Attorney Urges Marine Operators:  Mediate, Don’t Litigate

All marine operators dread the prospect of expensive litigation that follows when a company is sued. Whether it involves property damage or personal injury, lawsuits are expensive, time consuming, and divert company resources from its business plan.

When a company is sued, the outcomes available from traditional litigation often present a lose-lose situation. If the company goes to trial and loses, it is faced with paying the judgment in favor of the plaintiff and paying all the costs and expenses of the legal defense.

Even if the company wins, there are still considerable resources expended for the legal defense. While insurance may cover the defense cost, the expenses of litigation can affect the company’s insurance loss record, increasing insurance premiums for many years to come.

Saving Time, Expense

Sophisticated marine companies and their insurance underwriters recognize in many cases that if a reasonable settlement can be reached early in the litigation, a lot of time and expense can be saved. So how does a company reach a prompt and reasonable settlement?

Ron Fox of the Fox Galvin law firm in St. Louis has practiced maritime law for nearly 40 years. He says the answer is mediation. “Mediation is a simple, informal, flexible process where the parties work to settle a suit or even a claim on terms both can accept,” Fox said. “In mediations, both sides meet, share information and their perspectives with the hope of finding common ground.”

Fox trained at the University of Missouri Center for Dispute Resolution and has many years of experience with mediations representing marine companies. Now he has taken the next step and serves as a “neutral” in mediations. A neutral or mediator is the umpire at the mediation who helps the parties reach a settlement. Whether it is a Jones Act personal injury case or a navigation-related property damage matter, a trained mediator can optimize the chances of a cost-saving settlement.

Fox points out that there are many reasons why mediation is preferable to litigation. First, mediations are confidential, so nothing said or done during mediation can be used against a party, even if no settlement is reached.

Second, a settlement from mediation is prompt and final. Settlements end protracted litigation, and there is no appeal that could drag on for years.

Third, mediation settlement agreements can include remedies or benefits that a trial could never provide. For example, the parties can agree that the settlement terms, including any amount paid, will be kept secret and never disclosed. By contrast, a court could never order a verdict to be kept secret.

Finally, the parties, not a judge or jury, control the outcome. In mediation, the parties are entirely in control. They alone decide whether they will settle and on what terms.

Fox notes, “A major incentive to settle a case is to avoid the risk and uncertainty of trial. Settlement eliminates these uncertainties. A good mediator helps the parties understand they can either take control of a case by settling, or they can face the risk of trial over which they have little or no control. Having control is frequently better than rolling the dice.”