Like all civil litigation, probate litigation is expensive and involves attorney fees and other legal costs. Probate disputes are often particularly fact-intensive, requiring more attorney time on the matter, which can translate into more fees for clients. Depending on the circumstances of the case, a successful mediation may help minimize these legal expenses.
Mediation is a dispute-resolution process in which a neutral mediator (typically an attorney with relevant expertise) attempts to facilitate a mutually acceptable settlement agreement that resolves the parties’ dispute. The process is nonbinding, meaning all parties must voluntarily agree to the resolution.
Mediation may occur in one of two contexts: before a lawsuit is filed or while a lawsuit is pending. Pre-litigation mediation has the greatest potential to minimize legal expenses. If the mediation results in a settlement resolving the dispute, then no litigation will be necessary and no litigation-related legal fees will be incurred. The parties will still incur fees for legal counsel during mediation, and it would be imprudent for a disputant to proceed without an attorney.
However, pre-litigation mediation is not always feasible. A party should not mediate until they possess the information necessary to make an informed decision about a potential resolution. For example, if a trustee has misappropriated funds from a trust, the beneficiary needs to know how much was embezzled and how much of the trust’s assets remain in order to negotiate a settlement intelligently.
The trustee may or may not be willing to voluntarily disclose the needed information before pre-litigation mediation. Outside of the litigation process, the beneficiary has no ability to compel the trustee to disclose the needed information. In that scenario, the beneficiary would have to file a lawsuit in order to obtain the needed information before participating in mediation.
In the context of probate litigation, Michigan probate courts often (but not always) require the parties to participate in mediation. A distinction is made between early and later mediation, depending on when it occurs in the course of the lawsuit. Early mediation, if successful, will avoid more legal fees than later mediation. However, the key question remains whether the parties possess the information needed to engage in meaningful settlement negotiations. Early mediation should not be held until that information is obtained.
It is not necessary for the parties to discover every single fact before participating in mediation, but it is necessary for them to possess the fundamental facts of the case. What those fundamental facts are will depend on the nature of each case.
The parties should not always rush to participate in mediation. In some cases, a party may believe there are factual and/or legal grounds to file a motion asking the probate court to grant summary disposition where some or all of the claims would be decided immediately. In that case, mediation is often deferred until after the summary disposition stage. If a party has a chance of prevailing on the case by filing such a motion, they will be unlikely to agree to a settlement agreement until they know if the court is willing to grant their motion. This can be a
cost-effective strategy.
Mediation can not only resolve a probate dispute but also avoid substantial related legal fees. A disputant should retain experienced probate litigation counsel to advise as to whether and when to engage in mediation.
