Everyone negotiates differently, but certain patterns emerge over time. Often, a plaintiff will have a much too high settlement demand which will lead to a much too low response to that demand. There are two outcomes when this pattern emerges. Either the parties will methodically make small settlement moves until an agreement on a dollar amount is reached, or the parties will never make any meaningful settlement moves and the case does not settle. To get out of this settlement stagnation pattern, I often encourage parties to make a substantial move to encourage the other party to make a substantial move in return. Two recent mediations illustrate this point.
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A strategic Section 998 Offer to Compromise can make all the difference in getting a matter resolved. This was highlighted in one of my recent mediations. The plaintiff was clinging to a speculative damages theory; when faced with a settlement offer that reasonably valued her claim, she was determined to reject the offer and go to trial. In making that decision, plaintiff believed that her “worst-case scenario” was that she would lose at trial. This was before she learned about the heightened risks associated with the threat of being served a 998 Offer to Compromise.
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