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Litigation Is Not The Answer

From the Blog of Phyllis G. Pollack.

       More and more parties are using mediation (which is nothing more than a negotiated resolution ) to resolve their lawsuits.  Perhaps, the following explains why.

        In late April 2008, the U.S. Chamber Institute for Legal Reform published its Lawsuit Climate – 2008 in which it ranks the states’ liability systems. The survey conducted by Harris Interactive, Inc. polled 957 in-house general counsel, senior litigators and other senior attorneys “who are knowledgeable about litigation matters at companies with annual revenues of at least $100 million.” (Id.) The polling occurred by telephone between December 18, 2007 and March 19, 2008, with each conversation lasting about 23 minutes on average.

      As I live in Los Angeles County, California, the first thing I looked for was California’s ranking. It is ranked 44 out of 50. (It seems that in 2007, it ranked 45 and in 2006, it ranked 44). The five best states, respectively are: Delaware (#1); Nebraska (#2); Maine (#3); Indiana (#4); and Utah (#5). The five states below California (or worse than California) are: (Illinois (#46); Alabama (#47); Mississippi (#48); Louisiana (#49); and West Virginia (#50).

      In looking through this study, I discovered another statistic: the worst jurisdiction (i.e. specific city, or county courts) is Los Angeles County: 14% of the respondents thought this. Chicago (Cook County), Illinois came in second worst: 11% of the respondents thought this.

          As this statistic took me aback, I continued reading to find out why corporate attorneys thought Los Angeles County was so bad. The top 12 issues (with the percentage of respondents who cited the reason) broke down as follows:

      1. biased judgment – 20%;
      2. corrupt/unfair system – 5%;   
      3. unfair jury/judges – 5%;
      4. have read/seen a report on a case – 5%;
      5. unpredictable jury/judges – 4%;
      6. personal experience – 4%;
      7. incompetent jury/judges – 4%;
      8. overburdened with cases/too many cases – 4%;
      9. not enough knowledge/experience about other states – 4%;
     10. high jury awards – 3%;
     11. too liberal – 3%; and
     12. slow process – 3%.

       When the respondents were asked what should be the most important issues for state policy makers, the top five issues mentioned were: speeding up the trial process – 12%; reform of punitive damages – 10%; eliminate unnecessary lawsuits – 9%; tort reform issues in general 8% and high litigation costs – 5%.

         Indeed, in a separate study published by Public Opinion Strategies in April 2008, 88% of the respondents (executives at California businesses) stated that the number of frivolous lawsuits is a “serious problem,” while 45% believed frivolous lawsuits to be a “very serious problem.” Sixty-two percent believe that the number of frivolous lawsuits has increased in California in the last 3 – 5 years. Moreover, 50% of the respondents stated that they had made a business decision primarily to avoid a potential lawsuit. Ninety percent of the respondents stated that a threat of a lawsuit is a factor in making business decisions.

       While these two surveys are from the perspective of defendants and thus reflect a certain bias, their results still provide food for thought. Without doubt, the results are based on perceptions of either corporate attorneys (Lawsuit Climate – 2008) or business executives (Public Opinion Strategies). But, perceptions are “reality” and to these two sets of respondents, the litigation system in many states is not fair, not predictable, is over-burdened and is presided over by inexperienced judicial officers.

       . . . Which brings me back to mediation and the negotiated resolution of a lawsuit. The issues raised by the respondents provide all the more reason to resolve disputes through mediation. First and foremost, the parties, themselves, control not only the results, but the process. They need not worry about biased judgments, corrupt/unfair systems, unfair juries/judges, unpredictable juries/judges, incompetent judges and juries, overburdened judges, high jury awards, or a slow process.

           By agreeing to mediate their dispute, the parties are in total control: they select a neutral, the pace or timing of the process, the length of the process, the simplicity or complexity of the process and most importantly, the results. The parties control their own destiny – the outcome to their dispute. They can resolve it in any way that they want to do so, and not in a way dictated by some stranger – a judge or jury.

          So. . .the next time someone tells you they want to sue . . .think about this study. . .and the beauty of mediation.

           . . . Just something to think about.


Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE >

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