Women in the United States Judiciary

2009 State Court Judges in the US:

• 4,325 women of 16,950 total
• 26% women

2008 Federal Court Judges

• 47 of 164 active judges on the thirteen federal courts of appeal are male (29%).
• 25% of United States district (or trial) court judges were women in 2008.

Women in Corporate America

• In November 2002, women represent 15.7% of the corporate officers in America’s 500 largest companies. These percentages are up from 12.5% in 2000 and 8.7% in 1995.
• In April 2002, there were six female CEOs in the Fortune 500 and a total of eleven in the Fortune 1000.
• The number of women corporate officers:  2,140 out of 13,673.
• The number of women corporate officers:  2,140 out of 13,673. T
• Almost 95% or 2,141 of the top earning corporate officers are men, compared to only 188 or 5.2% of women top earners in the Fortune 500.

Earnings on the Dollar Compared to Men

• Asian/other women: 67 cents
• White women: 59 cents
• African American women: 57 cents
• Hispanic women: 48 cents

Family

• Women managers are more likely to be single parents than male managers.
• Women managers who are unmarried and have children under 18: 22 percent African-American, 15 percent Hispanic, 8 percent White, and 5 percent Asian/other women.

Women Lawyers

 JOIN THE PROFESSIONAL WOMEN'S NETWORK OF SOUTHERN CALIFORNIA TODAY!  We're "on the ground" locally and online nationally.  Building business one relationship at a time.

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Here's a copy of the Judgment Confirming Final Arbitration Award.

Comment later.  In the meantime, Money Money Money from Cabaret.

 

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I would not ordinarily post a power point presentation that is someone else's marketing vehicle.  Nor would I generally post a power point that is meant solely for the benefit of one side of any dispute (here, plaintiffs' personal injury attorneys).  I read though the entire lengthy presentation, however, and thought it contained some good tips over a broad range of issues that could well be useful to attorneys, clients and mediators in settling personal injury litigation involving the use of structured financial products.  So with all disclaimers considered given (not my opinions; don't vouch for accuracy, etc.) I uploaded the below presentation for anyone who might find it a useful jumping off point in this complex arena (i.e., it invovles arithmetic if not actually mathematics!)

 

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Check out Steve Mehta's recent post at Mediation Matters -- Negotiations Today Could Haunt You Tomorrow, once again confirming that the human interaction during the negotiation is more important to long term satisfaction with the deal than the raw economic benefit achieved.  As Mehta explains, a recent study reported Curhan, J., Elfenbein, H., Kilduff, G. Getting Off on the Right Foot: Subjective Value Versus Economic Value in Predicting Longitudial Job Outcomes From Job Offer Negotiations in the Journal of Applied Pyschology, 2009, V. 94, No. 2, 524-534 (.pdf)

found that the satisfaction with the experience the employees had during their job offer negotiations significantly predicted compensation satisfaction, job satisfaction, and turnover intention one year later.  By contrast, the actual economic value – meaning the value of the compensation package — achieved in the negotiation had no association with job attitudes or intentions to leave.

Interests In Employment Litigation

Just as the quality of the pre-employment relationship colors the entire workplace experience, so will a negative termination color the employee's retrospective view of the employment experience, thereby increasing the incidence of litigation.

 

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Among the most frequently asked questions at my negotiation trainings are these:

1. how do you negotiate with a sociopath?
2. how do you negotiate with people who are:
   
   1. evil
   2. dishonest; or
   3. 100% irremediable jerks
3. how do you negotiate when you are powerless (or simply weak)

Whenever someone asks me about negotiating evil, I think of Ken Cloke's brilliant book Conflict Revolution: Mediating Evil, War, Injustice and Terrorism – How Mediators Can Help Save the Planet (my review of that book here).  Some time ago, when I had the bright but failed idea of launching an online conflict resolution journal, Ken kindly let me publish his article Mediating Evil, War and Terrorism the Politics of Conflict, some of which I quote below.  I like the way Ken framed the problem in his earlier book, Mediating Dangerously, as follows:

For those who live under fascism, oppression, or tyranny, or face a fierce, unprincipled adversary, or are afraid even to exercise their own freedom, it may become necessary to engage in conflict, resist oppression, reject settlement, and raise their voices against the silence of acquiescence . . . . [T]here are limits to the desirability of ending [certain conflicts] prematurely, without a fair and honest examination of the underlying issues, and without the full participation of people whose lives will be irrevocably damaged by them . . . Collaboration implies mutuality and partnership, and even compromise involves give and take, but fascism merely [takes] giving nothing in return.

Those who recall the free speech movement on college campuses in the mid-sixties (most notably at U.C. Berkeley) will remember at least some of the words spoken by FSM leader Mario Savio:

There comes a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part, you can't even passively take part, and you've got to put your bodies upon the gears and upon the wheels, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, the people who own it, that unless you're free the machine will be prevented from working at all.

One might criticize this rhetoric as being a bit overblown for the context in which the students were operating but they were young; had been taught in public schools to believe in and cherish freedom; and, were stunned to find that their on-campus speech was regulated, controlled, and, punished.  Savio's voice is the voice of all peoples who find their freedom suppressed or denied altogether.

So what do we, mediators and interest-based negotiators, do when confronted with tyranny?  Cloke's partial response (see full article here) is as follows:

Genuine, lasting peace is impossible in the absence of justice. Where injustice prevails, peace becomes merely a way of masking and compounding prior crimes, impeding necessary changes, and rationalizing injustices. As the Trappist monk Thomas Merton presciently observed:

  To some men peace merely means the liberty to exploit other people without fear of retaliation or interference. To others peace means the freedom to rob others without interruption. To still others it means the leisure to devour the goods of the earth without being compelled to interrupt their pleasures to feed those whom their greed is starving. And to practically everybody peace simply means the absence of any physical violence that might cast a shadow over lives devoted to the satisfaction of their animal appetites for comfort and leisure.... [T]heir idea of peace was only another form of war.

When millions lack the essentials of life, peace becomes a sanction for continued suffering, and compromise a front for capitulation, passivity, and acceptance of injustice. This led anthropologist Laura Nader to criticize mediation for its willingness to “trade justice for harmony.”

True peace requires justice and a dedication to satisfying basic human needs, otherwise it is merely the self-interest of the satisfied, the ruling clique, the oppressors, the victors in search of further spoils.

For peace to be achieved in the Middle East or elsewhere, it is essential that we neither trivialize conflict nor become stuck in the language of good and evil, but work collaboratively and compassionately to redress the underlying injustices and pain each side caused the other. Ultimately, this means sharing power and resources, advantages and disadvantages, successes and failures, and satisfying everyone’s legitimate interests. It means collaborating and making decisions together. It means giving up being right and assuming others are wrong. It means taking the time to work through our differences, and making our opponents' interests our own.

In helping to make these shifts and move from Apartheid to integration, the South African Truth and Reconciliation Commission found that for people to reach forgiveness, they needed to exchange personal stories of anger, fear, pain, jealousy, guilt, grief, and shame; to empathize, recognize, and acknowledge each other’s interests; to engage in open, honest dialogue; to reorient themselves to the future; to participate in rituals of collective grief that released their pain and loss; and to mourn those who died because neither side had the wisdom or courage to apologize for their assumptions of evil, or the evil they caused their opponents and themselves.

At the same time, they also needed to improve the daily lives of those who suffered and were treated unjustly under apartheid. Where shanty towns coexist with country clubs, peace cannot be lasting or secure. Where some go hungry while others are well-fed, terror and violence are nourished. In the end, it comes down to a question of sharing wealth and power, realizing that we are all one family, and that an injury to one is genuinely an injury to all.

Making justice an integral part of conflict resolution and the search for peaceful solutions means not merely settling conflicts, but resolving, transforming, and transcending them by turning them into levers of social dialogue and learning, catalysts of community and collaboration, and commitments to political, economic, and social change. By failing to take these additional remedial steps, we make justice secondary to peace, undermine both, guarantee the continuation of our conflicts, and prepare the way for more to come.

By the way, tomorrow is Ken's birthday.  HAPPY BIRTHDAY KEN!!!

 

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Here's part I of the Resource Materials for the full-day training which included this Power Point Presentation.

Part I includes articles (see the Table of Contents) on The Social Psychology of Conflict; Negotiation and Gender; Distributive Bargaining; and, Integrative and Interest-Based Negotiation.

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My statistics page tells me that lawyers are not the only people searching for information about likely outcomes at trial.  The clients land here too.  For their benefit, here's a report from the Accident and Injury Lawyer Blog, penned last Spring but likely to reflect current trends as well. 

California Personal Injury Verdicts

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I spent the day at an advanced mediation training session at the U.S. District Court in Los Angeles where I serve as a settlement officer. I came away troubled by the wide array of responses to questions concerning the mediator's "right" or "desire" or "need" to use deception in separate caucus mediation - the primary form mediation takes in Southern California litigated cases.

At the end of our session, I suggested to a fellow mediator that all separate caucus mediation is inherently deceptive. He is a sophisticated practitioner and knew exactly what I meant. My husband - a litigator of 35 years who is also (newly) on the District Court's Settlement Officer panel - recoiled at the idea.

Here, for your consideration, is an excerpt from a lengthy discussion of the issue from the Journal of the DuPage County Bar Association -- Defining the Ethical Limits of Acceptable Deception in Mediation by JAMS mediator the Hon. John W. Cooley (Ret.) 

[C]onsensual deception is the essence of caucused mediation. This statement should not come as a shock to the reader when it is considered in the context of the nature and purpose of caucusing. Actually, it is quite rare that caucused mediation, a type of informational game, occurs without the use of deception by the parties, by their lawyers, and/or by the mediator in some form. This is so for several reasons.

First, a basic groundrule of the information system operating in any mediated case in which there is caucusing is that confidential information conveyed to the mediator by any party cannot be disclosed by the mediator to anyone (with narrowly limited exceptions). This means that: (1) each party in mediation rarely, if ever, knows whether another party has disclosed confidential information to the mediator; and (2) if confidential information has been disclosed, the nondisclosing party never knows the specific content of that confidential information and whether and/or to what extent that confidential information has colored or otherwise affected communications coming to the nondisclosing party from the mediator. In this respect, each party in a mediation is an actual or potential victim of constant deception regarding confidential information — granted, agreed deception — but nonetheless deception. This is the central paradox of the caucused mediation process. The parties, and indeed even the mediator, agree to be deceived as a condition of participating in it in order to find a solution that the parties will find "valid" for their purposes.

Second, mediation rarely occurs absent deception because the parties (and their counsel) are normally engaged in the strategies and tactics of competitive bargaining during all or part of the mediation conference, and the goal of each party is to get the best deal for himself or herself.

These competitive bargaining strategies and tactics are layered and interlaced with the mediator’s own strategies and tactics to get the best resolution possible for the parties — or at least a resolution that they can accept. The confluence of these, initially anyway, unaligned strategies, tactics, and goals creates an environment rich in gamesmanship and intrigue, naturally conducive to the use of deceptive behaviors by the parties and their counsel, and yes, even by mediators. Actually, even more so by mediators because they are the conductors — the orchestrators — of an information system specially designed for each dispute, a system with ambiguously defined or, in some situations, undefined disclosure rules in which the mediator is the Chief Information Officer who has near-absolute control over what nonconfidential information, critical or otherwise, is developed, what is withheld, what is disclosed, and when it is disclosed. As mediation pioneer Christopher Moore has noted: "The ability to control, manipulate, suppress, or enhance data, or to initiate entirely new information, gives the mediator an inordinate level of influence over the parties."

Third, the information system manipulated by the mediator in any dispute context is itself imperfect. Parties, rarely, if ever, share with the mediator all the information relevant, or even necessary, to the achievement of the mediator’s goal — an agreed resolution of conflict. The parties’ deceptive behavior in this regard — jointly understood by the parties and the mediator in any mediation to fall within the agreed "rules of the game" — sometimes causes mediations to fail or prevents optimal solutions from being achieved.

Thus, if agreed deception is a central ingredient in caucused mediation, the question then becomes what types of deception should be considered constructive, within the rules of the mediation game, and ethically acceptable and what types should be considered destructive, beyond the bounds of fair play, and ethically unacceptable. Or, perhaps more simply, in the words of mediator Robert Benjamin, in mediation what are the characteristics of the "noble lie" — deception "designed to shift and reconfigure the thinking of disputing parties, especially in the conflict and confusion, and to foster and further their cooperation, tolerance, and survival"? Because formal mediation is generally viewed as "nothing more than a three-party or multiple-party negotiation," we can begin to formulate an answer to this question by examining the current limits of acceptable deception as employed by lawyer-negotiators.

New Zealand mediator Geoff Sharp blogged on this topic under the rubric "noisy disclosure" recently, noting that

Mediators can assist parties in reaching a zone of possible agreement by making limited and heavily filtered disclosures of the parties’ private concessions that the parties disclose in caucus sessions (Brown and Ayres call this “noisy” communication).

See my own short post on mediator predictions and false signals here. 

 I urge all my readers to comment, but particularly litigators like my husband who may not know what many mediators have apparently known for quite some time -- that they are making "filtered disclosures of the parties' private concessions" after promising to keep all separate caucus communications strictly confidential.

My husband assured me on the way home tonight that he will henceforth require all of the mediators he retains to guarantee him that they will not "signal" his negotiating positions, tactics or strategies to his bargaining partners.

Your thoughts?

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The American Arbitration Association announces a new set of dispute resolution services for businesses and consumers, including new panel members of which I am one.

Mediation and non-binding arbitration are processes that offer parties opportunities to settle their disputes. Pursuing settlement helps clients to reduce the total cost of conflict management in their organizations, provides flexibility and protects valuable relationships with partners
and customers.

The American Arbitration Association®’s (AAA) Non-Binding Dispute Resolution Services for Businesses and Consumers is a suite of settlement services and solutions that include:

• Mediation

• Non-Binding Arbitration

• Non-Binding Arbitration and Mediation Contract Clauses Guide

An important element of the suite is access to AAA staff facilitators who stand ready to aid parties in selecting the settlement options most appropriate for their needs and the circumstances at hand. To reach a facilitator, simply select the “Contact Us” option below to send an email requesting information
and assistance.

Here are the consumer procedures.  You can also find these rules on the commercial dispute resolution page here.  And here's a .pdf download of dispute resolution clauses geared toward the business and consumer dispute resolution services provided by the AAA.

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Although a California Court may properly sanction a non-party insurance carrier who possesses the authority to settle litigation for its failure to participate in a mandatory settlement conference, there is no statutory (nor inherent) authority given the Court to sanction the carrier or a party for its purported failure to negotiate in "good faith."  As the Court in Vidrio v. Hernandez (2d DCA) explained today:

In sum, even were we to agree with the trial court's assessment of the conduct of counsel and the [insurance] adjuster, the failure to increase a settlement offer or to otherwise participate meaningfully in settlement negotiations violates no rule of court and is not a proper basis for an award of sanctions.11 (See, e.g., Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415, 1424 [“[w]e eschew any notion that a court may effectively force an unwilling party to settle by raising the specter of a post hoc determination that failure to do so will be evidence of failure to participate in good faith”]; Sigala v. Anaheim City School Dist., supra, 15 Cal.App.4th at p. 669 [“„[a] court may not compel a litigant to settle a case, but it may direct him to engage personally in settlement negotiations, provided the conditions for such negotiations are otherwise reasonable‟”].) [Defendant] filed an appropriate settlement conference statement; her lawyer and Mercury [the insurance carrier] attended the conference and participated in it. While the trial court‟s frustration at the parties‟ lack of movement is understandable, no more was required.
 

In particular, the Court of Appeal, held that the Court was not at liberty to "judge" whether the defendant and its carrier "should have" offered more than had previously been offered at a mediation either because the case was "worth" more or because the offer was so low in light of the attorneys fees and costs that would likely be incurred at trial.

I believe most mediators would approve of this ruling, even though it applies only to settlement conferences and not to mediations, the latter of which is protected from the Court's inquiry by Evidence Code section 1119.  Whether or not a mediator, a settlement judge, a party or a trial judge believes a defendant "should" offer more or a plaintiff "should" accept less by way of settlement, should not form the basis of an award of sanctions.  Not only would such a rule decrease citizens' trust and respect for the Courts, whose job it presumably is to provide a forum in which litigated disputes may be tried, such a rule would impermissibly chill the parties' Constitutional right to a jury trial.  

 

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In anticipation of working out Affiliated Organization agreements with SCMA and CDRC, current members of those two organizations (and others in the very near future) will receive special Enrollment Discounts as a benefit of your membership in either of those groups.  Group Discounts are also available for groups of two or more registering together.
 
Please visit AIM's site for more details and additional course listings.
 
The American Institute of Mediation cordially invites you to elevate your mediation practice
by joining us for one of our upcoming workshops.  Advance registration is required.

 

Be sure to read about available discounts, including Bring A Friend, Group Discount and membership in one of AIM's Affiliated Organizations.
 
 
UPCOMING WORKSHOPS:
 
 
Harnessing the Power of the Master Mediator
with Lee Jay Berman & Doug Noll
Wednesday afternoon - Sunday afternoon, May 6-10, 2009
 
Mediating Divorce Agreement
with Jim Melamed
Wednesday - Sunday, May 13-17, 2009
 
 
Mediating Dangerously: The Frontiers of Conflict Resolution
with Ken Cloke
Thursday - Saturday, June 4-6, 2009
 
 
Beyond Yes:  Deeper Wisdom and the Art of Negotiation
with Erica Ariel Fox
Thursday - Saturday, June 4-6, 2009
 
 
Settle More Cases by Mastering the Essence of Mediation
with Lee Jay Berman and Richard Millen
Thursday - Saturday, June 18-20, 2009
 
 
Building a Profitable Mediation / Collaborative Practice
with Forrest (Woody) Mosten
Thursday - Saturday, June 25-27, 2009
 
 
Post-Disaster Mediation Training
with Mel Rubin
Thursday - Friday afternoon, July 9-10, 2009
 
 
Mediating Mortgage Foreclosures
with Mel Rubin
Friday afternoon - Saturday, July 10-11, 2009
 
 
Mediating and Negotiating Commercial Cases
with Lee Jay Berman
Wednesday afternoon - Sunday afternoon, July 15-19, 2009
 
 
The AIM Institute is where leading mediators turn to continue their learning and career development.
 
 
WHERE:
 
Skirball Cultural Center
2701 N. Sepulveda Blvd., Los Angeles, CA, USA 90049
 
 
The American Institute of Mediation delivers “World Class Training for the Complete Mediator”.  Offering a unique and diverse curriculum whose sole purpose is to elevate a mediator's practice, the AIM Institute is where leading mediators turn to continue their learning and career development.  Being free of academic constraints and embracing other disciplines allows the AIM Institute to expand the frontier of this developing profession by offering practical courses designed to make an immediate impact on a mediator’s practice.  Our core faculty includes Lee Jay Berman, Ken Cloke, Erica Ariel Fox, Jim Melamed, Forrest (Woody) Mosten, Doug Noll and Mel Rubin.
 
Join our mailing list to stay apprised of new course offerings.
Join us on Linked In and Facebook.
 
www.AmericanInstituteofMediation.com

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As every lawyer knows and most students of high school geometry must learn in mastering "proofs," the answer often comes first, the rationale later.  I used to say, "I'm a litigator, I can rationalize anything."  As a mediator, my rationalizations have turned from the way in which facts can be shoe-horned into causes of action or affirmative defenses to the way in which harm arising from a dispute (including, most assuredly, the moral harm of injustice) can be monetized.

Now David Brooks in the New York Times (which appears to have disabled the "copy" function/1) tells us that philosophy has been sacrificed on the alter of emotion in his column The End of Philosophy. 

As Brooks explains, reasoning comes after moral judgment and "is often guided by the emotions that preceded it."  The good news is that those emotions are not merely competitive.  Brooks again:

Like bees, humans have long lived or died based on their ability to divide labor, help each other, and stand together in the face of common threats.  Many of our moral emotions and intuitions reflect that history.  We don't just care about our individual rights, or even the rights of other individuals.   We also care about loyalty, respect, traditions, religions.  We are all the descendents of successful cooperators.

My mediation experience teaches me that the "soft" arts of influence, empathy, community-building, and prejudice reduction, are as important (and often more important) to the successful (i.e., satisfying) resolution of a lawsuit than our prized ability to parse the evidence,  rationalize away the bad and privilege the good to sell our "proof" to judge or jury.

Most importantly, I find that when attorneys' clients leave a mediation with the belief that a certain rough justice has been obtained, they are more satisfied with the outcome, and with their attorneys' representation of their interests, than they might have been had they left with 10% more change jingling in their pockets.

The experts who study mediation tell us that "neutrals" don't make the difference between settling or not settling.  The cases will settle with or without us.  The difference mediators make is not settlement, but  client satisfaction.  Satisfied clients are  an absolute necessity for a successful legal practice at any time.  In these hard times, legal practices may fail in the absence of resolutions addressing the justice issues your client sought out a lawyer to resolve in the first place.

Money is the instrument.  But justice is the issue.

 

 

 

 

_____________

1/  More about this at IP ADR later today.

 

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(image by the great Charles Fincher at LawComix)

Thanks first to LexBlog for giving yesterday's post here a shout-out but more importantly, thanks to LexBlog for giving Arnie Herz' post at Legal Sanity Why lawyers should get emotional with clients coverage in the same daily compilation of LexBlog client posts, a tremendous resource I highly recommend you include on your news reader.

You'll see from my lengthy comment there that Arnie is singing my song about the law and emotion and in particular, the fact that we cannot make decisions without emotion something every trial lawyer, negotiator, mediator and sales person knows down to the knuckles of their spine.  Excerpt from Legal Sanity below.

Here are two facts:

• There’s a client service deficit in the law.

• Lawyers tend to regard emotions – their own and other people’s – as irrelevant to their work.

At first glance, these two facts seem unrelated. But they’re actually closely (even intimately) connected. 

Some time back, I posted on the interplay of emotions and client service in this new era of customer control. I linked to a ClickZ article citing a (then) new book by Dan Hill called Emotionomics: Winning Hearts and Minds. Launching from the premise that humans are primarily emotional decision-makers, the book discusses how emotions factor into our business opportunities in the marketplace and workplace. 

Picking up on this point from a slightly different angle, in a recent post, designer and marketing mentor Peleg Top says, Go ahead, get emotional. Top notes that, in marketing (and, I’d add, in providing) our services, “an effective way to generate action is to tell a compelling story, one that hits your customer’s emotions.” Suggesting that most service providers miss this mark, he observes . . .

For the remainder of Arnie's great post, click here.  And here's another great link on the same topic from Cutting Edge Law - the illicit relationship of lawyers and emotion.

More on the effective use of emotion in the negotiation of settlements soon.

 

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Discouraged by the adversarial process?  Looking for lawyers who will handle your commercial dispute without going to "war" with all the expense and collateral damage that involves?

This excellent talk by Webb has been viewed 202 times, while "Drunk Lawyer" below has been viewed by nearly 300,000 people.  It's not surprising that drunken trial lawyers are far more entertaining than some old guy talking about attorneys bringing potluck to negotiate the resolution of a lawsuit. 

The question is this:  Do you want to pay for the entertainment of conflict or resolve it and move on with your plans to create a profitable future for your company and its employees.

"Drunk Lawyer" is, after all, free on YouTube!

Thanks to Cutting Edge Law for gathering together the Stu Webb and other videos on the revolution in legal practice that's being fomented right around the corner -- just about the time the BigLaw model fails along with dinosaurs like General Motors.

You didn't hear it here first.  But you will hear it here often.

This is the fourth video of this painful encounter on YouTube but it's the one in which the attorney is asked to "blow" a breathalyzer for the Court.

 

 

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Interviews with ADR giants: Mediate.com opens video archive for month of April

Posted by: Diane Levin in Cool Things on the Web, Mediation, Mediation in Practice

Mediate.com, the world’s premier source for news, information, and articles about mediation, has opened its video archive to the public during the month of April.

For description of the type of videos available, run right over to Diane Levin's blog by clicking on the title up top.

Thanks Diane for getting the word out about this.

For a taste of some of the offerings, watch this short video of Ken Cloke talking to Robert Benjamin about the evolution of conflict  over the lifetime of an individual as well as over the lifetime of a civilization.

Cloke is my mentor and his insights are just as useful to the settlement of commercial litigation than are some of the competitive negotiation skills I've learned along the way.  Check out all of Ken's videos.

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Transparency Will Eliminate Unnecessary Wariness Between Parties (.pdf) from the April 1, 2009 Daily Journal

FORUM COLUMN By Victoria Pynchon As a mediator, the question I hear most frequently from lawyers is "How do I convince my opponent to sit down and negotiate without losing my competitive advantage?" Believe it or not, the answer is transparency. If you can remember way back to last July, when firms like Microsoft and Yahoo were still engaging in business as usual, you might recall that a merger fell apart because Yahoo was acting "weird." At least that's what Microsoft's chief executive, Steve Ballmer, told the Wall Street Journal. "We had an offer out that was a 100 percent premium on the operating business of the company and there wasn't a serious price negotiation ... until three months later. It was a little ... weird." Lawyers know that three months rushes by in the blink of an eye. The board of directors meets. It seeks an analysis from the mergers and acquisitions people, who consult with outside counsel's antitrust department, which renders a decision but whose members first have to chat with the tax guys. Then there are the IP people with whom to discuss license agreements and, of course, the managers in the human resources department, who may or may not have advice about executive parachutes - platinum, golden or brass. And yet the Yahoo-Microsoft merger fell apart because Microsoft felt that Yahoo's delay was "weird." Let's go back to what every trial lawyer knows. In the absence of information, people make stuff up. Weird stuff. And the stories we tell ourselves about our uncommunicative commercial partners do not include one where the other guy is laboring day and night to fulfill our fondest desires. No. In the absence of information, we weave elaborate conspiracy theories in which our opponents are scheming to fleece us of our rights, obstruct our prospective economic advantage and turn our world upside down. Your dentist can tell you what your opponent wants to be told. A fully illustrated pre-game outline of the upcoming procedure that goes something like this "First I'll put a little numbing cream on your gum. That way the shot of Novocain won't hurt too much. Then I'll drill," she'd say, holding the fearful appliance up and switching it on. "It may sound louder in your mouth than it does here in my hand, but I'll only have it on for about five minutes, after which ... etc., etc." So how do you get your opponent to the bargaining table without sounding weak? You say "Listen, Ted, I know both our clients believe their cases are as good as gold but after an initial round of discovery, it's my practice to call a timeout to discuss settlement." Pause. "How does that sound to you?" Ted says it sounds all right. Which it does. Because Ted's got three incredibly acrimonious cases in his practice right now. Last year, one of his adversaries served an ex parte application with three bankers boxes of exhibits the day before Christmas. At 4:59 p.m.  And she scheduled the hearing for hearing on the day after Christmas. Sure, the judge would deny it, but Ted couldn't assume anything. He worked 15 hours on Christmas Day. So it sounds good to Ted. More important to your own litigation plan, your opponent has just agreed to come to the bargaining table, even though the actual meeting won't be held for several months. When the appointed hour arrives, you will not have to ask for a settlement conference at a time when it might show weakness on your part. It's part of the plan. For the remainder of the article, click here.

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Challenges to good faith settlements that cut off the rights of non-settling defendants to seek indemnification and contribution from settling defendants are nearly always doomed to failure.  Trial courts are understandably eager to clear their dockets and there's no docket-clean-up pitcher like the first defendant to settle.  Deny the motion and bring a settled defendant and his trial-ready resources back in to the litigation when the first defendant-domino has just successfully toppled over?   Not likely, my friend. Not in the trial court at any rate.

These motions are so difficult to oppose that I've seen a target defendant threaten a marginal player (my client) with sanctions just for challenging the target's very low six-figure settlement in an eight-figure antitrust action.

It looks like low value settlements got just a little bit harder to defend yesterday when the Second District Court of Appeal reversed a trial court's good faith settlement finding in  Long Beach Memorial Medical Center v. Superior Court (Conners).

Best quotation:  "The hospital contends that the physicians‟ $200,000 settlement -- representing 2 percent of plaintiffs‟ $10 million damages estimate -- was so far out of the “ballpark” it was not even in the parking lot."  With a first runner-up to "If section 877.6 is to serve the ends of justice, it must prevent a party from purchasing protection from its indemnification obligation at bargain-basement prices."

The Court of Appeal relied upon the following "facts" in finding that the trial court abused its considerable discretion in granting a good faith motion to defendant physicians in light of defendant hospital's opposition.

• payment of $200,000 in settlement for a $10 million claim, which the appellate court found to be "wholly disproportionate."  As the Court opined "[e]ven a slight probability of liability on [the settling doctor's] part would warrant a contribution more significant than 2 percent."
•  the "evidence" supporting the court's finding that the settling physician's probable fault was "not de minimis,"  which appears to have been based upon Plaintiff's attorney's fault analysis (not generally known for its unbiased nature) and the physicians' counsel's candid (?) suggestion that his clients' contribution to a global settlement might be in the range of $1.5 million;
• the availability of $2 million in coverage, which "militated against a good faith determination" because the settlement constituted only 10% of available policy limits [carrier alert here!];
• the non-settling Hospital's contention that the physicians and their attorneys engaged in "bad faith tactics" during two mediation sessions -- a factor the appellate court acknowledged it was barred by mediation confidentiality from considering -- but which it neatly avoided by concentrating on post-mediation negotiations; /*
• the timing of the physicians' settlement offer, which suggested to the appellate court that their "reason for entering into the settlement with plaintiffs was to cut off the hospital's . . .  right to indemnity from the physicians" (I thought that was a legitimate reason to settle litigation but see the Court's citation to Mattco Forge, stating that when a defendant  “enters into a disproportionately low settlement with the plaintiff solely to obtain immunity from the cross-complaint, the inference that the settlement was not made in good faith is difficult to avoid.” Mattco, supra (emphasis added); and,
• a consideration I've never seen defeat a good faith motion before - that a settlment "dictated by the tactical advantage of removing a deep-pocket defendant . . . is not made in 'good faith' consideration of the relevant liability of all parties. . . ." (leading to the question whether we're now required to consider the interests of clients other than our own in entering into a settlement agreement on a contested claim)

If this case isn't depublished (an unfortunate California practice) or taken up for review, it will bear re-reading and deeper thinking about the stategy and tactics of breaking away from the mob to cut a separate deal beneficial to one's own client without "consider[ing] . . the relevant liability of all parties . . . "

Comments welcome!!

 

________________

*/  This is a good place to note the importance of either indicating in the parties' post-mediation written negotiations that the mediation is continuing (hence the communications remain absolutely protected) or that the mediation has concluded (hence bringing those post-mediation settlement negotiations outside the scope of the strictly enforced mediation confidentiality restrictions).

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Wondering how to settle construction litigation in the midst of an economic downturn that has emptied your contractor clients' pockets?

Check out How Can Insulation Contractors Maximize Insurance Coverage over at Scott Godes' excellent Corporate Insurance Blog.

If I had to live my commercial litigation career all over again, I would start by making sure I understood everything I possibly could about the potential for insurance coverage, particularly when reading the terms of coverage makes me believe there is none.

When "sudden" can mean "gradual" all bets on attorneys understanding the ordinary meaning of policy language are off, right Scott?  As Scott's post notes, his recent presentation, Insurance_Coverage_Issues_for_Asbestos_Non-Products, discusses the potential for multiple policy limits of insurance coverage to apply to asbestos claims.

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I'm bookmarking this article.  I'll translate its main points from the academese to plain English this week-end along with insights on how to help your opponent make the legal decision you want him to make -- settle the case in the range of reason. 

A Third View of the Black Box:  Cognitive Coherence in Legal Decision Making by Professor Dan Simon of the USC School of Law.

And, somewhat off point but triggered by this image, an excerpt from Rilke's Letters to a Young Poet on the way in which wisdom eventually arrives:

try to love the questions themselves as if they were locked rooms or books written in a very foreign language. Don't search for the answers, which could not be given to you now, because you would not be able to live them. And the point is, to live everything. Live the questions now. Perhaps then, someday far in the future, you will gradually, without even noticing it, live your way into the answer.

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NB:  All names and situations altered to protect my own and my "opponents'" anonymity and to honor the confidential nature of the mediation.

This experience is going to take a while to digest.  First let me tell you what was GREAT about my recent mediation experience.

1. I hired an attorney who was a full-time, highly experienced mediator.
2. Because the mediation concerned a long-term contractual relationship with an emotional breach and immediate cessation of business, I choose a community mediator because I wanted someone skilled not simply in pressing the parties for compromise, but in  "transformative" (whole dispute) mediation (about which more later).
3. With two talented community co-mediators, I experienced the freedom of expression in joint session that confidentiality provides.
4. I learned how much courage it takes for all parties to face one another and talk about their own part in causing the dispute-creating series of events.  
5. I experienced the nearly invisible but critical support and encouragement provided by an "audience" (lawyers, mediators, insurance representatives) "schooled" "on the spot" in respectful listening.
6. Though the unguarded nature of my conflict-narrative and the pain caused by listening to my former partners' account initially felt like walking a tight rope without a net, as my story proceeded without interruption or apparent contempt from my "opponents" a great sense of comfort and freedom came over me.  I'm an old hand myself at creating an atmosphere of hope and safety so I didn't think that "trick" would work on me.  I found, however, that the mediators' ability to assure me of the confidential nature of the process and the benefits of frank discussion, enabled me to tell my truth, in as multi-dimensional, textured and admittedly fallible manner possible.  It amazed me -- as the client -- that so subtle shift in the atmosphere of the room would permit me to say, in all sincerity, that "though our experiences of the same series of events diverge wildly, I don't believe either of us is lying.  We've simply strung the facts together in a different way from opposing points of view."
7. The opportunity the co-mediators gave me to apologize for "my part in the dispute" while still  asserting the strength of my "position" that I would not be blackmailed, bullied or defeated, left me ready to settle or proceed without feelings of fear, shame, or anger.

To the extent I'll be able to tell this story (and I'm not certain I'll be able to until many years after its final resolution) the readers of this blog will be the first to know.

It's not magic.  It does, however, rest upon the mediators' wholehearted belief that human beings desire reconciliation as much or more than they desire money or the "stuff" that money provides.  It is premised on the elementary principle that the disputants would rather be happy than right.

Best advice to arise out of this session:  when you're mediating, hire an attorney-mediator to represent you just as you'd hire an insurance attorney if you had a dispute with your carrier.  One of the smartest decisions I've ever made.

Good resources for transformative mediation practice:

Institute for the Study of Conflict Transformation

The Promise of Mediation: Responding to Conflict Through Empowerment and Recognition by Bush and Folger

Conflict Revolution, Mediating Evil, War, Injustice and Terrorism by Ken Cloke

Restorative Justice Online

Beyond Conviction (documentary on restorative justice in prisons)

 

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I've scaled my MCLE way back this year, including any continuing education that requires travel unless, of course, it's something I'm speaking at to continue growing my business.  Some MCLE courses, however, stay on my radar -- particularly those that don't require me to leave the office and that teach me skills to help me thrive in hard times.  This IP settlement webinar is one of those continuing education courses I'd attend unless I thought I was already the best settlement attorney I could be.  So seriously consider joining me and Chicago-IP lawyer extraordinaire R. David Donoghue of Holland + Knight for Hard Times? Learn How to Negotiate the Best IP Litigation Resolution

ADR in IP Litigation from ALI-ABA

Wednesday February 18, 2009 from 1:00-2:00 pm EST

Why Attend?

In a difficult economy, intellectual property protection and assertion is more important than ever. The combined stressors of a poor fiscal climate and shrinking legal budgets place a significant strain on any business dependent upon IP assets. as companies face difficult economic decisions, it is increasingly difficult to fit the expense and extended uncertainty of copyright, patent and trademark litigation into a forward looking business plan. This one-hour seminar explores the use of alternative dispute resolution as a means of protecting intellectual property and business activity, while minimizing the expense and devotion of time related to traditional IP litigation.

What You Will Learn

This program examines how to move an IP dispute toward alternative dispute resolution; best practices for controlling the expense and length of the process; and best practices for successful alternative dispute resolution. Whether you are an experienced IP practitioner or simply one grappling with IP issues in your general commercial practice, knowing how to offer your clients a wide array of ADR options might make the difference between a practice that survives and one that thrives. The seminar will cover the following topics:

How to choose between litigation and ADR.

• The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.
• The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.
• The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
• The Ten Mediation/Settlement Conference Traps for the Unwary.
  

Invest just 60 minutes at your home or office to learn about alternative dispute resolution in the IP field from this duo of experts. This audio program comes to you live on Wednesday, February 18, 2009, 1:00-2:00 pm EST, via your phone or your computer. Materials corresponding to the course may be downloaded or viewed online.

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From the Department of Counter-Intution we learn that our general assumption about pre-trial discovery -- that the open exchange of information will help align the expectations of disputants and increase efficiency by facilitating settlement /1 -- is probably inaccurate.

In When Ignorance is Bliss:  Information, Fairness, and Bargaining Efficiency, George Loewenstein, Department of Social and Decision Sciences and Don A. Moore, Graduate School of Industrial Administration, at Carnegie Mellon University, tell us that when "information . . . is complex or ambiguous enough to allow for different interpretations" by opposing counsel,

[s]elf-serving interpretations of fairness encourage biased estimations of the probability of prevailing in court and lead people to hold out too long, fight too hard, and settle too slowly.

Simply put, because we interpret incoming information as confirming -- and often strengthening -  our existing views, the "convergence" of adversarial views pre-trial discovery proponents hoped for, does not occur.  Rather, discovery tends to increase the parties' belief in the rectitude of their analysis, thereby proportionally decreasing the potential for settlement.  As Loewenstein and Moore explained:

In studies examining the self-serving bias, the magnitude of the bias was an extremely strong predictor of impasse, and two different manipulations that eliminated the bias led to close to 100 percent settlement compared to an impasse rate of about 25 percent in the absence of such debiasing.

The full article is well worth reading even though much of it is burdened with academese.

Because we attorneys pride ourselves on being able to "see the other side," here's an article entitled Confirmation Bias in Complex Analyses about a study in which intelligence analysts were provided with an analytic tool to help them overcome confirmation bias.  The tool -- Analysis of Competing Hypotheses -- was an

hypothesis testing matrix,” where the rows represent the evidence, the columns the hypotheses under consideration, and the cells the extent to which each piece of evidence is consistent or inconsistent with each hypothesis. The goals of the ACH matrix [were meant] to overcome the memory limitations affecting one’s ability to keep multiple data and hypotheses in mind, and to break the tendency to focus on developing a single coherent story for explaining the evidence—a tendency which [other researchers] hypothesized create[d] predecision distortions (and presumably the confirmation bias).

ACH [was] hypothesized to offset confirmation bias by ensuring that analysts actively rate evidence against multiple hypotheses and reminding analysts to focus on disconfirming evidence.

Absent the template, the process sounds a lot like that we attorneys use to test our theories and evaluate those of our opponents'.  Alas ACH provided the least amount to help to those study participants with professional analytic experience.  As the authors report, "ACH had no impact at all" on the professional analysts' tendency to give greater weight to the evidence that supported their theories and less to that which disconfirmed them.

What to do?  I'll attempt to find an answer before writing my next post.

______________________

Loewenstein and Moore quote Richard Posner on this expectation as follows: 

a full exchange of information…is likely to facilitate settlement by enabling each party to form a more accurate, and generally therefore a more convergent, estimate of the likely outcome of the case.

Richard A. Posner (1986:525) Economic Analysis of Law (3rd ed. Little, Brown 1986)

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SUMMARY [from JD SUPRA]: On December 22, 2008, GateHouse Media sued the New York Times, alleging that the "hyper-local" news aggregation pages on the New York Times-owned site Boston.com infringed its copyright and trademark rights. At the judge's order, the case proceeded on an extraordinarily expedited basis, with a bench trial set to begin on January 26, 2009. On the day prior to the start of trial, the parties settled.

The NYT agreed to remove all links created using GateHouse RSS feeds, and to refrain from using such feeds to create links to GateHouse content so long as GateHouse implemented commercially reasonable technological measures intended to prevent use such use.

The NYT did not agree to cease linking to GateHouse stories by other means (e.g. by typing in link text manually).

This is the settlement agreement.

Still, I'd prefer to see the parties draw up the complete agreement rather than use a letter agreement anticipating cooperation (when did that last happen) in negotiating the details for the final formal contract.  See the Devil in the Details here.

And if you're looking for forms to get you started try searching JD Supra but REMEMBER not to use anyone's form without making sure it satisfies your local legal standards.

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Because litigation is so often settled with insurance dollars, from time to time we bring you updates on recent judicial interpretations of common policy terms.  The following article answers the question in the Fifth Circuit whether CGL policies cover certain types of construction defect claims.

(left, author Schramek)

"Fifth Circuit Narrowly Construes 'Business Risk' Exclusions in CGL Policies"
Fulbright Briefing
Adam T. Schramek
February 2009

A recurring dispute between insurance companies and Commercial General Liability (“CGL”) policyholders concerns whether CGL policies provide coverage for construction defect claims. In its recent decision in Mid-Continent Casualty Co. v. JHP Development, Inc., No. 05-50796 (January 28, 2009), the Fifth Circuit takes the latest step in Texas jurisprudence on the issue, concluding that the “business risk” exclusions in such policies, at least as currently drafted, do not exclude coverage for damage to a contractor’s non-defective work even if caused by his own defective work.

Read on here.

We owe the head's up on this article to whoever convinced Fulbright's powers that be that the firm should micro-blog on twitter here:  @Fulbright.

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It's the British, of course, who we have to thank for the common law, the adversarial system of justice and that most lyrical denunciation of lawyers' passionate pursuit of legal procedure, Bleak House.  Charon QC is a serial podcaster, writer and producer of the satiric online soap opera West London Man, founder of the largest private law school in Great Britain, and all around QC about town.

My postcast interview with the great QC is here and his own is below.

Podcast 94: US lawyer Victoria Pynchon on ADR, mediation and settlement in the USA

Today I am talking to Victoria Pynchon, a US lawyer based in Los Angeles, California. She was a commercial litigator and trial attorney for 24 years before shifting her practice from representing clients in court to helping lawyers settle lawsuits hat involve greater risk, expense or time than their clients wish to expend. She this work through Judicate West Dispute Resolution Services, serves as a private judge (arbitrator) for the American Arbitration Association, is an adjunct professor at Pepperdine University and blogs at IP ADR and Settle it now. Interestingly Vickie also acts as a sherpa for Blawg Review the international rolling carnival of law bloggers and is on Twitter.

So who is Charon QC?  Let him tell you himself in this Podcast Interview at Family Lore, the blog of British family law attorney John Bolch.  To get an even better idea of Charon QC and the many reasons to read his blog, I give you his own introduction to himself at Charon QC the Blawg.

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Wheat and Chaff: Juries and Litigation

Let me tell you a short story.

A senior in-house lawyer is meeting with the CEO to talk about a problem the in-house lawyer had been asked to solve.  The in-house lawyer describes how his efforts at negotiation had failed, so he had taken steps to find a random person off the street so that person could resolve the problem for the in-house lawyer.  The CEO looked at the in-house lawyer like he was out of his mind.  The in-house lawyer, now worried by the CEO's reaction, asked if the CEO would feel better if he instead chose 12 people randomly from off the street.  The CEO fired the in-house lawyer.

Does anybody think the CEO is crazy?  Me either.  But let's rerun the story with three extra sentences.

For remainder of story, run right over to Patrick J. Lamb's blog, In Search of Perfect Client Service.

Knowing that a bench or jury trial is the only Better Alternative to a Negotiated Agreement (BATNA) what's a concerned CEO to do?  No, I'm not going to say "hire a mediator."  I'm going to say this.  Hire a litigator who understands and is skilled at interest-based bargaining.  The mediator, after all, is your last option.  You need an attorney who maximizes the potential for the best negotiated resolution possible at every major turning point in the litigation.  If you've hired a hot-head litigation firm, that's good.  There's absolutely nothing wrong with playing hardball.  Just make sure you also have available the litigation marital counselor -- at least one attorney in the hardball lawfirm, or settlement counsel outside of it, who is able to call a cease-fire and bring the parties to the negotiation table.

I like what Patrick J. Lamb has to say in his blog and in his bio.  He's got big firm background and 21st century thinking.  If I were looking for a business litigator/dispute resolver/efficiency machine, it's to people like Patrick I would go.

Also, see today's post at the IP ADR Blog about patent infringement jury trials and what you don't know about what your jury is thinking can hurt you.

 

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If you live in Ohio, there's some hope that you can negotiate your way out of foreclosure with a Court-annexed foreclosure mediation program.  See Foreclosure filings rise in five counties at the the Crescent News. Excerpt below.

UPDATE:  Connecticut also has a foreclosure mediation program: See
Success For Mortgage Mediation in Connecticut?

Effective July 1, 2008, Connecticut established a mediation program for foreclosures.  Statistics available for the latest period ending November 30 2008 reveal some interesting detail.  Mediators are working diligently to rescue residential homes from the auctioneer.  However, the program is missing important components.

In the period of July 1st to November 30th, there were 9,917 foreclosures filed in the state, an average of 450 cases per week.  In that period, mediators successfully negotiated 519 cases so that homeowners got to remain in their homes.  This is just slightly over 5% of all cases filed.  Only 380 cases or 3.83% resulted in a modification of the mortgage terms.  Despite the hard work of Connecticut’s mediators, the state’s residents are not being protected from foreclosure.

UPDATE:  You can find a podcast about the New Jersey foreclosure mediation program on the New Jersey Law Blog here!  Here's the New Jersey Court's material for that program.

UPDATE:  Thanks to the ABA Dispute Resolution Magazine for informing us that Minnesota now also has a foreclosure mediation program.  See Minnesota Law Offers Foreclosure Mediation to Homeowners at the Foreclosure Listings blog here.

UPDATE:  Foreclosure Mediation Programs Commenced Under Local Ordinance in Providence, Rhode Island: Providence Foreclosure Ordinance Aims to Protect Renters (excerpt below):

 PROVIDENCE, R.I. (WPRI) - In an effort to protect families from foreclosure, Providence Mayor David Cicilline unveiled two ordinances Monday morning during a news conference in the city's Olneyville neighborhood.

The first proposal, Tenants Protection Against Foreclosures Ordinance , is meant to protect renters from eviction when their apartments are subject to foreclosure proceedings.

A proposed state law, that would have provided similar requirements, failed in the General Assembly last year. Rhode Island Housing Executive Director Richard Godfrey applauded Providence for stepping in to provide that protection.

The second proposal, Foreclosure Mediation Ordinance , would require financial institutions and property owners to engage in mediation with a HUD-approved counselor before moving ahead with a foreclosure.

UPDATE:  Lawsuit stops eviction in predatory lending case in California here.

"We have a court adjunct mediation program," said Schmenk. "The worst thing people can do is do nothing. The best thing is to get an answer filed on their behalf and open up a discussion with the mortgage holder to avoid it going to the foreclosure sale. Often times they can get something worked out with the lending institution short of losing their home."

When a foreclosed home goes up for auction bids start at two-thirds of the property's appraised value.

"Most time the lenders are holding significantly more than that in debt," said Schmenk. "We've noticed in a number of cases things get worked out and they are able to enter into some kind of accommodation that works for lender and mortgage borrower."

Schmenk encourages individuals facing foreclosure to take part in mediation programs.

There was a mediation just last week in Defiance County, said Cheryl Timbrook of the common pleas court. Overall, she said that they haven't had many requests for mediation so far.

Sonnenberg said Henry County has had a mediation program available for foreclosure for a year. She said there has been an increase in requests for mediation since the court started sending out information about the program as well as how to file an answer to the foreclosure summons received by defendants.

"I don't think many people knew about it before," she said.

Chris DelFavero, mediation coordinator for the state's Northwest Ohio Court Mediation Services, said he's seen an increase in individuals asking for foreclosure mediation. Northwest Ohio Court Mediation Services covers Henry, Defiance, Fulton, Paulding, Williams and Putnam counties. The program started last spring.

"With the help of the (Ohio) Supreme Court we established a process for referrals through the (county) clerk's offices," said DelFavero, who added that referrals started to pick up this summer. "Last month I had the most referrals since we started. I had 11 referred this past month. We started with just two or three a month, and now we have two a week."

DelFavero said that many cases involve jumps in interest rates, causing payments to increase or individuals who have seen a decrease in pay.

"Those are the cases we hopefully can resolve and come up with a repayment plan or refinance their rates," he said. "The general problem in the industry was the subprime rates. Some of it is the economy, with people losing their overtime. Sometimes loans are given based on people making $40,000 and then they lose their overtime so now they are making $30,000. They are working, but may have fallen four to five months behind. The lender usually will work with them."

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It's getting very late in hour eleven of the mediation and everyone is tired and cranky.  We've agreed upon:

• the total sum of the settlement;
• the period of time over which the settlement will be paid;
• the Stipulated Judgment in the event of default; and,
• the amount of the Stipulated Judgment (far more than the agreed upon settlement sum).

We could put these terms in a skeletal settlement agreement right now; include the "magic language" from Evidence Code section 1123 that will permit enforcement of the mediated agreement; and, let everyone get on the road, onto a plane and into bed.

Because these parties couldn't agree on what year it is, however, no one balks at my suggestion that we write up the entire deal -- settlement agreement with mutual general releases; the Stipulation for the Entry of Judgment; and, the proposed Stipulated Judgment itself.

The first problem is everyone's failure to bring a form Settlement Agreement and Mutual Release, let alone one that included enforceable terms for the entry of a Stipulated Judgment in event of default.   

ADVICE???  Carry these documents on a "flash" or "jump" drive whenever you're going to a settlement conference or mediation.  Heck, carry them with you to the first day of trial where you might be startled to learn that your adversary is prepared to settle the case right now!

Fortunately, I had access to my own files which contained detailed forms for everything we needed, forms I offered to counsel as guides. I did so only with the express understanding that I did not recommend my own forms as adequate, complete or enforceable.  

I'm just the mediator, not the legal representative of the deal in loco parentis.

It's a good thing we made the effort to fully document the deal because it threatened to fall apart over all of the following terms:

• the dismissal of ancillary proceedings
• forbearance from inducing future actions by non-parties
• liquidated damage clauses for the breach of certain critical deal points
• indemnification for future actions if induced by certain of the parties

Each of these items required separate negotiation and compromise and as to each I helped the parties calculate the degree of possible misbehavior by their adversaries and the protections that might "fit" the probable harm.  I do not believe the parties would have been able to resolve these terms (as well as others too confidential to mention) without third party assistance.  One was so difficult to predict both the series of possible events and potential remedies that we provided for arbitration of that term alone in the event of alleged default.

When we all finally left the building at one in the morning, we had fully completed paperwork, signed by all parties in hand. 

And yes, I was the only one present who could type.

 

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The anger, suspicion and ill will that has characterized the first eight hours of this mutli-party, eight-figure antitrust mediation is about to heightened as I deliver Defendants' terms:  they will pay the settlement agreed upon in six equal yearly installments over three full years without any security to back it up.

Are you wondering what your mediator is thinking at times like this?

Aaaarrrrggggghhhhhhhhhhhhhhhhh!!!!!!!!!!!

That "thought" is momentary, however, like the cry you squelch when the trial judge does something like, say, grant the other side's motion to disqualify your expert witness during the second week of trial. 

I don't have a plan, but I do have ideas.  Just as my suggestion that we use a bracketed offer to break impasse had eventually done just that, I'm already thinking of ways that the parties' most intractable and conflicting positions might move them toward agreement.

"They can wait," defense counsel is saying, "or they can try the case in February and see if they can collect it," to which a principal adds,  "this puts them on our side for a change.  If we make the money we believe we can, they'll benefit too."

"I thought you said you knew you could," I say, laying groundwork for the contingency ahead. 

"Yes, absolutely.  We know we can."

Back in the Plaintiffs' caucus room, the parties and their counsel aren't simply angry; they're flabbergasted.

"They sand-bagged us," says Plaintiffs' counsel.  "We'll report this to the Judge.  They didn't come here in good faith.  They're deliberately wasting our time."  

After some calming discussion about why the cash-poor defense would deliberately pay their own attorney and one-half of my daily fee in bad faith . . . a question to which no answer ever eventuated . . . Plaintiffs and their counsel begin to confidently predict the defense's inability to make a single installment payment.  Plaintiffs believe the defendants have resources - secreted away somewhere - but will never use them to settle this case.

When the temperature of the room has diminished to that of the sun's surface rather than its core, I ask about the possibility of a stipulated judgment in the event of default. 

"In a sum you hope the jury will award you at trial," I proffer.  "If you're right; if they have no intention, nor any ability, to pay even the first installment, you'll be in the same position on default that you'd be in if you prevailed at trial.  And if they're capable of paying, they're much more likely to do so if the alternative is a mutl-million dollar judgment against them."

Though the total sum of the Stipulated Judgment is the main topic of discussion over the following two hours, the parties' insistent conflicting predictions for the future make it all but inevitable they will eventually reach agreement.  If the defense never pays, the Plaintiffs will have their judgment more or less immediately, without the burden of proving it up.  And if the defendants are good for their word that they can service the "debt" the settlement agreement creates, they never have to worry about this potential judgment becoming a reality. 

The Stipulated Judgment as Contingency Contract

As Professor Leigh Thompson of the Kellogg School of Management, Northwestern University, writes in The Mind and Heart of the Negotiator, the contingencies built into the parties' agreement (and the Stipulated Judgment providing for its enforcement) permit them to use their differences to reach agreement - betting on their own predictions for the future and protecting themselves against their worst fears about the other.  As Professor Thompson instructs:

Often, a major obstacle to reaching negotiated agreements concerns negotiators' beliefs about some future event or outcome.  Impasses often result from conflicting beliefs that are difficult to surmount, especially when each side is confident about the accuracy of his or her prediction and consequently uspicious of the other side's forecasts.  Often, compromise is not a viable solution, and each party may be reluctant to change his or her point of view.

Fortunately, contingent contracts can provide a way out of the mire.  With a contingency . . . differences of opinion among negotiators concerning future events do not have to be bridged; they become the core of the agreement. . . . [Parties] can bet on the future rather than argue about it.

Here, the agreement calling for a Stipulated Judgment of sufficient size to deter default, allowed the parties to:

1. bet on rather than argue about their different forecasts for the future;
2. manage their decision-making biases (overconfidence and egocentrism) by building them into the settlement agreement itself;
3. solve the trust problem by creating a contingency (judgment) against the unknown ability of the defendants to perform
4. diagnose the other side's honesty by "daring" him to bet on his own predictions
5. reduce risk through sharing the upside gain (defendant will pay) and the potential loss (defendant will default)
6. increase defendants' incentive to perform at or above contractually specified levels.

See The Mind and Heart of the Negotiator, The Six Benefits of Contingency Contracts, Box 8-2.

There's more, however.  The parties agree to the Stipulated Judgment in principle and sum during hour eleven and we've got three more hours to go.

Stay tuned!

 

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It's 8 p.m. and you've just spent nine straight hours negotiating the settlement of complex commercial litigation with multiple parties that was filed before George Bush first took office.  The case has been up on appeal twice and is now scheudled for trial in February.  All defendants but the final three standing have settled.   Three of the principals have flown in from out of state and two of the attorneys have driven a few hundred miles to Los Angeles from their home towns. 

"Let's just write up the deal points," says Lawyer No. 1, yawning.  "We can write up the full agreement over the long weekend."

Lawyer No. 2 turns to me and says "Judicate West has a form, right?  Let's use that."

Before we go further, let me give you the complete, verbatim language of the online skeletal Judicate West form.

Date:_________________

Stipulation for Settlement


    VS.                           

IT IS HEREBY STIPULATED by and between the parties through the respective counsel or representative of each that the above-referenced case has been settled according to the terms memorialized herein below.  This document is binding on the parties and is admissible in court pursuant to Evidence code section 1123 and enforceable by motion of any party hereto pursuant to CCP section 664.6.                                                                                   

In order to facilitate the above specified terms of settlement, the parties further agree that on or before the          day of          they will execute or change the following:

• Settlement / Release Agreement   Prepared by _____plaintiff_____defendant

• Request for Dismissal     Prepared by _____plaintiff_____defendant

Other____________________________________________________________

All relevant parties must sign below.  Copies are acceptable in lieu of originals.

I know.  You didn't expect the case to settle.  At least that's what I've been hearing you all tell me since hour one of the mediation.  But now we're in hour nine and the basic deal points have been reached.  It's January 15.  Trial is in 30 days.  You have all the parties present and the mediator who has by now sussed out the BS; developed a good working relationship with all sides of the dispute; knows how hard the parties worked to get here; and, is unlikely to let the "devil" in the details sink the settlement ship.

What do you do?

My own answers in next post.

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Daily Journal Newswire Articles www.dailyjournal.com © 2009 The Daily Journal Corporation. All rights reserved.

FORUM (FORUM & FOCUS)  •  Jan. 08, 2009 Every Case Is a Winding Road FORUM COLUMN By Victoria Pynchon I have a confession to make. I am about to become embroiled in litigation. Though I preach the religion of negotiated resolution, I've nevertheless hired litigation counsel to assert my rights and pursue my remedies. This is one of those moments when the rubber of our ideology meets the road of personal circumstance, the moment we are called upon to decide to walk our talk or take the more familiar road. For more than 30 years - first as paralegal, then as a law student and finally as a commercial litigator - I'd been swimming in the waters of legal rights and remedies. The adversarial ocean had become so familiar a habitat that it rarely occurred to me that I was under the surface. One day toward the end of my first year of mediation practice, a much more experienced friend hooked me by the cheek and threw me on the deck of his ship, where I was gasping for air. He'd asked me to co-mediate a will contest without the benefit on my clergy - lawyers with experience in the field. The "fish out of water" conversation that ensued went something like this: Joe Mediator: "The family doesn't want to hire a lawyer. They just want to mediate." Vickie: "But I know absolutely nothing about wills, trusts and estates. The parties need to talk to a lawyer first to learn their rights and remedies." Joe: "You still don't get it, do you?" Vickie: "Get what?" Joe: "It's not about rights and remedies. It's about interests." Vickie: "But how can they evaluate their interests without knowing their rights and remedies?" Joe: "Because they're not interested in what the law says - they want to do what they believe is right for them as a family under the circumstances." These people wanted to resolve a legal dispute without knowing their legal rights? Were they nuts? I understood "interests" - they were all the rage in ADR circles - the desires, fears and needs of the parties that drove them to take legal positions. Sometimes those interests were non-economic - the need for revenge, the desire to be personally accountable, the fear of failure, the hope for forgiveness and reconciliation. Others, though economic, could not be remedied by way of damages - better access to foreign markets, for instance, or wider distribution chains; the acquisition of better manufacturing processes; or, the retention of executives with "pull" in Washington. But all of those matters were secondary to legal rights and remedies, weren't they? You had to know what your rights were. To read entire article, click here. Here's a .pdf of the article taken from the "hard copy" of the paper.

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The lowest level, most critical, most easily learned (you can even use a cheat sheet!) and most shockingly ignored skill is authenticating documents and bringing them within the available exceptions to the hearsay rule.

As we wade ever deeper into the waters of electronic discovery, E-Commerce Law provides us with the Internet Evidence Series below.

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I'd stop flogging this dead horse if I didn't have to weekly convince litigants of their own enduring human tendency to prefer relative well-being over absolute material possessions.

This week, that "news" is brought to you by the New York Times to explain why a surprising number of us have not been made terribly unhappy as our financial fortunes decline.  As Op-Ed contributor Sonja Lyubomirsky (of The How of Happiness: A Scientific Approach to Getting the Life You Want) observes today:

the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.

Why? Because we "care more about social comparison, status and rank than about the absolute value of our bank accounts or reputations."  In other words, we're more concerned with justice (fairness) than we are about the money.  Which is why our clients have sought out our help with their personal, financial and commercial problems -- because we're in the justice business.  When we understand this, the negotiation of financial settlements becomes a whole lot easier because there are many more ways to deliver justice than by throwing money at it.  

Read the full (short) article Why We’re Still Happy here.

 

 

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Are mediators being hook-winked by clients who create artificial impasses for the purpose of procuring a favorable mediator's proposal?  Does the mediator's recommendation carry so much weight that the parties are subject to a manipulated mediator's proffer?  Does the mediator become just a tool of a party bent on flim-flam?   Or is all distributive bargaining flim-flam?

Check out John DeGroote's in-house point of view over at Settlement Perspectives and leave a comment.  I've already left two there myself.

I understand some lawyers are settling all their cases with mediators' proposals.  Why is that?  Are they savvier than their colleagues?  Or do they just need the authority of the mediator to "sell" settlement to their clients?

Jump in here or over at John's place.  Whether you're a mediator, a litigator, or a client, we'd both appreciate your fresh ideas. 

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From this coming Monday's Forum Column in the Los Angeles Daily Journal (byline V. Pynchon):

 

Psychologists tell us that we are not only "meaning making" beings, but that we are all born conspiracy theorists. Viewing a field of nonsensical, unrelated data, we naturally begin to "connect the dots" - to organize the information into a coherent, and often compelling, narrative.

Pattern making or conspiracy theorizing is a human survival mechanism. We have never been the fastest or the biggest creatures on the planet. We don't have the sharpest teeth or blend in all that well with the scenery. Our soft, easily punctured skin is not covered with a protective shell. In a pinch, we can't take a running leap and fly away from land-bound carnivores who might make us their prey.

We are, however, the canniest creatures on the planet. To avoid the tiger who made lunch of our best comrade, we surveyed the scene and committed the pattern of otherwise unrelated details to memory. Five banyan trees, a narrow stream, and, a pile of rubble left by a recent avalanche means "there are tigers here."

Couple this with Fundamental Attribution Error and you have all of the ingredients necessary to blame inadvertently caused harm on elaborate conspiracies cooked up by our untrustworthy companions - Fundamental Attribution Error being our universal tendency to over-emphasize the role of others' negative personality traits to explain why harm befell us.

So it is with our legal adversaries. Once the channels of communication have been severed by the filing of a lawsuit, attorneys and clients alike begin to make up "what really happened" based on predispositions, scattered conversations, faulty memories and scraps of documentation.

 

Continue reading Monday's Daily Journal Forum Column here.

 

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Thanks LACBA for the daily case reports!

Trial court lacked authority to review discretionary, prehearing order by arbitrator, who imposed stay on arbitration of dispute concerning uninsured motorist policy until plaintiff--who was driving on work-related business in company car provided by employer when rear ended--pursued workers’ compensation benefits in light of Insurance Code Sec. 11580.2.

Briggs v. Resolution Remedies

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More than 360 Connecticut homeowners have avoided foreclosure in the past five months thanks to a new mediation program established by the state, but some think it’s still being underutilized.

The program, which was part of comprehensive mortgage relief legislation passed earlier this year, allows borrowers to meet their lender face-to-face to try to reach a settlement on an overdue mortgage.

If the borrower chooses mediation, lenders are required to participate and the process can delay foreclosure by 60 days or more.

Some lawmakers have touted the program as the first of its kind in the country.

About 28 percent of the estimated 5,513 homeowners who are eligible for the program have applied for mediation, and 361 people have reached a settlement that allowed them to keep their home. Another 116 homeowners decided to leave their home but were able to reach an agreement with their lender to pay off the balance of their mortgage. Mediation remains unsettled in 203 cases.

“All of us familiar with the program would like to see more people participate,” said Ann Parent, an attorney for the Connecticut Fair Housing Authority. “We don’t know why more homeowners aren’t requesting mediation, but we feel like more should.”

Parent said she supports the program and agrees that it is serving an important purpose, especially for homeowners who can’t afford a lawyer to guide them through the foreclosure process. At the same time, however, she said it’s unfortunate that less than 30 percent of eligible homeowners are using it.

Continue reading here.

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Friend and colleague Los Angeles attorney-mediator Linda Bulmash of ADR Services, Inc. advises  us to be consistent in negotiating the resolution of litigation in this month's LACBA negotiation tip.

The Power of Consistency in Negotiation and Mediation
 
When a person makes a public commitment to a course of behavior, the human psyche will push them to follow through with their commitment. For instance we break New Years resolutions because we seldom share them with others and usually do not write them down.

An interesting phenomenon occurs when the commitment is made public or a person pro-actively takes the first step to follow through with a course of action. An interesting research study found that although people are often unsure of their choice of the winning horse at a racetrack, they become much more confident of their choice once they place their bet. They are driven to consistency once they make a public commitment to a course of action.

Therefore experienced negotiators and mediators focus on getting people to publicly verbalize and/or write down each small commitment to follow a certain course of action (e.g. buy a car or resolve a dispute) knowing that once done publicly, it is highly likely that they will believe this is the best choice and will find a way to attain the object of their commitment.

Thanks, as always, for the great advice Linda!  And if you're looking for a local neutral, check out Lucie Baron's dynamite list of L.A. mediators here!

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image from ChaosScenario

Wal-Mart Settles Suit Over Pay for $54 Million

MINNEAPOLIS (AP) — Wal-Mart Stores, the discount retail giant, will pay up to $54.25 million to settle a class-action lawsuit that accused the company of cutting workers’ break time and allowing employees to work off the clock in Minnesota.

The class includes about 100,000 current and former hourly workers who were employed at Wal-Mart Stores and Sam’s Clubs in Minnesota from Sept. 11, 1998, through Nov. 14, 2008.

Wal-Mart has also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws.

In July, a Dakota County judge ruled against Wal-Mart in the lawsuit, saying the retailer, based in Bentonville, Ark., violated Minnesota state labor laws two million times by cutting worker break time and “willfully” allowing employees to work off the clock. Court proceedings had been scheduled for next month to determine punitive damages.

Continue reading here.

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Must read:  Embracing Conflict's analysis of Dueling Banjoes in Deliverance written by  Niel Denny, a Collaborative family solicitor working in the South West of England who is a member of my twitter network here: @nieldenny.

Excerpt and video below but a reading of the entire post is a must for anyone looking for reasons to believe that we can reach one another across political, cultural, religious, social and economic divides.

The music develops by a process of answer and call. One of them plays a riff, or a short section of music, which is then followed by the other. They react to one another responding to and developing upon the riff they have just heard. By doing so they produce this amazing music in a memorable scene that is part of cinema folklore.

It represents a rare moment of optimism in what is an otherwise unbearably dark, oppressive film.

In the process of exchanging these riffs the protagonists are effectively collaborating. They are communicating. We can see their riffs as an analogy for talking. The riffs work where the spoken word does not. Drew and the Banjo boy clearly develop and enjoy a relationship while they are playing.

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Nothing irritates a court more than doing unnecessary work because counsel fails to comply with the local rules.  Here in Huschke v. Slater, the Court was sufficiently put out to order that the attorney "personally" pay the sanctions ("don't even think about asking your client to pay, buster!") and to order the opinion published for all the world to see.

Like that pesky appeal where the Court called my client a "school yard bully" for failing to stipulate to the genuine nature of the insurance policies at issue (and no I am not providing a link to that one).  Ordered it published too. Grrrrrrrr.

I'm filing this one under "Advice to Young Lawyers" in the hope that they do not have to learn how to ignite the appellate court's wrath the hard way.

Hey!  Let's all be careful out there!

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People who are joined together by a dispute -- which includes everyone engaged in litigation and their attorneys -- are suffering more than most from a universal cognitive bias known as fundamental attribution error.  FAE is one of the ways we explain our troubles to one another. 

If we have suffered misfortune and are able to attribute our loss to the actions of another, we will universally attribute the series of events resulting in our loss to the bad intentions or evil character of the person we lawyers call "the defendant." 

If we are the defendant, we will universally attribute the series of events resulting in the injured party's loss to the circumstances causing Plaintiff's harm (or, of course, to the Plaintiff's evil intentions). 

The attribution of harm primarily to character or motive on the part of the victim and primarily to circumstance on the part of the accused is fundamental because it is hard-wired into the way we think.  It is an attribution error because it attributes effect to a particular type of cause.  It is error because all human activity and the inevitable conflicts that arise from it

"take[s] place not only between individuals, but in a context, culture and environment; surrounded by social, economic, and political forces; inside a group or organization; contained by a system and structure; among a diverse community of people at a particular moment in time and history; on a stage; against a backdrop; in a setting or milieu."

See Ken Cloke's Conflict Revolution (this from the Introduction) here and my review of it at The Complete Lawyer here.

In other words, all events, conflicts, injuries, and benefits, all causes and effects are determined both by human actors and by circumstance.  We are the cause and the effect of everything that surrounds us and everything that we surround.

How does this knowledge help us resolve our disputes and why does the way we tell our stories hold the key to resolving them?   I could give you more explanations from the field of social psychology or I could simply tell you a story.  In this case, I tell the story of a book of stories written by Malcolm Gladwell who writes about the stories we tell ourselves and one another about success. Gladwell, we're told, introduces us to Bill Gates as

a young computer programmer from Seattle whose brilliance and ambition outshine the brilliance and ambition of the thousands of other young programmers. But then Gladwell takes us back to Seattle, and we discover that Gates’s high school happened to have a computer club when almost no other high schools did. He then lucked into the opportunity to use the computers at the University of Washington, for hours on end. By the time he turned 20, he had spent well more than 10,000 hours as a programmer.

At the end of this revisionist tale, Gladwell asks Gates himself how many other teenagers in the world had as much experience as he had by the early 1970s. “If there were 50 in the world, I’d be stunned,” Gates says. “I had a better exposure to software development at a young age than I think anyone did in that period of time, and all because of an incredibly lucky series of events.” Gates’s talent and drive were surely unusual. But Gladwell suggests that his opportunities may have been even more so.  

Continue reading the NYT Sunday Book Review of Gladwell's new book, Outliers, here.

More on using dual narratives to help you settle litigation tomorrow (or later this afternoon)

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Many in the legal blogosphere are buzzing about the recent Supreme Court decision letting stand a Central District injunction barring wheelchair-bound Jarek Molski from filing further ADA accessibility cases in our local federal trial court here in Los Angeles.  See Justice Berzon's and Kozinski's spirited dissents to Ninth Circuit's Per Curiam refusal of the Petition for a full panel re-hearing here.

Mr. Molski was declared a vexatious litigant by the California Central District federal court back in 2004.  See Wendel Rosen's excellent report of that case here.  Molski v. Mandarin Touch Restaurant, 347 F. Supp. 2d 860 (C.D. Cal.2004) (declaring Molski a vexatious litigant and requiring court approval prior to his filing future lawsuits); aff'd Molski v. Evergreen Dynasty here.

Still active is Molski's case in the Eastern District of California which was recently permitted to go forward by the same Ninth Circuit Court of Appeal.  As the Ninth Circuit explained the factual background of Mr. Molski's "serial litigation,"

[Plaintiff] Molski and his lawyer Thomas Frankovich (“Frankovich”) were purportedly in the business of tracking down public accommodations with ADA violations and extorting settlements out of them. On cross examination, Molski acknowledged that: he did not complain to any of [the defendant's] employees about his access problems; he had filed 374 similar ADA lawsuits as of October 8, 2004; Frankovich had filed 232 of the 374 lawsuits; even more lawsuits had been filed since that date; Molski and Frankovich averaged $4,000 for each case that settled; Molski did not pay any fees to Frankovich; Molski maintained no employment besides prosecuting ADA cases, despite his possession of a law degree; Molski’s projected annual income from settlements was $800,000;2 Molski executed blank verification forms for Frankovich to submit with responses to interrogatories; they had also filed lawsuits against two other restaurants owned by Cable’s; they had filed a lawsuit against a nearby restaurant; and Sarantschin obtained up to 95% of his income from Frankovich’s firm for performing investigations for ADA lawsuits.

See Molski v. MJ Cable, Inc. here.

Despite these apparently damning facts, in its 2007 affirmance of the vexatious litigant finding, the Ninth Circuit noted some of the reasons why Molski and his lawyer could not be condemned for their pursuit of serial ADA litigation.  The ADA, noted the Court,

does not permit private plaintiffs to seek damages, and limits the relief they may seek to injunctions and attorneys’ fees. We recognize that the unavailability of damages reduces or removes the incentive for most disabled persons who are injured by inaccessible places of public accommodation to bring suit under the ADA. See Samuel R. Bagenstos, The Perversity of Limited Civil Rights Remedies: The Case of “Abusive” ADA Litigation, 54 U.C.L.A. L. Rev. 1, 5 (2006).

As a result, most ADA suits are brought by a small number of private plaintiffs who view themselves as champions of the disabled. District courts should not condemn such serial litigation as vexatious as a matter of course. See De Long, 912 F.2d at 1148 n.3. For the ADA to yield its promise of equal access for the disabled, it may indeed be necessary and desirable for committed individ- uals to bring serial litigation advancing the time when public accommodations will be compliant with the ADA.

But as important as this goal is to disabled individuals and to the public, serial litigation can become vexatious when, as here, a large number of nearly-identical complaints contain factual allegations that are contrived, exaggerated, and defy common sense. False or grossly exaggerated claims of injury, especially when made with the intent to coerce settlement, are at odds with our system of justice, and Molski’s history of litigation warrants the need for a pre-filing review of his claims. We acknowledge that Molski’s numerous suits were probably meritorious in part—many of the establishments he sued were likely not in compliance with the ADA.

On the other hand, the district court had ample basis to conclude that Molski trumped up his claims of injury. The district court could permissibly conclude that Molski used these lawsuits and their false and exaggerated allegations as a harassing device to extract cash settlements from the targeted defendants because of their noncompliance with the ADA. In light of these conflicting considerations and the relevant standard of review, we cannot say that the district court abused its discretion in declaring Molski a vexatious litigant and in imposing a pre-filing order against him.

In other words, when the legislature puts the enforcement of the ADA in the hands of disabled individuals without permitting them to recover damages, you can't blame private attorneys for working the market created for the private enforcement of public laws even if you can blame them for the manner in which the market is worked.

So what does this have to do with the settlement of litigation and, in particular ADA Litigation?

Because these accessibility cases always cost more to defend than to settle and because they're often indefensible, the rational business decision is simply to settle the darn things.  

No one, however, wants to be extorted.  And in the few ADA cases I've mediated, it's the principled refusal to pay money at the point of a gun that interferes with a business establishment's willingness to do the economically "rational" thing rather than, say, try it;  appeal it to the Ninth Circuit; and, pursue it to the Supreme Court of the United States.

For those representing defendants who are feeling extorted, I offer my own (previously posted) ADA mediated settlement story below.

Continue Reading...

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Excerpt below.  Full story here.

FORT PIERCE, Fla. – Authorities say an 11-year-old boy hit his mother in the head with a saw and then offered her $5 not to call police.

H/t to @SCartierLiebel in my Twitter network.

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From Point of Law - Master & Settlement: General Tobacco sues AGs, competitors

Upon the 10th anniversary of the tobacco master settlement agreement (see below here and here), we find the legal disputes carrying on. Indeed, it appears the settlement did more sparking than settling. Perhaps that's the inevitable result of addressing important policy questions through a joint lawsuit by state attorneys general instead of through a state-by-state basis by legislative bodies, which can better weigh public sentiment and balance political considerations. So, more litigation.

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I have recently been asked by several lawyers to write a few posts on mediation and negotiation terminology not only because some attorneys are unfamiliar with these terms, but also because different mediators and negotiators use them to mean different things. 

Mediators, lawyers and negotiators who read this post are invited to add, correct, object, or suggest further refinements and to add their thoughts on further strategic and tactical uses and perils of the impasse-busters we discuss today - the bracketed offer and the mediator's proposal.

And because my readers may find this post as dry as bones, I once again offer the X-rated "Negotiation Table" as pretty #%$@ true and funny  (think Ari Gold). 

Bracketed Offer:  Party A makes an offer to bargain in the zone he wishes to see the negotiation move to.  This is often used when neither party wishes to step up to the line of probable impasse and it can also be used to re-anchor the bargaining zone.  Quite simply, Party A offers to bargain in the range of, say, $2 million and $3 million.  He offers to put $2 million on the table if party B is willing to put $3 million on the table, i.e., "I'll offer to pay you $2 million if you'll offer to accept $3 million to dismiss your suit."

If party B does not accept the bracket, party A will not be "stuck" with having actually placed $2 million on the table when the next exchange of offers and counter-offers begins.

Responding to a Bracketed Offer:  Party B can:  1.  respond with a counter-bracket, i.e., I'll make an offer to accept $3.5 million in settlement if you'll put $2.5 million on the table; or, 2.  refuse the bracket and ask for an unbracketed counter.

Mediator's Proposal: 

The basics:  the mediator chooses a number for the parties, making an "offer" to settle for, say $2.3 million which the parties are free to accept or reject.  It is a double-blind "offer."  If either party rejects the "offer" neither party knows whether the other accepted or rejected.  Acceptances are communicated only if both parties accept, in which case they have a deal.

The circumstances:  The parties should seek a mediator's proposal only when they have reached a hard impasse.  A hard impasse exists when both parties have actually put their true bottom line on the table or their next to the bottom line and they see no hope of it closing the deal.

The purpose:  Both parties believe they could convince their principal  to accept a deal that is more than they wanted to pay or less than they wanted to accept, but they cannot convince their principals to put $X on the table or accept $Y.  They hope to use the authority of the mediator to sell the deal to their principals.  If they are the principals, they are willing to settle for a number lower or greater than planned but not willing to close the bargaining session having made such a concession, which would have the effect of setting the floor or establishing the ceiling of all future bargaining sessions.

The Mediator's number:  I do not know whether there is a general practice among mediators about how they choose the number proffered.  When parties ask me to make a mediator's proposal (I rarely recommend one in the first instance) I explain my practice as follows:  When I make a proposal I am not acting as a non-binding arbitrator or early neutral evaluator.  In other words, my proposal is not a reflection of the value of the case.  The number I propose will be a number that I believe the Plaintiff is likely to accept and the Defendant is likely to pay.

In rare instances, the parties wish to continue bargaining in the event a mediator's proposal is not accepted by both parties.  I have permitted this in a few circumstances after explaining to the negotiating parties that it often causes resentment on the other side because they feel as if the party who wishes to continue negotiating is unfairly attempting to use the mediator's number as a new bench-mark from which to bargain. 

I highly recommend against continued bargaining after the rejection of a mediator's proposal on the day of the mediation.  It should serve as a hard stop because the parties respond to it as an ultimatum.  That's part of its power.  Take it or leave it. 

Just as you would not continue bargaining after indicating that you were putting your last dollar on the table, you should not continue bargaining (during that session) after the mediator has, in effect, put both parties' anticipated bottom lines on the table for them.

 

 

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First she's all about the election and now she's back to post-mid-Century America's gender wars?  Say it ain't so, Vickie!

These are just statistics from an extremely limited sample that tells more about this particular program in this particular place concerning the particular types of cases being mediated than they are about the relative abilities of male and female mediators.

I'm unaware, however, of any controlled studies on gender differences in mediation results.  I do know that there's a gender imbalance in the profession and have had panel administrators acknowledge on the QT that even when they're choosing mediators or settlement officers pro bono lawyers tend to choose men most of the time.  

So for women struggling in the profession, here's your moment of zen.

Examining the graphical representation of mediator gender and settlement rates, one can see that there are male mediators who settle cases at higher than average rates, as well as female mediators who settle cases are lower than average rates. Nevertheless, it appears that most of the popular mediators who settle cases at higher than average rates are women, while the majority of popular mediators who settle cases at lower than average rates are men.

Some may object to this “battle of the sexes” analysis on the grounds that men and women should be treated as equals. Based on our data, however, male and female mediators are not statistically equal with respect to the rate at which they settle cases. Whether this “good” or “bad” is more a matter of philosophy than statistics.

In her book In a Different Voice, Carol Gilligan described how men and women think about moral conflicts differently. Her research suggests that men tend to consider conflict in terms of rights while women generally view conflicts in terms of dynamic relationships. Accordingly, a “female” approach to conflict resolution may be better suited to the process of facilitating mediated settlements than a “male” approach to conflict.

For a colored chart and remainder of post, see Correlation of Mediator Gender to Settlement Rate at Practical Dispute Resolution here.

When I think of my own experience as a neutral for the past four years and compare it to my experience as an attorney in the first four years of my practice 1980-1984, I can only say that it is somewhat similar.

What made the difference in the years that followed?  Women flooding the profession.  As women litigators and bench officers begin to retire, I suspect that we'll begin to see greater use of women neutrals.  And no, I do not believe that the paucity of women on commercial mediation panels nor what I believe to be their greater struggle to build a thriving practice there is based upon conscious sexism.

Like the tendency to prefer judges over attorney mediators (a preference I believe to be waning) I believe that the sub-conscious preference for male over female mediators arises from a continuing misunderstanding among members of the bar about what settles cases.  Too many attorneys continue to believe that they need a mediator who can overpower the will of their adversary.  And if you're looking for raw power (particularly the power of authority) in American commerce and law, you will naturally choose the judge over the attorney and the man over the woman.

I haven't written about this in the past because it is a topic that tends to divide people and it is not my intention to start a tiny gender war in the tiny world of mediation.

But when these statistics started pouring into my in-box, I couldn't ignore the topic any longer.

Please feel free to comment.

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It's official!  I've joined the faculty of Solo Practice University™

Huh?

I don't see that University in any tier of the U.S. News and World Report's Law School Rankings!  And if it's not ranked for goodness sakes, does it even exist?

Yes, Virginia, a school for legal practitioners does exist "as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy."

O.K.,Solo Practice University™ is not Santa Claus but it comes pretty darn close.

Solo Practice University™ is a revolutionary new web-based educational community that picks up where your legal education left off.

Learn from some of the most progressive lawyers, marketing pros, technology consultants and legal business giants how to:

* Plan, build and grow your private practice
* Differentiate yourself from the competition
* Attract and engage new clients more easily

… and much more. They just can’t teach you that in law school.

Need to transform your marketing strategy in these troubled economic times?  You can learn  not just how to blog your way into your desired market, but how to leverage what you love into how much you make from Blawgfather and SPU Professor Grant Griffiths.

Wondering whether to put rocket fuel into your networking vehicle by adding online social media?  You couldn't find a better teacher than SPU Professor Toby Bloomberg who has over 15-years of traditional strategic marketing experience and four years with social media through her company Bloomberg Marketing/Diva Marketing.

Are your clients peppering you with questions you can't answer about their rights and remedies in Cyberspace?  Then it is Christmas, Hannukah and Kawanza all rolled up into one when SPU Professor Brett Trout is teaching a course on intellectual property in cyberspace.

Whether your presence in Cyberspace is solo or in connection with a group practice, let SPU Professor Stephanie L. Kimbo help you hang out your virtual shingle. 

Don't yet know your way around the courtroom?  Thinking of adding criminal defense to your practice as a growth industry in troubled economic times?  Need to ask questions of a seasoned trial attorney that would make you feel inadequate to ask of your supervising attorney in the PD's office?  There's no better winter holiday gift than SPU Professor Scott Greenfield's semester-long course “The Practice of Criminal Defense - The Road to Perdition.”

Still waiting to take that first deposition?  Taking your 20th and can't stop worrying that the Court Reporter thinks you're just a tiny bit pathetic?  Don't know how to deal with obstreperous opposing counsel?  Afraid to run a line of killer cross-examination to re-position your case for summary judgment or settlement?  Wish you'd gotten the expert to admit that he'd consider the moon to be green cheese if his attorney had told him to assume it? (yes my partner did). 

Then you'll want to sign up for my Deposition Skills course based upon the NITA techniques I've taught for more than a dozen years and my own OJT during a 25-year commercial legal practice.

Let your real legal education begin at Solo Practice University™

 

 

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Excerpts from Kullar v. Foot Locker Retail, Inc. below.  Comment will follow.

[T]he fact that the settlement was reached during mediation to which Evidence Code section 1119 applies does not eliminate the court’s obligation to evaluate the terms of the settlement and to ensure that they are fair, adequate and reasonable. If some relevant information is subject to a privilege that the court must respect, other data must be provided that will enable the court to make an independent assessment of the adequacy of the settlement terms.

[T]he fact that communications were made during the mediation and writings prepared for use in the mediation that are inadmissible and not subject to compulsory production does not mean that the underlying data, not otherwise privileged, is also immune from production. (Evid. Code, § 1120 [“Evidence otherwise admissible or subject to discovery outside of a mediation . . . shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation . . .]; Rojas v. Superior Court (2004) 33 Cal.4th 407, 417; Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, 157-158.)

Foot Locker’s payroll records, for example, if relevant to the quantification of the claims being settled, are subject to discovery and may be introduced in opposition to the settlement even if they were disclosed to class counsel during the mediation, and even if class counsel was shown only a summary or analysis of those records that is not itself subject to production because prepared for use in the mediation.

                           *                           *                      *

Following the opportunity for limited discovery, the trial court should redetermine whether the proposed settlement is fair, adequate and reasonable. The court may and undoubtedly should continue to place reliance on the competence and integrity of counsel, the involvement of a qualified mediator, and the paucity of objectors to the settlement. But the court must also receive and consider enough information about the nature and magnitude of the claims being settled, as well as the impediments to recovery, to make an independent assessment of the reasonableness of the terms to which the parties have agreed.

We do not suggest that the court should attempt to decide the merits of the case or to substitute its evaluation of the most appropriate settlement for that of the attorneys. However, as the court does when it approves a settlement as in good faith under Code of Civil Procedure section 877.6, the court must at least satisfy itself that the class settlement is within the “ballpark” of reasonableness. (See Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500.)

While the court is not to try the case, it is “ ‘called upon to consider and weigh the nature of the claim, the possible defenses, the situation of the parties, and the exercise of business judgment in determining whether the proposed settlement is reasonable.’ ” (City of Detroit v. Grinnell Corp., supra, 495 F.2d at p. 462, italics added.) This the court cannot do if it is not provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.

By remanding we do not suggest that the proposed settlement ultimately may not pass muster. We hold only that the trial court may not finally approve the settlement agreement until provided with sufficient information to assure itself that the terms of the agreement are indeed fair, adequate and reasonable.

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Here are my upcoming speaking and teaching engagements in November and January!

I'm baaacccckkkkkkkkkkkkkkkkkkkk!!!!!!!!!!

Judicate West Neutral and IP ADR Mediator and Blogger Victoria Pynchon.

Coach/Instructor, National Institute of Trial Advocacy: Building Trial Skills
Location: Loyola Law School Los Angeles
City: Los Angeles, CA
Dates: 1/2/2009 - 1/8/2009
Director: Williams, Gary C.

This is a week-long intensive program for new and/or experienced attorneys who need to learn/brush up on their basic trial skills.  If you can take the time, your entire practice will benefit from the experience.

BrightTALK Intellectual Property Summit here! on November 11, 2008 Webcast Free

Negotiating a Settlement in IP Litigation

   12:00 pm
   Presenting Victoria Pynchon, Judicate West, CPR, Settle It Now, IP ADR Blog

And coming soon!  Deposition Skills Training (NITA techniques) at Solo Practice University!!

 

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by Guest Blogger Brian Herrington

Don’t Agree To Mediate Too Soon In The Litigation

The mediation of litigated cases involving personal or economic injury should mainly be about money. Unless the issues of law and fact have been fully fleshed out, mediation sessions get bogged down in contentions about ultimate facts and conclusions of law that neither side can "win."

Let’s take a drug case in which the drug causes a signature disease that only has 3-4 causal connections.  Until the defendant knows my client’s medical history and definitively understands that the only causal connection present in my client’s case is the drug at issue, the defendant cannot fully appreciate the strengths of the plaintiff's case, leading to an unbridgeable divergence in the two sides' valuation.  On the other hand, if I’ve not yet conducted adequate discovery to learn that the drug didn’t contain the offending agent until after my client quit taking the drug, then I’m going to waste my time – and everyone else’s – by asking for 7 figures.

If the attorneys are making arguments that sound like summary judgment motions during a mediation, both parties are wasting their time. No one should proceed to mediate before they know what they  agree on and what they disagree.  Ideally, the parties should agree upon as many facts and legal issues as possible before sitting down to negotiate settlement. 

Make Sure The Money Person Is There

I will no longer attend a mediation unless the individual authorized to write the settlement check is present.   None of this, “We have to get on the phone and see what corporate says” for me. You do not want to mediate with defense counsel only.  It’s much easier for an adjuster or other money person to hold tight at a number when he/she doesn’t have a plane to catch. In fact, one of the first things I ask the corporate representative at a mediation is, What time is your flight?  This information usually tells me volumes.

Make Sure The Mediator Knows Who to Talk to Before the Mediation Begins

Assuming there’s only one plaintiff and one defendant, there are no less than four parties that the mediator may need to direct his/her attention to: (1) defense counsel (2) the corporate representative of the defendant (3) plaintiff’s counsel and (4) the plaintiff. In any given litigation, one or more of these parties could be the source of impasse. Usually my clients are very well-oriented on where we need to be money-wise heading into mediation. The occasion does arise, however, when I need the mediator to help me help my client understand that his or her expectations of recovery are unrealistic.  On those occasions, I instruct the mediator confidentially that my client needs a little reality testing if the case is going to settle. 

All of us sometimes have unrealistic expectations.  I certainly can, as can  defense counsel or the corporate representatives.  The point is the mediator needs to know who needs to be talked to a little more than the others. I encourage any mediator with whom I work to accept confidential settlement letters. In these letters, I mention which parties I think might be barriers to settlement.

If you have a mediator who only talks to the lawyers, you’re probably in for a long and unsuccessful day. Or, given the situation, it may be the clients who are being hard-headed. In these instances, the mediator needs to talk right past the lawyers and speak directly to the clients. As a plaintiff’s lawyer, I won’t deal with a mediator who won’t talk directly to my client or the corporate representative.

The lawyers' job is to represent their clients and the mediators job is to bring the lawyers together. If the lawyers are in the way, the mediator needs to ignore them for a while and deal directly with the clients.  Ensure that the mediator you’ve agreed to will do this.

Before The Mediation Set A Time Limit For Real Progress

This last point is something that I’ve only started employing in the last few years, and it’s worked wonders. In a courteous and professional tone, I inform defense counsel that if we’ve not made sufficient progress by a certain time or within a certain number of hours – usually 2-3 – then I will leave.  What constitutes “sufficient progress” is case-specific, and you’ll know it when you see it. I give this caveat to defense counsel so that there’s no misunderstanding at the mediation. If, by all reasonable measures, my case is worth 7 figures, I’m not going to spend 6 hours trying to get to 6 figures. I simply will not let that happen to me anymore.

By informing defense counsel ahead of time that I won’t stay more than a couple of hours unless I see real progress, I’ve managed to avoid many of the lowball offers that usually start the defense side of the mediation. Or, if I get a lowball offer, the numbers start increasing once I remind the mediator and defense counsel that I will leave if substantial progress isn’t made.

Of course, this point applies equally to plaintiff’s counsel. I can’t start off at $10 billion dollars like Dr. Evil with a law degree. I make sure that my offers are within reason so that I can be justifiably indignant if defense counsel starts playing games with the offers.

One Size Does Not Fit All

As I said at the beginning, there is no foolproof way for the plaintiff lawyer to approach mediation. There are numerous approaches and many depend on the parties involved. These are some of the broad categorical approaches that I take and they’ve worked for me.  I hope that you find them useful as well.  Happy mediating.

About The Author

Brian Herrington is the founding partner of Herrington Law, PA in Jackson, Mississippi. Licensed in Mississippi and Tennessee, Brian litigates consumer class actions, cases involving defective drugs and medical devices, and personal injury cases all over the country.

You can obtain more information about Brian's practice by going to Herrington Law PA’s main website here. Brian blogs on numerous issues relevant to litigation at Mississippi Consumer Lawyer here.  You can also follow Brian on twitter at twitter.com/brianherrington.

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Civil Procedure Sec. 998--which permits a defendant to shift costs to plaintiff if plaintiff rejects a settlement offer and then fails to obtain a more favorable judgment--does not eliminate substantive requirements for awarding attorney fees to a prevailing Fair Employment and Housing Act defendant; prevailing defendant in FEHA action is only entitled to recover fees if plaintiff rejects defendant's settlement offer, fails to obtain a more favorable judgment, and plaintiff's action was without any legal or factual foundation. Mangano v. Verity, Inc.
 
 

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There's nothing like getting a new Harpers in the mail to upset my idealistic dreams of a new America flourishing under an Obama administration.  Here's the opening November '08 Harpers slap-in-the-face for dreamy liberals like me:

After eight years of catastrophic Republican misrule—in the midst of economic crisis and rising unemployment, in a nation plagued by ruinous energy costs and inflation, bank failures, and staggering public and private corruption—an eloquent, charismatic, intelligent Democratic candidate was locked in a statistical tie with a doddering old hack whose primary argument for his claim to the most powerful office on earth is that he was shot down over Vietnam and tortured for five years. Indeed, this remained the case even after McCain demonstrated beyond all doubt, in his impetuous selection of a ludicrously unsuitable vice- presidential candidate, that he lacked the good judgment that is the primary qualification for the job. If the Democratic Party loses this election, then it should forever concede the presidency.

Ouch!  I read this magazine for the same reason I watch Fox News.  To upset my own comfortable ideologies.  That's the trouble with us liberals -- we're always fretting about being fair, when, according to Harper's Roger Hodge we're just a big bunch of conflict-avoidant pussies.  

Conflict in politics is not a metaphor, and as with any fight, the audience is likely to get involved. That is the essence of politics. A campaign that decides in advance that voters are tired of negative campaigning, that they are sick of partisan attacks and will respond only to positive messages, has stupidly left the field of battle. The people who truly dislike political combat are presumably among the 95 million who do not vote. Senator Barack Obama, a sophisticated and intelligent man with sophisticated and intelligent advisers, promises to change Washington, to eliminate the tone of partisan rancor, to foster a new spirit of brotherhood and cooperation. Poor lamb, he wishes to lie down with lions. But the Kingdom has not come.

The answer? 

Attack!!

Unfortunately, the sovereign voter can do little, on his own, to remedy the situation, especially if he happens not to live in Florida or Ohio. Yes, he can make a campaign contribution, a slightly more effective form of voting, but unless the Obama campaign decides to wage a more creative and destructive war, casting monetary ballots remains an empty gesture. (Of course one can also join the battle personally, perhaps by repeating the rumors about John McCain’s Alz heimer’s meds or the Sarah Palin sex tape.) Ultimately, we return to the problem of political will, to the Democratic Party, to the commitment of its party bosses to prevail, finally, in this election.

We can hope for change, that the Republicans will make some fatal error, or that Obama’s party will fight hard enough to persuade a decisive number of “low information” voters that John McCain is not only a liar but a menace to our children’s future. Recent precedents, however, are not encouraging. The Republican Party lied its way through eight years of criminal misrule while Democrats mostly just cowered in a back room. Now, faced with a clumsy deception about whether Sarah Palin sought an earmark for a small town in Alaska, Obama exclaims, “Come on! I mean, words mean something, you can’t just make stuff up.” Oh, yes, Barack, we can.

In the same issue that suggests we dirty our hands by calling John McCain a liar and the Bush administration's "misrule" criminal, we read that Obama is a detached blank screen upon which voters can project any quality they like (or dislike) because . . . well . . . his mother was lonely and so is he:

Obama wants to believe in the common good as a way of providing a fullness to experience that avoids the slide into nihilism. But sometimes I don’tknow if he knows what belief is and what it would be to hold such a belief. It all seems so distant and opaque. The persistent presence of the mother’s dilemma—the sense of loneliness,doubt, and abandonment—seems palpable and ineliminable. We must believe, but we can’t believe. Perhaps this is the tragedy that some of us see in Obama: a change we can believe in and the crushing realization that nothing will change.

See The American Void by Simon Critchley

This is usually the point at which my own McCain-supporting mother breaks in with "honey, you know, you can think too much."  And after years, decades really, of finding this refrain irritating, I finally agree with her about the thinking part if not about her taste in Presidential candidates.

Like the Obama caricatured in this month's Harpers as an ineffective dreamer as intent on replacing his deceased mother's lack of faith with liberal-Christian-do-gooding as Oliver Stone suggests "W" was intent on finally pleasing Daddy, I simply choose to have faith in the stated values of the Democratic party.  I continue to believe that over time, we can do better as a nation through consensus and problem-solving, collaboration and compromise, than we can by adopting the tactics of the world's strong-arm leaders and disciples of discord. 

The Good News

Assuming that the guy I think Obama is -- highly educated, articulate, and idealistically dedicated to serving the common welfare -- actually exist on the political scene (and I will not give up this faith any more readily that others would renounce their own religions) I believe them to be riding the bow-wave of transformation.  I have staked my professional life on this faith in my fellows' ability to work toward the common good, abandoning the extremely lucrative practice of legal battle in exchange for the far less financially rewarding practice of collaborative negotiated conflict resolution. 

Who are the real cowards here and who the heroes?  People who refuse to negotiate face-to-face "without pre-condition" ("we won't discuss settlement unless they're willing to put $10 million on the table first") and without the protection of several layers of legal counsel?  Or those who are willing to test the rectitude of their "position" by sitting across a table with their opponent to frankly discuss their mutual role in whatever commercial or personal catastrophe flowed from the intersection at which their (mis)fortunes collided? 

The social psychologists tell us that we live on the razor's edge of individual survival (me, me, me, me, me) and the collective good.  It is our great challenge as a species to live that which we cannot refuse to understand -- "we" cannot drill a hole in "their" side of the boat without sinking all of us.

So I will continue to brave reading Harpers (which discourages me) and risk the challenge to my world view of Fox News commentary (which so often enrages me) on the off-chance that my religion -- tolerance; compassion; collective effort; empathy and the like, has more staying power than the religion of hate; discord; and, denial. 

And I will also continue to believe that none of us could ever possibly be right.  

Only that we could potentially be happy.

Ending on a positive gaping void note with Hugh McLeod's greatest to date contribution to humanity:  How to Be Creative.  You can catch him on Twitter here.

 

 

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The first thing we mediators are taught (after digesting the imperative to "be conscious") is that people in conflict need to be in an atmosphere of hope and safety to be able to:  (1)  recognize the point of view of another; (2) be accountable for his/her own "part" in the dispute; and, (3) generate creative solutions to bust past impasse.

This is the reason one of the post categories over at the IP ADR Blog is "Innovate, Don't Litigate," which is the dispute resolution mantra of Sun Microsystems CEO Jonathan Schwartz.

That said,  I am happy to link my readers to The Financial Crisis' Silver Lining over at Harvard Business Publications.

Perhaps the good times are in fact dead. And certainly someone thinking of forming the umpteenth "Web 2.0-widget-to-grab-audience-and-find-advertisers" ought to pause to think whether they really have some kind of defined competitive advantage that can translate into a sustainable business.

But real customers continue to face real problems. And as always, innovators who figure out different ways to solve those problems--and make money doing so--will have opportunities to create new growth businesses. In fact, the creative destruction unleashed by a crisis always opens up opportunities for innovation.

As a simple example, consider a New York based startup called On Deck Capital, Inc. As described in Monday's Wall Street Journal, the company loans money to small businesses. Instead of relying on individual loan officers to pour over episodic financial information and make decisions, the company has an algorithmic approach that uses software to analyze a company's day-to-day activities in a non-obtrusive way to assess credit worthiness. Its loans feature higher interest rates than loans from most banks, but lower than alternative sources.

The company launched in May, and has already distributed $10 million in loans. It has suffered very few defaults. The current credit crisis and hesitancy of many banks to loan to even the best-run small businesses creates substantial opportunity for On Deck to extend its model.

Llssez le bon temps roulez!

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I watched the debate last night with people who support my candidate.  They all also happened to be mediators, so they understand concepts like confirmation bias --the tendency to search for or interpret new information in a way that confirms one's preconceptions and avoids information and interpretations which contradict prior beliefs. It is a type of cognitive bias and represents an error of inductive inference, or as a form of selection bias toward confirmation of the hypothesis under study or disconfirmation of an alternative hypothesis.

I've been Twittering (shoot me! this is addictive behavior).  But all behavior has it's "up" side.  The "up" side to following my Twitter network's running real-time commentary of the debate was the exposure of my own (and my friends') confirmation bias.  I have both McCain and Obama supporters in my network and it was as if the two groups were watching entirely different debates.  And they were. 

Because nothing is objective.  Let me repeat that.  Nothing is objective.  Everything we hear, see, touch, smell and taste is filtered through our entirely personal experiences, the collective or "received" reality of the society (micro or macro) in which we live, and interpreted based upon those experiences, which are further complicated by universal cognitive biases and particular core beliefs (our "operating principles").

If nothing is objective, there is no truth beyond that which one has faith in. ("faith is the substance of things hoped for, the evidence of things not seen.")

Yes, I know, the scientific method.  But you and I don't test our beliefs, opinions, perceptions and conceptions by the scientific method.  We hear, we see, we smell, we taste, we touch and we respond.  We opine.  We believe we are right.

So I said to my friends in the middle of the debate, "we're an example of "confirmation bias" and they took issue with me. And I let it go because I wanted to listen more than to impose my own view of our collective experience.  And I was Twittering, lord help me, with some people who didn't share my bias.

I missed statements made by McCain entirely.  It was if I hadn't even heard them.  I was listening to confirm that which I already believed, which means I screened out what didn't fit my view of McCain or Obama and highlighted those statements that confirmed my existing beliefs.

This is what happens every time you try a case to a jury.  It's why the little "g" god of the market place created jury consultants.  It is also what happens everytime you try to settle litigation.  Litigation raises confirmation bias to holy writ.  Which is why the little "g" god of the market place created mediators.  Why?  Because the client has filtered his opening story through his own subjective experiences, which we, the litigators, devote ourselves to proving by cherry-picking the facts that conform to those experiences and disputing all those that don't.  By the time the parties and their counsel get to me, they're often in different galaxies.  And I need to help them remember, or realize for the first time, that their opponent has woven the disparate facts of "what happened" into an entirely different story, and has done so without "lying" about those events.  Just as importantly, the parties come to understand that a  jury might well "buy" their opponents tale as the "right" one.

Here's the more important point to getting a better deal:   your opponent is often nearly as interested in your acknowledgement that his version of the events might be as accurate as yours as he is in  "winning" the case.  When (or if) the parties clear this hurdle, they can get down to serious horse trading, benefitting both. 

So, forget the pundits.  If you believe your guy "won" last night, it's probably equal parts a measured opinion and a peculiarly subjective experience, one that you do not even know you've tailored to fit your own view of reality.

I like Obama because I believe he acknowledges this from time to time.  Not always.  But often enough to make me feel comfortable with him in a White House.  Am I right?  How could I possibly be?  We won't know anything until one of these men moves from campaigning to governing.

Lord help us all.

 

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It's effective, it's efficient and it's client-centered.  Just what we need to weather the financial storm.

 What?  The mediated resolution of litigated cases. 

Nobody blogs it better than Diane Levin at the Mediation Channel, who hosts Blawg Review # 181 in celebration of International Conflict Resolution Day.   BR's anonymous Ed. recently had these kind and grateful  words for Diane:

We'd like to take this opportunity to thank Diane for her many contributions to Blawg Review, having now hosted four outstanding presentations -- #43, #94, #130 and #181. Behind the scenes, in her role as a Blawg Review Sherpa, Diane has made contributions to many other issues of Blawg Review, too. So, speaking for myself and all the other Blawg Review hosts she's helped along the way, we'd like to say thanks a bunch and give you this extra little bit of link love to show our heartfelt appreciation.

Tomorrow I'll start my day by reading, and giving my own readers a head's up on what looks to be one of the best Blawg Reviews of the year by the best ADR blogger ever.

Anyone working up the nerve to host, click here. Lesser mortals can submit their week's best post by taking a look at the submission guidelines here. Next week Blawg Review  will appear at ..

 

Preaching to the Perverted.

(totally unrelated photo; just getting my iPhone photos from Paris in the mix)

But what a Blawg Review Diane has given us.  Thank goodness it's Columbus Day or I'd be short-changing my actual work-work by reading #181 half the day and its links the other half of the day.  And don't expect Diane to limit herself to mediation.  Most of us are also lawyers, after all, so she also covers the best legal posts of the week on the topic of the law, legal practice, life as lawyers -- the "whole catastrophe" as Zorba said. 

Geoff Sharp is spot on in urging you to read Blawg Review #181.  It could be malpractice not to do so!!

Brilliant Diane!  Thanks.

 

 

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Geoff Sharp at Mediator blah blah today asks the first academic question with which I was forced to grapple in my LL.M studies at the Straus Institute -- can you cherry pick transformative mediation techniques to settle commercial litigation?  

I realized I had re-entered the academy the day Joe Folger -- author, with Baruch Bush, of The Promise of Mediation -- said only transformative mediation "works" and its principles  must be strictly followed. 

(drawing courtesy of Charles Fincher at LawComix.com)

Why was this an echt academic moment?  Because the course I was taking from Joe -- "Ideologies of Mediation" -- had, before that moment, been suggesting that all ideologies interfere with durable, party-satisfying resolutions.  Now it seemed the problem wasn't with ideology itself but with the wrong ideology.  Hmmm, felt like law school.  Forget Pennoyer v. Neff.  It's all about this Buckeye case with the exploding boiler.

At the time, my litigator husband was skeptical of all mediators and all mediation techniques.  We took a long walk down a Malibu beach after one of Joe's classes while I tormented him with questions about ways in which mediators could help him settle the case he was then working on -- the World Trade Center insurance coverage litigation. 

Frustrated, I interviewed Folger and Bush -- raising Steve's questions -- which I crafted into a Q&A for mediate.com -- Can Transformative Mediation Work in Commercial Litigation?

Later, Ken Cloke (Conflict Revolution) would tell me "you are the technique," opening the door for me to use mySELF to best settlement effect, remembering old lessons while continuing to learn new ones.  See We Tell Ourselves Stories in Order to Live.

If you wonder why I'm such a joint session fanatic, it's due largely to Joe's and Baruch's teaching as well as my own experience mediating community disputes locally -- the only place true transformative mediation is practiced.  Engage the people with the problem and you're more than half way home.  You just have to be capable of getting the lawyers to trust you enough to give up just a tiny bit of control to help the process happen.

As another mentor -- Richard Millen -- taught me, people don't have legal problems, "people have people problems" which are burdened with justice issues. 

Choose your mediator wisesly, collaborate with him/her and you will not only settle the case, but emerge with a client who got what he/she/it hired you for -- to resolve the commercial problem and  the justice issue that called for the retention of a lawyer in the first place.

And if you're in the UK, check out Justin Patten's post on small companies missing the benefits of mediation -- complete with an offer of a free consultation. 

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If you believe that law blogging is not only informative and entertaining, but capable of transforming our lives, our society, our culture and our legal system as well, run don't walk over to Peter Black's Freedom to Differ which not only rocks, it twitters, on One Web Day.  Surely this will be the BlawgReview of the year!

. . . .one recurring theme on this blog has always been a recognition of the value in a strong and free internet.  Therefore it is an honour to be able to host Blawg Review on Monday September 22, 2008, which is One Web Day 2008.  One Web Day was founded three years ago by Professor Susan Crawford from the University of Michigan, and she describes it as an "Earth Day for the internet".  The One Web Day website describes the day in the following terms:

The idea behind OneWebDay is to focus attention on a key internet value (this year, online participation in democracy), focus attention on local internet concerns (connectivity, censorship, individual skills), and create a global constituency that cares about protecting and defending the internet.  So, think of OneWebDay as an environmental movement for the Internet ecosystem. It’s a platform for people to educate and activate others about issues that are important for the Internet’s future.

If you'd like to host BlawgReview or submit to it, click here.  All future BlawgReview hosts please note -- THE BAR HAS BEEN RAISED!

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After generously commenting on my own comments to his article on the Privitization of Justice (any chance I can get permission to publish it here Professor?), Harvard Law School Professor Peter Murray left a comment which I've decided to bring "upstairs." 

Murray assures me he is no "enemy" of mediation, reminding me that behind every accusation (mine) is a cry for help (mine) which I sometimes think this entire blog-effort consists of.  In Jerry McGuire's words, help me help you.  Professor Murray has graciously offered to do so by joining the (soon to be formed) steering committee of the LegalTED Conference about which you'll all see much more after the election. 

Professor Murray's comment below.

Ms. Pynchon's comments on my article on privatization of civil justice are right on. Of course the situation is nuanced. Mediation is an excellent technique to facilitate settlement of many, perhaps a majority, of the disputes which end up in the civil courts. My point is that having this service provided by private professionals rather than public servants increases the likelihood of economic influences playing a larger role than they would in a purely public institution. And mediated results, while providing some attributes that litigants cannot obtain in public judgments, does not provide others, namely a kind of vindication and creation of public norms to govern others.

I would be delighted to join a Steering Committee to set up a conference on these issues.

Let the conversation continue!

 

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The following important update on the recovery of bad faith treble damages from the lawyers at  Edwards, Angell, Palmer & Dodge

California Federal Court: Insured Plaintiff Can Seek Treble Punitive Damages For Insurer’s Alleged Bad Faith

The U.S. District Court for the Central District of California recently denied a motion to strike and allowed a plaintiff to pursue treble punitive damages against his insurer for the insurer’s alleged bad faith. Novick v. UNUM Life Insurance Co. of America, C.A. No. 08-02830-DDP-PJW (Aug. 7, 2008).

The insurer issued a long term disability benefits policy to the plaintiff in 1976, providing benefits should the plaintiff become totally disabled due to an accident sustained during the course of his career as a surgeon. In June 1992, the plaintiff filed a disability claim with his insurer after sustaining a spinal injury that allegedly prevented him from performing surgery. The insurer initially paid benefits to the plaintiff, but discontinued making the benefits payments on January 18, 2007. Shortly thereafter, the plaintiff filed suit against its insurer alleging breach of contact and breach of the covenant of good faith and fair dealing.

In his complaint, plaintiff seeks punitive damages pursuant to California Civil Code §3294, which allows an award of punitive damages for conduct that constitutes malice, fraud or oppression. The plaintiff also seeks treble punitive damages pursuant to California Civil Code §3345, which provides for an award of treble damages “in actions brought by, on behalf of, or for the benefit of senior citizens or disabled persons . . . to redress unfair and deceptive acts or practices or unfair methods of competition . . . [when] a trier of fact is authorized by statute to impose either a fine, or a civil penalty or other penalty, or any other remedy for the purpose or effect of which is to punish or deter . . . .”

The insurer argued that §3345 does not provide for the trebling of damages for insurance bad faith claims. The court reviewed the legislative intent behind the statute and determined that the legislature did not intend for the statute to be limited to actions that specifically mention unfair business practices. The court noted that, as bad faith claims redress unfair practices, §3345 applies to insurance bad faith claims. Accordingly, as the plaintiff alleges that the insurer acted in bad faith, the court held that the plaintiff is entitled to pursue his request for treble punitive damages.

Full text of opinion here.

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John DeGroote of Settlement Perspectives soon to appear at Mediate.com Featured Blogs.  The missing link between mediators and litigators. 

The client!!

Now we just need a blogging claims adjuster and we can bring peace to the Middle East.

Below are John's impressive credentials.  We meant to meet for a "quick" cup of coffee.  We talked negotiation strategy and tactics for nearly three hours.

As I review websites I often wonder about the experiences of the authors and the biases they bring, so I feel I should disclose mine for those who want to know more. I have been fortunate to work with two “hands on” in-house legal teams, with settlement negotiations handled primarily by employed lawyers rather than their law firms. I am also lucky to have practiced in law firms with true trial lawyers who generated genuine negotiating leverage whether settlement was their objective or not. Through these experiences I have settled cases threatened, pending or mediated in about 20 states - from Montana to Florida and from New Hampshire to California - and have managed the resolution of disputes around the world. Working with and against some very good lawyers and employing some of the truly legendary mediators, I feel fortunate to have seen a real cross-section of styles and approaches. In almost all of these cases I have had the opportunity to work behind closed doors with the people who really decide when cases settle - CEOs, CFOs, General Counsel, COOs, individual plaintiffs, insurers, board members, auditors, and more.

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I note today that yesterday's post was . . . . well . . . a little snippy.  

Now that I've managed to get my hands on a copy of Professor Murray's article on the privitization of justice (which I'll post as soon as someone gives me permission to do so) I have a few more observations that are more nuanced than my first reaction.

First, I note that much of Professor Murray's article focuses on arbitration agreements that are forced down the throats of consumers -- an injustice that is so far removed from one that might arise in a mediated settlement conference that I'd like to address it separately on another day.  

Second, I am not without criticism of court-annexed mediation practices -- those criticisms populate this blog in great number.  Nor am I naive or inexperienced enough to pretend that mediators do not effect party decisions even when they are represented by attorneys who are presumably mediation- and mediator-savvy.     

Nevertheless, re-reading Professor Murray's criticisms of mediation this morning, I am once again stuck by the number of untested assumptions upon which he bases his pretty radical suggestion that mediated settlement agreements be vetted by judicial officers. The major and minor premises of Professor Murray's accusation that mediation corrupts justice include the following:

• there is only one set of "powerful repeat players" -- insurance companies -- who choose and use the services of mediators;
• the other set of repeat players -- plaintiffs' personal injury and employment counsel -- are more or less universally poorly equipped to either influence the mediator or to protect their clients from mediator bias;
• the easily influenced plaintiffs' bar, if not protected from mediator bias, will counsel their clients to voluntarily enter into sub-optimal settlement agreements that favor the interests of insurance carriers over those of their own clients';
• there is such a thing as an "objectively bad settlement" that a judicial officer would be  equipped to detect and remedy; 
• money paid to a "neutral" is the only pernicious influence on dispute outcome, as opposed to, say, racial, nationality, gender, and/or any other socio-economic differences between a judicial officer and a litigant or between the jury and a litigant; and,
• judicial officers are not subject to the influence of the repeat attorney-players who appear before them and socialize with them at Bar Association and other events.

Of all of the assumptions requiring testing before we impose a supervisory judiciary upon mediators, the premise that an objective, measureably "reasonable" settlement of any dispute exists is the one that most requires addressing.  

Because I could write a book on this topic, let me just highlight some of the factors that would make third-party vetting of mediated settlement agreements difficult to impossible. 

• money is not the only reason people file suit nor the only basis for their decision to settle it;
• whether the litigation at issue is a $2500 slip and fall action between a local grocery store and its customer; or a billion dollar insurance coverage dispute between an insurance carrier and an oil company, the people and commercial players involved are at least as -- if not more -- concerned with injustices that the law does not address as they are with those that it can address;
• though mediated settlement agreements are partially based upon the cost of further litigation and trial, on the one hand, and the probability of victory times the potential jury verdict on the other hand, they are also based on party needs, desires and fears that have nothing whatsoever to do with legal causes of action such as:
  • a corporation's fear that it will not be able to overcome jury bias against commercial enterprises, particularly if that enterprise is engaged in providing liability and/or property damage insurance to its customers;
  • the fear of individuals that they will not be able to overcome jury bias against any marker of their marginalization from the dominant culture such as color, gender, nationality, sexuality or religion;
  • the desire that one's opponent acknowledge responsibility for the role he/she/it played in the events giving rise to the dispute and for the actions taken to resolve it, many of which further inflame the parties' experience of injustice; 
  • party desires for revenge; and,
  • party tendencies to "read" and "spin" the dispute in a way that is favorable to him/her/it in all particulars -- misperceptions that are often corrected in the course of joint sessions between the parties who actually experienced the injury-causing event.

Examples of ways in which parties are able to resolve conflict in the context of their highly individual interests rather than the little buckets of rights and remedies into which we pour the facts of their dispute?

• a physician gives his consent to settle a malpractice action when he realizes that the Plaintiff is not attempting to "hold him up" but genuinely experienced the breast examination he gave her as an assault;
• the creditor agrees to settle for pennies on the dollar when convinced by evidence proffered during a confidential mediation session that the debtor would be bankrupted by any payment in excess of the offer (evidence not discoverable in litigation because it is not "relevant" to the causes of action alleged);
• garment manufacturers settle acrimonious copyright infringement litigation after their counsel allow them to have a confidential mediation conversation which cannot be used in court against them during which they learn that they have more in common -- and more ways to advantage one another economically -- than they have to fight about;
• a claims adjuster is brought to tears -- and seeks greater settlement authority -- by a father's frank confession in a confidential mediation conversation of the guilt he carries for the loss of his child in an automobile accident caused by the  high speed blow-out of an allegedly defective tire; and,
• family members not only settle their lawsuit but reconcile after years of self-imposed exile when they realize the "family" asset they've been fighting over is worth less to them than their love for one another. 

What I'd like Professor Murray and everyone who reads his article to understand is that we all share this justice problem.  The adjudication system is not working well for the people it was designed to serve.  The ADR options we've put in place to smooth out the rough edges of 18th century adversarial theory and practice are themselves insufficient to efficiently and fairly resolve 21st century conflicts.      

That's why I'm calling for a LegalTED Conference.  And if Professor Murray will forgive the snippiness of yesterday's post, I'd like him to be one of the members of  the Steering Committee.

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Orange County Bar Association Alternative Dispute Resolution Section Meeting Reminder

Thursday, September 4, 2008
Noon to 1:30 p.m.
Wyndham Hotel
3350 Avenue of the Arts, Costa Mesa

Speaker:

Victoria Pynchon
Attorney at Law, Mediator
Author of the Settle It Now Negotiation Blog
Judicate West
 

Using and Losing Cognitive Biases to Win Your Next Negotiation

• How common biases prevent us from influencing others, interfere with case analysis, and confound attempts to learn true needs of others
• Learn how to identify specific biases to negotiate better deals for clients

For more information or to register:  Call FastFax at (949) 440-6700, x4 and request document 2279.   Register ONLINE using the OCBA’s online calendar at OCBar.org
 

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(while we're walking down memory lane anyway, "Have It Your Way" from 1976) 

When I ask litigators why they don't choose arbitration over litigation before unpredictable judges in a crowded court, their answer invariably is "because I can't appeal the ruling."   We cling to appellate review even though we appeal fewer cases than we try -- which is a very small percentage of our case load as it is. 

Not surprising, however, we litigators, as Max Kennerly recently noted, tend to be risk-averse, not risk-embracing (h/t Blawg Review # 174).  To give up that one last chance for our client to be vindicated and for us to be triumphant is generally just too much for us. 

Now we can have our arbitration cake and and follow it up with appellate ice cream.  Yesterday, the California Supreme Court in Cable Connection, Inc. v. DirecTV  held that arbitrating parties' agreement to seek appellate review of legal errors is enforceable in California State Courts despite its uneforceability in federal court.  As the Supreme Court explained:

On the first question, the United States Supreme Court has held that the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not permit the parties to expand the scope of review by agreement. (Hall Street Associates, L.L.C. v. Mattel, Inc. (2008) __ U.S. __ [128 S.Ct. 1396, 1404-1405] (Hall Street).)

However, the high court went on to say that federal law does not preclude “more searching review based on authority outside the [federal] statute,” including “state statutory or common law.” (Id. at p. __ [128 S.Ct. at p. 1406].) In Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 (Moncharsh), this court reviewed the history of the California Arbitration Act (CAA; Code Civ. Proc., § 1280 et seq.).

We adhere to our holding in Moncharsh, recognizing that contractual limitations may  alter the usual scope of review.

The California rule is that the parties may obtain judicial review of the merits by express agreement. There is a statutory as well as a contractual basis for this rule; one of the grounds for review of an arbitration award is that “[t]he arbitrators  exceeded their powers.”  (§§ 1286.2, subd. (a)(4), 1286.6, subd. (b).)

Here, the parties agreed that “[t]he arbitrators shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error.” This contract provision is enforceable under state law, and we reverse the contrary ruling of the Court of Appeal.

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AUGUST 25, 2008 | FORUM

If You Know the Case Law, Litigation Doesn't Have to be Robotic

By Victoria Pynchon 

Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived like most privileges, including the near-sacred attorney-client privilege. Simmons v. Ghaderi, 2008 DJDAR 11107. You cannot be estopped from relying on it. Eisendrath v. Superior Court, 109 Cal.App.4th 351 (2003). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code Section 1123. Fair v. Bakhtiari, 40 Cal.4th 189 (2006).

Insurance policy-holder counsel Kirk Pasich of Dickstein Shapiro has criticized nearly all recent interpretations of mediation confidentiality by the California Supreme Court on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.

"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding, "Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith."

Why, indeed?

If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish between them despite their training in the field. Nor have California's courts been of any real assistance.

What's in a name? Here, plenty. The application of California's Rules of Evidence to mediations has such significant potential economic consequences that mediator and litigator malpractice actions are surely looming on the horizon.

What type of misbehavior can occur in a mediation? Here are just a few examples: One party can make a misrepresentation of material fact on which the other relies in entering into a settlement agreement; as Pasich notes, an insurance carrier can act in bad faith; one mediating party could tortiously interfere with a third party's contract or prospective economic advantage; or the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a "good faith" hearing.

Even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code Section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.

Given the potentially significant adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?

Not so much.

If you have a DJ subscription, continue reading here.

 

Enforcement of Mediated Settlement Agreements in California - Get more Legal Forms

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If you've been following the conversation between Settle It Now and Max Kennerly's Philadelphia Litigation and Trial Blog, you'll know that a "settlement unicorn" is composed of "two hostile parties on the verge of a lawsuit [who] get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on." 

I believe in Unicorns and Max doesn't so I've promised to keep my eyes open for appearances of that storied creature.  Previously, I have reported the Unicorn's appearance here (community mediation; potential lawsuit, no lawyers); here (litigation + lawyers who send the parties to community mediation); and, here (litigation + lawyers + clients who seek mediation without lawyers to resolve dispute).  

Today, I have a story of the Unicorn visiting the mediation room in a litigated case -- a case of the type that my (new) friend Max Kennerly suggests will not attract that shy beast because: 

The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.

[My Comment:  the "intertwined interests" all parties to litigation have is the litigation itself with its attendant cost, delay, and, uncertainty, not to mention the discomfort "ordinary" people experience when plunged into the foreign environment occupied by attorneys with their strange "causes of action" and "affirmative defenses," their demurrers and JNOV's; their res ipsas and, most importantly, their view that only facts pertaining to a "cause of action" or "affirmative defense" are relevant to the injustice suffered by their clients.] 

[T]he plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full" compensation. . . .

The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic.

[My Comment:  I've said before that all litigation is "fundamentally non-economic" -- it's about justice.  Though Max is one of the few practicing litigators who agrees with me, he does not believe in the existence of my solution -- a settlement conference or mediation conducted in joint session].

Hence a Mediation Unicorn with litigation and attorneys prior to any meaningful discovery.

I'm talking to a plastic surgeon whose artistry not only went unappreciated, but which gave rise to a lawsuit for battery and malpractice. 

The plaintiff is a model and an actor.  The surgery, she claims, left permanent scaring on her nose.  Her opening demand is $500,000.  I am trying to persuade the physician, his attorney, and the claims adjuster, not to walk out.  The plaintiff's deposition has been taken and the doctor's is scheduled for the following week.  No experts have been retained.  

The parties have made the rare effort to settle the case early in the litigation.

This is what the defense thinks about the opening demand in response to their good faith participation in an early mediation:  

%&*#%*#%@& and %&^@(% and *&$)*#! 

I am suggesting to the defense in separate caucus that they allow me to conduct a joint session in which the parties can talk about the surgery, the scarring and their post-surgical communications.  I explain that the Plaintiff is more angry than acquisitive.  She believes that the doctor disrespected her when she complained about the scarring. 

He denied that I had a scar.  He was rude and dismissive.  He disrespected me.  He had no bedside manner.  

She is one of the few personal injury plaintiffs who comes right out and says what so many plantiffs feel.  

I want him to suffer.  My attorney says he has to report any settlement in excess of $30,000 to the Medical Board.  I want to make him do that.  I want him to suffer as I have.  It's not about the money.  It's about accountability.  I want him to be accountable.   

The parties resist a joint session and we spend two hours negotiating in the strato- and nano-spheres.  $10,000.  $490,000.  $12,500.  $475,000. 

"We're getting nowhere," says Plaintiffs counsel.  "Tell them we're leaving." 

"The case will never settle.  This is a waste of time for my doctor and my claims examiner.  Tell them we're leaving. The case will never settle.  It simply won't settle.  The case cannot settle." 

Click Your Heels Three Times and Say "There's No Place Like Home."

Attorneys are fond of saying that all mediators do is "keep them in the room."  They might be right, but the difference is the room I keep them in.  It's a mediation room, not a conference room or a deposition room or a courtroom.  It's a room in which I ask the doctor if the feeling he has is something akin to a fish being hooked, pulled up out of the water and thrown onto the deck of someone's boat, gasping.  He cracks a smile for the first time that morning.

It's a room in which I say there must have been a miscommunication, a misunderstanding.  It's a room in which I say to the defense that the Plaintiff feels angry and disrespected.  It's a room in which I caution the Plaintiff that the physician is from a different culture than her own -- one where a doctor does not express empathy but only certainty in his skill and expertise. 

The claims adjuster asks me if I'd been able to see the Plaintiff's scar from where I was sitting -- across a conference room table.  I admit that I could not.  I acknowledge what is patent in the defense room -- the Plaintiff is blindingly beautiful.  A jury is unlikely to award her much in the way of damages.  I have said as much to the Plaintiff.  But she is angry and wants a pound of flesh.

I have another mediation in the afternoon.  I tell the defense we have fifteen more minutes.  The claims adjuster keeps repeating "the case will not settle, the case will not settle, the case will not settle." I take this to mean that the defense very much wants to settle the case. 

"If someone repeats something over and over again," my mentor Ken Cloke taught me, "that is the key to the resolution."  While that might be so, I haven't yet found a way to use that key to open any door.  But it is not really my case to settle.  It's my job to keep them in the room.

"I Want to See the Scar," says the claims examiner.

I wish I could take credit for the following but I cannot.  The Plaintiff's attorney says "why don't they go to the ladies room where my client can show Ms. Y the scar and together they can look at it."

I hear the click of the Unicorn's hooves in the hallway.  The plaintiff's attorney is male.  I don't believe he knows what he's suggesting.  He wants to send two women into one of the safest and most congenial, soul-bonding rooms in all of God's creation -- the women's room.

I know the case will settle.

We are finally in joint session.  The claims examiner says, "I want to tell you that I now see the scar.  I'm sorry I denied it.  We'd like to offer you $X to settle the case."

Did $X settle the case?  No.  But $X + $Y settled the case ten minutes later.

And just around the corner, you could see the shadow of the settlement unicorn rear up on its hind legs in celebration.

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Thanks to Kevin's Remarkable Learning Blog (a fellow Forbes Blog Network member) for his  Seven Steps for Mending Broken Business Relationships. 

Each of the seven steps can help litigators de-escalate the conflict inherent in litigation before all-important settlement negotiations, whether they are conducted with the assistance of a third party neutral or not. 

One or more of them might also help ease tension in the law firm -- a very tense place these days given the recession, lay-off's, the de-equitization of partners and the shedding of non-productive practice groups or of those that might conflict with the law firm your firm is about to merge with. 

It's a rough time.  Let's all be a little more careful of our social capital there. 

We're going to need it.

Decide. The first step is you must decide that you want to improve the relationship. The precursor to this step is recognition - recognizing that the relationship needs improving - but the heart of this is the decision that this relationship matters enough for you to make the effort required to improve it. Without this decision, nothing else matters.

Forgive or let it go. If you feel the other person has done something to cause the rift or break-down, you must either forgive them or let go of your issues with it. Without this step, the steps that follow may help some, but will be limited in their success.

Take ownership. Recognize your role in the relationship, and take ownership and responsibility for it. Yes, deciding and forgiving are accountability actions; but being clear that regardless of the situation you have played a role in the change to the relationship is critical to your success in repairing any damage. Otherwise you are only blaming the other person - which cripples your chance for improvement.

Make your intention clear. Once you have decided to take actions to improve the relationship, your behaviors will change. Take the time to explain your decision and your intention to improve the relationship. Let the other person know that both the situation and the person matter to you, and you want a better relationship. This cements your commitment and communicates your intention to the other person.

Assume positive intent. While I have long believed this concept in a variety of situations, a colleague recently expressed it this way and it makes the idea completely clear. Assume the other person was - and is - acting in good faith. Will you be wrong sometimes? Perhaps. But by starting from this assumption you will immediately change your perception and therefore your behaviors toward that person.

Listen more. We all know how important listening is and how good it makes us feel when we are truly being listened to. Grant that gift to the other person. Listen intently, carefully and actively. Not only will you understand them (and their perspective) better, but they will trust you more and the relationship will build from their perspective.

Make an effort. Deciding is one thing. Doing is quite another. If you want better relationships, you must make the effort - it will seldom, if ever, happen automatically.

For the full post (well worth reading) click here.

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Judge Alexander Williams' retirement from the bench and entry into private neutral practice with ADR Services is good news for the legal community.  I co-mediated dozens of cases with the Judge while I was earning my LL.M from the Straus Institute and have spent many hours discussing the nuances of mediation practice with him.  Once known for his temper (and the bow tie he appears to have forgotten to wear in the photo at right)  the Judge has learned the rewards of patience. 

Always one of the Los Angeles Superior Court's most charming and articulate bench officers, Williams is now also among the most calm and canny settlement officers available in a town fairly crawling with mediators.  Couple his bench strength with an Ivy League intelligence and unusual depth of knowledge of mediation theory and practice, and you have one of the new go-to guys on the block.

An excerpt from the Daily Journal's article on Judge Williams below with a link if you're a subscriber to read the entire article.

Retired Judge's New Mantra: 'Deal or Ordeal'

By Greg Katz

LOS ANGELES - Superior Court Judge Alexander H. Williams III is about to take his first job ever in the private sector. He will step down from the bench Sept. 15 and join Century City's ADR Services as a mediator.

Williams started his law career in the U.S. Navy's Judge Advocate General's Corps in 1969, worked as an assistant U.S. attorney from 1975 to 1984, and then was appointed to the bench by Gov. George Deukmejian.

Even earlier than that, he worked briefly as a police officer in his native Virginia.

"My very first day on the job, I wrecked a police car on a railroad track," a catastrophe that made the front page of a local newspaper, he said with a laugh.

His dispute resolution career isn't likely to be a trainwreck, though.

Once known for his fiery temper - "I used to be a judge beating up on parties," he told the Daily Journal in 2004 - Williams long since has reversed that reputation.

After studying mediation at Pepperdine University's Straus Institute for Dispute Resolution 10 years ago, Williams began to settle nearly all the cases in his courtroom. His skill and advocacy for dispute resolution won him the Southern California Mediation Association's Peacemaker of the Year award in 2003.

To continue reading, click here.

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Check out today's post at the IP ADR Blog on the Supreme Court's mediation confidentiality decisions and ways to protect your client from the resulting pitfalls -- Malpractice Alert:  Is it a Settlement Conference or a Mediation? 

Why you should care about the answer and what you can do to protect your client and yourself.

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This page can always be found under Links to the left. 

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This just in from Sydney,  Australia. 

I imagine the results are as good or better here in the States, particularly in Los Angeles where mediation practice is both broad and deep.

 

Couples, families choosing mediation in battle of wills

DE FACTO couples disputing about property after splitting up, and siblings fighting over their parents' wills, are increasingly using mediation rather than dragging their battles through the court system.

The latest figures show that NSW Supreme Court registrars had done as many mediations in the first half of this year as they had done in total last year as people realised they could sort out their disputes on their own terms, in privacy, rather than in front of a judge, the Attorney-General, John Hatzistergos, said.

Most disputes were resolved without going any further, freeing up courts and judges for other matters, he said. "It is very encouraging that so far this year 59 per cent of the mediation sessions have concluded with the litigants resolving their dispute," Mr Hatzistergos said.

"Mediation ensures cases . . . . continue reading here.

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UPDATE:  See the analysis of Thottam at May it Please the Court, noting that the "big print giveth and the small print taketh away."

Before further discussing the problems created by the Thottam holding, I'm providing a "brief" of the case about which I ranted and raved earlier here today.  

• THE FACTS: 
  • A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
    • "shall be kept confidential and not disclosed to any outside person . . . ;
    • "shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
    • "shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”  
  • One of the parties contended that a chart drawn up and signed by the parties during the mediation, 
    • was sufficiently certain to be enforced according to its terms; and,
    • was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
  • THE RULES:
    • Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
      • "the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
      • "(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
  • PROCEEDINGS IN THE TRIAL COURT
    • Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
    • Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
    • at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
  • THE APPELLATE DECISION
    • the appellate court reversed the Probate Court's decision.
  • THE HOLDINGS
    • Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
      
      • may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
      • may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
    • Here, the Confidentiality Agreement satisfied those requirements; and,
    • The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain. 
  • RATIONALE
    • Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
    • the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
    • the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
    • the skeletal Settlement Chart was therefore admissible in evidence under that subsection.

This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections that have been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiari opinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi  in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.

Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement.  If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.    

Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.  

As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court.  It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels.  All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except  "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."

Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:

• an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
• a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).

What to do?  Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).    

You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding.  I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators. 

I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.

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The new Estate of Thottham case on the enforcement of mediated settlement agreements is troublesome because

• it appears to contravene the holding of the Supreme Court in Fair v. Bahktiari (full opinion here)
• it turns upon the interpretation of one ambiguous sentence in the parties' confidentiality agreement which I'm almost certain was not meant to create an exception to (or satisfy the requirements of) Evidence Code section 1123(c)
• it shows a remarkable persistence in the trial and appellate courts of the desire to enforce term sheets in non-compliance with the Evidence Code, privileging finality over the the parties' reasonable expectations that all the proclamations about confidentiality will be honored.  
• it creates uncertainty in the law, making it difficult for attorneys to guide their clients before, during and after mediation proceedings.

This is a ripe area for malpractice actions -- binding parties to agreements they later claim were not reached.  The Supreme Court keeps saying -- we mean what we say (Simmons v. Ghaderi) -- no exceptions to the requirements of 1123(c).  Nevertheless, the trial and appellate courts find enforcing skeletal mediation term sheets (this one was a chart) nearly irrisistable.  They just can't seem to get their minds around the idea that the point of mediation -- a non-legal process -- is to create a durable agreement that the parties all want to enforce.

If a mediated agreement were a consumer contract, there'd be a cooling down period during which the "buyers" could re-think a decision made in the heat of the moment with mediators and attorneys leaning on them to settle or else . . . . you know . . . whatever the parade of horribles is.   

Are parties bullied into settlement by mediators and even by their counsel?  Let's look again at the definition of bullying:  the repeated and deliberate abuse of power by one person or group of people over another person or group.

I'm not suggesting that mediators and attorneys know they are abusing the power of their position and authority to "persuade" the parties to accept a settlement that leaves the taste of injustice in their mouths.  We just sometimes forget how much power we possess and how overwhelming our importuning can feel to someone unfamiliar with the legal system.  Think about how helpless you feel trying to communicate with someone who speaks another language.

I've observed mediations in which the mediator -- repeatedly and, it can only be said, deliberately -- abuses his or her authority to gain the consent of parties who are clearly not comfortable with settling their case on the terms proposed and are certainly not satisified with the "deal."

Keep 'em in the room; wear them out; highlight their fears; diminish their hopes and then, when they're at their weakest, put a pen in their hand, ask them to sign and then elevate that signed agreement above all else because what we're after here is efficiency, brother, not justice -- a term too many mediators feel forced to put in quotes.  "Justice."  As if it could possibly be anything other than a cynical joke.

OK.  I misused this post to rant.

I'm going to come back and "brief" this case for you next, highlighting the traps for the unwary and commenting on the form agreement used by the Los Angeles Superior Court ADR panel -- a form that is now mandatory.

HEAD'S UP FOR THE NEXT POST NEW LAW STUDENTS -- THIS IS WHY IT'S IMPORTANT TO LEARN HOW TO DE-CONSTRUCT A LEGAL DECISION AND TEASE OUT THE HOLDING FROM THE RATIONALE, THE RULES AND THE DICTA. 

This Met News report, accurate as it is, doesn't do justice to the traps and troubles lurking here.

Evidence Code Sec. 1123(c)'s exception to mediation confidentiality--providing that a written settlement agreement prepared in mediation is not made inadmissible or protected from disclosure if signed by parties, and all parties expressly agree in writing to disclosure--applied in appellant's civil action to enforce chart prepared during mediation and signed by all parties which appellant claimed was a settlement agreement because estate beneficiaries, in agreement to mediate dispute over distribution of assets, agreed all matters discussed or agreed to in mediation would be kept confidential and not used in any litigation among them "except as may be necessary to enforce any agreements resulting from" mediation, and because chart--setting forth material terms which were sufficiently certain to provide a basis for determining what obligations to which parties had agreed--was a "settlement agreement."

Estate of Thottam - filed August 13, 2008, Second District, Div. Four Cite as 2008 SOS 4917
 

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(right, more fabulous Fincher)

Thanks to mediator Tom Matychowiak for alerting me to "Managing Expectations in Mediation," by Dan L. Stanford (under "Expert Advice" in this month's California Lawyer).  

Tom noted that while most of the article addresses the management of client and adversary expectations, it concludes with these paragraphs:

Once you know who the mediator will be, always contact him or her and try to meet in advance of the mediation. If that is not possible, have a pre-mediation telephone conference. Focus only on the strengths of your case: If you represent a plaintiff, talk about the clear liability evidence, significant damages, your client's expectations of a big award, problems with the credibility of the defendant, and your willingness to try the case. Set the bar high. If you represent a defendant, focus on the strengths of your defense, including technical defenses, any persuasive evidence, and any credibility issues the plaintiff might have. Set the bar low. From both perspectives, provide the mediator with everything that serves your interests. [emphasis in the original]

At the mediation, continue this effort and work even harder at it. If the other side convinces the mediator that you will accept a lesser result than advertised, your chance of success will plummet (and you may end up facing a very unhappy client). On the other hand, if you convince the mediator that your adversary is willing to give more to settle than is on the table, you may well be on the way to having a successful outcome and a satisfied client.

Comments?

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There's now a genuine reason for summertime dancing in the streets.  Charles Fincher of Law Comix has started a new blog here!!

 

Today's ADR offering below:

Why hasn’t the American Lawyer syndicated Fincher’s work for a nice little bundle of cash?

Hey!! AmLaw Editor!! Are you seeing these cartoons? Are you hearing the laughter in the hallways breaking the stress of daily practice? Are you understanding how many more pairs of eyes Fincher's work will deliver to you and your advertisers?  

Maybe you need to see this one:

Maybe Fincher just won't let his work appear there?  Or is he holding out for syndication in the New York Times?  The Wall Street Journal?  My small reader pool LOVES these and now they can subscribe via RSS feed over at the LawComix Blog. 

Thanks Charles!

 

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The jig is finally up.  I've been hemming and hawing long enough.  I need to just go ahead and answer Max Kennerly's question whether it's  possible to convene an early settlement conference in which the parties are united in a desire to settle the litigation.  

This is how you know I'm still as much a lawyer as I am a mediator. 

The answer is yes and no. 

But you can help change the "no" to a yes.

That's the hope part.

Here's the dispiriting part --The answer will not become "yes" if the parties continue to primarily engage in position-based distributive bargaining sessions in separate caucuses.  

My own professional experience (and the behavioral research of which I'm aware) suggests that Mr. Kennerly's Unicorn will only come into a room in which an interest-based negotiation is taking place, one in which there is at least one joint session among the baragaining parties.  

But first a story.  

This very morning I failed to settle a very small case that is poised to become a very big case with cross-actions for legal malpractice and malicious prosecution. 

The delta between the Plaintiff's final demand and the defendant's final offer?   

$3,000.

And I offered to throw in half the delta myself by making a contribution to the presidential candidate/s of the parties' choice.  Shock value.

The parties' failure to achieve settlement couldn't have been about money could it?  

(image from The Sphere of Economic Calculation at the Ludwig von Mises Institute)

Why not?  Because it was economically irrational not to settle. Which is not unusual.  Because there is no rational economic man.  Because we are incapable of making a decision in the absence of emotion.  /**  

As Professor Lee Alan Dugatkin explains in his article Discovering That Rational Economic Man Has a Heart,  

Although some economic decisions are made outside a social context, they are a minority. Social dynamics, many economists believe, are at the core of economic decision making—that is, decision-making about resource acquisition and expense allocation. What I decide affects you, what you decide affects me, and, even more to the point, I care how I fare economically compared with how you fare.  

I send a client a bill for $15,000.  He pays $9,000, refusing to pay the additional six because he believes I didn't earn it or that I did my job badly or that I didn't communicate to him all of the items I would naturually include in my bill.  There is a written agreement but no attorney fee clause.  It will cost me at least $3,000 in attorney fees to collect the six.  My client offers to pay me half of what is owed. 

Do you have the hypothetical in mind?  What would the rational economic man do?

The rational economic man would take the $3,000 because he cannot do better at trial.    

Did rational economic man appear at the mediation this morning?  Of course not.  Because he is a Unicorn!  He doesn't make decisions based upon numeric calculations or emotionless cost-benefit analyses -- which is why I knew  the parties would not accept my gap-closing political contribution suggestion (whew!)

Why Rational Economic Man is a Unicorn

In a social-economic experiment known as the Ultimatum Game, many researchers have found that when one party offered less than half the money subject of the game, "the other player often rejected it, even though by doing so he end[ed] up with nothing."  Id.  Dugatkin describes the results of one research project involving this Ultimatum Game as follows: 

 Alan Sanfey, Ph.D., and his colleagues at Princeton University examined the Ultimatum Game with 19 subjects in the role of responder and . . . observe[d] their brain activity. They found that when unfair offers (defined as those of less than half the resource) were made, responders often rejected them. As they did so, the area of their brains associated with negative emotional states (in this case, the bilateral anterior insula), rather than those associated with complex cognition (in this case, the dorsolateral prefrontal cortex) were most active. The more the offer deviated from fair, the more active was the bilateral anterior insula when such an offer was rejected. Anger at being treated unfairly by other players appeared to override rational economic reasoning. In the minority of cases when the offer was accepted, the dorsolateral prefrontal cortex was most active.

 We, like the capuchin monkeys mentioned yesterday, will deprive ourselves of thousands, tens of thousands, even millions of dollars if we believe the compensation being offered is so little related to our value or our loss that it seems unfair.  We will not pay money at the point of a gun nor accept money offered to us by villains or cheapskates. 

Mediation, Money and Justice

In today's semi-hypothetical mediation, the $3,000 offered felt too unfair to the plaintiff and the hypothetical $6,000 demanded felt too unjust to the defendant for the parties to reach a rational economic deal.  The parties' potential to achieve settlement was also seriously undermined by the degree of anger they expressed toward one another and the way in which they had villified one another - "rich deadbeat" on one side and "dishonest fiduciary" on the other.

I am neither magician nor miracle worker.  Nor am I in the social work or therapy business.  I do, however, know that when parties to a lawsuit are hopping mad and believe that the opposition behaved immorally, money is unlikely to change hands. 

In an effort to defuse the anger and de-demonize the parties, I held two joint sessions -- one that was not coached and one that was.  Then I separated the parties for the purpose of conducting a distributive bargaining session (she offered x; he counters with y, etc.)

In both the joint session and in the separate caucuses, I strove to humanize the parties for one another; attempted to reframe their behavior in a less villianous light; and, assisted them in conducting as rational a cost-benefit analysis as possible.  I also helped the parties reality test their beliefs about the likely outcome at trial and to evaluate the likelihood that the strength of their feelings today would translate into a hearty appetite for further, higher-stakes litigation two years down the line.  

No dice.

So What Can You Do?

I would love to deliver a stirring tale of a heroic mediator helping parties settle their dispute in the early stages before the threatened action and cross-actions were even filed.  But I can't.  This is more art than science and compared to my 25 years of experience as a litigator, I'm still a little green as a mediator after four years of full-time neutral practice.      

Let me just say this.  Mediating settlements in the early stages works more often than it fails, particularly if you do one or more of the following:

• hire a mediator who can rock and roll with the process rather than one who is a one-trick pony -- head-banger, or evaluator, or prophet of doom; peacemaker, or rabble-rouser or King of the Distributive Bargain -- your mediator should be able to play all or any of these roles as the situation demands;
• if you're angry and if you have villified opposing counsel or the opposition party, take a deep breath, sit down at your computer and write down the best, the mid- and the worst-case scenarios (I know you've done it already; but take a fresh look again right before the settlement conference)
• share these evaluations with your client
• if a trustworthy mediator with whom you've worked before suggests that it would be useful in joint session for your client to express his irritation, disappointment, anger or any other feeling that might interfere with his ability to make a rational decision, don't reject it out of hand 
• help your client de-demonize the opposition, reminding him that the "other side" is human and therefore fallible and is rarely downright evil
• remind your client that many disputes that seem to arise from malicious conduct actually stem from faulty communication
• know your bottom line and stick to it unless you genuinely learn something that makes you see the entire dispute in a different light, remembering that "a foolish consistency is the hobgoblin of little minds" 
• despite everything I've now said about litigants behaving irrationally, as I've written elsewhere in greater detail, Harvard negotiation gurus Deepak Malhotra and Max H. Bazerman suggest that negotiators too often confuse hidden interests and constraints with irrationality.  The mistakes and solutions when this is the case?  
  • Mistake No. 1: They are Not Irrational; They Have Hidden Interests -- find out what they are and you may well be able to resolve the dispute and settle the litigation without putting any more money on the table or making any further concessions;
  • Mistake No. 2: They are Not Irrational; They Have Hidden Constraints -- keep one ear to the ground for hidden constraints, explore them with the mediator, opposing counsel or the opposing party; often those constraints can be problem-solved away;
  • Mistake No. 3: They are Not Irrational; They Are Uninformed -- listen and respond; respond and listen.  You will find that EACH of you is uninformed about something that will likely make a genuine difference in the manner in which the litigation is resolved.
• If your opponent cannot or will not see reason, there's always the joy of just trying the darn thing.

______________________

**/  This thesis is based on the work of  Antonio Damasio as described by him in Descartes’ Error. 
 

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Max Kennerly over at Litigation and Trial has graciously and profusely responded to our call for comments about the road-blocks to achieving optimal negotiated resolutions to litigated disputes.

Because Max and I are straining toward the same goal every litigant does when the burdens of a lawsuit begin to outweigh its anticipated benefits, I'm going to include my readers in the conversation.

Our Interests are Adverse, Not Mutual or Intertwined

Max suggests that the hypothetical "business school" negotiated resolution doesn't provide litigators with much guidance in resolving litigated disputes because the buyer-seller-mutual-or-intertwined-interest template cannot be comfortably laid over a conflict between parties whose interests are entirely adverse.  As Max explains:  

The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.

Same with the plaintiff. Unlike buyers and sellers, who usually don't get much joy out of their 'conflict' as a conflict, the plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full"  compensation. 

The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic. 

Before moving on to adverse/intertwined/mutual interests, I want to emphasize that what the parties "interpret . . . as fundamentally non-economic" is the key to the settlement of litigated disputes -- not a roadblock. 

Nor can the feelings that accompany litigation be called  "emotional baggage" unless we interpret the desire for justice as pathology. 

This hunger for justice is so fundamental to our social relationships that even  primate relatives like  capuchin monkeys will deprive themselves of food if they sense it is being distributed unfairly.  In capuchin monkey land, injustice appears to consist of being required to do five times more work to "earn" the same benefits as another.  

People seek out lawyers rather than therapists to resolve the emotional issues that accompany conflict -- because they believe themselves to be victims of  injustice and lawyers are in the justice business.  Our clients have not simply suffered an injury (tripped over their own feet) but have a wrong (stumbled over a trip wire placed in their path by a malicious or careless actor).  We can explain until we're blue in the face that money is the only remedy the law can provide.  Our clients will continue to seek justice and will not easily settle for money alone.  

"The Unicorn Settlement"

Max asks that I acquaint him with the Unicorn -- the state "where two hostile parties on the verge of a lawsuit get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on" Unicorns. Excluding business disputes where the parties have an existing and potentially mutually beneficial on-going relationship, this type of settlement, says Max, is a myth.  He explains:

I entered the law expecting The Unicorn to be rare but real; by this point, I have been trained by defense lawyers not to bother to check for it. I still usually do, throwing out what I think is a perfectly reasonable offer early on, which is routinely ignored or dismissed by a letter that gratuitously refers to my claims as baseless, frivolous, or made in bad faith.

So that's my biggest question to you: how do you suggest I get defendants, prior to the courthouse steps, to even enter the mindset that there's a valid claim and mediation / settlement should be considered? Reframed in words closer to your post: what can I do to (a) get the joint session to happen and (b) ensure everyone's in the right mindset?

The Conditions in Which Unicorns Flourish

When I started practice -- in 1980 -- I did so in a small community -- Sacramento -- where everyone was a "repeat player" with everyone else.  Perhaps more importantly, you could file a suit in year one and try it to a jury in year two.  Not only defense counsel, but insurance adjusters, knew which plaintiffs' attorneys would try cases and which would not.  They also knew which ones could persuade a jury to bring back a hefty award.    

Though I only handled personal injury litigation for my first two years of practice (after which I changed firms and moved on to commercial litigation) I saw dozens of "unicorns" in my first few months of practice.  As the junior-most attorney in a small P.I. practice, I settled hundreds of cases without ever filing a lawsuit -- on the telephone with insurance adjusters.  (A really, really good reason to leave PI practice, but that's another story). 

I settled these cases in the world of "three times specials" at a time when and in a place where everyone knew one another and used a common metric to evaluate potential liability and damages.  In that environment, Unicorns flourished.

Unicorn Hunting in the 21st Century

Max isn't asking me to shoot ducks in a barrell here.  He's asking me to deliver the holy grail of mediation -- how to convene an early settlement conference in which the parties (and their attorneys) are united in a desire to settle litigation without protracted discovery or pre-trial procedural wrangling.  

I hate to keep leaving my readers on the edge of a satisfactory resolution, but I DO have work to do and will return to this -- and Max's further observations -- soon, really soon.  Stay tuned.  And join the conversation by leaving your own comments here.

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We've been having a blog-versation about joint sessions this past week thanks to attorney Gavin Craig, workplace conflict mediation trainer Guy Harris (see also An Attitude of Curiosity - continued) and Pennsylvania litigator and blogger Max Kennerly.

Kennerly says:

sometimes I don't want to discuss the case. Sometimes either we're at the end of the road or you're not even on our road, and I'm not going to humor you and your insufficient offers and your attempt to use social influence on me. Indeed, many of my best offers come after cancelling settlement conferences before they happen.

Just something to keep in mind. Every trick you know is a trick that can be played on you and/or your client.

While Craig recalls a mediation in which a joint session hardened the parties' positions as follows:

The mediator decided at the last minute that it would be nice to see if we could all meet and agree in a joint session.

In his defense, he had the advantage of reviewing the positions of both parties in their submittals. There was no warning that the mediator was going to try to help the parties come to an agreement in a joint session.

What I remember most was my client getting so incensed by the positions of the other party in the joint session. Unfortunately my client hardened his position – not helpful in mediation – and apparently the other party did the same. I think the theory about eye-to-eye meeting and negotiations is absolutely correct.

The problem is that parties bring so much emotion into a settlement discussion that I think they need to stay separate from the people creating the emotion before they can calmly assess the best course of action.

What interests me most about Craig's comment is this:

I think the theory about eye-to-eye meeting and negotiations is absolutely correct. The problem is that parties bring so much emotion into a settlement discussion that I think they need to stay separate from the people creating the emotion before they can calmly assess the best course of action.

I'm going to be writing about this conversation all week and invite others to please comment.

Right now, I'd like anyone interested in the resolution of conflict close to home (the neighbors; the  PTA President; the woman sitting in the cubicle next to you stripping laquer from her nails with industrial strength polish remover; the entire HR department; your boss, etc.) to read It Took a Villain to Save Our Marriage in the Style section of this Sunday's New York Times.

Here's the "money shot" for anyone who has ever mediated neighborhood disputes in a community mediation center as I do pro bono.

Then while the rest of the block kissed goodnight, I stomped down the street in the dark to Blocker’s house and pounded on his door.

He opened it, shirtless and calm; it unnerved me. I’m sure I looked crazed. I felt my face puff up. “Stop taking our signs!” I said.

There was a shift. It was he who had the advantage now — I was on his porch, and drunk.

But Blocker didn’t say anything mean. He didn’t seem angry, as he should have been, that I had bothered him late at night; he didn’t threaten to call the police. We stood close, inches away. There was an intimacy in our strange hate.

“I didn’t take them,” he said. “Seriously. The city picks them up sometimes. I know where they put them. I could check if you want.”

No, I didn’t want. But I thanked him, and walked home both shaken and comforted, and thinking Anthony would kill me if he knew I had crossed enemy lines like that, alone. I didn’t tell him.

There was one more encounter. Blocker drove by me in his car. He slowed and rolled down his window, and instead of grunting or sneering, he said, “Did you find your signs?”

“No. I didn’t look.”

We exchanged a few more words — about the weather, his dogs — but it was quick. He drove off, and a few weeks later we moved.

A trained and skilled mediator would take advantage of these two fleeting moments of concern on the part of "Blocker" who is the bully in this story with a heart-rending conclusion. 

Read it?

Now assume that these people -- all three of them and maybe a few additional neighbors as well -- belong to a homeowners' association with the power to fine the HOA "outlaw," making the fines a lien against his property.  Now its a legal dispute.

Ask yourself, what do the parties' legal positions have to do with the resolution of the conflict?

Leave your thoughts here -- down in the comments section -- and I'll be back soon to discuss the New York Times conflict resolution hypothetical based not only on my experience mediating the resolution of litigated commercial disputes, but also based on my pro bono community mediation experience and on the studies that earned me an LL.M that's purportedly not worth the paper its printed on (a judgment that could be just as easily applied to my Bachelors Degree in English Literature were it not for its transmogrification into a ticket to practice law).

Bonus Question:  do we really want to dedicate our lives to the satisfactory resolution of conflict -- which is what the law, after all, is all about -- or would we rather, like the author of It Took A Villain, take the pleasure to be had in the state of high dudgeon, self-righteousness, and passionate engagement with someone who is an easy target to blame for our own unhappy life circumstances?

Double Bonus Question for Lawyers Practicing in Los Angeles:  Would you let the Los Angeles Superior Court choose your trial attorney or your marriage and family counselor from a panel of people who have had 28 hours of training in their "professional" field of practice just because the first three hours are free?  

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