AN END TO LAWSUITS?
by Marvin A. Jacobs, J.D.

The command from her boss traveled across the large room and through the tall, open shelves where packages of medicine stood in neat rows like soldiers waiting to move out. “You’d better get going!” as if after so many years she didn’t have the routine and her route down pat.

Assistants in white coats were putting the last of the small baskets into a cumbersome four-wheeled cart. Each basket held the meds she would deliver from the Pharmacy Department to every nursing station in the hospital.

She took pleasure in her job and was grateful for the opportunity to move through the facility and the freedom to enjoy her daily connection with acquaintances she had cultivated over the years. If the carts were heavy, if the carpets were too thick, she was used to it and shrugged off these kinds of things.

She waited alone for an elevator to arrive at the landing, standing at one end of the cart between the entrances to two side-by-side passenger elevators, her hands wrapped around the tall, narrow metal tubes that stood at the corners of the cart.

When one of the elevators arrived, she began to back into the car, pulling the cart with her and sliding her hands along the sides of the long cart as she maneuvered it toward the open doors and over the sill. She was not surprised when the doors began to close. Her first surprise of the day occurred when the doors continued to close, hitting her right shoulder. The doors did not reopen, and she was pinned in place against the cart that still blocked the entrance.

This is the story she told her lawyer. In due course her allegations were written up in a pleading and she became the plaintiff in a lawsuit against the company that manufactured and maintained the hospital’s elevators. Once they received the suit papers, the defendants got their lawyers, battle lines were drawn, and the long, frustrating, costly rituals of civil litigation in the U.S. began to unfold.

We will return to this accident in a future issue of ELEVATOR WORLD. This is a prelude to a monthly column that will examine lawsuits, discuss risk management, raise and answer questions concerning vertical transportation litigation, stimulate discussion if not disagreement, inform and educate, maybe irritate, and point out some choices that can be made within an established legal structure that might seem puzzling at best, and absurd at worst.

The Long And Costly Road . . . The Limited Options

Once litigation starts, it is going to end in one of three ways. First, the lawsuit can be voluntarily dismissed by the plaintiff or, in exceptional cases, involuntarily dismissed by the court. Second, the case may go all the way through a trial that will decide questions of liability and whether or not to award monetary damages. Or third, a case may be settled at any time before a verdict is returned by a jury or a judgment is entered by the court in cases when the parties have agreed to have a trial without a jury.

There are limited options open to a defendant faced with managing litigation. The options are not mutually exclusive or set in concrete. Indeed, retaining imaginative flexibility and reserving the right to change course is a wise overview. Unhappily, however, none of the options ensure a satisfactory conclusion.

At the outset, the defendant can opt for a pro-active strategy aimed at convincing the plaintiff’s lawyer that the likelihood of success is far-fetched and plaintiff’s case ought to be voluntarily dismissed before attorney’s fees and litigation costs build up and complicate the way out. As a variant, defendant may offer a quick, early, modest settlement in return for a dismissal.

The prospect of convincing the plaintiff’s lawyer to dismiss or take an early, nominal settlement is dim. For one thing, the attorney may not know enough about the case to safely make this kind of a recommendation to the plaintiff, especially when the client may reappear with a new attorney and a malpractice claim alleging that the accident case was mishandled.

From defendant’s standpoint, aside from a natural curiosity to evaluate the merits of a new case, a corporate imperative to justify a settlement can block a quick, no-questions-asked settlement policy. Thus defendant may face a Hobson’s Choice between spending time and money to establish an informed position by gathering more, and more reliable, information than what is available at the beginning of a case, or closing the case quickly to avoid greater expense even in cases where at first glance plaintiffs’ claims seem shaky at best.

There is a ray of hope that remains for this pro-active push for an exit at the earliest opportunity. A voluntary dismissal or a prudent settlement may be worked out as the case goes on, particularly where at least one of the parties discovers compelling, one-sided evidence.

A second option for defendant is located along the opposite end of the timeline and requires an early commitment to try the case in court if it comes to that; early because thorough preparation for trial, although expensive, is a cumulative process and cannot be deferred indefinitely or put off until all other options have been exhausted. If trial is the last resort, the defendant and defense counsel must be on the lookout for settlement opportunities as the case builds.

If a trial cannot be avoided, it is generally believed that defendants win more than 70% of the elevator, escalator and moving walk cases that are tried. (What constitutes a “win” and why some cases are tried and others are disposed of without a trial are subjects for future columns.) To be sure, expectancy of an eventual good result provides little solace and no predictive value when the process server arrives with a new lawsuit. Nevertheless, a generalized probability of success at a trial should not be completely disregarded by defendant’s case manager in setting strategy.

Another general proposition to remember is that a defendant and defense counsel, no matter how diligent and forceful, cannot force an adversary to yield. A plaintiff’s vindictiveness or the intransigence of plaintiff’s attorney may block negotiations. Additionally, traumatic injuries often do not stabilize for a year or more post-accident, and plaintiff’s attorney therefore may resist putting a settlement price on the case.

Experience demonstrates that when lawyers start their engines and a case begins to flesh out, the litigants’ perceptions of the accident and the residual effects of plaintiff’s injuries often diverge and widen. Paradoxically, as the case goes on and differences multiply, the opportunities for a face-to-face negotiated dismissal or a sensible settlement can diminish.

Preparation for trial goes along with recognition from the outset that a case may have to be resolved later rather than sooner, perhaps by a trial requiring the best evidence that can be offered. Trial preparation allows the defendant to acquire the tools for a sound negotiating position at any stage of the case. If a dismissal or a settlement cannot be consummated along the way, defendant and defense counsel will find themselves prepared to conduct an effective trial and improve the odds of falling into the 70% success category.

How and Why Cases Settle

The get-ready-for-settlement-by-getting-ready-for-trial approach begs the questions of how and when to get the settlement fish into the boat. How then can the defendant engineer an opportunity to engage in settlement discussions that offers some promise of succeeding? Within conventional processes, the answers seem to be, not very easily.

Still cases settle because all litigants, no matter how polarized, share concern for an extreme result. The plaintiff’s nightmare scenario is a judgment in favor of the defendant that, to the attorney, also means the loss of litigation costs advanced as part of the contingent fee arrangement. Defendants, on the other hand, worry about a runaway verdict that has not been anticipated or planned for.

Sadly, most of the props that support the litigants’ common, if unspoken, desire to negotiate are few, become available late in the game, and are only marginally effective. The courts, while strongly advocating settlements, do too little too late to support that policy. At formal settlement conferences the court tries to dispose of cases using persuasion or pressure on whichever party appears to be the most pliable. The settlement conference judge or his designee, who may be an attorney plucked from the local trial bar, may have little interest in the subject matter of the case and limited time and skill to deal patiently and constructively with the parties.

In many jurisdictions, the court’s effort gathers steam just in advance of the trial getting underway. By this time one or another of the parties may have passed the point of no return and lost objectivity as the costs have mounted or the adrenaline has begun to flow. Sometimes our venerated adversary system, which has spawned a contentiousness that even lawyers abhor, creates ego-driven confidence in a case that can frustrate even the most tolerant settlement judge or make one-on-one negotiations more a matter of combat than peacemaking.

A Way Out?

It may appear as though we have arrived at a number of dead-ends: too few workable options; practical and personal stumbling blocks to an early dismissal or settlement; heavily qualified predictions that make sound business planning impossible; budget-blasting bills from counsel; and courts whose hearts are in the right place but whose systems do not work well when it comes to an early (or the earliest) disposition of cases. Does anything work for a defendant who wants to resolve things as promptly and cost effectively as possible?

During the last 10 to 15 years, the idea of Alternative Dispute Resolution (ADR), an alternative to a journey through the court system, has taken firm root and grown into a national industry. ADR traces some of its antecedents to written contracts that provide for private arbitration of disagreements. In an arbitration proceeding, one or more arbitrators take evidence and decide the questions in dispute in a fairly informal setting, thus saving time and a good deal of the expense associated with a trial. The arbitrators’ decision may be binding or non-binding, as the parties agree.

Court-mandated, non-binding arbitration has been adopted by courts as a tool to dispose of cases without the necessity of a trial. In my experience, court-sponsored arbitration is a poor fit and provides minimal efficacy in cases that commonly arise in our industry. The complexity of elevator systems, the skills and interest level of the arbitrators and the non-binding outcome raise as a serious question whether a defendant’s interests are best served in a proceeding that may amount to a dress rehearsal for the other parties.

More recently, mediation has become a popular means for ADR. Unlike arbitration, mediation capitalizes on the litigants’ desire to settle their differences when they find themselves mired in circumstances that block them from producing a settlement in direct negotiations. A skillful mediator, trained in conflict resolution, supervises the parties in a relaxed, nonconfrontational atmosphere and provides an unbiased voice of reason and compromise. By earning the trust of the parties – unlike court-appointed arbitrators, mediators are selected by the parties – and working independently with each party, a mediator with leadership and balance can discover what deal is doable and patiently work out ways and means to facilitate agreement.

To succeed, the key decision-makers for each party must be present at the mediation. Mediation can be scheduled when there has been sufficient time and preparation of the case for at least one of the parties to arrive at an informed position with enough confidence in what is known about the case to say, “Yes.”

A prudent moment to propose mediation may occur when the defendant has arrived at a dire technical assessment of a case and before the plaintiff’s lawyer has hired a consultant. Another propitious juncture to move into mediation occurs before the expense of expert witnesses’ depositions are incurred. In some cases, the parties may agree that an early, impartial evaluation may be productive. At each and every benchmark of case development the defendant should ask, “Am I ready to settle this case?”

Not A Panacea

In some cases, disagreements are too deeply entrenched or a party’s head is too firmly buried in the sand. In other cases, the plaintiff has guarded confidence in his or her attorney and resists the lawyer’s advice. Or a litigant may have concerns about ripple effects of a particular case that have nothing to do with the intrinsic merits of the lawsuit. There are, in short, certain cases where dogmatic positions are in control and settlement is beyond reach.

But these cases are more the exception than the rule. Often, headstrong or indecisive parties will listen to a neutral new voice and sweet reason has a better chance of penetrating. With a creative mediator, the parties can craft novel settlement agreements to meet the unusual requirements of a particular party. With patience, in the end, the litigants usually get what they want but cannot negotiate for themselves at the best price: a way out of the risks and expense of going ahead with a trial.

When an agreement cannot be consummated, mediation poses no threat to having a judge and jury subsequently decide the matter. Some jurisdictions, by statute or through court rules, confer confidentiality on disclosures made in mediation proceedings. In states where that is not the case, a written consent agreement required of the parties provides the same protection. The litigants are freed to talk openly to the mediator and bind the mediator to confidentiality in dealing with the other parties. Evidentiary material and concessions expressed in mediation are inadmissible in a subsequent trial.

Courts will readily implement the parties’ request for mediation as part of the courts’ support for ADR. The choices available to a defendant may not be perfect, and there are cases that deserve to be tried and won. However, for most cases, ADR techniques are well advanced toward the goal of providing useful alternatives to a trial.

In 1984, the Chief Justice of the United States Supreme Court, Warren Burger, in a speech to the American Bar Association, attacked the failure to develop less costly methods of resolving civil disputes. Taking a hard look at the landscape, he described a court system “too costly, too painful, too destructive, [and] too inefficient. . . .”

Nearly 17 years later, litigants recognize that the Chief Justice had it right. Along the way a defendant will be bedeviled by aggravating uncertainty, futile inquiries into the likely outcome, chunks of employees’ time lost to an activity that will not generate a dime of income, and a feeling there is no end in sight as the case slowly moves toward a place on the court’s trial calendar.

The answer to the question introducing this article – An End to Lawsuits? – unfortunately is no. However, there are ways of responding to litigation that suit the style of a defendant’s business and the exposure presented in each new case. There are advantages of a pro-active approach to litigation as a pathway toward an exit strategy. Experience tells me that a constructive litigation management plan provides greater opportunities and dividends than does a reactive, purely defensive stance as to a plaintiff’s claims.

There are imperfections in the available choices. However, the way I see it, mediation provides the most promising strategy to make an end run around the system’s shortcomings.

Marv Jacobs has 30 years of experience as a trial attorney defending elevator manufacturers and service companies and has formal training as a mediator. He is an advisor to the ASME A17.1 Risk Analysis Task Group. His firm, Jacobs Associates, provides litigation consulting services and facilitates alternative dispute resolution, including mediation and arbitration of cases involving elevators, escalators, and passenger conveyances.
© Marvin A. Jacobs, 2001

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