Paper Trail is a 12-part series that follows a single fictional case through every phase of American civil litigation, from pre-litigation to post-trial.
In Part 8, the judge denied Amanda’s motion for partial summary judgment on notice, leaving it a disputed question for the jury to decide. She granted Amanda’s motion to exclude Depot Print Shop’s medical expert, so his opinion questioning Patty’s recovery time won’t be heard at trial. With the case narrowed but neither side fully confident in how a jury would rule, they pause to consider whether this dispute really needs a judge or jury at all.
Why Cases Settle
Civil jury trials are surprisingly rare. While the rate varies by state, in general, less than 1% of lawsuits make it to trial. Most of those cases end because the parties resolved things themselves, without a judge or jury ever ruling on who’s right.
Trial is expensive and juries are unpredictable. A jury of strangers can read the exact same evidence the attorneys have spent months gathering and still land somewhere neither side expected, sometimes swayed by things that have little to do with strict legal analysis of the facts, like sympathy or a gut feeling.
By this point in the case, both sides also have nearly all the information they’re ever going to have. Discovery has been exchanged, depositions have been conducted, and the major pretrial motions have already been ruled on. The only real unknown left is the verdict itself.
Sometimes settlement conversations might even be required. A contract between parties might obligate them to participate in arbitration, or a court might order the parties into mediation as a prerequisite to trial, since courts have their own interest in keeping excess cases off their crowded calendars.
Negotiation
Negotiation is the most direct path to a settlement agreement. The parties, or their attorneys, simply talk to each other and try to agree on a number, with no third party involved. Negotiation can happen at any point in a case and often takes place repeatedly, from the first demand letter right up until a verdict comes in.
Amanda and Depot Print Shop’s attorney have been informally exchanging verbal settlement numbers for most of the case, without ever closing the gap in their respective offers.
Mediation
Mediation brings in a neutral third party, a mediator, to facilitate the conversation. The mediator doesn’t decide anything and doesn’t have the power to force either side to agree to terms. Their only job is to help the parties find common ground they couldn’t find on their own.
Mediators are typically retired judges or experienced attorneys, chosen by agreement of both sides rather than appointed by the court. A mediation can happen almost anywhere: a conference room at the courthouse, either side’s law office, or entirely remotely. Mediators often start with everyone in the same room, then split them into separate rooms and go back and forth between them, privately relaying offers and pushing each side to move a little further.
Amanda and Depot Print Shop’s attorney agree to try mediation, mostly to avoid the cost and uncertainty of a trial. For a while, it looks promising, until the conversation moves past the dollar figure. Depot Print Shop wants a non-disparagement clause included in any deal, barring Patty from discussing the dispute or her injury publicly. Patty won’t agree to it. She’s not just angry about her wrist, she’s angry that the store manager knew about the hazard and did nothing, and she’s not willing to stay quiet about it. Once that term is off the table, any realistic chance of a deal vanishes. Mediation ends without an agreement.
Arbitration
Arbitration goes a step further than mediation. Rather than just playing referee between the sides, a neutral third party, an arbitrator, decides the outcome. That decision can be binding, meaning the decision is final, or non-binding, meaning either side can reject it and proceed to trial anyway. Which one applies depends on how they landed in arbitration in the first place, whether voluntarily, by contract, or court ordered.
Similar to mediators, arbitrators are typically experienced attorneys or retired judges, either chosen by agreement of the parties or drawn from a panel approved by the court. Arbitration looks more like a trial than mediation does. Both sides are in the same room for the entire proceeding, evidence is presented, and witnesses can testify, all in front of an arbitrator rather than the judge or jury. It typically takes place in a conference room rather than a courtroom, either provided by the court or chosen by the arbitrator.
The judge overseeing Patty’s case requires the parties to attempt non-binding arbitration before trial. The arbitrator hears both sides and rules in Patty’s favor, but awards her a fraction of the money she demanded. Accepting it would end the case for far less than she believes a jury would award her. However, rejecting a non-binding arbitration award carries risk. If she doesn’t do better at trial than she did in arbitration, she would owe Depot Print Shop the amount they spent going to trial. Depot Print Shop doesn’t push to lock in the award either, optimistic that a jury will find them not liable at all. Both sides, for different reasons, are willing to let this go to trial.
What Settling Means
When a case does settle, the terms are written into a formal settlement agreement, a private contract signed by both sides. At the core of that agreement is a release, where the plaintiff gives up the right to sue the defendant over the underlying incident, in exchange for whatever the defendant has given them.
The settlement agreement itself doesn’t end the lawsuit though, as it is not typically filed with the court. For that, the parties provide the court with a notice of settlement, letting the judge know that the case has been resolved. The case is then dismissed with prejudice, meaning the dismissal is permanent, and the plaintiff can’t refile that same claim against the same defendant, even if they later regret the deal. A dismissal without prejudice leaves the door open to refile later.
What Comes Next
In Patty v. Depot Print Shop, none of it works. Negotiations stall, mediation ends with frustration, and Patty rejects the arbitration award rather than accept less than what she believes the case is worth. With every off-ramp exhausted, the case is heading to trial.
In the next installment of Paper Trail, Patty’s case finally makes it in front of a jury. Start at the beginning to read Patty’s story from the morning of the incident to final resolution.
Book a demo to discover how Steno can support your team throughout the litigation process.
-1.svg)
.png)
.svg)
.svg)
