigation.
- Time Efficiency
Litigation can take months or even years depending on your jurisdiction. Pro-longed litigation forces both parties to endure long periods of uncertainty while the parties work through discovery and motion practice. Pre-litigation mediation, by contrast, often takes place relatively quickly—sometimes within weeks or a few months after the dispute arises. Early mediation offers parties the chance to settle the dispute and return to their normal activities or business operations without the burden of prolonged legal battles and expense. This time efficiency is especially important in business settings, where disputes can disrupt operations and lead to lost revenue or good will.
- Preserving Relationships
In disputes involving business partners, family members, or long-standing professional relationships, the preservation of the parties’ relationship is often a priority. Traditional litigation, with its adversarial nature, can sour relationships and create lasting hostility. Early mediation, on the other hand, promotes open communication and an opportunity to resolve disputes quickly. Because the mediator is a neutral third party, the focus is on finding a mutually agreeable solution that can at times be challenging once a lawsuit is filed. This collaborative approach can help preserve professional and personal relationships, which is essential for ongoing business dealings or family dynamics.
- Assessment of Case Strength
Pre-litigation mediation with an experienced mediator, especially one that is a former judge, allows the parties to gain an objective assessment of the strength of their claims, as well as the identification of evidence that may be lacking. This neutral evaluation provides valuable insight, helping the parties determine whether pursuing litigation is worth the time, effort, and costs involved. For those uncertain about the viability of their case, this unbiased input can be crucial in making an informed decision prior to committing to litigation.
Cons of Pre-Litigation Mediation
- Non-Binding Nature
Pre-litigation mediation is non-binding, meaning that the parties are not required to accept any settlement that is proposed during mediation. If the mediation fails to result in a settlement, the parties are free to proceed with litigation. While this flexibility allows the parties to walk-away if an acceptable resolution is not reached, it also means that mediation can sometimes be a waste of time and resources if no agreement is reached. In such cases, the parties may still end up in court, but with added costs due to the failed mediation.
- Limited Insight on Claims
Mediation is most effective when both parties can negotiate on equal terms and with a comprehensive understanding of the relevant facts and evidence. However, when there is uncertainty regarding the claims or damages, the parties may lack a clear understanding of the full scope of each other’s positions. In such cases, to the parties may have to make a decision based on the incomplete information available to them. Parties are understandably hesitant to settle a case if the unknowns are too great or if they believe that the other party has access to crucial information that is not being shared.
Conclusion
Pre-litigation mediation is a powerful tool for resolving disputes outside the courtroom. Its benefits, including cost-effectiveness, time efficiency, and the preservation of relationships, make it an appealing option. However, it also comes with drawbacks, such as limited insight on the viability of each party’s claims and may increase hostility between the parties. Ultimately, whether pre-litigation mediation is the right choice depends on the specific circumstances of the dispute, the parties involved, and their willingness to negotiate a mutually acceptable resolution. Contact the attorneys at Lasher to assess whether pre-litigation mediation is an appropriate option for your dispute.
