Trenam’s Mediation Newsletter: Pumping Up or Deflating Damages for Mediation
Federal and State Court Judges in Florida order nearly every civil case, whether it is a commercial/ business litigation, a divorce proceeding, or a personal injury claim, to participate in mediation at some point during the life cycle of the case. As routine as this fact may be, lawyers tend to focus solely on the issues of liability, fraud, breach of contract, and the other principal issues of the case. Regrettably, they often forget to highlight and fully explore issues of damages as they prepare and present the case for mediation. Remember the famous adage: “Show me the money.”
As a trial lawyer, litigator, and particularly as a mediator, I often see lawyers overload their mediation briefs with the liability issues and go skinny on explaining or justifying damages. Doing so misses both the point of mediation and the opportunity to persuade opposing counsel and the mediator of the strength of their case. Lawyers should not only prepare a solid damages presentation for the mediation, they should create either a notebook or a power point deck with a substantial section highlighting (or undermining – depending on your party’s position) the damages of the case. Make sure you spend significant time with your client addressing the damages facts and issues and preparing the mediation presentation.
If you are the party seeking compensation, each item of damage should be separately set forth with supporting documents and case law. A summary page should start the presentation, with separate sections devoted to each category of damage, including interest (if applicable), costs, and attorney fees – if recoverable by contract or statute. Speaking the damages out loud is one thing. Demonstrating them on paper or power point is simply more powerful, compelling, daunting and intimidating. Often I will prepare a jury verdict with a line by line itemization of each damage question the jury will have to answer so the defense will see the full picture and hopefully get wide-eyed. And scared.
A party defending the claims should also prepare the same type of analysis, setting forth why damages are either not a consequence of the alleged conduct of breach or tort, not recoverable by law, or not proven by the facts and financial records. A statement or report from an accountant or financial expert summarizing the damages is also compelling.
The objective in any mediation is ultimately to determine damages. For the plaintiff, the goal is to build each claim from the foundation up, such that the opposing party will have a full picture of the risk they face if the case goes to trial. Although exaggerating the damages is not advisable (as it may undermine credibility), presenting every conceivable dollar to state the total claim at its maximum will provide leverage as negotiations ensue. The plaintiff can discount or even withdraw certain claims that are of secondary importance as the dialogue continues, while still asserting the primary claims. For the defense, it is equally important to understand and be able to undermine each item of damages and to demonstrate the weakness of the plaintiff’s case.
A successful mediation can often depend on making it appear to the other side they have scored some victories in the process. Thus, max out your damages, present them in an efficient and succinct manner, and then compromise a few, all of which bolsters your opportunity to reach a successful resolution at mediation.