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April 01, 2006

Making Sound Decisions: How to Help Your Client Evaluate Settlement Options

Imagine these two scenarios:

Scenario 1. A plaintiff’s lawyer represents a client who has filed a sexual harassment suit against her employer. At mediation, the lawyer makes an initial demand of $500,000. This number reflects the lawyer’s assessment of his client’s best-case scenario. In private, the lawyer discusses with his client the risks and uncertainties of litigation, and the possible outcomes if the case goes to trial. He tells his client that she has a “good” chance at winning on liability and a “pretty good” chance at collecting a “six-figure” damage award.

Scenario 2. A defense lawyer represents a corporate client who is the target of a suit filed by another company for breach of contract. At mediation, the plaintiff’s initial demand is $750,000. The defense lawyer tells her client that she believes the client will “probably lose” on liability, but that she doesn’t think that plaintiff could collect “anything near” $750,000.

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