Best predictor of settlement

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In a recent survey on federal court ADR programs, the Federal Judicial Center asked what are the best predictors of settlement and presented the following options:

  • Who the lawyers are
  • Nature of the issues in the case
  • Parties have discussed settlement prior to the initial court-sponsored ADR session
  • Summary judgment motions have been filed prior to the ADR session but haven’t been decided.
  • Who the parties are
  • Firm trial date has been set
  • Attendance of the person(s) with settlement authority
  • The amount of discovery completed before the initial ADR session

While it may be tempting to think that some factors are more correlated with settlement, anything short of a rigorous evaluation of the factors will yield biased and meaningless results. Indeed, I’ve often heard most of these reasons cited why the case settled after the fact, or more often why the case did not settle. In my experience, however, going into a mediation, I can’t point to any of these factors for why the case is more likely to settle.

  • Who the lawyers are
    • Some trial lawyers cultivate the image that they are tough negotiators who get their client a day in court. While that might be the marketing theme, the reality is that trial lawyers use their fierce reputation to extract favorable settlements.
  • Nature of the issues in the case
    • This factor only applies if someone wants a trial for publicity purposes or to get a decision changing the law. Otherwise, the parties can achieve the same or better results through settlement.
  • Parties have discussed settlement prior to the initial court-sponsored ADR session
    • While I prefer for parties/counsel to talk settlement beforehand, I haven’t seen any correlation between this and settlement. Prior discussions do, however, reduce the time it takes to reach agreement. Where it can make the process take longer is if the initial positions were “outside the realm of reason”.
  • Summary judgment motions have been filed prior to the ADR session but haven’t been decided.
    • Parties rarely ask me to mediate if a MSJ is pending. Instead, they ask to postpone the mediation until the court has ruled- the money and effort have all been expended. And if the motion’s strong, then there might not be a need for a mediation.
  • Who the parties are
    • Like with the lawyers point, some parties cultivate images as non-settlers. Some tech companies have fostered this image in the Non-practicing Entity (NPE) patent-litigation space to their advantage. Given that mediation is a voluntary process, I don’t see why a party who doesn’t settle would even agree to mediate.
  • Firm trial date has been set
    • People do focus better when faced with a deadline. But a deadline that is months or years away is not a strong driver of settlement.
  • Attendance of the person(s) with settlement authority
    • This is actually 2 factors in one: in-person attendance and attendance by someone with authority. On the former, I generally require the parties to attend the mediation in-person because communicating face-to-face helps me connect with parties. But I’ve settled plenty of cases where the parties were sitting in another time zone by participating by phone.
    • Having someone with authority participate does help because it reduces the time spent calling-back to HQ for approval. But if that person is available and hasn’t gone home for the day at 2 pm Pacific, we can still get the deal done.
  • The amount of discovery completed before the initial ADR session
    • In my initial scheduling calls, I’ll often ask what information the parties need before scheduling a mediation session to address this precise issue. The responses are all over the board- don’t need any discovery, need to take the parties’ depositions, need written discovery responses, need full blown fact and expert discovery.

I hope I’ve helped dispel the myth that there are across-the-board predictors of settlement.

Shirish Gupta is an award-winning mediator and arbitrator with JAMS. He is an Adjunct Professor of Law at UC Hastings in San Francisco and teaches lawyers, law students and executives how to negotiate.
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