Mediation is an efficient and effective option for resolving False Claims Act lawsuits
Here in Georgia, autumn has rolled in seemingly overnight. The yelling from the playground across the street was replaced by silence as kids returned to school. Their silence was abruptly replaced with the dreaded noise of suburban leaf blowers.
Yes, fall is definitely here.
But fall doesn’t just mean cooler weather; it also means settlements. The new fiscal year has begun for businesses, and so any legal settlements go on the following year’s reports.
Christmas is just around the corner, so individual clients are eager to resolve their cases and go shopping for loved ones. Courts want to move long-standing cases and motions off their dockets before they land on the dreaded “six months list” compiled at the end of September, which tells Santa they have been naughty by not being efficient with their case management.
And nobody likes working during the holidays, so settling cases in September and October guarantees we all get to spend more time with our families.
Keep reading to find out how our Atlanta whistleblower attorneys make the most of this season.
What is mediation?
We are such fans of mediation for resolving thorny qui tam and retaliation cases that partner Jason Marcus even spoke on this issue at the State Bar of Georgia’s False Claims Act Summit in 2019.
And so, unsurprisingly, Bracker & Marcus LLC had three separate mediations scheduled for September and October this year. Since we are already in the process of preparing for these mediations, we thought it would make sense to discuss what is mediation and why it works so effectively in False Claims Act cases.
First, what is mediation? Mediation is a process where lawyers and their clients meet in person or virtually. The goal is to try to work out a settlement with a neutral third-party mediator refereeing the event.
Under the “east coast” philosophy of mediation, the meeting begins with each side presenting their best case to the other side.
This may be the only time that a party is in the same room hearing directly from the other side prior to trial. For months, the client has been hearing from their lawyers about how strong their case is and how well the litigation is going.
Needless to say, this can serve as a harsh wake-up call when they are then presented with the weight of the evidence by the opposing counsel.
Why do we need mediators?
Clients and lawyers often litigate in an echo chamber. We fall in love with our cases or defenses, and so it can be difficult to hear what the other side is telling us without assuming they are bluffing about the strength of their case.
Similarly, although lawyers should do their best to give their clients a fair evaluation of the case, the monthly billing on this case could be a lawyer’s meal ticket, which will come to an end the minute the case gets settled.
This is where a good mediator comes in. They have no skin in the game. Their only interest is resolving the case. They are learning about the case for the first time in preparation for this mediation.
The mediator will listen to both sides, consider the issues, and then proceed to explain to each why their case is not as strong as they think it is. This is the second shock to the system – having a veteran attorney, often a former judge, exposing the weaknesses in their case.
It is the neutrality and gravitas of the mediator that is key to this discussion. It is profoundly effective to hear from a good mediator why they will lose the case and that they need to settle it as soon as possible.
Mediation and False Claims Acts Cases
Mediation is particularly effective in False Claims Act cases because the area of law is so unsettled and the penalties for losing are so harsh.
For a relator, a case can be rock-solid when it is filed, but a negative opinion in another case can entirely change the rule of law. Something may be a clear violation at the time it occurred, but then a new administration decides to change the rules and make it legal.
And at any time, the government can dismiss a relator’s lawsuit. There is a lot of incentive for a relator to get the case settled sooner rather than later.
Conversely, a defendant may feel pretty confident about their defenses, but if they are wrong, the results can be catastrophic. The False Claims Act imposes a civil penalty of about $10,000 to $20,000 for every false claim, statement, or record in the case. For a medical provider, every patient has their own claim, and so this penalty could be applied thousands of times for even a minor fraud.
An effective mediator reminds them that if there is any doubt about whether they will win at trial, they need to consider settlement. The alternative could be bankruptcy.
Mediators Work for Everyone’s Best Interest
In sum, there is a lot of risk for both relators and defendants in False Claims Act litigation. A good mediator can explain and exploit those risks to drive both parties toward a settlement.
They say a good settlement leaves both parties dissatisfied, and it is the function of the mediator to convince both parties that it is in their best interest to leave dissatisfied.
No matter the outcome, mediation is often another very important part of a successful False Claims Act case. Experienced legal counsel is always prepared to go to trial, but will assert their client’s case effectively during mediation as well.
If you have a case, contact our False Claims Act attorneys at 770-988-5035 as soon as possible.