When it comes to paying (or not paying) employees, the cri de coeur of American business is not yes, we can but because we can.
We don't provide our employees with health care insurance because we're not required to. We pay them minimum wage because we can.
We don't pay our interns because they've been convinced by career placement counselors, their parents and American business, that there are so many over-qualified people to perform the largely clerical tasks they're "hired" to do that they have to work for free.
See PayGenY for all the many reasons this is actually, legally and morally wrong. And it pains me deeply to say that friends of mine who could afford to pay new college grads at least minimum if not a living wage, ask them to work for free because they can.
What has happened to our moral compass?
What has happened to our understanding that the wheel of fortune will always turn and that when it turns down for those at the top, it's a feast for sharks unless the fallen has treated his partners and subordinates as valuable members of a team, without whom he could not accomplish the job he's doing, let alone make the money and accrete to himself the power he has taken for himself.
I have seen this in action too many times for it to be a one-off.
The first shall be last.
It was ever and will ever be so.
The President of PETA, interviewed by Alec Baldwin in his must-hear podcast, Here's the Thing, noted that American business justifies animal cruelty so long as it can connect mistreatement to a penny or two increase in the price of its stock. The same is true for corporate human capital. The shock of the recession and its aftermath (socialize the loss and privatize the gain) has caused everyone from highly compensated senior equity partners to the last-hired guy in the mail room to react the way rats do when the man in the white lab coat throws the switch on the electrified grid beneath their feet.
They either attack one another or go catatonic.
Big Law in particular is treating its people very badly because it can. The people from HR, sometimes with security officers beside them, are walking up to legal secretaries with twenty-five to thirty years of experience and terminating them on the spot, hovering over them as they pack their things and walking them out the door.
I call this the new American perp walk.
If HR knew what it was doing, it would know this - people's claim-making inclinations are highly colored by the manner in which they are terminated. As Joan Didion so eloquently reminded us,
We tell ourselves stories in order to live. The princess is caged in the consulate. The man with the candy will lead the children into the sea. The naked woman on the ledge outside the window on the sixteenth floor is a victim of accidie, or the naked woman is an exhibitionist, and it would be 'interesting' to know which. We tell ourselves that it makes some difference whether the naked woman is about to commit a mortal sin or is about to register a political protest or is about to be, the Aristophanic view, snatched back to the human condition by the fireman in priest's clothing just visible in the window behind her, the one smiling at the telephoto lens. We look for the sermon in the suicide, for the social or moral lesson in the murder of five. We interpret what we see, select the most workable of the multiple choices. We live entirely... by the imposition of a narrative line upon disparate images, by the 'ideas' with which we have learned to freeze the shifting phantasmagoria — which is our actual experience.
If we terminate employees disrespectfully, subject them to humiliation and treat them unjustly, the story they will tell themselves about their recollected work experience will be one of disrespect, humiliation, and injustice. If we terminate them respectfully, with sufficient notice and with offers to help them make the transition, the story they will tell themselves about the past will reflect the present and claiming-activity will be reduced.
The LOC describes this archive as a “selective collection of authoritative sites” associated with law schools, research institutes, think tanks, and other expertise-based organizations. “These blogs contain journal-style entries, articles and essays, discussions, and comments on emerging legal issues, national and international,” the LOC says.
Despite what the description says, several practitioner blogs, not affiliated with any school or organization, are included in the archive. Among them are Marc Mayerson’s now-defunct Insurance Scrawl, Howard Bashman’s How Appealing, Curacao lawyer Karel Frielink’s Karel’s Legal Blog, Victoria Pynchon’s Settle it Now Negotiation Blog, Scott Greenfield’s Simple Justice, Ken Lammer’s CrimLaw, Diane Levin’s Mediation Channel, and Jeff Beard’s LawTech Guru.
In a post this week at the Law Library of Congress blog In Custodia Legis, Matthew Braun, senior legal research specialist, provided further background on the archive. It was created, he says, “so that the legal events detailed and analyzed in the blogs of today can be studied for years to come.”
In a post this week at the Law Library of Congress blog In Custodia Legis, Matthew Braun, senior legal research specialist, provided further background on the archive. It was created, he says, “so that the legal events detailed and analyzed in the blogs of today can be studied for years to come.”
"Studied for years to come."
The LOC describes the archived law blogs as a selective collection of authoritative sites associated with law schools, research institutes, think tanks, and other expertise-based organizations.
Even sweeter but hilarious to anyone who survived "intro week" in law school. The dictate then was as follows: First you cite Harvard and Yale. Or as my Yalie husband would correct, Yale, then Harvard. After that, you took a trip through the legal Ivy League. Only if you were truly desperate did you cite, say, the Constitutional law professor at Chapman who is the only ultra-conservative voice against SCOTUS' recent Constitutiuonal stamp of approval on modernity (think Prop 8, DOMA).
I'll add links to all these other great legal blogs anon. In the meantime, click on Ambrogi's post for all the links. And thanks to my colleague, Don Philbin, for emailing me the link with a note of congratulations. His ADR Toolbox is must-read for all ADR practioners, most particularly those who appear before mediators and arbitrators.
As Colin Powell said, the most important information to gather in international diplomatic negotiations is "the other guy's decision cycle." And Don is the smartest ADR practitioner in the room. Know his decision cycle and your facilitated negotiations will deliver more than you ever dreamed they could.
We were in hour ten of a multi-party mediation convened to settle a million dollar copyright dispute among three Los Angeles garmentos. Counsel for the target defendant was demonstrating righteous indignation for my benefit. He was packing his trial bag, fuming about the other parties’ bad faith and the waste of time the mediation had been.
I don’t highly recommend this negotiation tactic but I see it a lot.
“We’re leaving,” counsel shouted, gesturing that his client should follow.
I too have a temper. I don’t know a litigator who doesn’t. But I tuck it down deep when I’m playing the role of “neutral.”
“I don’t think that’s a good idea,” I responded in the low, slow, patient tone of voice you use with over-excited children and frightened animals.
“And why do you think that?” he snarled.
“Because the first thing your client said to me was that failure here today was not an option. He’s broke. He’s nearing retirement. He’s beaten. He can’t sleep at night. He needs me to get the best deal possible and then he desperately needs to take a vacation.”
The client, who hadn’t moved a muscle since this exchange began heaved an audible sigh of relief and said to me “thank you so much. I’ve been saying that for two years and no one has ever acknowledged it before.”
This is where legally astute resolution of litigation by executives and managers comes in.
A mistake that lawyers sometimes make is failing to ask for what they want. If they do want an evaluation they can ask for it when they hire the neutral. There are processes variously known as neutral evaluation, non-binding arbitration, or early case assessment which are designed specifically for this purpose. They can be used independently or they can be combined with mediation.
I was once hired to give a neutral evaluation in a commercial real estate case. The parties told me at the outset that while they were interested in exploring settlement they were really interested in my opinion on the merits. So we conducted a mediation that included a neutral evaluation. Not only did this meet their needs, the evaluation was given in a confidential setting and could not be used as evidence if they did not settle.
The point is that both parties wanted the process to be evaluative. It was not a situation where one party was expecting the mediator to be evaluative and the other party wanted the mediator to refrain from doing so.
When parties hire a mediator, they need to be of the same mind about the process. Otherwise the result will be like splitting a steak with your partner when one of you likes it rare and the other likes it well done. Somebody is going to get indigestion!
I'm dashing this post off between mediations. Here are statements I will not have to hear you make if you are a lean, mean negotiation machine.
"If she'd asked for a reduction in her commercial lease rate in light of the downturn in the economy, we would have negotiated a decrease in her yearly rent."
"If they'd come to me to discuss the matter before they hired lawyers, we could have resolved this ourselves. Now that I've spent $___________ in attorneys' fees, I don't see anyway of coming to a resolution short of trial."
"I don't respond well to ultimatums. Tell them we'll see them in Court."
(requiring me to reframe the "ultimatum" as an effort to suss out their bottom line and to say, for the ten thousandth time, "if you're moving in the direction of one another, there's still a possibility that your true bottom lines overlap so let's keep negotiating")
"I'll be frank with you, my true bottom line is . . . . . "
No no! Please do not tell the mediator your "true" bottom line. If you're telling her the truth (something she does not assume) then she will drive the negotiation toward your bottom line. Any mediator will. They can't help it. Any number that enters the negotiation environment in a circumstance of uncertainty about value will serve as an anchor, strongly influencing the outcome in every exchange of offers and counter-offers.
On the other hand, if you think you can fool her with a false bottom line, you are a brown belt and may proceed.
"They will never agree to my terms."
If the mediator says she doesn't agree with you, listen up! She's holding confidential information from the other side. Just as importantly, only you know what your actual terms are, so no one can predict the future of any negotiation because no one knows what their bargaining partners' true bottom lines are. Don't get ahead of yourself. Be patient. As long as you're moving in the direction of one another, a deal is more likely than not.
"They're negotiating in bad faith."
There's no such thing as "bad faith negotiation."
Are they lying to you about a material term of the potential agreement or facts that drive your decision? If so, put it in the deal memo as a condition precedent to your obligation.
"He's scum (a liar, evil, contemptible, etc.)."
That may be true. It should not, however, keep you from entering into a deal that reduces your economic risk to an acceptable level at a cost that makes business sense to you.
"O.K., but they have to pay your full fee."
I've just helped the parties settle a nine-figure case with five plaintiffs and twenty defendants and you want them to pay my $5,000 fee. You're quibbling over $2,500 after paying $34 million to settle this case? You're trying to save face, which is fine. But is it worth making your opponent lose face and potentially blowing up the deal you've just spent fifteen hours and tens of thousands of dollars negotiating?
Architect David Denton spends much of his time on a lush tropical island, where he experiments with cutting-edge building designs and creates spaces for artists to showcase their work.
Never mind that the island only exists in the virtual-reality world of Second Life, a popular online venue where people interact via digital avatars. Denton, 62, said he purchased the island for about $700 — real money, not virtual cash — from its former owner, and considers it his property.
Here's the thought this article triggers. If 90% of all litigation involving people (I'll skip corporate litigation and litigation brought to vindicate rights such as that declaring Prop 8 unconstitutional) will end with a retired Judge telling the people that litigation is too expensive and a jury trial too uncertain for them to bear, why don't we just litigate virtually (with Linden dollars!) giving the parties the experience of litigation that will eventually drive them to settlement?
I'm sure some smart programmer can come up with an algorithm for most personal disputes, including both factual templates and the application of simple legal principles. A "ticker" could keep track of the dollars your virtual attorney is billing on your law suit's screen everyday. Continuances, discovery motions, pre-trial proceedings and depositions could all be simulated.
Then the parties return from the virtual life of Second Life Litigation and sit down in the old fashioned way to negotiate a resolution to their dispute or, if necessary, hire a village elder trained in conflict resolution, sometimes called a mediator, to help them do so.
A criminal defense lawyer I know used to ask me "just exactly what is it that you 'litigators' do everyday anyway?'"
What we do, my friend, is discovery.
Saying that discovery is part of litigation practice is like talking about the wet part of the ocean.
How do you know when you're finally finished with legal practice? When do the heavens open up and angels descend with the news that you've finally done enough and may now go and do that which you truly love?
It's usually a discovery moment.
For one of my former law partners, it came on the heels of a five page meet and confer letter. Single spaced. When my friend's secretary came into her office with the written response, the expression on her face ranged between shock and amusement.
"You're not really going to send this, are you?"
"Yes, I am. Let me sign it."
"No no no no no no no. I can't let you do this."
"Yes you can. Let me sign it."
Here's the response that struck fear into the heart of an overworked legal secretary:
And yes. She sent it.
For those of you who have not yet reached the promised land of Discovery Whatever, I've got very very very good news for you.
This is, of course, the $64 million dollar question. Or the $640 million dollar conundrum. Or the $6.4 billion dollar SNAFU.
Abandon all hope . . . .
The answer: make a checklist and follow it!
Atul Gawande's Checklist Manifesto - How to Get Things Right is not about ordinary lists - those "to do's" we never get around to; the recipe for gramma's extra fudgey brownies; or, even the T-minus rocket launch count-downs (forcing functions) which my friend the astral-orbital engineer has been holding his breath through this week (his T-minus rocket count aborted at six seconds last night).
I'm talking about communication check-lists of the sort used by our friends in the sky-scraper business - the ones that have achieved this jaw-dropping "annual avoidable failure rate":
What kind of check-list does that? In the construction industry, it's a "submittal schedule" - a checklist that doesn't
specify construction tasks; it specif[ies] communication tasks. For the way the project managers dealt with the unexpected and the uncertain was by making sure the experts spoke to one another - on X date regarding Y process.
The submittal schedule assumes that if you get the right people together to talk things over as a team, serious problems can be identified and averted. It's that simple and it works as well for physicians dealing with routine but complex collisions between genetics and circumstance as it does for contractors and jet pilots. Checklists, it turns out, can solve problems like raising a child . . . . or resolving disputes.
Can Gawande's "communication checklists" be good news for in-house counsel trying to prevent litigation?
Yes they can. And they already exist. Dispute resolution techniques are scalable -- the procedure described can be used for fights over shared lockers equally well as conflicts over shared political boundaries. Scalability means that the system for solving the small problem can also be used to solve the big one by "adding new functionality at minimal effort."
The even better news for in-house counsel is the fact that you do not need a "mediator" to follow this list. You do need enhancements, however, to take you from the fight over a shared school locker to the lawyer threatening to sue your company for defamation or products liability or antitrust violations or securities fraud.
The Middle School Checklist today.
STEP I: SETTING THE STAGE: INTRODUCTION AND GROUND RULES
Mediators: introduce themselves; explain the process of mediation and that it is voluntary; explain that mediators are neutral; explain confidentiality; establish a safe and comfortable environment; and, get agreement on the following ground rules:
No name-calling or put-downs.
Agree to solve the problem.
Be willing to listen.
STEP II: DEFINING THE PROBLEM
Mediators: Ask who will talk first; ask what happened; ask how he or she feels about what happened; summarize each statement; and, give each party approximately equal time to talk.
STEP III: IDENTIFYING THE ISSUES
Mediators: Use active listening skills (repeating, summarizing, clarifying); create an agenda; focus on issues important to both parties; stay neutral; ask if any issues have been missed; and, identify areas of miscommunication or wrong assumptions.
STEP IV: FINDING SOLUTIONS
Mediators: Address issues one at a time; brainstorm solutions; ask what each party would like the other to do differently in the future; ask what each party can do to resolve the dispute; and, ask what can be done differently if the problem occurs again.
STEP V: AGREEMENT AND CLOSING
Mediators: • Write specific agreements for each issue outlining who will do what,
where, how and by what date; balance the agreement so both parties take responsibility for the solution; be sure the agreement is realistic for each party; be sure the agreement really addresses the issues; ask if any issues have been missed; ask parties to prevent rumors by telling people the dispute is resolved; and, thank the parties and congratulate them for their hard work.
[P]laintiffs’ articulations of their litigation objectives rarely correlated with legal actors’ perceptions.
In fact, a regular and conspicuous occurrence was the failure to mention financial compensation as an objective at all unless probed (occurring in 65% of interviews).
Instead, what plaintiffs recurrently repeatedly was a lexicon of non-fiscal, extra-legal objectives for litigation. The issue of ‘principle’ was prominent for plaintiffs as revealed in the various objectives they passionately spoke about. ‘It’s not about the money’ was a recurrent theme throughout. Many of the comments concerned dignity and respect after the injury, inability to be heard, refusal to listen, dismissal and victim blaming.
Moreover, plaintiffs’ extra-legal objectives did not appear to be affected by the passage of time, as there were no marked disparities in the way plaintiffs spoke of why they sued and what they wanted from the civil justice system as between plaintiffs who had commenced litigation three to four months earlier (interviewed subsequent to court-mandatory mediations) and claimants who had been litigating for several years (interviewed after voluntary mediations of cases already on trial lists).
Here are the results from the question: what are your aims in mediation?
The disparity in mediation aims of plaintiffs and plaintiff lawyers revealed important differences in what each planned for mediation in terms of how to resolve the same case. Other than wanting settlement, the mediation objectives of plaintiffs and plaintiffs’ lawyers were diverse in all categories. For instance, though some plaintiff lawyers noted their clients wanted defendants to admit fault (37%), regardless of feasibility not a single one sought this at mediation. In comparison, virtually all plaintiffs (94%) sought fault admissions at mediation. Similarly, plaintiff lawyers never mentioned wanting to hear defendants’ explanations of the disputed incidents. Again this was something that most plaintiffs desired (71%). Finally, as compared with the bulk of claimants (88%) who sought apologies at mediation, only a minority (32%) of plaintiff lawyers did (though almost half remarked that apologies were important for their clients).
We’re celebrating Mothers Day by posting Blawg Review #263 at the She Negotiates Blogfor one obvious and some not so obvious reasons. The obvious reason is the word “She.” The not-so-obvious reasons are: (1) Mother’s Day was a peace and reconciliation movement before it was a holiday; and, (2) peace exists only when we have the political will to seek and the negotiation tools achieve the resolution of conflict.
I'm sure you've noticed that we're celebrating negotiating women here this month in honor of International Women's Day and National Women's History Month. Other than tomorrow night's free negotiating women teleseminar with super coach Lisa Gates, I'm celebrating by posting in one place all of my articles on negotiating women.
If you're entering the job market, you'll want to check out Forbes' Magazine's Tips for Negotiating Your First Salary. If you do not negotiate your first salary, you stand to lose half a million dollars over...
Practicing law, particularly litigation, is often frustrating, sometimes humiliating, and frequently simply dispiriting. On the other hand, the practice of law can be thrilling, intellectually stimulating, challenging, absorbing, and a darn good way to make a good living. When you...
(Right, women protesting, 1912. My own grandmother was 12 years old at the time this photo was taken. By the time she was old enough to vote in 1921, she could vote) Why women's voting rights and Hillary Clinton's DNC...
If you're a certain age, you'll remember women's magazines as mostly "Can This Marriage Be Saved" (The Ladies Home Journal to which PWNSC members Cathy Scott's and Cordelia Mendoza's mother was always submitting articles) or 101 Things to do with...
Yesterday, we talked about the different negotiation styles of men and women. Today, we're going to explore how men can benefit from learning women-speak and women can benefit from learning man-talk. All of the data relied upon and excerpted below...
Although I am indisputably a "woman lawyer," I have never thought of myself in those terms. I'm a lawyer. And I'm a woman. I'm also a writer, a step-mother, a wife, a daughter, a river rafter, and an aficionado of...
(and, yes, I am not only old enough to remember the "Second Wave" Women's Movement, I took a quite serious role in it, first as an unpaid volunteer and later through the federal government's "Program for Local Service" at...
Thanks again to Vicki Flaugher of SmartWomanGuides.com for inviting me to have this conversation with her about ways in which women can and do maximize their bargaining power. And yes we do talk about negotiating the purchase of an automobile...
In part two of Vicki Flaugher's interview with me, we discuss ways in which women can comfortably respond to aggressive zero-sum distributive bargainers and negotiate better business deals using their natural strengths. I'd like to once again thank Vicki Flaugher...
Video below is part I of an interview on negotiation challenges, strategies and tactics for women with Vicki Flaugher, founder of SmartWoman Guides. The full audio of the video is here along with Ms. Flaugher's kind comments about our conversation....
How to Negotiate Anything: Free Intro Thursday, Mar 18, '10 8pm EST Some researchers say that women's failure to negotiate working conditions, salary or other compensation--along with their hesitancy to seek what they're worth when they do negotiate--is one of...
Whereas American women of every race, class, and ethnic background have made historic contributions to the growth and strength of our Nation in countless recorded and unrecorded ways; Whereas American women have played and continue to play a critical...
When I posted Negotiating Gender: Why So Few Women Neutrals? I had not yet found a source for the statistical representation of women neutrals on the American Arbitration Association Panel. I've now located an article on the AAA website from...
Although most of the major providers of alternative dispute resolution services tout their commitment to diversity in the ranks of their neutrals, the coloration of nearly all ADR panels continues to be white; the nationalities European; and the gender male....
Thanks to Ed. at Blawg Review for passing along this (somewhat rambling but well worth watching) lecture at Stanford University by Deborah Kolb, the Deloitte Ellen Gabriel Professor for Women and Leadership at the Simmons College School of Management....
Yes, Virginia, lawyers do "win" mediated settlement negotiations every work day. They do so by:
their reputation for success at trial;
their ability to choose the right moment to first discuss settlement;
their ability to "control" their team and their client ("control" being a legal term for good client relations arising from top notch client communication skills);
their negotiation skill set - both in terms of long-term strategy and "at the table" tactics;
their persuasive skill set - both with opposing counsel and with the mediator;
their ability to conduct a risk-benefit analysis that approximates the true likelihood of their probable success at trial;
their determination to make aggressive but reasonable first offers;
their possession of and willingness to stick to a set of flexible "bottom lines" that give them sufficient room to "horse trade" and "hang the meat low enough for the dog to smell it;
their ability to bring the right people to the table at the right time; and,
their ability to walk away without dramatics if the other side is unwilling to negotiate in the realm of reality.
Some of these skills are in all litigators' arsenals. Where most litigators are the weakest is in the negotiation of settlements. I know it not only because it was my greatest area of weakness ("I'm paid to win not to settle") but because I see it evidenced in mediation when attorneys bargain half the day away in the useless strato- and nano-spheres.
Here are two new resources you should have at hand every working day. "Having blog resources at hand," by the way, means having a google or other news reader to send you RSS feeds.
Decision Tree Analysis - the Decision Tree Analysis Blog by PaperChace. There's a ten-day free trial of PaperChace's decision tree analysis software for mediators, a free trial I'll take advantage of once the $^%@# book is finished (any day now, really). Laywers love numbers in the way only people who don't understand them can. I've had cases settle promptly as soon as everyone has put themselves to the task of making numeric estimates of their chances of success on the merits at any given stage of the litigation. For making the uncertain certain and depressing overly optimistic client expectations there's nothing quite like numbers. Do check it out.
There's another mediation blog to read as well, but not simply "yet another" blog by yet another mediator. This is Lee Jay Berman, one of the best and busiest mediators in town, the teacher of thousands in Pepperdine's internationally known and respected "Mediating the Litigated Case" and President of his own mediation think-tank and training station - the American Institute of Mediation.
The blog, Eye on Conflict, will deliver to you free of charge the wisdom, education and training you'd otherwise pay thousands of dollars for. Listen, I spent two full years at the Straus Institute earning my LL.M in dispute resolution and every time I talk to Lee Jay he tells me something that improves my ability to help lawyers negotiate settlement 100%. Today Lee Jay mourns the passing of a giant in our field - Richard Millen. As you read Lee Jay's tribute, you come to understand just how deeply embedded he and his vision are in mediation theory and practice in Southern California.
Put these two dynamite resources in your news reader and be as good a settlement negotiator as you are a litigator and trial attorney.
Thanks Roger! This didn't just make my day; it made my year!
Plaintiff’s Motion to Compel Acceptance of Lunch Invitation
The Court has rarely seen a motion with more merit. The motion will be granted.
The Court has searched in vain in the Arizona Rules of Civil Procedure and cases, as well as the leading treatises on federal and Arizona procedure, to find specific support for Plaintiff’s motion. Finding none, the Court concludes that motions of this type are so clearly within the inherent powers of the Court and have been so routinely granted that they are non-controversial and require no precedential support.
The writers support the concept. Conversation has been called “the socializing instrument par excellence” (Jose Ortega y Gasset, Invertebrate Spain) and “one of the greatest pleasures in life” (Somerset Maugham, The Moon and Sixpence). John Dryden referred to“Sweet discourse, the banquet of the mind” (The Flower and the Leaf).
Plaintiff’s counsel extended a lunch invitation to Defendant’s counsel “to have a discussion regarding discovery and other matters.” Plaintiff’s counsel offered to “pay for lunch.” Defendant’s counsel failed to respond until the motion was filed.
Defendant’s counsel distrusts Plaintiff’s counsel’s motives and fears that Plaintiff’s counsel’s purpose is to persuade Defendant’s counsel of the lack of merit in the defense case.
The Court has no doubt of Defendant’s counsel’s ability to withstand Plaintiff’s counsel’s blandishments and to respond sally for sally and barb for barb. Defendant’s counsel now makes what may be an illusory acceptance of Plaintiff’s counsel’s invitation by saying, “We would love to have lunch at Ruth’s Chris with/on . . .” Plaintiff’s counsel. 1
1 Everyone knows that Ruth’s Chris, while open for dinner, is not open for lunch. This is a matter of which the Court may take judicial notice.
Read on by clicking on the .pdf above.
And how could I resist adding the "will you go to lunch!" scene from David Mamet's Glengarry Glen Ross.
If you're following this blog but not Diane Levin's Blog The Mediation Channel, I have good news for you. Diane is an extremely focused, disciplined and lively writer. She's also one of the brightest and most canny negotiators, mediators and negotiation trainers I know.
With the goal of promoting clearheaded and reasoned debate and improving discourse, each month I skewer a different fallacy.
Before giving you entree to this excellent series, let me first note that these arguments do not justify any movement in your negotiation position. Remember - you need a new number and a new reason to counter that new number. If your mediator or negotiating partner expects you to give up something, he'd better have a darn good reason for you to do so. If you're a lawyer representing a party, you can feel your client figuratively or literally tugging on your sleeve when you offer more or agree to accept less in the absence of a justification that makes business sense.
The Misleading Ellipsis (to which I add this caution ~~> the quickest path from respected advocate to deceitful scoundrel is the misleading ellipsis - Judge, Arbitrator, Mediator and Opponent will all distrust your bona fides from that date forward; if you can't think of a better argument, fall on your sword on this issue and create a better one just over the next hill).
Diane adds one new fallacious argument every month. I'll endeavor to keep up with her. But more reliably, get her RSS feed, add it to your google reader and never again be without the wisdom of this brilliant mediator and negotiation trainer and consultant. That's her smiling face at top. Visit her often! at The Mediation Channel.
Conflict is in the house. The evil fairy surrounded the castle with deadly thorns. The "good" fairy put everyone in the castle to sleep. Will you be the valiant Prince in your own dispute story? Or are you the prize? The beautiful one who would prefer to remain unconscious rather than address the great battle between good and evil represented here? Did you hire a lawyer to resolve your dispute for you? Will he make it to the castle in time? Or will he spend the bulk of his energy erecting more obstacles to prevent your adversary from reaching you. By the time both champions reach the castle, will everyone be too bloodied and broke to rise from your bed and put your house back in order?
The not so secret opinion among mediators is that attorneys make settlement more difficult. Just as lawyers are heard to say that "litigation would be great if it just weren't for the clients" (a "problem" only class action plaintiffs' lawyers have actually resolved), mediators tend to say "mediation would great if it weren't for the lawyers."
Esteeming the rule of law in America as I do (especially in the recent era of its greatest peril) I have never seen lawyers as a problem in facilitating settlement of the lawsuits they have been eating, drinking, sleeping and, dating for years longer than I've spent reading their briefs and engaging in some pre-mediation telephone discussions.
I can't say lawyers are a problem because: (1) they're my job; and, (2) they're "my people" in the "tribal" sense. A few bad apples aside, lawyers are among the hardest working, most ethical, creative, multi-talented professionals I know. And they are pretty much solely responsible for fighting the battle, on every common weekday, to preserve the rule of law as a bulwark against tyranny on the right and anarchy on the left.
Let's start with this particularly widespread canard from the article:
Attorneys may delay the settlement of a dispute through mediation for financial reasons. For example, the payment of professional fees on the basis of hours worked could motivate the attorney to delay the settlement of the dispute to increase the number of hours billed to the client (citations omitted). Such non financial reasons as a desire to build or preserve a reputation for “hardball negotiating” in highly publicized cases could also motivate an attorney to delay settlement of the dispute [which the authors don't mention often results in a far better outcome for the client]. In addition, attorneys’ (or their clients’) commitment to or belief in their case based on questions of justice or other principles [which are worth, in my opinion, greater attention that purely monetary outcomes] could also delay settlement until “defending the principle becomes too costly” (citation omitted). Finally, attorneys may wish to justify both their role and their fees with unnecessary interactions./1
Are we mendacious, self-serving, parasites of the "justice system," feathering our own comfortable nests as we attempt to preserve the "outdated" notion that the justice system is capable of delivering justice? I don't believe so, but let's not get all anecdotal about these questions when we have cold, hard statistics within reach. What were the results of this study on the way in which attorneys might "get in the way of" a successful mediation?
Here's the bottom line assessment (please read the article yourself to draw your own conclusions).
The empirical data we collected in this study indicate that the presence of an attorney in a mediation does not significantly affect the settlement rate, the time needed to reach an agreement, the perceived fairness of the process, the parties’ level of satisfaction with the agreement, or the parties’ level of trust that the agreement will be honored. These results indicate that attorneys have much less impact than is claimed by those mediators who do not welcome their involvement in the mediation process.
Nevertheless, the results also demonstrate that the presence of an attorney does affect mediation outcomes in at least two ways: by reducing the parties’ level of satisfaction with the mediator’s performance and by reducing the level of reconciliation between parties.
So the Myth Busters of this study conclude that attorneys:
don't "significantly affect the settlement rate" /2
don't significantly affect "the perceived fairness of the process";
don't significantly affect "the parties' level of satisfaction with the agreement; and,
don't significantly affect the "parties' level of trust that the agreement will be honored."
This is the subjective viewpoint of the litigants, mind you, in a dynamic where the mediator often openly attributes the success of the mediation to the clients' attorney - an observation which is more deeply true than most mediators would care to admit with all their white horse hi-ho silver, magic bullet off-to the-rescue enthusiasm.
What did litigants report to the authors of this article? They indicated that attorneys adversely affected mediation outcomes in two ways: (1) they reduced the parties' "level of satisfaction with the mediator's performance"; and, (2) they "reduced the level of reconciliation between the parties."
Of all of the purported effects of attorneys' presence at mediation - without whom, it must be noted, the parties would not likely be induced to sit down and mediate at all -- the only significant perceived difference is the failure of the mediation process to reconcile the parties - something in which the legal system has little to no interest.
Please read the article for proposed solutions to the reconciliation issue. As to the remainder of the study's findings, I have this to say:
whenever two or more people are gathered together, the dynamics of the group more profoundly affect the outcome than do the contributions of any individual member of the group. Our "reality," especially as it appears in a group setting, is "co-created." See the New York Times must-read article on the Psychology of Terrorism and Retail Marketing at Google Books (the latter noting that because people live in a social world which is co-created in social interaction with others . . . . [they] can be thought of as both products and producers of the social world." Id. at 218.)
try as you may, you will never be able to untangle the threads that create the intricate tapestry of a settlement; every member contributes something invaluable without which the precise result could not possibly have been achieved.
who is therefore responsible for the good and who responsible for the purportedly bad results of mediation? That's easy: EVERYONE IS.
That being the case, we are all responsible for our outcomes - whether our contribution is "negative," i.e., resisting settlement, for instance, or "positive," i.e., problem solving the reasons given by Mr. Negative that the case simply can't settle on terms acceptable to all. Remember your University philosophy class? Thesis, Antithesis, Synthesis. We need people willing to state the negative to problem solve it positively. The relationships cause the outcome, not one member of a group unless that member is a tyrant with loyal troops at his command.
If you'll allow me a literary reference that justifies my own collegiate career and says far more eloquently than I ever could why we're all accountable, I first give you one of my favorite authors, Paul Auster (who you may remember as the screenwriter of the movie Smoke).
The world can never be assumed to exist. It comes into being only in the act of moving towards it. Ese est percipii. Nothing can be taken for granted: we do not find ourselves in the midst of an already established world, we do not, as if by preordained birthright, automatically take possession of our surroundings. Each moment,each thing, must be earned, wrested away from the confusion of inert matter, by a steadiness of gaze, a purity of perception so intense that the effort, in itself, takes on the value of a religious act. The slate has been wiped clean. It is up to [us] to write [our] own book.Paul Auster,The Decisive MomentfromThe Art of Hunger.
The second excerpt I will leave for your thoughtful consideration is by the greatest scholar of comparative religions to ever inhabit the planet - Joseph Campbell (skip the intro with the new age music).
Schopenhauer, in his splendid essay called "On an Apparent Intention in the Fate of the Individual," points out that when you reach an advanced age and look back over your lifetime, it can seem to have had a consistent order and plan, as though composed by some novelist. Events that when they occurred had seemed accidental and of little moment turn out to have been indispensable factors in the composition of a consistent plot. So who composed that plot? Schopenhauer suggests that just as your dreams are composed by an aspect of yourself of which your consciousness is unaware, so, too, your whole life is composed by the will within you. And just as people whom you will have met apparently by mere chance became leading agents in the structuring of your life, so, too, will you have served unknowingly as an agent, giving meaning to the lives of others, The whole thing gears together like one big symphony, with everything unconsciously structuring everything else. And Schopenhauer concludes that it is as though our lives were the features of the one great dream of a single dreamer in which all the dream characters dream, too; so that everything links to everything else, moved by the one will to life which is the universal will in nature.
It’s a magnificent idea – an idea that appears in India in the mythic image of the Net of Indra, which is a net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems. Everything arises in mutual relation to everything else, so you can’t blame anybody for anything. It is even as though there were a single intention behind it all, which always makes some kind of sense, though none of us knows what the sense might be, or has lived the life that he quite intended.
Lawyers, mediators, clients, experts, consultants, legal assistants, and, yes, even your spouse with whom you consulted before today's mediation, every one of them is part of the "net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems [so that] [e]verything arises in mutual relation to everything else, so you can't blame anybody for anything" and, by the way, we can't credit credit nor bear all the responsibility for anything. We are all capable. We are all accountable. And we all contribute something to the whole.
So we can stop pretending to be better than we are now. We can all put down the burden and shame of our own entirely human fallibility; the myth that we ever do anything without the contribution of others; and, the pretense that we don't behave as badly, or as well, as other people do. We're part of the team. We're in it together. Isn't that good news for the New Year?
And to give you a treat from having gotten this far, a scene that is all about seeing, from Paul Auster's Smoke.
1/ I'd be interested, of course, in what the authors consider to be "unnecessary interactions."
2/ This is a particularly interesting finding since mediators have also been found not to improve the settlement rate but only greater party satisfaction in several studies.
Don Philbin, the author of this must-read article (click on the image for the .pdf) on the reasons you walk away from negotiations fearing you've either left money on the table or paid too much for what you receive in exchange, is an attorney-mediator, negotiation consultant and trainer, and arbitrator.
Don is listed in The Best Lawyers in America (Dispute Resolution), The Best Lawyers in San Antonio, and the Bar Register of Preeminent Lawyers.
Don's ADR Toolbox where this article can also be found is an indispensable resource for all attorneys negotiating the settlement of a lawsuit or a business deal (wait a minute! the negotiation of a settlement is a business deal!)
And, it's not inconsequential that Don is one of the nicest guys I know. If you're going to spend a day or a week or a month with a mediator or an arbitrator, you deserve not only the brightest, most wise and best prepared arbitrator or mediator, you also deserve to have a little fun in the process because . . . you know . . . the money simply isn't worth the unhappiness that comes when dealing with . . . . the other sort too often.
Why does mediation work? For several reasons that I can think of [including] the flexibility to make a business decision. Commercial contractors and subcontractors are in a business, and they should be making business decisions. While one such decision can be to go to litigation; litigation is not always the best solution from a financial, or stress perspective. Construction professionals, with the assistance of construction attorneys, can come up with a creative way to deal with a problem and solve it.
Because Doug, Lee Jay and I spent the entire day yesterday talking about legal rights and remedies as well as legal procedure in the context of negotiating the resolution of litigation, I was once again engaged in the soul-searching that always accompanies situations challenging my loyalty to the adversarial/rights-remedies business and stimulates my enthusiasm for the interest-based, consensus building, collaborative, problem solving negotiated resolution business.
Before giving you an excerpt that should tempt you to download the article and put it on your nightstand, I want to say this: I work on the razor's edge of my lifetime career-investment in the adversarial system, on the one hand, and my new'ish passion for collaborative, interest-based negotiated resolutions to disputes, on the other. I spent 25 years as a warrior who rightfully took advantage of my adversary's weaknesses. I was not a problem solver. I was engaged in a fight to the death on a pre-determined field with rules in which I believed for causes I knew to be just. As a result, I approach all alternatives to the adversarial process with a litigator's skepticism, wariness and world-wearyness. There is no kumbya in me. It is only my intellectual curiosity that survived the beating my heart took from the world-weary, cynical, grizzled old defense attorneys who taught me how to practice law (as adversaries testing my mettle) in Sacramento thirty years ago.
Sic transit gloria mundi.
The engine that drives litigation's morality tale is that conflict resolution is a contest between parties, one of whom necessarily represents good and the other necessarily represents bad. As a result, litigation seeks to designate who has committed moral transgressions by breaching legal norms (or, from the perspective of the defendant, who wrongfully accuses others of having done so).
The Story of Mediation subverts these norms by transforming this familiar morality tale into a story of collaboration. This subversion begins through how mediation conceives of conflict itself. Implicit in the Story of Litigation is that conflict represents a breach of the norms of conduct, thereby ripping the social fabric in some way large or small. In contrast, in mediation, conflict is a norm of conduct, a necessary byproduct of humans having distinct experiences and personalities and needs. Conflict is thus not necessarily a disruption of the moral order, and, indeed, can sometimes be productive.
Mediation's normalization of conflict, however, cannot eliminate what appears to be a deep-seated human need to understand experience in terms of struggles and strivings. Humans have great difficulty perceiving events as generated by causes beyond our control - what Amsterdam and Bruner evocatively describe as an inability to see events as "One Damn Thing After Another." We must instead "shape them into strivings and adversities, contests and rewards, vanquishings and setbacks."
The meta-narrative of litigation maps these "strivings" and "vanquishings" onto the struggle of one party against another and enlists the aid of the court to vindicate justice on behalf of the wronged party. In contrast, the meta-narrative of mediation seeks to map these "strivings" and "vanquishings" onto a collaborative struggle to resolve conflict. This narrative casts all participants as players in a process - collaboration - that is focused on reaching the common goal of successfully resolving or transforming a dispute. This story has moral entailments because collaboration is accepted as a social and moral good. Unlike litigation, however, this story does not generate a binary moral universe that divides the good from the bad, but, rather, a universe that values collaborative striving to achieve common ground and resolution.
This story places mediators in a role that is very different from the role played by decision-makers in litigation. Rather than being heroes of moral vindication to whom wronged parties appeal for justice, mediators promote and model collaborative striving to overcome conflict. This plays out in many accepted techniques in mediation. Mediators, for example, often seek "commitment" from participants to the process of mediation, although mediators are careful not to extend this commitment to a commitment to agree. This commitment to process is a proxy for a commitment to collaborate to seek to resolve conflict, thus incrementally moving participants away from contested litigation and towards collaborative problem solving. Similarly, mediators often "reframe" participants' statements in order to emphasize "common ground." This is also an effort to move parties away from a morally charged contest and into collaboration. Finally, mediators encourage and model collaboration through a positive message of optimism and progress towards resolution, even when (or, perhaps, especially when) impasse appears likely.
Moreover, mediation approaches the narrative movement from Efforts to Restoration of Steady State in a very different way than litigation. Whether the Steady State is Restored or Transformed constitutes what I have earlier characterized as a "fork in the road" in the Austere Definition of Narrative. The very language through which litigants seek redress of grievances - to "be made whole," "to pay your debt society" (with its implication that payment of the debt would return the ledger to balance), even the word "remedy" - implies Restoration. In contrast, mediation tends to reject Restoration as a state to which the parties (and society as whole) should or even can return. Rather, mediation seeks Transformation on the part of all disputants so that conflict is resolved. It does so by embracing the notion that perceptions of the world (including perceptions of the actions of others) are unstable, thus enabling parties to appreciate alternative perspectives as a way to promote resolution of conflict. Mediation, therefore, does embody a plot that adheres to the narrative movement described by the Austere Definition, albeit in ways that are utterly alien to the morality tale of the story of litigation. The story of mediation can be characterized as follows:
Steady State: Whatever Each Party Views as Pre-Conflict
Trouble: Whatever Each Party Views as Constituting Conflict
Efforts: Collaborative Striving To Overcome Conflict as Modeled and Promoted by Mediator
Transformation of Steady State: A New Relationship Among Parties
While reading this opinion (or simply this post) think about Carrie Prejean's accusation that Larry King's question to her -- "why did you settle" --was "completely inappropriate" because (presumably) her thought process was protected by mediation confidentiality.
In yet another 2-1 opinion on mediation confidentiality -- Cassel v. Superior Court -- California's Second District Court of Appeal grapples with hard facts that made bad law.
In conversations between litigation counsel and its client, Cassel, held on the days immediately preceding mediation as well as on the day of the mediation itself, Cassel allegedly told his attorney - Wasserman - that he would be willing to accept something north of $1.25 million to settle the case. On the day of the mediation, Cassel signed a settlement agreement providing for payment of $1.25 million. Cassel thereafter sued his attorney for legal malpractice, alleging that Wasserman "forced him to sign the settlement agreement for $1.25 million, rather than the higher amount he had told Wasserman . . . was acceptable." (if you're interested in the 411 on mediation advocacy malpractice, see my recent post Yet Another Path to Attorney Malpractice in Mediation Proceedings: Coerce Your Own Client)
Before trial of the malpractice action, Wasserman filed a motion in limine asking the trial court to preclude the introduction into evidence of any testimony concerning Cassel's [otherwise attorney-client privileged] communications about the sum he was willing to accept in settlement. The trial court granted the motion, holding that these communications - undeniably conducted in preparation for the mediation - were protected by mediation confidentiality under both the plain language of Evidence Code section 1119 and the Supreme Court decisions interpreting it.
The majority on the appellate panel disagreed for the following reasons:
Communications between a party to mediation and the attorney representing him in that mediation are not part of the mediation "process" if they are not communicated to either the mediator or the opposing party because California law defines mediation as a procedure in which "a neutral person . . . facilitate[s] communication between the disputants to assist them in reaching a mutually acceptable agreement.”
"For mediation purposes, a client and his attorney operate as a single participant."
Once the court collapses the attorney and client into a single "participant," there are no mediation communicationsamong participants to protect, or, as the Court more formally stated: they were not communications between 'disputants' and the 'mediator,' as required to come within the definition of a 'mediation' or 'mediation consultation' and, therefore, to qualify for protection under mediation confidentiality."
"the fact that Cassel or his attorneys may have discussed a specific dollar amount for settlement" did not necessarily make it a communication that, in the WimsattCourt's words "are materially related to, and foster, the mediation," because "some of the communications were more related to the civil litigation process as a whole rather than to the mediation."
the most principled (but not necessarily correct) reason for the Court's holding: the attorney and its client were "not within the class of persons which mediation confidentiality was intended to protect from each other—the “disputants,” i.e., the litigants—in order to encourage candor in the mediation process."
finally, the Court's holding:
With start of trial within two weeks, the meetings and accompanying communications between Cassel and Wasserman . . . were for trial strategy preparation, not just for mediation . . . The crux of the communications was that Cassel wanted his Wasserman Comden attorneys to honor his wishes, but they resisted to the extent, according to Cassel, that they breached their duties to him as his counsel. Neither Cassel nor Wasserman Comden assert that the communications contained information which the opposing party (or its representatives) or the mediator provided during mediation or otherwise contained any information of anything said or done or any admission by a party made in the course of the mediation. For the foregoing reasons, we conclude that the communications solely between Cassel as a client and his lawyer, Wasserman Comden, do not constitute oral and written communications made “for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation” protected by section 1119, subdivisions (a) and (b) or communications by “participants” protected by section 1119, subdivision (c).
Huh?????? Because separate caucus mediation communications between attorney and client about the sum the client is willing to settle the case for are not communicated to the mediator or the opposing party during the mediation (especially if the attorney fails to communicate the client's expressed wishes?) they cannot be considered "communications made 'for the purpose of . . . a mediation consultation"??
This is perhaps the most convoluted reasoning of any appellate opinion in memory. I'd prefer a decision that just came right out and said something along the lines of - sure the communication falls squarely within the language of the confidentiality statute, but we don't think it ought to apply where a client is suing his attorney for duress in the course of a mediation proceeding. The Court is justifiably worried about saying that because the Supreme Court has repeatedly cautioned the lower courts not to make court-crafted exceptions to mediation confidentiality. (See Simmons v. Ghaderi)
Intellectual dishonesty never got any court anywhere near the goal of justice. This might just have been the case that made the Supreme Court relent and say, "o.k., in this extremely narrow circumstance, we'll permit an exception to the statutory provision." If the Supreme Court refused to budge, this case just might have persuaded the California legislature to make a few necessary exceptions to mediation confidentiality. Now, unless the appellate court reconsiders and follows the wisdom of the dissenter, Californians won't be given the opportunity the common law creates to "course correct" the law-making process to meet the challenges of unintended legislative consequences.
As the dissent correctly observes:
In the end, the majority‟s analysis of section 1119, subdivision (a), seems to be founded primarily on its concern that protecting private communications between a client and his or her lawyer under the rubric of mediation confidentiality may shield unscrupulous lawyers from well-founded malpractice actions without furthering the fundamental policies favoring mediation. That may well be true; but, respectfully, it is not our role to make that determination. Rather, it is for the Legislature to balance competing public policies and to create an exception to the statutory scheme governing mediation confidentiality where it finds it appropriate to do so.
For those more interested in Prejean than in mediation confidentiality, here's an analysis of the Prejean/King dust-up with the Prejean money quote: "I don't see anywhere in the Bible where it says you shouldn't get breast implants."
And if you think mediation can't be as dramatic as courtroom "gotcha" moments, here's the proof that anything at all can and does happen in those "confidential" rooms:
It was reported by TMZ.com, who broke the story of the lawyers' gambit, that the lawsuit was settled within seconds of the sex tape being shown to Prejean. Just to make the episode even more embarrassing for the 22-year-old, her mother was also attending the meeting at which the tape was shown.
Do remember that California law only precludes parties from: (a) introducing confidential mediation communications into evidence; and, (b) obtaining evidence of those communications in discovery. Although sub-section (c) of section 1119 broadly provides that mediation communications "shall remain confidential," no one to date has suggested that disclosure of those communications gives rise to a cause of action in favor of any party opposing their disclosure to the general public.
Patrick Deane of Nestlé is senior counsel to the largest food company in the world, and the disputes he runs into involve distributors, retailers, suppliers and consumers in every part of the globe. His ideal mediator combines logic and intuition; a concern for detail; and the knack of an epatheic listener. He noted that commercial disputes — even financial ones — are seldom dry, but instead involve personalities, risk of loss of face, and other human attributes just as much as more personal claims do. The question of subject-matter expertise was of little importance to Deane, compared to these essential qualities in a mediator who must be expert in a process that, at heart, is aimed at cost effectiveness. “A lack of industry expertise has never caused a failure of the mediation process.
Here's my opinion (as if you didn't already know). As Colin Powell says, the most important knowledge to have in international negotiations is the other guy's decision cycle. I imagine the great predictor, the political scientist and Hoover Institute Fellow Bruce Bueno de Mesquitas would say something along the same lines (see TED lecture below). See also the NYT piece, Can Game Theory Predict When Iran Will Get the Bomb?
What is the "other guy's" decision cycle? It is comprised of every interest he must satisfy and every person he is accountable to for the foreseeable (and probable unintended) consequences of that decision. Personal injury attorneys turned mediators are well acquainted with the decision cycles of both Plaintiff and Defense counsel as well as with the interests, needs, and desires of injured Plaintiffs, on the one hand, and insurance adjusters and their supervisors on the other. Employment attorneys turned mediators are also deeply knowledgeable about the decision cycles of counsel on both sides of the table (one usually specializing in employees and the other in employers) as well as with the interests, needs and desires of terminated, demoted, or harassed employees on the one hand and of employers - both large and small - who often feel as if the Plaintiff is little better than a highway robber. Judges turned mediators are better acquainted than anyone else of the decision cycles of juries -- a jury verdict being the alternative to a negotiated resolution.
You knew I'd come to my own "specialty" knowledge. Some of it is industry specific -- insurance and financial institutions, for instance, and the garment, manufacturing, health care, commercial real estate, construction, and technology industries. Though my experience in these fields adds some value to my commercial mediation practice, what I'm most skilled at is knowing the decision cycles of commercial litigators and their business clients. I understand, for instance, the clients' reporting relationships; the metrics against which their performance and that of their corporate superiors are measured; the impact of SEC reporting requirements in "bet the company" litigation; and, the effect settlements in nine or ten figures might have on upcoming plans for mergers or acquisitions.
I can read a financial statement.
At a minimum, I can ask the questions necessary to obtain the knowledge required to ascertain the interests that must be satisfied by both parties to transform the litigation into an opportunity to make a business deal. And I know how to make the commercial clients happy with their attorneys' final resolution of the business problem burdened with the justice issue that brought the case into court in the first instance.
I am also schooled in the "field" of conflict resolution. I understand at depth the cognitive biases -- universal tendencies in the way we think -- that inhibit rational decision making. I know how conflict escalates and, more importantly, how it can be deescalated. I understand the role emotion plays in decision making (particularly the emotion most common among business litigation clients - anger); the gentle (and not so gentle) art of persuasion and, perhaps most importantly, the optimal negotiation strategies and tactics for the business problem at hand.
And, I know in the knuckles of my spine what keeps commercial litigators awake at night, worrying about the next strategic, tactical, legal or extra-legal move to make; how to explain to the client that the case has suddenly gone south; and, how to deliver that bad news to the client in a way he or she can hear it and successfully report it to the GC, the CEO, the Board of Directors or e ven the shareholders.
I know this sounds like a lot of boastful self-promotion (it is). Please don't take my word for it. Anyone charged with finding, retaining and hiring a mediator to assist the parties in resolving a piece of hard-fought, sophisticated, complex commercial litigation would do well to check with his or her peers on any mediator's boastful self-appraisals.
This is what I recall of mediator-hunting, however. I'd send out a list to my colleagues. I'd invariably get back opinions that were all over the board. He/she is great with clients but usually ends up splitting the baby in half. He/she talks too much and listens too little. He/she marginalized the client and made me look bad. He/she charges $15,000 per day and is one of the go-to mediators for this type of case but I was unimpressed, as was the client. This guy/gal can settle anything. Brilliant. Magical.
So what's a beleaguered litigator to do? Ask people you respect both inside and outside your law firm. Ask how the mediator handles the "process dimensions" of the mediation. Does he/she simply carry numbers and rationales back and forth between separate caucus rooms. Can she give bad news to both sides. Can he go beyond positional, zero-sum bargaining and into interest-based negotiated resolutions? Is the client happy with the result and with the process? After you've done this basic research, call the mediator yourself and ask him/her about the way in which she/he might handle the mediation of the particular matter you need to have resolved. You should not only have the best information possible in making your choice, you should get a fair amount of terrific free advice and external brain-storming along the way.
I really just meant to cite the Business Conflict Blog and get back to revising The ABC's of Conflict Resolution - my second draft due on October 30.
So what's my answer to the question whether the mediator should have industry knowledge? That answer lies, as most legal problems do, in the gray zone. Industry knowledge helps. But every commercial litigator knows that we can learn any industry if we have a basic understanding of how commercial enterprises work. That's what I know -- commercial litigation -- and it is the reason I don't mediate personal injury or employment disputes with anyone below the rank of senior executive. I don't know the right questions to ask and I don't know -- at depth -- the parties' or counsel's decision cycles.
My own personal 200-year present spans the life of my maternal grandparents who were nine years old in 1909, and that of my step-children’s children, who (assuming they procreate on a reasonable schedule) should be ninety-five'ish in 2109.
My imagined grandchildren,  born sometime between today and 2014, will not be strangers to any of my grandfather’s technologies. Despite the advent of compact fluorescent light bulbs, the early lives of my step-children's children will likely pass under the glow of the same incandescent lights that brightened granddad’s one-room school house. They will be transported to school in cars with internal combustion engines, learn the same alphabet from the same cardboard and paper books (as well as from the "e" variety)  and play many of the same games he did – hop scotch, jump rope and ring-around the rosy.
Change will etch itself into the lives of my grandchildren as surely as it did my own, my parents' and my grandparents'. Hybrids will give way to fully electric (and perhaps hemp-powered) vehicles (effective or defective) and though electricity will continue to be generated by hydroelectric dams, wind farms and nuclear power plants, some new and unimaginable source of power will surely push back the nights of my grand children's children. 
Law, politics, society and culture also exist in the 200-year present of conflict resolution. In my personal 200-year span, the law seems to have changed the most profoundly. Was it the law first and culture later? Or do they weave our future together?
The first U.S. woman lawyer, Myra Bradwell, was admitted to practice a mere ten years before my grandmother was born. Mrs. Bradwell’s legal career was the subject of one of the sorriest U.S. Supreme Court decisions ever handed down, in which the Court opined,
The civil law as well as nature itself, has always recognized a wide difference in the respective spheres and destinies of man and woman. Man is, or should be, woman’s protector and defender. The natural and proper timidity and delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life. The constitution of the family organization, which is founded in the divine ordinance, as well as in the nature of things, indicates the domestic sphere as that which properly belongs to the domain and functions of womanhood. The harmony, not to say the identity, of interests and views which belong, or should belong, to the family institution is repugnant to the idea for a woman adopting a distinct and independent career from that of her husband … for these reasons I think that the laws of Illinois now complained of are not obnoxious to the charge of any abridging any of the privileges and immunities of cities of the United States.
My grandparents', parents' and step-children's 20th Century was dominated by genocide on a scale and a technological precision unimaginable to our earlier forebears. Mid-century brought with it the threat of nuclear annihilation but also liberated millions of people enslaved by colonialism. We cured polio in my own lifetime with both "dead" and "live" vaccines (neither of them counterfeit) - a singular moment in scientific history during which no one took ownership of the cure and no one tried to stop others from seeking another, a problem Patently O addressed this week in Reverse Payments.
Whether god or satan, heaven or hell, war or peace "won" the twentieth century, the world's greatest peace-making body was created during it -- the United Nations. And here in the U.S., the “living room war,” Viet Nam, coupled with the largest generation of adolescents ever to grace American society, ended the forcible induction of young men into the military. 
With the recent discovery of our earliest ancestor, Ardi, our biological and social lives exist in a 4.4 million year now. Our physical bodies “evolve” in the womb along the same lines as did our species and, once born, we carry with us our earliest organs.  Most critical of these to conflict escalation and avoidance is our “fight-flight” mechanism – the amygdala. And the most pertinent biological agents to promote the collaborative resolution of conflict are our “mirror neurons” which
provide a powerful biological foundation for the evolution of culture . . . absorb[ing] it directly, with each generation teaching the next by social sharing, imitation and observation.
How we’ve manage to survive despite our tendency to misread one another’s actions, intentions and emotions, is often the subject of those who advise us how to choose and move juries -- here -- Anne Reed at Deliberations (explaining why "they" don't see things like "we" do here); and, the Jury Room (explaining why pain hurts more intensely when we believe it's been intentionally inflicted here).
The Most Effective Conflict Resolution Technology is the Oldest
One of our true original gangsters, Al Capone, is reported to have said that “you can get much further with a kind word and a gun than you can with a kind word alone” and one of our greatest Presidents, Theodore Roosevelt said “speak softly and carry a big stick.”
As Robert Wright, author of The Moral Animal explained, had Tit for Tat been tossed into the game with 50 steadfast non-cooperators, there would have been a 49-way tie for first place. But none of the players' programs failed to cooperate in at least some circumstances, leaving Tit for Tat the clear victor. According to Wright, humans, like the programs in Axelrod's competition, are evolutionarily “designed” to cooperate under at least some circumstances. The engine and benefit of cooperation is present in our neurochemistry. When scientists observed the brain activity of volunteers playing the Prisoner’s Dilemma game, for instance, they found that the participants' “reward circuits” were activated and their impulsive "me first" circuits inhibited when they cooperated. Cooperation, retaliation, forgiveness and a return to cooperation. Tit for Tat.
We don't "dis" lawyers here at the Negotiation Blog. We simply remind ourselves that our primary purpose is the promotion of justice, with a stable societal order closely behind. Most people don't understand, for instance, that Shakespeare's famous the first thing we do, let's kill all the lawyerswas not an insult. In King Henry IV, Act IV, Scene II, Shakespeare's sentiment was not his own, but that of a revolutionary who wished to destroy the social order.
The historic "present" of laws and lawyers is in the thousands, not simply the hundreds, of years. Hammurabi (make of his choice for the memorialization of his laws what you will) was the sixth king of Babylon, remembered for creating -- in his own name (and likeness?) - the first written and systematic legal code.
For the wrongful killing of another, for instance, the victim’s kin were paid according to the social status of the deceased party. Thus the ‘man price’ for killing a peasant was 200 shillings and that for a nobleman 1200 shillings. Payments were not, however, tailored to the loss, but fixed according to types of affront, a distinction we continue to make when we punish intentional torts more severely than negligent ones. >
Lawyers, litigators and trial lawyers are too often demonized by the ADR community as if you could get someone to sit down to negotiate without first pointing the gun of litigation at their heads; I salute you (and myself, for that matter!) for bringing us all to the bargaining table. See Steve Mehta's recent post at Mediation Matters, Factors When Peace Makes Sense for a note that touches upon the symbiotic relationship between litigation and mediation, litigators and mediators.
I shouldn't cite single legal blogs twice, but I cannot resist this quote of Scott Greenfield's on another pundit's view of the future lawyers have in store for them, i.e.,
shucking oysters for a living if we don't accept a future of lawyers being piece workers in factories, sending our work off to Bangalore in pdf files and complementing people on their choice of forms at Legal Zoom.
Which came first? Public civil trials or private arbitrations? You’ll be surprised, I’ll wager, to hear that arbitration was one of the earliest forms of dispute resolution, practiced by the juris consults of the Roman Empire. Roman arbitration predates the adversarial system of common law by more than a thousand years. 
Ah, the glory of Rome! The juris consulti were (like too many mediators) amateurs who dabbled in dispute resolution, raising the question whether they (and we) should be certified or regulated as Diane Levin asks at The Mediation Channel this week. The Roman hobbyists gave legal opinions (responsa) to all comers (a practice known as publice respondere). They also served the needs of Roman judges and governors would routinely consult with advisory panels of jurisconsults before rendering decisions. Thus, the Romans – god bless them! - were the first to have a class of people who spent their days thinking about legal problems (an activity some readers will recall Ralph Nader calling "mental gymnastics in an iron cage").
It was Buckminster Fuller who famously opined that the "significant problems we face cannot be solved at the same level of thinking we were at when we created them." If you keep this aphorism in mind for the remainder of this post, you'll likely have some extraordinarily innovative comments to make in the comment section below.
As the Law Guru wiki reminds us, we can trace the adversarial system to the "medieval mode of trial by combat, in which some litigants were allowed a champion to represent them." We owe our present day adversarialism, however, to the common law's use of the jury - the power of argumentation replacing the power of the sword.
The Act abolishing the infamous Star Chamber in 1641 also granted every "freeman" the right to trial by "lawful judgment of his peers" or by the "law of the land" before the Crown could "take or imprison" him or "disseis[e] [him] of his freehold or liberties, or free customs." Nor could he any longer be "outlawed or exciled or otherwise destroyed." Nor could the King "pass upon him or condemn him."
English colonies like our own adopted the jury trial system and we, of course, enshrined that system in the Fifth, Sixth, and Seventh Amendments. Whether this 17th century dispute resolution technology can be fine-tuned to keep abreast of 21st century dispute creation technology (particularly in the quickly moving area of intellectual property) remains one of the pressing questions of legal and ADR policy and practice, particularly in a week in which a Superior Court verbally punished the lawyers before it for filing The Most Oppressive Motion Ever Presented (see the Laconic Law Blog). The motion?
Defendants['] . . . motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication. Defendants’ separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants’ own papers conceded. And the moving papers concluded with a request for judicial notice of 174 pages. All told, defendants’ moving papers were 1056 pages.
Mediator, author and activist, Ken Cloke, suggests that interest-based resolutions to conflict must replace power and rights based resolutions if we expect to create a future in which justice prevails. As Ken wrote in Conflict Revolution:
Approaching evil and injustice from an interest-based perspective means listening to the deeper truths that gave rise to them, extending compassion even to those who were responsible for evils or injustices, and seeking not merely to replace one evil or injustice with another, but to reduce their attractiveness by designing outcomes, processes, and relationships that encourage adversaries to work collaboratively to satisfy their interests.
Evil and injustice can therefore be considered byproducts of reliance on power or rights, and failures or refusals to learn and evolve.
All political systems generate chronic conflicts that reveal their internal weaknesses, external pressures, and demands for evolutionary change. Power- and rights-based systems are adversarial and unstable, and therefore avoid, deny, resist, and defend themselves against change. As a result, they suppress conflicts or treat them as purely interpersonal, leaving insiders less informed and able to adapt, and outsiders feeling they were treated unjustly and contemplating evil in response.
As pressures to change increase, these systems must either adapt, or turn reactionary and take a punitive, retaliatory attitude toward those seeking to promote change, delaying their own evolution. Only interest-based systems are fully able to seek out their weaknesses, proactively evolve, transform conflicts into sources of learning, and celebrate those who brought them to their attention.
These are the words I leave with the readers of Blawg Review #234 because they are the ones that informed my personal and professional transformation from a legal career based on rights and remedies to one based upon interests and consensus.
Whatever my own personal 200-year present was, is and will be, it is pointed in the direction of peace with justice, with an enormous and probably unwarranted optimism best expressed by the man after whom my law school was named: Martin Luther King, Jr. - the arc of history is long, but it bends toward justice.
Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues. Next week's host, Counsel to Counsel, will devote its round-up of the week's best legal posts to the Great Recession.
 Earlier scientific theory posited that each human embryo (see Embryo Mix-Up at the Proud Parenting Blog) passes through a progression of abbreviated stages that resemble the main evolutionary stages of its ancestors, i.e., that the fertilized egg starts as a single cell (just like our first living evolutionary ancestor); as the egg repeatedly divides it develops into an embryo with a segmented arrangement (the “worm” stage); these segments develop into vertebrae, muscles and something that sort of looks like gills (the “fish” stage); limb buds develop with paddle-like hands and feet, and there appears to be a “tail” (the “amphibian” stage); and, by the eighth week of development, most organs are nearly complete, the limbs develop fingers and toes, and the “tail” disappears (the human stage). It turns out that this one-to-one correlation was too simplistic, but it remains safe to say that our biological development still passes through several stages that “recapitulate” the evolution of our species.
 The amygdala is a region of the brain that permits the formation and storage of memories associated with emotional events. It permits us to “read” the emotional responses of our fellows and is thought to facilitated our ability to form relationships and live and work in groups. It is also the source of our “fight or flight” response to danger.
Studies show that some mirror neurons fire when a person reaches for a glass or watches someone else reach for a glass; others fire when the person puts the glass down and still others fire when the person reaches for a toothbrush and so on. They respond when someone kicks a ball, sees a ball being kicked, hears a ball being kicked and says or hears the word "kick."
“When you see me perform an action - such as picking up a baseball - you automatically simulate the action in your own brain,” said Dr. Marco Iacoboni, a neuroscientist at the University of California, Los Angeles, who studies mirror neurons. ”Circuits in your brain, which we do not yet entirely understand, inhibit you from moving while you simulate,” he said. ”But you understand my action because you have in your brain a template for that action based on your own movements. “
 Looking toward the future, the Neuroethics and the Law Blog predicts that in the “experiential future, we will have better technologies to measure physical pain, pain relief, and emotional distress. These technologies should not only change tort law and related compensation schemes but should also change our assessments of criminal blameworthiness and punishment severity” here.
The adversarial system of medical negligence fails to satisfy the main aims of tort law, those being equitable compensation of plaintiffs, correction of mistakes and deterrence of negligence. Instead doctors experience litigation as a punishment and, in order to avoid exposure to the system, have resorted not to corrective or educational measures but to defensive medicine, a practice which the evidence indicates both decreases patient autonomy and increases iatrogenic injury.
(Iatrogenic, by the way, is a fancy term for “we have know idea whatsoever what the source of this ailment is). Chris is looking for comments so run on over there if you’ve been thinking about medical malpractice litigation during the marathon American health care debates.
Regulations that govern certified mediators in Virginia would have more teeth under changes now under consideration.
Among the changes is a provision that would allow the Supreme Court’s Division of Dispute Resolution Services to immediately suspend mediator certification if a mediator refused to respond to concerns based on a complaint about improper behavior.
The DRS has extended the deadline for comments to the proposed rule changes to Oct. 30.
Documents marked with the proposed changes are available on the Web site for Virginia’s Judicial System (www. courts.state.va.us).
A member of the ethics committee convened to recommend changes said the changes will allow the DRS to have a more immediate response when there are credible allegations of ethics concerns about a mediator. Lawrie Parker, director of the Piedmont Dispute Resolution Center in Warrenton, said the proposed standards would allow action by DRS in certain cases without having to convene the complaint review committee for guidance.
A big question in trial for lawyers to consider is whether to apologize for their client’s “alleged” conduct. Many lawyers are reluctant to do so under the theory that it could lead to a greater chance of liability being imposed on them. Recent research sheds light on this issue.
According to researchers at George Mason University and Oklahoma State University apologizing to a jury may lead more favorable results. The results of the study will be available in a the journal Contemporary Accounting Research.
Assistant accounting professors Rick Warne of Mason and Robert Cornell of OSU found that apologizing can result in lower frequencies of negligence verdicts in cases when compared to a control group receiving no apology or remedial message. The researchers hypothesized that apologies allow the accused wrongdoer to express sorrow or regret about a situation without admitting guilt. Alternatively, a first-person justification allows the accused to indicate the appropriateness of decisions given the information available when decisions were made.
“We found that apologies reduce the jurors’ need to assign blame to the [wrongdoer] for any negative outcomes to the client,” says Warne. “It also appears that an apology “influences the jurors impression that the auditor’s actions were reasonable and in accordance with professional standards.”
From preparation to closing, some of L.A.'s most prominent mediators reveal the secrets of getting the best deal available for your clients.
Read former CAALA Trial Lawyer of the year Sandy Gage's article on Getting the Best Results in Mediation and AIM founder, mediator and trainer Lee Jay Berman'sTwelve Ways to Make Your Mediator Work Harder for You.
My ADR Services, Inc. colleagues Jan Schau, Michael Diliberto, Joan Kessler (the brains behind the entire issue!) and Leonard Levy round out the issue with Telling Lies, Telling Secrets (Schau); Opening Offers: Who's on First (Diliberto); The Defense Reveals Mistakes that Could Cost Your Client Money; and Kessler's incisive executive summary of them all.
Oh, yes, I'm here too with one of my mediation narratives, We Tell Ourselves Stories in Order to Live.
The online Advocate can be read like a magazine, complete with turning pages. It's a pretty cool online journal format in addition to being a great contribution to the growing literature on best mediation practices.
Dive in! The water is warm and the natives are friendly.
The following is the conclusion of an excellent post on the recent Pfizer-Justice Department settlement noting that it met "the People's" justice interests better than a judgment could have. The full article, Settlement and Justice for All by Robert C. Bordone & Matthew J. Smith** can be found here at the Harvard Negotiation Law Review.
More than honoring principles a court might champion, the negotiated settlement with Pfizer allows the Justice Department to secure commitments from Pfizer that would have been unlikely in a court verdict. In addition to the enormous cash payment, the settlement agreement allows for closer monitoring of Pfizer by Justice Department officials in the years ahead, ensuring corporate accountability and providing an extra measure of protection for consumers. As part of the deal, Pfizer entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services and will be required to maintain a corporate compliance program for the next five years.While a judge might choose to retain judicial oversight in a particular case, federal courts typically lack the expertise or resources to provide the kind of enforcement needed to ensure a systemic and long-term remedy in a technical or highly specialized case such as this.
The Pfizer settlement represents the best kind of transparent, efficient, and wise government law enforcement. It holds Pfizer wholly accountable for its actions, sends a strong and clear message to the public that corporate malfeasance will not be tolerated, provides for ongoing enforcement, and it does it all at a fraction of the cost of trial. While many cases should proceed to trial for reasons of precedent and public policy, negotiated settlement – when approached with wisdom and aplomb – can be a most efficient and effective means of law enforcement.
Thanks to Don Philbin for being one of the best navigators of quality in the ADRosphere! "Friend" him on Facebook here.
**/ Robert C. Bordone is the Thaddeus R. Beal Clinical Professor of Law at Harvard Law School and Director of the Harvard Negotiation and Mediation Clinical Program. Matthew J. Smith is a Lecturer on Law at Harvard Law School and a Clinical Fellow at the Harvard Negotiation and Mediation Clinical Program
Because the vast majority of my litigation and mediation clients were and are corporate entities or highly successful entrepreneurs, executives or managers, I was and am rarely in a position to coerce a client into doing something it didn't want to do.
As a mediator, however, I hear stories.
Some of the stories I hear are told by disgruntled individuals who feel as if they were coerced by their own counsel into settling their litigation during a mediation. Others have reported that they felt ganged up on by their attorney and the mediator. Some have complained that they were unduly pressured to stay in the mediation process long after they were too tired or hungry to think clearly.
These stories are troubling to any mediator who values the good reputation of the mediation process itself. They should also disturb attorney mediation advocates.
Is it below the standard of care for an attorney to subtly (or not so subtly) pressure his or her client to settle litigation? Under certain circumstances, I think it is. Here's the bad news. If a litigant is unhappy with the outcome of mediation, he or she is far more likely to bring a complaint (or lawsuit) against his or her own attorney.
In a 2006 article in the Ohio Journal on Dispute ResolutionTAKE IT OR LEAVE IT. LUMP IT OR GRIEVE IT: DESIGNING MEDIATOR COMPLAINT SYSTEMS THAT PROTECT MEDIATORS, UNHAPPY PARTIES, ATTORNEYS, COURTS, THE PROCESS, AND THE FIELDPaula M. Young, Assistant Professor at the Appalachian School of Law cites Mel Rubin on "settle and sue" cases which Rubin suggests are on the rise among clients unhappy with the outcome of a mediation. Rubin "also suggests that if a client is unhappy with the outcome of mediation, he or she is more likely to sue his or her attorney for malpractice. Id.
What might actionable attorney mediation malpractice look like? Young cites the example of one woman who told the following story:
I refused to sign several times. My attorney then began yelling at me to “shut-up and sign the damn thing” I wasn't allowed to leave until it was signed . . . . The words, “NO I can't sign this,” fell on deaf ears. I was so unfamiliar with the process of it all and what it meant and what the outcome entailed.
Young has a systemic solution for problems like these: procedural "justice" during the mediation itself and grievance procedures for dissatisfied litigants. She writes:
To the extent the procedural justice research indicates that parties who perceive they have received procedural justice in mediation also perceive that the negotiated outcome in mediation is fair, we would expect that these parties are not likely to later sue their attorneys for malpractice. Even when the client has little trust in his or her attorney, a mediation process that enhances procedural justice allows the party to assess directly whether he or she feels exploited or mistreated in the process.
Even if the mediation process itself lacks procedural justice and the client accordingly remains dissatisfied and suspicious, a well-designed grievance system, emphasizing procedural justice from the client's perspective, may give the client the reassurances he or she needs. A client who suspects collusion between his or her lawyer and the neutral could seek the informed opinion of the regulatory body, without ever having to file a legal malpractice law suit.
Remember that we tend to stumble and fail when we're Hungry, Angry, Lonely (marginalized) or Tired (HALT) and so do our clients. When I notice litigants flagging or attorneys losing their tempers, I suggest a walk around the block, a nutrition break (not eating more cookies) and, in extreme cases (someone becomes ill during the course of the session) reconvening at a later date. Remember how powerful and all-knowing you appear to be to your clients and what a strange and frightening land the "justice system" is for those who are encountering it for the first time.
There's no better defense to professional negligence actions that the quality of your relationship with your clients. Keep channels of communication open. Demand that your adversary and the mediator treat your client with respect. At the first sign that a mediator is exercising undue influence on your client, say something, just as you would if opposing counsel were harassing your witness at a deposition. Follow these dictates and you'll rarely if ever be worrying about calling your insurance carrier.
As every mediation advocate must know by now, the California Supreme Court has locked down mediation confidences from attack at every turn. There can be no implied waiver of Evidence Code section 1119's protections and you cannot be estopped to assert it (Simmons v. Ghaderi) (.pdf of the opinion here).
Your client may have been coerced into signing off on the agreement; may not have understood what she was signing; or her assent could have been induced by your opponent's material misrepresentations of fact. Your client's insurance carrier may be guilty of actionable bad faith during the course of the mediation. Too bad. The mediation proceeding is given greater protection than given to penitents in a confessional.
But you can inadvertently expressly waive the protections of mediation confidentiality if you've carelessly crafted your own confidentiality agreement.
California's Second District Court of Appeal held in Thottam (.pdf of opinion here) that a party's confidentiality agreement did just that -- waived the protection -- permitting one party to introduce an otherwise inadmissible draft agreement into evidence for the purpose of enforcing an otherwise unenforceable mediated settlement agreement.
As the Court in Thottam held, 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, including a writing executed before a settlement agreement has purportedly been entered into. Because the "draft agreement" at issue in Thottam did not contain 1123's "magic" enforcement language and because the term sheet drawn up during the mediation was not sufficiently certain to enforce in any event, one party to the subject probate proceeding objected to its introduction into evidence and to the admission of testimony concerning otherwise confidential statements made during the mediation.
Had there been no confidentiality agreement, the issue would have been controlled by Evidence Code sections 1115 et seq.; the "agreement" would have been excluded from evidence as non-compliant with section 1123; and, no evidence of statements made during the mediation would have been admitted into evidence.
Here's the danger of drafting your own confidentiality agreements in an attempt to expand the scope of mediation confidentiality.
According to the appellate court opinion, because the parties expanded the scope of confidentiality beyond that provided by the statute, the exception to the protection ("except as may be necessary to enforce any agreements from the Meeting") was broader than the enforcement exception contained in section 1123. As one blogger cogently put it at the time, "the big print giveth and the small print taketh away."
I think it's safe to say that this result was pretty much completely unpredictable and that it was within the standard of care for counsel to expand the protections contained in section 1119 (for an example of the problems created by its relatively narrow confines, see mediator Debra Healy'scomments and my response about the scope of mediation confidentiality in an earlier post in this series).
Post-Thottam, however, counsel must be extremely careful in drafting confidentiality agreements lest they inadvertently take away the protections the legislature created and the Supreme Court has so assiduously enforced.
In short, don't get fancy. Just stick with the language of section 1119
If you didn't already understand how to protect your mediated settlement agreement from challenge, you do now.
But wait a minute! Is that what you want?
What if your client entered into the agreement only because its opponent made a material misstatement of fact? What if one of your co-defendants challenges your settlement agreement as not having been made in good faith, thus exposing your client to potential liability for indemnity or contribution? Can you win the "good faith settlement" motion without the testimony of the participants in the mediation?
Parties are entitled to walk out of a mediation with a whole range of outcomes, from a completed settlement agreement, to a term sheet, to an oral understanding, to a promise to think over the other side's last offer, to a promise to see the other side in court! As long as both sides understand what they are getting at the conclusion of the mediation session, there should be no basis for a malpractice claim for any of these outcomes. If the parties choose to use a term sheet with no language in it indicating that they have settled their case, they just need to understand that any party can renege on the deal after the mediation. In some cases, that may be what the parties want, to give them some time to think the whole thing over.
Joe's comments put the emphasis in mediation advocacy back where it belongs -- on the fully informed assent of the parties and on the strategic plans of litigation counsel.
So here's yet another way to commit legal malpractice as a mediation advocate: don't fully understand the implications of mediation confidentiality on the final resolution of your client's dispute. I'll just bullet point ways to protect yourself and your client below and ask others to chime in with their recommendations:
if your client is relying upon the veracity of its opponent's representation in entering into the deal, write that representation into the agreement or deal points, i.e., "Party A and Party B both understand that Party A is entering into this agreement based upon the following representation/s: .................................... " Then you can include any other language that makes sense in the context of the agreement. You can provide that Party B's production of documents confirming its representations to Party A is a condition precedent to Party A's obligations under the settlement agreement. If your client simply needs protection down the line in the event FACT X proves to be untrue, you can include a liquidated damage clause in the agreement or provide for an expedited means of resolving any dispute resulting from the falsity of FACT X ; or, you could provide that the falsity of FACT X will render the settlement agreement null and void;
you could avoid the problems created by the strict enforcement of mediation confidentiality by agreeing with your opponent (in writing!) that the neutral-facilitated settlement negotiation is not a mediation to be governed by Evidence Code section 1115 et seq. but a settlement conference governed by Evidence Code section 1152 et seq. This option would be a useful one to a defendant who is settling the action separately from co-defendants who might bring a motion challenging the good faith of your settlement.
Less drastically, you could simply include in your settlement agreement a provision by which the parties agree that the mediation confidentiality protections as codified in section 1119 will not apply in the event a co-defendant challenges the good faith of the settlement. Remember that the mediator is considered incompetent to testify so that your waiver of mediation confidentiality in the event testimony is needed to oppose a challenge to the good faith of your settlement may not permit the mediator to testify at the hearing (or to offer a declaration in opposition to the motion) as well he or she -- a neutral party -- shouldn't.
You're a litigator. There are probably hundreds of ways to skin this particular cat. The keys are knowing and understanding the law of mediation confidentiality and thinking through all of the implications it might have on your clients' rights or interests down the line. That's what we litigators do and we shouldn't abandon those strategic considerations just because we believe we're settling this case for good and it will never come back to haunt us or our clients again.
Remember, you are in control of the process. If you don't like mediation confidentiality, tailor a confidentiality agreement to suit your circumstances. You will, of course, have to "sell" your proposal to your opponent. The best time to do that might well be at the end of the mediation rather than at its commencement. By that time, your opponent is pretty darn committed to the resolution of the lawsuit. His client is already planning on ways he can more profitably spend his time and money other than on further litigation, attorneys' fees, and court costs. The plaintiff is, I guarantee you, already spending the settlement monies or planning the celebration back at the office and wondering whether this might lead to the promotion he or she has been waiting for.
Yet another way to commit legal malpractice (and how to avoid it) tomorrow!
That's not a summons and complaint for malpractice, is it? Because of something you didn't know about ADR advocacy?
C'mon! ADR is all about avoiding litigation, not creating it, right? The good news is that there hasn't yet been an ADR malpractice suit of note. The bad news is, I see ADR negligence at least once a month and am holding my breath against the day lawsuits began a'poppin.
To help you avoid ADR malpractice, here is just one of ten pitfalls to be covered in this series that can make you a malpractice magnet for disgruntled clients.
write up a "term" sheet reflecting your mediated settlement agreement without including the "magic language" of Evidence Code section 1123
absent this language, a party with buyer's remorse can resist the enforcement of a "term sheet" if he feels he was was coerced into signing it; entered into it based upon a misrepresentation of material fact made during the mediation; or, that it simply does not accurately reflect the terms the parties' orally agreed upon during the mediation
use the magic language of Evidence Code section 1123 and your "term sheet" should be enforced and your client's bargaining partner precluded from introducing into evidence (pursuant to section 1119) any statement made by anyone during the course of the mediation, including allegedly coercive, misleading, or, fraudulent statements of fact allegedly inducing his consent.
the cure (from Caplan again) is the following "belt and suspenders" clause:
The parties intend this Agreement to be admissible, binding and enforceable, and subject to disclosure within the meaning of those terms in California Evidence Code § 1123 (a), (b) and (c), and this Agreement is expressly not privileged from disclosure under California Evidence Code § 1119. In addition, if the formal Settlement and Mutual Release Agreement contemplated hereinabove is [e.g., not executed within ten (10) days of the date of this Agreement] this Agreement may be enforced by motion under California Civil Code § 664.6 and the court shall retain jurisdiction over this Agreement until performance in full of the settlement terms herein.
Below is an Orange County Superior Court form that satisfies the requirements of section 664.6 (providing an expedited enforcement mechanism for the settlement agreement) but which fails to recite all of the magic words including admissible, enforceable, and subject to disclosure. So please don't trust any form other than your own!! Even forms issued by the Courts. The fact that you are entitled to an expedited hearing under 664.6 to enforce your mediated settlement agreement does not mean that you will be permitted to enforce the agreement against your opponent's will.
Of course the best way to avoid claims arising from buyer's remorse is to create a durable settlement that all parties will want to enforce. That means avoiding agreements that your client enters into when he or she is hungry, angry, lonely (i.e., sidelined) or tired (HALT). It also includes agreements that feel coerced by an overly aggressive mediator preying on the weaker of the two (or three or four) parties. And yes, Virginia, there is always a more vulnerable party; all mediators recognize who that is; and, too many mediators make a beeline for that party's soft under-belly.
Another way to avoid challenges to the mediated settlement agreement include:
bringing a fillable template settlement agreement (and these days, also a Stipulation for the Entry of Judgment in the event of default on a payment plan) that is a complete, final and binding agreement that contains the "magic language" of section 1123 that all parties execute before they leave the mediation session (no matter how tired everyone is and how much everybody wants to just go home and deal with the inevitable nit-picking over the relatively inconsequential terms of the agreement tomorrow).
not letting your fear that the "details" might blow up the "deal" you've spent so many hours negotiating.You know how these deals go off the rails the following morning when your opponent begins to nit pick terms, often as a face-saving mechanism. Let the mediator help you close the deal right there and now, assisting the parties in resolving the minor terms that can blow up in your face if left until tomorrow.
And speaking of tomorrow, I'll have Tip No. 2 for avoiding malpractice litigation arising from mediated settlement agreements. Stay tuned!
For more posts on confidentiality in both California state and 9th Circuit district courts, click here.
Today's New York Times Op-Ed piece on "diplomatic engagement" (Terms of Engagement) as a strategy for "chang[ing] [Iran's] perception of its own interests and realistic options and, hence, to modify its policies and its behavior," offers good strategic negotiation lessons for mediators and mediation advocates alike. As Crocker explains:
[E]ach case of engagement has common elements. Engagement is a process, not a destination. It involves exerting pressure, by raising questions and hypothetical possibilities, and by probing the other country’s assumptions and thinking. Above all, it involves testing how far the other country might be willing to go. Properly understood, the diplomacy of engagement means raising questions that the other country may wish to avoid or be politically unable to answer. It places the ball in the other country’s court.
Litigation is an extremely good way to "exert pressure," on your negotiation partner by burdening it with the costs of waging the adversarial contest. The litigation itself not only "rais[es] questions and hypothetical possibilities" but through the process of discovery, it also "probes [the opponent's] assumptions and thinking" and "test[s] how far [your opponent] might be willing to go" to achieve victory.
Parties disappointed with mediation and mediators are usually dissatisfied with the mediator's inability to engage in the final step of "engagement diplomacy" -- "raising questions that the [opponent] may use to avoid or be [positionally] unable to answer." A good mediator is unafraid to raise those difficult questions with each side of a dispute. But raising those difficult questions is not enough. A good mediator must also be able to deliver bad news to the parties in such a way that the parties are able to hear it.
If the goal of the negotiators -- the attorneys -- is to "change the[ir] [opponent's] perception of its own interests and realistic options and, hence, to modify its policies and its behavior," the negotiators and their clients must be prepared to:
reveal to the mediator
hidden constraints preventing them from modifying their demand or offer; and,
hidden interests that must be served in order to justify any such modification
candidly acknowledge (in separate caucus)
the weaknesses of their position; and,
any constraints on their client's willingness and ability to put their convictions to the test of a jury verdict or judgment by the court
help the mediator help their clients understand that most litigation is based upon differing subjective experiences of the same "objective" series of events so that no one must admit that the other side is "right" and their own side is "wrong"
An example of the lengths to which people will go to be "right" is unfortunately provided to us today by the obituary of the first anti-abortion advocate to be shot and killed for his beliefs. The slain activist spent years protesting outside the car dealership owned by Tony Young, who explained how the protests finally ended (from Slain Abortion Opponent Loved the Controversy)
Mr. Young said that after about three years of protesting outside his dealership, Mr. Pouillon came in and offered a truce. “ ‘Tony,’ ” Mr. Young said the exchange began, “if you would just agree that I’m right on my beliefs, I’ll stop.’
“I just told him, ‘Sure, Jim, you’re right,’ ” Mr. Young said, chuckling. After that, he said, Mr. Pouillon moved on.
Although few cases could so easily turn on the dime of a semi-sincere acknowledgement that the other side is "right," most attorneys would be surprised by how much value can be generated by acknowledging that the other side's version of the facts or the law is not crazy, evil, bizarre, intellectually dishonest or asserted in bad faith. See The Biggest Lie in the Business: It's Only About Money. As I noted there:
The social scientists who study these things say that the way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected.
Conversely, research shows that business people are reluctant to recommend legal action if they believe that they and their company have been treated respectfully.
By the same token that business people are reluctant to recommend legal action if they believe their company has been treated respectfully, they are often far more willing to settle litigation if they believe their positions have been heard and acknowledged as having been made in good faith. For those headed toward settlement discussions or mediation, Crocker has good advice:
[B]y far the greatest risk of [diplomatic] engagement is that it may succeed. If we succeed in changing the position of the other [side's] decision-makers, we then must decide whether we will take yes for an answer and reciprocate their moves with steps of our own. If talk is fruitful, a negotiation will begin about taking reciprocal steps down a jointly defined road. Engagement diplomacy forces us to make choices.
If litigators and their clients are aligned in the interest of settling litigation, they must prepare themselves to take "yes for an answer" by having in place a strategy of engagement that will permit them to reciprocate the other side's moves with steps of their own. A good mediator should be capable of bringing all parties to the on-ramp of the road that counsel and their commercial clients are well-placed to and highly skilled at jointly defining.
Powerlessness and silence go together; one of the first efforts made in any totalitarian takeover is to suppress the writers, the singers, the journalists, those who are the collective voice. - Margaret Atwood
Every year, a town in Japan named Taiji kills 2300 dolphins and small whales. This year, that slaughter was halted for a single day because of the activism of the man who trained Flipper for television, Rick O'Barry. Here's his account of the making of The Cove.
What did Flipper's trainer want to do? He wanted to stop the slaughter. Here's where the Harvard Negotiation article on power in negotiation comes in. I'll let the authors of the Harvard article speak for themselves.
In order to understand [why the less powerful sometimes prevail against their more powerful bargaining partners] one needs to analyze power as more of a relational and perceptional concept. The relational dimension is captured in Dahl’s definition that “A has power over B to the extent that he can get B to do something B would not otherwise do." For example, most non-governmental organizations (NGOs) are less resourceful than the World Bank. Yet the Bank can enhance the legitimacy of its programs by including NGOs. Over time, participating NGOs could influence the Bank’s agendas to some extent. Thus viewed, parties with asymmetric resources may wellsharea mutually dependent relationship.
It is also worthwhile tonote that power sometimes lies in the eye of the beholder. A party’s decisionsmay be shaped as much by its perception of the situation as by objective reality. Zartman and Rubin, in studying power in negotiation, define it as “the perceived capacity of one side to produce an intended effect on another through a move that may involve the use of resources.[A]s Fisher and Ury have pointed out, the resources a party owns do not necessarily translate into effective negotiating power, which is much more context-specific. The authors cite the example of the US, which “is rich and has lots of nuclear bombs, but neither has been of much help in deterring terrorist actions or freeing hostages when they have been held in places like Beirut"
The common tactics under a power-based approach include coercion, intimidation, and using one’s status and resources to overpower opponents.
One tactic omitted from the list of power-based tactics is one of the most compelling -- the strategy used by Martin Luther King, Jr., Ghandi and, yes, anti-abortion activists -- bearing witness and shaming.
There are many moments of shaming and bearing witness in The Cove -- the moment when activist O'Barry holds his iPhone before the eyes of the Japanese official who has just told him that cateceans are killed quickly, with surgical precision (you can see that moment in the trailer here). There's the day O'Barry, who has been permanently barred from IWC's conferences, walks in with a flat screen television strapped to his chest and silently moves in front of each row of delegates, showing them the video of the slaughter in the Killing Cover. And then, at movie's end, the wrenching scene of O'Barry standing in the middle of a crosswalk in Tokyo, that same flat screen on his chest, silently bearing witness as thousands rush past him and a few, half a dozen perhaps, stop in their tracks to watch the footage of the fisherman in the Killing Cove that he and his team gathered at the risk of their freedom and perhaps their lives.
I vowed to be back in Taiji when the dolphin killing began. I’ve often been here alone, or accompanied by a few environmentalists. Sometimes, I was able to talk a major media organization into sending someone.
When I got off the bus at the Cove this afternoon, I was accompanied by my son Lincoln O’Barry’s film crew, a crew from Associated Press, Der Spiegel (the largest magazine in Germany), and the London Independent.
I was talking with the police, as the international journalists stood around listening, suddenly a camera crew arrived from Japan! And then another! And then still another!
You have to understand that this is SO IMPORTANT. These TV stations have REFUSED to cover the story in Taiji for years and years. NOW, for the first time, they have shown up, with cameras rolling.
The Cove movie led to the strong action by the city of Broome, Australia, in suspending the sister-city relationship with Taiji. So now, the Japanese media are sitting up and listening, for the first time.
[A]ll Japanese will soon know about the cover-up that has occurred by the government in refusing to stop mercury-contaminated dolphin meat from being sold to unsuspecting Japanese consumers and children.
But Taiji can change this image of shame, if they want to. I will be telling them that the town of Nantucket used to be the capitol of the whale killing industry in the US. Now, it uses its history of whaling combined with whale-watching to market tourism very successfully. Whales and dolphins are worth more alive than dead. Taiji can do this, too. But the killing has to stop.
Once shameful national behavior has been exposed (a contentious or power-based negotiation strategy) the weaker parties (people vs. governments) must build their negotiating strength through trust. As Power and Trust in Negotiation and Decision Making asserts:
Identification-based trust is grounded in empathy with another person’s desires and intentions and leads one to “take on the other’s value because of the emotional connection between them.” It often exists among friends. Fostering understanding and friendly ties may therefore be a step to engender identification-based trust. For example, Reagan and Gorbachev developed a cooperative relationship in the late 1980s partly because they had repeated face-to-face talks over the years. Reagan also sought to cultivate a non-hostile atmosphere in these talks by appealing to common interests, actively diffusing tensions and using his sense of humor. Because friendship and liking tend to generate trust and assent – sometimes in a subconscious fashion – Cialdini observes that salespersons often befriend their customers before promoting their products. Trusting someone in certain situations may thus come with risks of manipulation or exploitation
In asymmetrical power relationships, the building of trust among activists is necessary for the formation of a grass-roots coalition capable of overwhelming more powerful parties (perceived economic and national interests as well as that most powerful of impasse creators: the status quo) with passionate commitment to an idea and the hope that the idea can be made a reality.
O'Barry's documentary is a call to action that asks us to respond to our "better angels." If enough of us hear the call and respond, there is no power that can stop this movement to stop the killing.
As Martin Luther King, Jr. once said, "the arc of history is long but it bends toward justice."
The subjects covered in this issue include the chaotic state of federal mediation confidentiality protections [by Phyllis G. Pollack]; the dangers of [mediator] class action fairness declarations [by Jay McCauley and Jeff Kichaven] and the difficulties inherent in applying federal conflict of interest laws developed with attorney advocates in mind to attorney neutrals and their law firms [by Robert J. Rose].
Though these issues are of critical importance to daily practice in our federal courts, very few advocates are aware that these problems exist, let alone how they might be fixed. The Resolver’s first mission is to make available to FBA members the highest level of scholarship and best practices in federal mediation and arbitration practice. The second—and perhaps the most important— mission of The Resolver, is to commence a robust and sophisticated conversation among federal lawyers, on the one hand, and district and circuit court mediators on the other, about the means by which we can more efficiently, effectively, and durably help our clients resolve their litigated disputes.
(from the Letter from the Editor by yours truly)
You'll also want to read the Message from the [ADR] Section Chair, Simeon H. Baum, whose energetic leadership is making the ADR Section of the Federal Bar Association a dynamic new force in the ADR field.
As Baum's message notes, we have great things in store for the work of the FBA's ADR Section. Simeon writes:
For those of you who are interested in what you encounter in The Resolver, we welcome you to participate actively in the FBA. Become a liaison to the section on behalf of your local chapter. If you have thoughts on pending or possible legislation that affects the dispute resolution field . . . please feel free to share them with us—publish your piece in the next issue of The Resolver.
Or, reach out to the section and your chapter and look to put your cause at the forefront of the FBA’s legislative agenda. We can take advantage of Bruce Moyer and the FBA Governmental Relations Council to cultivate the best in the ADR field through national legislation, where appropriate.
If you have a CLE program on ADR that you would like to promote, please let us know through the ADR Section, and the section can collaborate with your local chapter [Board member Jeff Kichaven is the CLE Chair this year and you can reach him at the link above].
Along these lines, the section is hoping that FBA chapters will host fireside chats or roundtable discussions featuring the circuit mediator for that area [and local Board members will be reaching out to those chapters to initiate those roundtables.
These CLE events—perhaps accompanied by a breakfast, lunch, or cocktail reception—can provide an excellent opportunity not only to enhance the use of those ADR forums, but also to meet with likeminded neutrals and representatives.
With this first issue of The Resolver at hand—thanks to the efforts of editor Vickie Pynchon, our generous contributors, and FBA sections and divisions manager Adrienne Woolley (email@example.com), we invite you to join us in the unending way of creative service to your clients, the bar, and society via the path of resolution.
Someone recently told me that you can't argue with a story, only with a position or another argument. That's why narrative is such a powerful impasse breaker and why asking diagnostic questions, which elicit stories rather than arguments, so often bridges gaps between the parties that yawn as wide as the Grand Canyon That's why I'm listing Asking Diagnostic Questions as the second most powerful means of breaking negotiation impasses.
Diagnostic questions are those that reveal your bargaining partners’ desires, fears, preferences and needs. Though your bargaining partner will never reveal its true bottom line, it may well acknowledge that it places a far lesser or higher value on the subject of litigation – real property, for instance -- than you do. And though your adversary will never acknowledge the rectitude, nor even often the good faith, of your legal or factual position, she may easily disclose that she needs the money she seeks to infuse capital into her business, to pay back debts, to put her children through college or to acquire much-needed catastrophic health insurance.
You may also find that your bargaining partner is willing to disclose whether he is risk averse or risk courting and whether his predictions for the future of an enterprise – yours perhaps – are more optimistic or pessimistic than your own. Once you learn what your opponent wants, needs and prefers, you can commence – or reconvene – a negotiation that is more tailored to your adversary’s desires; one that will increase the number and value of items both of you have to exchange with one another.
Just a few examples from my own practice:
a case concerning the repayment of over-paid health insurance benefits to physicians settled at a number the defendant said she would never pay when the Plaintiff revealed the existence of an agreement between it and a board member that no one else who was overpaid would get a better deal than he had.
a case concerning the dissolution of a partnership settled when I asked Partner A what his valuation of the enterprise's inventory was in a case to dissolve the partnership. Because he placed a far lower value on that inventory than did Partner B, Partner B (who planned to continue in the import-export business) was happy to accept A's valuation, offering to purchase it from him on the spot (and agreeing to a lower valuation of the good will of the partnership business than he'd earlier been prepared to acknowledge).
a property damage case settled when I asked the Plaintiff, in separate caucus, what he planned to do with the proceeds of the settlement. The defendant, who "knew someone in the business," was able to obtain the item Plaintiff wanted at a lower cost than Plaintiff could have procured it, bridging the gap between the parties' negotiating positions.
a patent infringement case settled when I asked the Plaintiffs what they were afraid would happen if they agreed to give the alleged infringer a license to manufacture and market the allegedly infringing product. Plaintiffs said they believed the market would "get really hot" in three years time, allowing the infringer to make a killing on their technology. When I asked the defendant what he thought about Plaintiffs' suspicions, he said he planned to phase the product out of his product line within three years. I suggested that the defendant agree to a graduated royalty which would require him to pay an unusually high percentage of its sales during the years Plaintiffs were convinced he'd be selling "their" product and at a time when Defendant swore he would not.
In a lemon law case, I asked the Plaintiffs to tell the mobile home manufacturer to explain why they'd purchased the $200,000 vehicle in the first place. Plaintiff's answer so undermined the defendant's "buyer's remorse" theory of the case that the matter settled quickly thereafter.
I asked a perplexed defendant why the Plaintiff had chosen to sue it out of the entire universe of Plaintiff's competitors. Defendant quickly responded: "because we have better people, more talent and potentially better technology. Plaintiff wants to remove us from the market" I thereafter brokered a deal involving a joint venture between the two companies using company A's talent and company B's far larger distribution network.
As you can see from these few examples, diagnostic questions break impasse on "pure money" cases, as well as in those where the parties more or less obviously have something other than money to trade. Once again, it is critical to remember that no one wants money but everyone wants something that money can buy. Ask the ultimate reporter question about your negotiating partner's fears, desires, wants and needs -- WHY? -- and you will see impasse dissolving before your very eyes.
With apologies to "staying on topic" purists, I give my Lit Major readers the literary passage that comes to mind whenever I think too long about asking questions:
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.
I begin a series today on what I believe are the five most effective ways to break impasse. This morning's impasse-breaker will aid business people negotiating the settlement of a commercial dispute the most because it requires the generation of hitherto unseen business advantages to sweeten the pot.
Transform the dispute into an opportunity to make a business deal
Google’s CEO Eric Schmidt famously said that “litigation is just a business negotiation being conducted in the Courts.” If you look at litigated disputes in that light, the settlement option landscape immediately broadens. There are only certain remedies available in court or arbitration and those remedies may not be exactly what the parties are looking for.
If we remember that money is simply the means to obtain something else the parties desire – better distribution networks; insurance against future calamity; the security of knowing one’s intellectual property has not fallen in a competitor’s hands; health care; a college fund; even the acknowledgement that we have heard and understand our opponent’s point of view – we can add value to our negotiations before attempting to distribute it in a way that seems fair and just under the circumstances.
Often more important than finding commonalities between bargaining partners is locating those items that the parties value differently. A dollar may just be a dollar, but one company’s inventory, trade secrets or present pool of talent will seldom be worth the same in our competitor’s hands as it is in ours. In some cases our assets may be more valuable to another than they are to us, in which case we can choose the higher value as the central rationale for our proposal, remembering that where value is uncertain, the first party to put a price tag on it will “anchor” the bargaining range in his favor throughout the course of the negotiation.
Therefore, a savvy negotiator searches for both common and divergent interests in an attempt to put as many different options on the bargaining table as possible. Generating such options can melt impasse over hard “bottom line” dollar and legal position conflicts and transform a distributive negotiation session ("what I lose, you win and what you lose I win") into a business opportunity that will leave both parties better off than they could have imagined.
I cannot recommend John DeGroote's Settlement Perspectives blog too highly or too often. This week he praises CPR's new Early Case Assessment Guidelines. Praise from John is hard to come by. I join in his comments below and suggest that all my readers click on the link below for his excellent commentary.
The International Institute for Conflict Prevention & Resolution, known also as the CPR Institute, has recently published CPR’s Early Case Assessment ; Guidelines (2009), which are designed to “set forth a process designed to help businesses decide early on how to manage disputes, including identifying key business concerns, assessing risks and costs, and making an informed choice or recommendation on how to handle the dispute.” They certainly meet their objectives.
I reviewed with some dismay the July 12, 2009, post titled Mediators' Proposals: the Good, the Bad and the Ugly, which seemed to endorse counsel who deceive the mediator to push the negotiations to a mediator’s proposal./* I primarily litigate, but I devote a small percentage of my practice to serving as a mediator.
A mediator’s proposal can be a very effective tool for mediators and the parties to promote settlement when the negotiations have honestly and appropriately reached an impasse. The chance of the proposal generating a settlement, however, will increase greatly if the parties and attorneys respect the mediator and his or her opinion.
If the parties and attorneys respect the mediator, then they will respect the proposal, making it more likely that they will accept the proposal. Without respect, there is nothing more than a gambler’s hope that the proposal will be in an acceptable range. Further, if the lack of respect is mutual, then there is a risk that the mediator will subconsciously tilt the proposal in favor of the other side, which certainly will not promote settlement.
Every mediation has some elements of a game, but while the gamesmanship can involve concealment and even some sleight of hand, it should not devolve into deception. One example that has worked well where there is complete trust and respect between the mediator and at least one side is for that side to divulge the final offer near the outset of the session with the understanding that the mediator will have some latitude to dole out the total authority in bits and pieces with the hope of settling at or near that final number.
This is deceptive because the mediator is telling the other side that obtaining each “concession” is a hard fought battle, but it eliminates the risk of moving too quickly to the end game against an opponent who does not care what the opening number might be, but only wants to halve it (or double it) before the end of the day. This is deceptive because each private session with the side who divulged his or her final number creates an opportunity to discuss future vacations and how the kids are doing. If, however, the goal is to reach a settlement that works for all concerned and gives all parties a sense of accomplishment, then it is a fine tactic that promotes efficient negotiations, likely avoids altogether the need for a mediator’s proposal, and minimizes the fees of the attorneys and the mediator.
Candor and respect towards a mediator has an additional benefit that may not be of advantage to the immediate clients, but will promote productive future mediations on other matters. If I can tell my client that a particular mediator is good, that I respect that person, and will seriously consider everything that that person says, then the client is more likely to listen to what could be bad news about the case. This level of respect is rarely earned in the first session with a new mediator, but only after several mediations. Without candor and respect, the attorneys and parties just want to “win” without realizing that the cost of “victory” may be dearer than the settlement obtained through a positive and respectful mediation.
* Editor's comment: I did not mean to endorse duplicity on the part of counsel or the gaming of a mediator for the purpose of obtaining a favorable mediation proposal. I only meant to emphasize the fact that many attorneys can and do "game" the system, including as much manipulation of the mediator herself in the process.
-- Gregory Nerland
Akawie & LaPietra
1981 N. Broadway, #320
Walnut Creek, CA 94596
savvy negotiators angle for an advantageous impasse rather than a settlement. Compromise is no longer the goal of the mediation exercise; instead it becomes a play to the “neutral,” whose power to craft the mediation proposal will make her the real decisionmaker:
In cases where the mediator’s proposal will be based on who will pay what, the parties — or worse yet, one party — will spend valuable time and effort constructing an impasse when, in the absence of a mediator’s proposal as a fallback, he might have actually achieved a compromise settlement; or
In cases where the mediator’s proposal will be based on the value of the case, no one has an incentive to be candid with the mediator — so positions become more important than interests; or
In cases where the parties aren’t sure what will drive the mediator’s proposal, they dig into their positions and hope for impasse — with the most likely result being a mediator’s proposal predicated on those positions.
A reluctant plaintiff will make a large jump if the money is really “on the table.” Defendants will come up with money they otherwise deny having, if it means that the case is really over. It also eliminates reactive devaluation.
For those who skipped social psychology in college, reactive devaluation is what every lawyer is taught in the first year of practice, if not earlier. "If the other side wants it," said my first mentor, "you don't, even if it seems like a good idea to you." With that admonition ringing in the ears of every litigator, the need for mediators is obvious. Given the dangers cited by DeGroote, however, the mediator's proposal may now be simply another way to "game" the mediator.
I have two short stories to illustrate the reason I re-direct the parties to bracketing when they ask me to make a mediator's proposal. But first, let me explain that I am one of those mediators who used my "proposal" option to put a number on the table I thought both parties would accept even though it would be a stretch for both of them. I usually tested these assumptions in separate caucuses by asking each side "if they came down to $X would you come up to $Y." When the numbers didn't overlap, I'd gauge how much pain there might be for both parties to bridge the gap, along with other entirely subjective opinions such as:
how invested each side was in walking away with a settlement that day
how firm each side was in their assertion that they would not go below or above a certain number
whether either attorney needed help in bringing a little more reality to their clients before the parties would be ready to accept a proposal by the mediator; and,
how much "street cred" I'd developed with the parties personally so that they'd accept my estimate of the settlement price-point even if they wouldn't accept their own attorney's advice /*
The first time I felt manipulated into making a mediator's proposal that wasn't the best both parties could do occurred at the close of a particularly fractious commercial mediation. In the presumed Zone of Potential Agreement , my proposal was high on the side of the Plaintiff because I felt that the defendant had more "give" than did Plaintiff's counsel.
I made my proposal and both sides accepted. When I walked into the defense caucus to tell counsel that he had a deal, however, I was met with a burst of laughter, the clapping of hands and the following statement: "I was prepared to take less; that's a great deal. Thanks so much."
Everyone Lies to the Mediator
That was the hardest lesson I'd had to date in the truism that EVERYONE lies to the mediator. You do not get to lie to the mediator twice, however, so I caution anyone who's feeling that she put one over on the mediator either to keep it to herself or never to hire that mediator again.
Still, I took a lesson from the attorney's merriment. I realized immediately that he was not the only, nor the first, attorney to manipulate me. He was simply the only one to let me know it. I don't like being manipulated. But that's what litigators are trained to do. We call it "persuasion." Still, I didn't like the look of my mediator's finger prints on that settlement, one that now appeared unduly influenced by my credulity.
So that's reason no. 1 -- an extremely strong reason no. 1 - why I don't' like to make mediator's proposals and why counsel might ask themselves whether they want to continue asking for them.
"If We'd Wanted a Third Party to Decide, We Would Have Arbitrated This Case"
The quote above is from an attorney who represented one of the parties in the largest and most sophisticated commercial case I've mediated to date. We were at the end of day two and the parties -- who had traveled great distances to meet in a neutral city -- were nowhere near a landing point. I was a sufficiently experienced mediator to land the case, but new enough to feel as if I'd run out of options when I suggested making a mediator's proposal.
"I didn't hire you to have a third party make my decision for me," said counsel. "If you want to get the parties closer together, why don't you suggest a bracket?" (for a explanation of bracketing, see my colleague Ralph Williams' article Introducing Deal Points - the Basics.)
I'd used brackets as a means of testing the parties' true distance before that day ("if he went to $X would you come down to $Y?") but I'd never made a mediator's proposal that was a bracket, i.e., "I suggest that the defendant put $X on the table if plaintiff will reduce its demand to $Y."
Although we didn't settle the case that day with a bracket (it took four full months of follow-up telephone negotiations to do that) I took counsel's point to heart. The parties don't hire me to make a decision for them. They're much happier when they get to make the decision themselves. Even though the parties do decide whether to accept the mediator's proposal, it hasn't come to them as the result of their own hard work. That being the case, the agreement reached is far less durable (subject to failure based upon nit-picking deal points after the agreement has been reached in principle) and far less satisfying than one achieved without the mediator's thumb on the scale.
I decided to stop making mediators' proposals more than two years ago. In all that time, however, I've never refused to make one. Rather, I've suggested alternative ways of achieving resolution, at least one of more of which settled the case in every case where the parties asked for a mediator's proposal.
I'd like to hear thoughts on these points -- manipulation and party satisfaction -- from my litigator readers as well as my mediator readers.
* I say this with the following caveat: I would never attempt to influence clients to do something other than what their attorneys advise. From time to time, however, the attorney needs to make the mediator the "bad cop" in the negotiation so that the client will not feel as if the attorney is no longer fighting for his interests. I only play "bad cop" with the attorney's advice and consent. My job is to get the settlement concluded making the attorneys look good, not bad.
I was reading a great article in the New York Times this morning about "blue sky" transparent diplomacy in light of Obama's Cairo speech and was intrigued by the phrase "constructive ambiguity" in international diplomacy.
One is, don’t tell lies. The other is, you can say more in private than you can in public, but they have to be consistent.
This brought to mind not simply the one or two memorable instances in which I caught mediators in deception during my litigation practice, but a recent experience communicated to me by a friend about one of those $15/K a day mediators. I ask for the full 411 on these mediations because I'm intrigued by the value $15K/day buys. Here's the story.
My friend called me during a recent mediation to tell me that his mediator had just left the room after leaving this message with his "team."
Your opponents just asked me to make a mediator's proposal of $X.Y million.
Assuming that this disclosure was not a breach of confidence, I had to ask myself whether it was simply a (manipulative) hypothetical "offer" approved by the other side in form and content that the other side could safely disown. In either case, I felt it was (a) unethical - i.e., a breach of confidence; or, (b) partial (not neutral, which is also unethical).
Someone could likely talk me down off the ledge on this one but I'm having trouble seeing it as permissible mediator behavior. Assuming it wasn't a breach of confidence, it raises the question whose ox is being gored here? How much manipulation by the mediator is acceptable - is ANY manipulation acceptable and if the mediator is manipulating, is it POSSIBLE for him/her to do so without also being PARTIAL?
I have "caught" mediators in deception during my practice (and have not been quiet about my experience). In case mediators do not recall legal practice, let me remind them that counsel talk to one another and despite our differences usually trust one another more than we trust our mediator. If you lie to one of us or disclose something you shouldn't be disclosing, don't let the separate caucuses in which the mediation is taking place mislead you about the state of "play" in the litigation. If the mediator is dishonest, will be found out.
If we do not hold ourselves to the absolute HIGHEST POSSIBLE ethical standards, our credibility, and our careers, are seriously at risk.
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!)
wave of redundancies sweeping across the nation is forcing a number of employers, employees and their advisors such as lawyers and trade unions into conflict situation. As customers become slower and slower at paying added pressure is created for their suppliers and relationships become strained.
Because the "approach taken by those involved and their attitude in dealing with the conflict will have a significant impact on the outcome and the costs involved in finding a solution," Justin provides the following easy to implement solutions:
1 Avoid macho posturing – In an attempt to hide the weakness of their position some people are all bluff and bluster in conflict situations. . . . . (more)
2 De-personalise problems – My experience of disputes is that often things can happen due to personal issues between the individuals. It can be difficult to take the personalities out of a matter but believe me there are clear benefits. . . . (more)
3 Focus on your own emotions – In many work environments there are unwritten rules that emotions are not to be expressed. Is this really wise? . . . (more)
4 Listen – Effective communication starts with the speaker taking responsibility for understanding the language, perspective and experiences of the listener. . . . (more)
5 Analyse the Conflict – Research on problem solving indicates that the effectiveness of solutions increases significantly once the real problem is identified. . . . (more)
Justin Patten handles conflict for a living and whilst as a litigation solicitor he is familiar with the combat zone of the court room he much prefers to work with clients to achieve mediated solutions through negotiation and agreement. Contact Justin on 0844 800 3249 or email Justin here.
A White Paper with advice on How to save money, maintain business relationships and avoid negative publicity by embracing the power of mediation to resolve business and employee disputes. Download the PDF here.
You can subscribe to Justin's invaluable eZine here.
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.
[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.
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).
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.
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 toprovide a forum in which litigated disputes may be tried, such a rule would impermissibly chill the parties' Constitutional right to a jury trial.
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.
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."
"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.
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.
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 . . . "
*/ 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).
I'm attaching a Policyholders Guide to Mediation not because it's particularly useful in regard to the strategy and tactics necessary to be a successful mediation advocate, but to share with my fellow mediators just how low an opinion many litigators have of us.
Notice on page 2 (Mediation Downsides) the following:
mediator may inappropriately discourage/scare the policyholder to force a settlement
mediator may "tell insurance company things you ask them to keep secret" (!!!)
mediator may have a financial stake in keeping the insurance company happy
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.
I hired an attorney who was a full-time, highly experienced mediator.
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).
With two talented community co-mediators, I experienced the freedom of expression in joint session that confidentiality provides.
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.
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.
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."
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:
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
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.
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.
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.
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.
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?
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.
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:
bet on rather than argue about their different forecasts for the future;
As you'll recall, we're in hour nine of the mediation. The parties have finally agreed to settle the antitrust litigation the Court ordered them to mediate ("we won't settle; we'll only be here for an hour").
Defense counsel wants to write up the "deal points" and make a quick getaway. Before she does so, we have the following conversation.
"We'll need three years to pay it."
I fake calm.
"Your security?" I ask, my mind racing to the other room where an already unhappy set of plaintiffs are sitting.
"We don't have security. I told you my clients are broke. I also told you we'd need terms but you didn't want to talk about them."
This is true. From hour one the defense insisted they'd need to pay over time and the Plaintiffs wanted to know what terms the defense was thinking of. Throughout the day I'd told them both the same thing: "let's see if we can agree on a number before we start talking terms."
I have reasons for this. They are as follows:
once people have agreed upon a number, it's far more difficult for them to walk away from a deal; the Plaintiffs have already begun to think about what the money will mean to them and the defense has begun to imagine life without the litigation;
people are risk averse. So long as there is no (or only minimal) money on the table, it's easy to refuse to engage in the often difficult process of readjusting their expectations and compromising their desires. When there's enough money on the table to make both parties want to settle, walking away involves loss.
This is often the trickiest part of the mediation. The three-year time table and absence of security is, I know, enough to blow up this deal. I'm going to take heat from the Plaintiffs' side, for resisting their efforts to learn the Defendants' terms before they spent an entire day agreeing upon the price. I don't, however, regret my decision. If these terms cause the negotiation to break down now, they certainly would have done so in hour one.
How I help the parties negotiate what is poised to become a rancorous impasse in the next post.
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."
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
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.
FORUM (FORUM & FOCUS) • Jan. 08, 2009 Every Case Is a Winding Road
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.
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?
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.
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.
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.
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.
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.
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.
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.
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.
O.K.,Solo Practice University™ is not Santa Claus but it comes pretty darn close.
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Learn from some of the most progressive lawyers, marketing pros, technology consultants and legal business giants how to:
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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.
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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. Brett is a patent attorney and frequent national speaker on internet and intellectual property law. 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).
[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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
A lessee of commercial office space complains that the common areas are not being properly maintained. The local high school has just banned Catcher in the Rye. Again. A prestigious law firm fires a first year associate because he refuses to remove his new “tongue stud.” These seemingly disparate disputes have one quite obvious but ill understood characteristic in common – they are all examples of unresolved conflicts that have ripened into discrete disputes.
Pretend for a moment that you never went to law school. I know. It's hard. But give it a shot.
Lawyers (those other people who went to law school) are are trained to understand, manage and remedy all disputes, no matter however different they might be, in a single, highly controlled manner.
To help their clients deal with the problems mentioned here, lawyers will read the lease; research the latest Supreme Court rulings ("Fuck the draft"); and, study the statutes. Once they understand the facts that are relevant to the law, they “think like lawyers.”
How do they do that? "Think" like lawyers?
First, they subject the facts and the law to as much scrutiny as any idea can bear before it disintegrates into the dust of first principles. They create a chronology of events, highlighting and tailoring the "story" of the conflict that "fits" the available "causes of action" giving rise to "rights" in their client, obligations in their "opponent" and remedies for the harm suffered.
This "legal" dispute was once about a relationship between people. Now it is an "actionable" claim in an extremely controlled process in which one of the parties will "win."
That, of course, rarely happens because the legal system has become too expensive and the law too uncertain for most people to risk what used to be it's goal -- a jury trial.
Lawyers recognize frivolous or baseless or "defendable" claims by observing just how uncomfortably the “facts” sit inside their opponent's “causes of action.” When called upon to justify their entitlement to get their client's claim before a jury (demurrers, motions for judgment on the pleadings, summary judgment motions, non-suits) the Plaintiff's attorneys can and will simply change the way the story is told. They make the facts fit the law. There's nothing wrong with that. That's their job. If the facts won't "fit" the law, lawyers apply themselves to the law's creative expansion.
What attorneys do not learn in law school is how and why conflict develops into a dispute and then predictably evolves, usually getting more acrimonious and difficult to resolve.
My friends who are lawyers (I never went to law school, remember? and neither did you) tell me that they know how to escalate conflict but not how to de-escalate it. They also tell me that they see a lot of injustice. Sometimes the injustice arises because the laws themselves are unjust. Sometimes the tragic and unfair consequences of human interactions just don't have any legal remedy. And sometimes the legal process itself makes disputes worse -- more protracted, frustrating and expensive -- rather than better.
In common law countries, like ours, where the law is forged in the fire of conflict, shouldn't attorneys be taught not only how to "win the case" but also how to dampen the flame? Most litigators I know would respond with a resounding "no!"
Conflict resolution that is not "handled" as litigation or arbitration is for some other professional to deal with. Therapists come to mind. Don't they help the parties deal with that most uncontrollable aspect of any dispute -- something not only lawyers but the law itself exclude from the legal action?
Feelings. Not just sad or mad feelings. But the type of feelings that make teenagers shoot other teenagers on the streets of Los Angeles. Feelings of loss, tragically unfair outcomes, powerlessness, rage and despair.
The purpose of this post and the new thread that it is meant to begin? To start something radical.
If you're not aware of what I'm about to tell you, you should be.
I was just talking to a friend over coffee the other day about how we're using 18th Century technology (the jury trial) to solve 21st Century problems.
Here's the idea. A legal TED Conference.
If you'll look at what TED accomplishes, you'll know what I don't mean. I don't mean a conference to trot out any new/old "ADR" ideas -- mediate this, arbitrate that, create new rules and forms for the lawyers to use.
I mean creating the highest level think tank we can to first envision and then implement a dispute resolution technology that incorporates what we've learned since we first enshrined the jury trial in our Constitution more than 200 years ago.
I have one man in mind -- Larry Lessig. But surely there are others. The first step would be to suggest names for the coordinating committee.
Why do I think of TED? Because what it envisions cannot be accomplished. It cannot even be envisioned. It's a fool's errand. One I'd be willing to spend the rest of my own life working on.
I've recently been covering mediation confidentiality from an attorney's point of view. Because my statistics page reminds me that clients also read this blog, I sometimes direct posts to the people with the problem -- clients.
This morning I notice that someone landed on my site seekingan answer to this question:
What can you do if your HOA Board member breaks the mediation confidentiality agreement.
The lawyerlike answer to this question is -- "it depends upon what the agreement says."
But let's assume the question is covered by California law.
The Scope and Effect of Mediation Confidentiality in the Hands of Clients
Nearly every mediator begins every mediation session by explaining how and why information exchanged in mediations is confidential. I know from my community mediation work that the people usually want to know something lawyers rarely ask -- whether they'll be able to discuss what happened in the mediation with friends or family.
In the absence of a more restrictive agreement among the parties, under California law today, the answer is "yes, they can."
What's confidential? The California Evidence Code (section 1119) says that everythng said or done during a mediation is confidential
cannot be "discovered," i.e., you cannot be compelled to disclose those communications in answers to interrogatories, in deposition testimony and the like.
Those are the only restrictions on the disclosure of confidences exchanged in a mediation held in California in the absence of a more restrictive agreement. Unless a California court broadens the scope of mediation confidentiality, an HOA Board Member who runs around the complex or neighborhood talking about who said what during a mediation is not "breaking" (breaching) the California's protections for mediation confidences.
The Parties Can and Do, However, Agree to Limit the Communication of Mediation Confidences to the Participants in the Mediation.
A contract is an agreement that creates private law governing the parties' relationship with one another. If you enter into a Confidentiality Agreement in mediation, you should understand that you are creating obligations that bind you as well as rights that protect you. A google search turned up Confidentiality Agreements that provide remedies for their breach. This one for instance provides two poential consequences for breach:
any party to the agreement is entitled to ask the court to stop (enjoin) any other party from disclosing confidential communications; and,
the party who wrongfully discloses mediation confidences will be liable in damages (including the expense hiring attorneys) for any damages caused by his or her breach of the confidentiality agreement.
The California-based ADR Services has a similar term in its Confidentiality Agreement (here).
Failure to obey an Injunction can be enforced by contempt, but this remedy is expensive, would require multiple trips to the courthouse, is difficult to obtain and would not likely make up for the harm caused by disclosure. The second remedy - damages -- would require you to file a lawsuit and your monetary losses are highly unlikely to be worth the expense of litigation.
disclos[ing confidential information] to anyone [who is] not involved in any existing litigation, or any litigation that may arise, concerning the subject matter of this mediation session . . . .
The term "involved in . . . litigation . . . concerning the subject matter of this mediation" is broad and ill-defined. All homeowners might be said to be "involved in" the litigation subject of the mediation. If you read the contract language broadly, you might convince your HOA Board member that talking about the medaition around the condominium complex or in the neighborhood violates the Confidentiality Agreement.
There's nothing in this agreement, however, that states what the consequences of breach might be. Nevertheless, if you suffered monetary harm as the result of the breach, you might well be able to file suit for damages in a breach of contract action. Off the top of my head, I can't think of any harm that might flow from the Board Member's indiscretions that would cause sufficient economic harm to justify the cost of a lawsuit.
The commercial ADR panel on which I serve, Judicate West, makes a form Confidentiality Agreement available to the parties (here) which merely restates the controlling principles of confidentiality law in the State of California. In light of the recent Thottam opinion in California, I would hesitate before asking parties to sign any agreement that:
expands the scope of confidentiality beyond that provided by the Evidence Code, while at the same time,
carves out an exception for the enforcement of the agreement.
For my analysis of that opinion and the problems it creates for mediators drafting confidentiality agreements, click here and here.
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."
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?
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).
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.
Heck -- given that we spend nights and weekends feeding this blog, there's a pretty strong argument that we're crazier than the next guy.
We fret about whether each and every one of the ten million documents has been reviewed and coded correctly, and we change commas into dashes -- and back again -- in footnote nine on page thirty of the brief.
We believe that our clients are more likely to win if we do our jobs right, and we devote an awful lot of energy to that cause.
And then the system kicks in.
Courts make utterly unpredictable procedural rulings that dramatically change the value of our cases. The MDL Panel, for example, may decide to consolidate a set of cases in a jurisdiction that previously had nothing to do with the litigation -- like sending Breast Implants to Alabama or Albuterol to Wyoming -- and all of a sudden an unanticipated body of local appellate law governs your federal issues, and your cases are either won or lost for reasons beyond your control. (See In re Korean Airlines, 829 F.2d 1171 (D.C. Cir. 1987).)
Or you tee up a legal issue in front of a judge, and you can't predict the result, because the cases are breaking fifty/fifty in that area. The judge might grant summary judgment, or he might deny it. Or, as happened in Tucker v. SmithKline Beecham recently, he might grant the motion in September and reconsider the following July. Your lawyering skills presumably had nothing to do with it.
One judge grants a Daubert motion, holding that the evidence linking Accutane to inflammatory bowel disease is junk science, inadmissible in a court of law. But, a couple of weeks earlier, a New Jersey jury had awarded millions of dollars of damages based on that same evidence.
One judge holds that a claim accrued on the day the plaintiff was diagnosed with a disease, and another holds that the identical claim -- on identical facts -- didn't accrue until the plaintiff "discovered" his claim based on press coverage or an article in the scientific literature. The statute of limitations bars the first claim; the second one goes forward.
You're a hero or a goat, and you had nothing to do with it.
One judge holds that the warnings on your client's product are adequate as a matter of law. Another holds that the question of adequacy is one of fact, to be decided by a jury.
One jury then finds in your client's favor, but a second jury -- looking at precisely the same warnings -- finds the opposite.
We're not complaining about this, really.
They're our lives, after all, and we picked this profession, and it can be awfully exciting and challenging and, yes, fun.
But doesn't it sometimes feel a tad random?
More to the point, our system sinks tens of millions of dollars into massive discovery to ensure that every last fact is known -- presumably in pursuit of an accurate result. But those carefully honed inputs then yield results that are both unpredictable and flatly inconsistent with each other (which means that at least one was wrong).
If the system ultimately values cases wildly inconsistently, just why does society invest massive resources into trying to ensure accuracy? Aren't there better things to do with our collective wealth?
But we digress.
We have to go back to scrutinizing the footnotes in all of the drug and device precedents, to pry out of them every last ounce of utility for our clients.
If we didn't, then a brief might not be perfect, and we might be more likely to lose.
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.
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.
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.
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.
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 thathave been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiariopinion -- 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.
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.
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
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?
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?
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. /**
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.
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.
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.
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.
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.
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?
most . . . plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer . . .
Plaintiffs, however, are not the only ones who made the "wrong" decision -- defendants were mistaken in 24% of the cases. Defense errors, however, were far more costly.
getting it wrong cost plaintiffs . . . about $43,000 . . . For defendants, who were less often wrong about going to trial, the cost was . . . . $1.1 million.
What to do?
It's no answer to say " take the last best settlement offer," though one party or the other will 80 to 90 percent of the time and often on the courthouse steps, i.e., at the point of a gun when decision-making is at its most flawed.
Nor, I must concede, is the answer simply mediation, which is, after all, pretty much a pig in a poke. Why? Because mediation practice ranges all the way from
to a mediator who knows only how to repeat "trial is expensive and the result uncertain"
to a settlement officer who does nothing more than shuttle numbers back and forth between two rooms
to a "transformative" mediator who allows the parties free reign to "vent" their "feelings" without helping them get a grip on the very real and serious consequences of the negotiated resolution that has been proposed to them.
A friend of mine who is a psychoanalyst once told me that patients get better in therapy despite their analysts' "technique." It's the relationship that's curative, she told me. A patient in need will find the water of healing in the desert of a therapist's theory. If the same can be said of mediation -- that it's the relationship that's curative -- the question that naturally arises is whose relationship?
fundamental attribution error -- the tendency to over-emphasize personality-based explanations for behaviors observed in others while under-emphasizing the role and power of situational influences and reversing this error when the behavior at issue is our own.
Just-world phenomenon — the tendency for people to believe that the world is "just" and therefore people "get what they deserve"
We get so stuck in our positions that we fail to ask diagnostic questions that have been proven to result in significantly better negotiated outcomes for both parties.
My friend Judge Alexander Williams -- the soon to retire full-time settlement Judge in the downtown Los Angeles Superior Court -- has the following poster hanging in his jury room.
The surface is what the lawyers know.
The depth and breath; the texture and particularity; the details of the dispute and the desire for justice that exists on both sides, is known only to the litigants. And they haven't (and won't) tell you what they know or want.
Why you should never leave a mediation or settlement conference without letting a skilled mediator facilitate a joint session in which the litigants can explore their joint interests and conflicting goals will be the subject of my next post.
I have alot more to say about this but for the moment am simply linking you to an article at Cognitive daily demonstrating the known fact that you are far more likely to persuade another if you are making eye contact with him.
And still opposing parties resist sitting in the same room with one another when attempting to settle litigation!
There is a considerable body of research showing that eye contact is a key component of social interaction. Not only are people more aroused when they are looked at directly, but if you consistently look at the person you speak to, you will have much more social influence over that person than you would if you averted your gaze.
So why would the S[pecial Litigation Committee] release [Wilson Sonsini] and Larry Sonsini? The SLC wrote that it weighed the opinion of a legal ethics expert as well as testimony and documents related to Sonsini and the firm’s roles at Brocade. It also listened to Sonsini and his firm’s “contentions that Brocade employees misled WSGR about stock-option grants” and that the firm had negotiated a good settlement with the SEC and helped avoid DOJ action against Brocade. The committee also considered the firm’s longstanding relationship with Brocade and the firm’s “willingness” to help the company resolve any “outstanding questions” about the backdating.
There's been some salacious commentary (such as WAC's Like a Vixen) about Blawg Review # 171. I just want to say to anyone who missed the sexual revolution -- on either side of the generation gap -- we're sorry to have started it all. We just never really left high school.
We've also heard some complaints that the most recent Blawg Review is just too darn long. In honor of our sister blog and those attorneys who are still billing 2400 hours/year, we give you the IP Executive Summary of the Virgin Blawg Review #171 below.
My late mother, aleha ha-shalom, told me repeatedly that I had a religious obligation to learn every day, and I have honored her memory by doing exactly that. Learning also involves changing how you think about things; it doesn't only mean reinforcing the existing views you already have. In this respect, Second Circuit Judge Pierre Leval once said that the best way to know you have a mind is to change it, and I have tried to live by that wisdom too. There are positions I have taken in the past I no longer hold, and some that I continue to hold. I have tried to be honest with myself: if you are not genuinely honest with yourself, you can't learn, and if you worry about what others think of you, you will be living their version of your life and not yours.
Other IP bloggers have, of course, reflected on Patry's Final Blog Words here and here.
The IP Dispute of the Week, of course, is Hasbro's suit against Rajat and Jayant Agarwalla for their Facebook hit Scrabulous. Scrabble itself was invented during the Depression by Alfred Mosher Butts, an out-of-work architect. How did he do it? As the New York Times explained in its review of Steve Fastis book, Word Freak (Zo. Qi. Doh. Hoo. Qursh)Scrabble's inventor assumed that the game would work best if the game letters "appear[ed] in the same frequency as in the language itself." So he
counted letters in The New York Times, The New York Herald Tribune and The Saturday Evening Post to calculate letter frequencies for various word lengths. Playing the game with his wife, Nina, and experimenting as he went along, Butts carefully worked out the size of the playing grid (225 squares, or 15 by 15), the number of tiles (100), point values for the letters, the placement of double- and triple-score squares, the distribution of vowels and consonants, and so on.
If Player 1 opens with "fringe" (double word) for 24 points; Player 2 follows by slapping an "i" on the triple word score followed by an "n" for "infringe" and 33 points; and, Player 1 responds with "ment" for 19 points, the combined score for "infringement" is 75 points. Our readers can do the math and moves on "trademark" and copyright."
"a new studio tactic [is] not to prevent piracy, but to delay it . . . Warner Bros. executives said [they] prevent[ed] camcorded copies of the reported $180-million [Dark Knight] film from reaching Internet file-sharing sites for about 38 hours. Although that doesn't sound like much progress, it was enough time to keep bootleg DVDs off the streets as the film racked up a record-breaking $158.4 million on opening weekend. . . The success of an anti-piracy campaign is measured in the number of hours it buys before the digital dam breaks.'"
Next week, the Blawg Review will be hosted by the Ohio Employer's Law Blog which we expect will be far more respectful of BR's readers' political, religious and sexual sensitivities than this one was. Thanks for letting us play. And a very, very, very good night!
Change your definition of “winning” to include the business perspective. “Winning for the business” may not mean victory in a trial but preserving management time and protecting the business’s reputation and brand. From Early Case Assessment from Seagate Services.
Seagate is selling an e-discovery product (reason number one for leaving commercial litigation now -- e-discovery). But the quote above nails my own attitude toward resolving complex commercial disputes.
In the criminal law, the negotiation ends either in a plea bargain or the Best Alternative to it -- trial.
Most civil lawyers don't think about revenge much. When settling a case, however, they should understand their clients' desire for vengence if they want to break past the psychological impasse to giving up the ultimate reward in a society based upon the law -- vindication of a party's position and punishment of the opposition by way of a jury verdict.
Even Dr. Melfi wants revenge in a world where the "justice system is %$^#'ed up."
The good news for countries clinging to the rule of law (as we are despite the recent assaults upon it) is as follows:
vengeful feelings are stronger in countries with low levels of income and education, a weak rule of law and those who recently experienced a war or are ethnically or linguistically fragmented. Anthropologists tend to believe that vengeful feelings were useful in binding a family or group together in early human society. They were protective devices before states were established and did the job of punishing wrongdoers.
This may be the biggest break-down in attorney-client communication in the history of litigation. Because this public statement by Allstate about its former attorney would be highly defamatory if not true, I'm taking Allstate at its word here.
Allstate claimed that it had not deliberately flouted Manners’ orders. Rather, it said, its now-former attorney — then with the firm of Wallace, Saunders, Austin, Brown & Enochs — had failed to respond to discovery requests.
Allstate said it was appalled when it learned last year that it was being threatened with contempt.
“Allstate litigates hundreds of bad faith cases each year,” Allstate stated in court documents. “And it responds to discovery requests — just like the ones in this case — in many of them. There is no reason in the world for Allstate not to participate in discovery — particularly in this case, where there is an underlying judgment of $1 million.”
Allstate said it “immediately removed” the attorney from the case and retained new counsel.
The answer to the question "how to break bad news to my client" can be found at any of the links below. Most of these links are for health care professionals, who have to break bad news to their patients and their families far more often than we have to tell our clients that something went terribly awry. Put that at the top of your attorney gratitude list.
Do not avoid seeing the [client] or leave them anxiously waiting for news. Sometimes anticipation can be worse than even the worst reality.
Treat others as you would wish to be treated yourself.
Get the facts before you start.
Make sure you will not be disturbed. If necessary switch off phones or bleeps.
Be factual but sympathetic. Always be empathetic however you may feel personally.
Give time for the information to sink in and the opportunity to ask questions before moving on. Do not seem rushed.
If the [client] does not seem able to take any more be prepared to end the consultation and to take it up again later.
Look for all the cues, verbal or others. , , , Perhaps they would like you to speak to someone else or to have someone with them for the next meeting.
Never say that nothing can be done or the [client] will lose all hope.
Whilst trying to be positive never lose track of the fact that this is a serious and potentially fatal [reverse in the litigation]. Be optimistic but do not promise success or anything else that may not be delivered.
It is no surprise that increased aggression in a naturally aggressive proceeding has negative consequences. For example, parties that often meet for the first time at a mediation or settlement conference arrive not trusting or respecting each other, making resolution much more difficult. Pynchon suggested a somewhat radical solution to the email problem -- live meetings with opposing counsel. She suggested that you routinely have live meetings with opposing counsel throughout the course of a litigation, including perhaps even doing some meetings over a meal. The face-to-face contact would generate the trust and respect needed to resolve issues that always arise during a litigation. I have always advocated live meetings with co-counsel in a multi-party litigation. Email communications (or even conference calls) tend to get out of hand and the parties tend not to pay enough attention to others' positions. I am going to expand that practice to opposing counsel.
One other thought, that I do not know if Pynchon will agree with. Those who still avoid email and continue using letters as a main communication means are not off the hook. I started practicing when letters, not emails, were how you communicated with opposing counsel. Those letters tended to be far more aggressive than the attorneys were in a live conversation. And I suspect people tended to read extra aggression into the letters they received. I do not know if aggression is stronger in emails than letters, but the same problem exists whether you hit send, hit print or use a pen to write to opposing counsel.
I will, however, provide the appellate court's comment on human fallability -- a recognition we all need to carry into any settlement conference or mediation with us. Vast conspiracies are the rare one-off. As Al Gore once said -- we think we can evacuate the planet but not New Orleans? It's our human capacity for error coupled with our human tendency to search the field for someone to blame that accounts for most unresolved conflict. Here's the local Met News article on the opinion and the appellate opinion itself (from our own Second District here in Los Angeles):
"The jury system is fundamentally human, which is both a strength and a weakness. . . . Jurors are not automatons. They are imbued with human frailities as well as virtues. If the system is to function at all, we must tolerate a certain amount of imperfection short of actual bias. To demand theoretical perfection from every juror during the course of a trial is unrealistic."
Assuming your client insists on orally memorializing the settlement reached in mediation, you must comply strictly with Evidence Code Sections 1118 and 1124. An oral agreement reached during a mediation can be proven and enforced only if (1) its terms are recited to a court reporter or recorded by a sound device in the presence of all parties and the mediator, (2) the parties expressly agree to those terms on the record, (3) the recording is reduced to writing and signed within 72 hours of its recordation and (4) all parties to the agreement expressly agree in a writing, in the sound recording or in the reported record that the signed written transcript may be disclosed.
Th[e] procedure for enforcing an oral settlement is so technical and cumbersome . . . (counsel and mediators rarely have court reporters standing by or tape recorders in their breast pockets), that we recommend against it.
We instead suggest that the parties document all settlements in writing, even if the writing contains only skeletal deal terms and even if someone has to begin drafting it at 2 a.m. The agreement should provide that the parties intend it to be enforceable or binding and that all parties expressly agree in writing to its disclosure. . . . If an action is pending between the parties, the memorandum of understanding should be made enforceable under Code of Civil Procedure Section 664.6.
See also the Supreme Court's decision in Fair v. Bhaktiari, interpreting the phrase "words to that effect" in section 1123(b) as requiring a written mediated settlement agreement to "directly express the parties’ agreement to be bound by the document they sign."
Almost right will not do. You must strictly comply with these provisions or your mediated settlement agreement will not be enforceable.
The standard residential purchase contract in California is produced by the California Association of Realtors® (CAR). It contains two sections that are easy to overlook or to take as “boilerplate”, but that can be very important if things go awry between the parties. One of those sections deals with attorney fees, providing that, in the event of any proceeding between buyer and seller, the prevailing party shall be entitled to attorney fees and costs from the non-prevailing party. The attorney fee section contains an exception, however, and that exception is spelled out in the portion of the contract referring to mediation. There it is said that, if either party initiates an action “without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees… .” [my emphasis] /*
When Mr. Thrifty and I purchased our house in '02, we were presented with one of these form contracts. I'm a lazy form contract signator myself. Negotiation training or not, I generally assume these contracts are "take it or leave it" and I sign them accordingly. /**
Not Mr. Thrifty.
"What's the procedure?" I recall him pressing our real estate agent. "When is the demand for mediation supposed to be made and how are the parties supposed to conduct it and what happens if the parties can't reach agreement on the mediator to conduct the process?"
He was having none of it.
"I'm crossing it out," he said, as blue ink flowed over the mediation provision and our agent let out of small gasp of dismay.
By that time, everyone was so "bought in" to the sale, that Mr. Thrifty's effort to strike the form language prevailed. No mediation necessary in this household!
Beware of Form Contract Language
As Bob Hunt explains, the Lange Court gave the back of its hand to the contention that it was "too difficult" to make the required demand for mediation.
“If the [sellers] could be found and served with a lawsuit by mail, they could have been sent a mediation demand by mail[,]” [held the Court] All that the plaintiff had to do was attempt to mediate before he filed suit; and he didn't. Quoting a related case, the court noted that the mediation provision “means what it says and will be enforced.”
Though it's not surprising to find bare bones ADR provisions in industry form contracts -- bones so bear that their meaning must be litigated -- defeating the purpose of the summary proceedings provided for -- it is surprising to find attorneys continuing to paste form contract language into their client's negotiated agreements. This is particularly troublesome when what's at stake -- the attorneys' fees -- makes the difference between bringing litigation or not or settling litigation or not.
If it's worth putting a clause into your contract, it's worth spending the time to imagine what might happen if circumstances triggering that clause arise. If you're practicing in a firm with both transactional and litigation attorneys, I highly recommend that the wordsmiths run the "standard" ADR, attorney fee, choice of law, and venue provisions by the litigators who have undoubtedly already tested these provisions in the fire of conflict. You won't be sorry you did.
*/ The case -- Lange v. Schilling -- was originally ordered not not to be published. Had that Order stood, the case would not create precedent under California law. As the reader of the linked opinion can see, however, it was subsequently ordered published and can be cited as authority.
**/ The form contract language at issue reads as follows:
Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. . . . If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.
POPULAR ADR BLOGGER GETS SOME FACE TIME IN LOS ANGELES
By Greg Katz
Daily Journal Staff Writer
SANTA MONICA - Nearly everybody in the Southern California mediation community knows the face of mediator Geoff Sharp but not too many have met him.
That's because the New Zealand-based mediator's scruffy mug sits atop his popular ADR blog, Mediator Blah ... Blah ..., at mediatorblahblah.blogspot.com.
Sitting down for coffee at a beachfront hotel with Los Angeles mediator and fellow ADR blogger Victoria Pynchon, Sharp said his blog is what got him his ticket for this trip to Southern California.
He was in town at the request of the Pepperdine University School of Law, giving a lecture at the Straus Institute for Dispute Resolution's annual summer dispute resolution conference last week.
"For someone like me to get to Pepperdine - why would you ask a farm boy like me?" Sharp said, laughing. "The blog's the only way that I talk to these people."
Sharp's witty and concise blog helps chart the course of the online mediation conversation. There are about 150 ADR blogs worldwide, according to one blogger, and many of them link back to Sharp's.
He blogs a potpourri of ADR links, anecdotes and opinions on a wide range of mediation topics, most of them relevant to both local and international audiences.
In one recent post, he chided some "lazy" neutrals who have given parties the impression that mediation is "a process where you show up at a downtown building but never speak to, or even meet, the room full of people with whom you have your problem and whose cooperation you require to solve it."
In another post, Sharp described a mediation in which a lawyer asked him to calculate the hypotenuse of a right triangle.
Sharp said he initially was worried that he couldn't do it.
"But I am pleased to report dear reader, that I was equal to the task," he wrote.
Sharp also broaches sensitive subjects, writing at length about how difficult it is for mediators to build their practices.
But whether the difficulties of mediation are financial or mathematical, he wouldn't think about going back to litigating.
In the late 1990s, Sharp left his litigation practice at Bell Gully, a large New Zealand law firm, to start mediating.
Sharp is now a member of the advanced mediation panels for both of New Zealand's widely recognized mediation training organizations, LEADR and the Arbitration and Mediation Institute of New Zealand.
He also is consulting with the International Mediation Institute on its proposed mediator qualifications standards. Mediator standards are a frequent subject of his blog posts, as well.
He said he relishes the freedom he gained from leaving a big firm, though mediating often proves lonely.
"If you ask why [mediators] blog, it's because we're so solitary," Sharp said.
Becoming an ADR blogger, he said, was like making friends "on the same block in a new town," even though most other bloggers are in other countries.
Sharp said that blogging about mediations, with their strict confidentiality rules, can be complicated.
At first, he would post about specific events in mediations, such as one lawyer who wore his Bluetooth headset throughout a mediation, even when he "went to the john," Sharp said.
Was it blinking?" Pynchon chimed in.
But now, with a wider audience, Sharp focuses on the more philosophical and legal issues in mediation. When he wants to tell a particular story, he embellishes the events that happened in mediation so no one feels their confidential conduct is being publicized.
"I haven't let the facts get in the way of a good story," says the disclaimer on his blog.
Pynchon, who writes the popular ADR blog Settle It Now, at negotiationlawblog.com, said that even when bloggers are careful, mediator blogs can disturb parties. One party recently came to Pynchon asking whether a post referred to that party's case.
Another post, about the California Supreme Court mediation confidentiality case, Simmons v. Ghaderi, provoked the defendant to call Pynchon personally.
"It's like having a cartoon character come to life," Pynchon said of being contacted by someone she only knew through reading briefs and opinions. Simmons v. Ghaderi, 143 Cal.App.4th 410 49 Cal.Rptr.3d 342 (2006).
But despite the occasional hassle, blogging has become a way of life for the two mediators.
"For me, blogging and dispute resolution rest on the same principles: collaboration and reciprocity," Pynchon said.
Sharp nodded his agreement.
"I don't do this profit," he said with a smile. "I do it for ego."
Noting the benefits of appellate mediation and the desirability of participants attending in person, a California appellate court warned insurers in Campagnone v. Enjoyable Pools & Spas that even the potential of coverage requires a representative with full settlement authority to attend court-ordered appellate mediations in person, unless excused in writing by the mediator. Further, the court warned parties and counsel that they may also face sanctions if they fail to notify insurers with potential coverage about appellate mediations. The court noted that California’s strict mediation confidentiality provisions prevent mediators from disclosing whether anyone fails to attend, but that an aggrieved party may do so in seeking sanctions from the court. The court withheld sanctions in this case only because no previous opinion had spelled out these requirements, even though the insurer was only liable for amounts in excess of $3 million and the judgment in the trial court was $2.4 million.
And thanks to arbitrator and mediator extraordinaire Deborah Rothman for passing this along to me. (speaking of gender politics, Deborah graduated with the first class of women to be admitted to Yale University)
O.K., the subject line was meant to shock you and to draw criticism for what I will admit is my greatest unresolved prejudicial default -- that white men over 65 who didn't participate in the American cultural revolution of the late nineteen sixties and early 1970's did not and will never "get it."
failed to disclose that he'd been censured while on the bench for making "sexually suggestive remarks to and asked sexually explicit questions of female staff members; referred to a staff member using crude and demeaning names and descriptions and an ethnic slur; referred to a fellow jurist’s physical attributes in a demeaning manner; and mailed a sexually suggestive postcard to a staff member addressed to her at the courthouse.”
The majority arbitrators deciding the malpractice case stated that the female claimant was not credible because the "severity of the symptoms to which she testified went beyond what she described to her doctors, adding, “This claimant has had five prior facial surgeries.”
Similarly, in summarizing the claimant's expert’s testimony, these arbitrators noted, “One thing probably everyone can agree upon, after five facial surgeries, [claimant] could have done without a sixth one.”
Back to My Own History as Descriptive of -- But No Excuse for -- My Own Biases
We all have biases that we hide from others and some that we successfully hide from ourselves.
We live, I'm told, in a 200 year present. That means that my early life affects your life today. After all, I'm an old white woman, about whom you may well have biases. If I sit on your arbitration panel, you're going to want to understand those biases. That's why I'm giving you a bullet-pointed history of what the world was like when I was forming my essential character at 17 years of age in 1969.
the "want-ads" in the classified section of every major newspaper in American were categorized by gender -- "help wanted - women" and "help wanted - men"
in my senior year in high school, my entire class took "preference aptitude" tests to give us an idea of what our future careers might look like -- the girls were given "pink" tests and the boys "blue" tests -- had I shown an aptitude for, say, math (and no I didn't) I would have been steered into nursing; my male friends into "medicine" as physicians.
women were subject of explicit ridicule in magazine and newspaper cartoons -- we were airheads, bimbos, bad drivers, harpies or -- the "new" stereotype -- communist-longhair-folk-singing-America-hating-hippie-riot-inciting-"girls" who were alternately "men hating" or -- an old phrase -- "of easy virtue."
it wasn't until the 1970's, when I was in college and already planning a career teaching English (after all, nursing required math-skills) that the idea of a career in the law for women as anything other than a secretary began to seem possible.
by the year I graduated from law school in 1980, Columbia's female population had grown to a whopping 32%
although the enrollment of women in my law school class at U.C. Davis was nearly 50% in 1980, when I told my beloved mother in 1976 that I was going to apply to law school she said "why do that, honey? Be a legal secretary, then you can marry a lawyer."
when my husband attended Yale Law School ('67-'70) he had seven women classmates
when I was practicing law (these all from the early '80s)
a partner for whom I worked told me that women weren't permitted at the local "men's only" club because "we don't want our wives there."
a Judge required me to identify myself as Mrs. or Miss and when I said I didn't think it necessary to identify myself by my marital status, asked "what are you some kind of [women's] libber?" (yes, I lost the motion)
I was advised by the few women attorneys senior to me not to get pregnant until after I made partner
secretaries were allowed to refuse to be assigned to a woman attorney
the first woman to make partner at my law firm was quite openly referred to as "the first muff partner" by her colleagues
on the other hand, when a client said (of my assignment to its case) that the company did not want to be represented by a "girl," my partner told the client "then you don't want this firm representing you because she's the best associate I have"
I promise to work on my prejudices. And I advise anyone who is about to appear before any dispute resolver -- be that person male, female, white, black, young or old, GOOGLE THEM FIRST!
This just in from the Met News for California practitioners.
Where minor entered a settlement agreement with a third party tortfeasor by and through a guardian ad litem, and court made an allocation of the medical expenses portion of the settlement in the order approving plaintiff’s compromise, trial court did not err in rejecting plaintiff's later motion to reduce the amount of Medi-Cal lien against settlement proceeds by the same percentage that the settlement bore to the overall value of plaintiff’s case.
Question: how do you determine the "overall value" of the plaintiff's case in order to reduce the lien by the same percentage that the settlement bears to that value? Declaration by the Plaintiff's attorney? Anyone who's actually read this case, do let my readers know!
In a down American economy, litigation tends to increase. More suits are filed. And in my view clients and their plaintiff's lawyers file more questionable suits, i.e., ranging from Rule 11 violations and frivolous to iffy and wasteful. Employee and business nuisance cases are a big chunk of those filings.
A good arbitration panel or mediator will cut to the quality of the suit and its likelihood of success quicker than even the best American judges, who often feel obligated to give bad and iffy cases a wide berth. And good judges understand the problems of the business community and the utility of arbitration and mediation.
Get jurists on your side in your attempt to drive iffy cases into ADR.
Happens all the time; the parties come together to mediate their dispute and find that they haven't really understood their differences or the areas of agreement .
"Your client didn't care about the first shipment of goods?"
"No, it was the second that was the problem."
"What was wrong with the second?"
"They were plaster of Paris."
"What are you claiming as damages .. .. . "
Forget ADR. Pick up the telephone and talk to opposing counsel.
My most recent post on this issue stressed the need to de-demonize one's opponent in order to free everyone up to creatively participate in a joint session in which defensiveness and posturing are not the orders of the day.
Listen, the parties have already demonized one another by the time they bring their dispute to an attorney. Once the lawyers take over and the parties stop communicating with one another, it's the interaction between the attorneys thatexacerbates the already existing sense of distrust and betrayal.
Now, several states are trying to improve lawyer-to-lawyer relationships by eliminating the term "zealous representation" from their Codes of Conduct and replacing it with terms like "honest," "effective" and "honorable."
My immediate response to changes in language is that they make no difference. Then I remember how changing "Mrs." and "Miss" to "Ms." and taking the "man" out of fire, police and mail, changed career aspirations for generations of women.
So I'll ask my readers. Do you think the removal of the term "zealous advocacy" will have an effect on the practice of law?
According to writer and surgeon Atul Gawande's recent article The Itch, the way the pepper tree in my back yard appears from my bedroom window may be as much as ninety percent memory and only ten percent "data." As Gawande writes:
Given simply the transmissions along the optic nerve from the light entering the eye one would not be able to reconstruct the three-dimensionality, or the distance, or the detail of the bark -- attributes that we perceive instantly.
In other words, perception is not merely reception. "Objective reality" is just the brain's "best guess" about what the eyes observe, the ears hear and the fingers touch.
"The images in our mind," Gawande explains, "are extraordinarily rich."
We can tell if something is liquid or solid, heavy or light, dead or alive. But the information we work from is poor -- a distorted, two-dimensional transmission with entire spots missing. So the mind fills in most of the picture. You can get a sense of this from brain-anatomy studies. If visual sensations were primarily received rather than constructed by the brain, you'd expect that most of the fibres going to the brain's primary visual cortex would come from the retina. Instead, scientists have found that only twenty per cent do; eighty per cent come downward from regions of the brain governing functions like memory. Richard Gregory, a prominent British neuropsychologist, estimates that visual perception is more than ninety per cent memory and less than ten per cent sensory nerve signals.
Gawande doesn't explain how we manage to agree on anything with such impoverished perceptual abilities and richly imagined constructs of "objective reality." I suspect that our insatiable urge to tell one another stories is the primary way we create the collective memories that allow us to agree upon such simple "facts" as "the apple is red and somewhat round," if not necessarily that "the blue Kia entered the intersection after the traffic light turned red."
What strikes me about Gawande's article is not so much the pure science described there, but the way in which opposing parties in litigation resemble "phantom limbs" and joint sessions the mirrors used by physicians to treat the pain "felt" in them.
Recent research demonstrates that amputees' phantom limb pain can be reduced or eliminated by "fooling" the brain into believing that the missing limb is "well." When researchers asked amputees to put their surviving arm through a hole in the side of a box with a mirror inside and to then move "both" arms,
[t]he patients had the sense that they had two arms again. Even though they knew it was an illusion, it provided immediate relief. People who for years had been unable to unclench their phantom fist suddenly felt their hand open; phantom arms in painfully contorted positions could relax. With daily use of the mirror box over weeks, patients sensed their phantom limbs actually shrink into their stumps and, in several instances, completely vanish. . . .
. . . here’s what the new theory suggests is going on: when your arm is amputated, nerve transmissions are shut off, and the brain’s best guess often seems to be that the arm is still there, but paralyzed, or clenched, or beginning to cramp up. Things can stay like this for years. The mirror box, however, provides the brain with new visual input—however illusory—suggesting motion in the absent arm. The brain has to incorporate the new information into its sensory map of what’s happening. Therefore, it guesses again, and the pain goes away.
Litigation separates the parties from one another as radically as an amputation, often under circumstances where the law suit is all they have in common. Like amputees, the parties cannot massage the missing muscle, scratch the irritating itch, or ease the frustrating pain.
When physicians give their patients mirrors and instruct them to move their one remaining arm in concert with its physically re-imagined partner, they conduct a silent concert of healing. With "new" information (hey! there's my other arm and it's not all cramped up!) the brain readjusts and stops sending false signals. The muscle relaxes. The itch is scratched. The pain is relieved.
Joint sessions can be used as mirrors to make missing disputants appear again./* The mediator -- who is trained in this art -- creates an environment (the "box") in which the parties are able to adjust the mis-impressions and correct the mis-communications that make the conflict so difficult to resolve. After a brief period of discomfort and incoordination, the disputants begin to tell their stories of injustice in concert, spontaneously harmonizing the points on which there is little disagreement and resolving those parts of the tale where the greatest differences lie.
Those parts of the story that have grown wildly distorted in the absence of any corrective influence, are shrunk back to their appropriate size. Freed from the tyranny of their phantom "others," the parties begin to work collaboratively to solve the problem that they now understand is mutual.
Though this is surely metaphor, the process is not just theory. When parties consent to a joint session orchestrated by the mediator in collaboration with their attorneys, this type of reconciliation happens more often than not.
Don't, however, confuse this joint session with those in which attorneys give one another presentations proving their entitlement to victory as if there were a phantom "decider" -- a missing arbitrator or judge -- somewhere behind a curtain. These are the type of "joint sessions" that have given joint sessions a bad name because counsel well know their opponents' "positions"and the parties tend to become less rather than more amenable to settlement when their opponents' point of view is once again argued to them -- this time in quarters that are far too close for most lawyers, let alone their clients.
We'll keep exploring this issue. For now, more of the Gawande article below.
A new scientific understanding of perception has emerged in the past few decades, and it has overturned classical, centuries-long beliefs about how our brains work—though it has apparently not penetrated the medical world yet. The old understanding of perception is what neuroscientists call “the naïve view,” and it is the view that most people, in or out of medicine, still have. We’re inclined to think that people normally perceive things in the world directly. We believe that the hardness of a rock, the coldness of an ice cube, the itchiness of a sweater are picked up by our nerve endings, transmitted through the spinal cord like a message through a wire, and decoded by the brain. . . .
[There are] some serious flaws in the direct-perception theory—in the notion that when we see, hear, or feel we are just taking in the sights, sounds, and textures of the world. For one thing, it cannot explain how we experience things that seem physically real but aren’t: sensations of itching that arise from nothing more than itchy thoughts; dreams that can seem indistinguishable from reality; phantom sensations that amputees have in their missing limbs. And, the more we examine the actual nerve transmissions we receive from the world outside, the more inadequate they seem.
Our assumption had been that the sensory data we receive from our eyes, ears, nose, fingers, and so on contain all the information that we need for perception, and that perception must work something like a radio. It’s hard to conceive that a Boston Symphony Orchestra concert is in a radio wave. But it is. So you might think that it’s the same with the signals we receive—that if you hooked up someone’s nerves to a monitor you could watch what the person is experiencing as if it were a television show.
Yet, as scientists set about analyzing the signals, they found them to be radically impoverished . . .
Before you run over to Gini's site to read Lande's excellent post or his great article, I'd like to simply bullet-point some observations based upon my four-years of full-time mediation and arbitration practice.
when I co-arbitrate with some of the best commercial arbitrators in the business -- these are Ivy League lawyers with many decades of experience representing Fortune 50 Companies in AmLaw 100 Law Firms, the ultimate decision changes many times during the course of deliberations and almost always could go either way.
having spent a considerable time in the Los Angeles Complex Court as an experienced commercial litigator "externing" for credit to earn my LL.M in '06, I can tell you that the deliberations in chambers of these highly respected jurists is not much different that those in which I have engaged when sitting on an arbitration panel
The take away? No matter who is hearing your case, your chances of winning are 50-50. Flip a coin. Think this doesn't apply to you? I have arbitrated cases being handled by the top ten law firms in the country. I have seen those same type of firms litigate and try cases in the Complex Court. It's 50-50 friends.
Below -- observations on how you and your mediator can be "happy together." (And the Turtles from 1967 so that you can have a little musical accompaniment to this post)
Observations of End-Game Litigation from a Mediator's and Settlement Consultant's Perspective.
Despite years of inquiry and the review of millions of documents, sophisticated parties (Fortune 50) represented by dynamite law firms (AmLaw 50) haven't yet learned the most fundamental information about the following matters -- most of which are more important to the settlement of the case than the cost-detriment-benefit-position-driven-chance-of-victory settlement posture:
what are the hidden interests that your opponent must satisfy before accepting a settlement that is below the number he once told his client should never under any circumstances be accepted?
what are the hidden constraints upon your opponent's authority that must be removed before he can pay more money than he once told his client should never under any circumstances be paid?
why was this litigation initiated in the first instance?
who gave the litigation the "green light"?
what are the probable consequences to the continued financial security of the person who gave the litigation the "green light" in the first place or who has authorized the defense bills for the last 5, 10, or 15 years?
is the person who green-lighted the litigation in the first place still employed by your client?
what are the probable consequences to the financial well-being of the corporation who must pay more than it wishes to pay or accept less than it wishes to recover?
Who is the most frightened person in the room, i.e., whose hide might be sacrificed if the litigation settles for more/less than predicted, or, often worse, actually goes to trial.
There are so many of these settlement-driving and -inhibiting questions that only my own personal time contraints -- I must start my day's work -- make me stop listing them.
Let me conclude with this however. Never underestimate your client's reluctance to settle the case on terms that seem unjust to it. This is the most important function a mediator can play on the day of settlement -- explaining justice issues to the clients and helping the clients de-demonize their opponent -- which occurs most easily in JOINT SESSION yet which most litigators would rather have their teeth drilled than attend.
O.K. I can't conclude without saying this. If you have the courage to try a case, you possess the cajones to participate in at least one joint session to help the parties come to terms with the justice issues -- which are often driven by the conclusion, affirmed over and over again in the course of the litigation, that their opponent is an evil, mendacious, grasping, greedy, malicious, duplicious lying liar with his pants on fire.
This is almost never true. The parties on both sides almost always possess equal parts of good and bad, just like the rest of us.
Let your parties re-adjust their perception of "the enemy" in joint session. I can almost guarantee you that a conversation will ensue in which the parties spontaneously tell each other what interests they really need to satisfy to settle and what constraints they are really working under. And I don't guarantee a lot of things.
Why can't I do this for the parties?
Because often neither side will disclose these matters to me because they don't trust that I won't use that information to help settle the case and because the parties won't believe what I say about their opposition in the first place (obviously, they've pulled the wool over my eyes).
"How do you know he's not lying?" is a question mediators are asked on a regular basis. My answer is "I have no idea." But if you let your client talk to the opposition -- with any constraints, restrictions and control you wish to retain -- which I can orchestrate for you -- your client will be able to elicit the details that give any story a ring of truth (or falsity) while at the same time watching the body language that constitutes between 60 and 80% of all communication.
Would you try a case without 80% of the information you need? Of course not! And yet you're content to avoid a joint session when that session could provide you with between 60 and 80% more information than you had when you arrived on the morning of the mediation or settlement conference?
Suspend your disbelief in the mediator ("who-will-do-anything-to-settle-the-case") for just a couple of minutes. Remember that we're in possession of confidential information we cannot divulge to you.
Take our lead. And if you don't trust us to do so, for heaven's sake find a mediator you can trust!
I take these criticisms very very seriously, repeating throughout any mediation session my opening assertion that my role is to present the parties with choices and to faciliate a settlement if they believe it may be better alternative to continued litigation, not to hustle them away from their right to a jury trial.
I would be far more successful in being "neutral" about proceeding to a jury trial if there were an easier, less costly, and speedier way to bring a dispute before a jury. We have, lamentably, permitted our cherished rule of law to become so procedurally encrusted that it sometimes seems like no option at all -- at least not an option available to all but the wealthy or those represented by lawyers willing to accept a contingent fee.
All of this troubles me. I invite comment at the same time that I provide the thoughts of some of our greatest statesmen and jurists about the right to trial by jury.
"There was not a member of the Constitutional Convention who had the least objection to what is contended for by the advocates for a Bill of Rights and trial by jury." (1788)
"Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle and fed and clothed like swine and hounds." (1774)
"I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." (1788)
"Trial by jury is part of that bright constellation which has gone before us and guided our steps through an age of revolution and reformation." (1801)
"The wisdom of our sages and the blood of our heroes has been devoted to the attainment of trial by jury. It should be the creed of our political faith." (1801)
"Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." (1789)
John Quincy Adams
"The struggle for American independence was for chartered rights, for English liberties, for trial by jury, habeas corpus and Magna Carta." (1839)
Patrick Henry of Virginia [Patriot who said "Give me liberty or give me death!"]
"Trial by jury is the best appendage of freedom by which our ancestors have secured their lives and property. I hope we shall never be induced to part with that excellent mode of trial." (1788)
"The friends and adversaries of the plan of the convention, if they agree in nothing else, concur at least in the value they set upon the trial by jury; the former regard it as a valuable safeguard to liberty; the latter represent it as the very palladium of free government." (1788)
"The protection of life and property, habeas corpus, trial by jury, the right of an open trial, these are principles of public liberty existing in the best form in the republican institutions of this country." (1848)
Judge Stephen Reinhardt
"Our constitutional right to trial by jury does not turn on the political mood of the moment, the outcome of cost/benefit analyses or the results of economic or fiscal calculations. There is no price tag on the continued existence of the civil jury system, or any other constitutionally-provided right." (1986)
"Trial by jury is the best institution calculated for the preservation of liberty and the administration of justice that was ever devised by the wit of man." (1762)
Judge William Bryant [First African-American federal district court judge in D.C]
"If it weren't for lawyers, I'd still be three-fifths of a man." (2004)
Justice William O. Douglas
"The Massachusetts Body of Liberties was a new Magna Carta. It contained many of the seeds of the civil liberties which today distinguish us from the totalitarian systems, including the right to trial by jury." (1954)
Justice Hugo Black
"Our duty to preserve the Seventh Amendment is a matter of high Constitutional importance. The founders of our country thought that trial by civil jury was an essential bulwark of civil liberty and it must be scrupulously safeguarded." (1939, 1943)
Justice Ward Hunt
"Twelve jurors know more of the common affairs of life than does one man, and they can draw wiser and safer conclusions than a single judge." (1873)
The cost of a thing is the amount of life that you must exchange for it -- now or in the long run (Thoreau)
if you have an on-going relationship -- even as limited as a note payable -- squeezing the last nickel out of the deal may impair your bargaining partner's ability to perform
what goes up, must come down, i.e., squeezing out the last nickel creates enemies who none of us can afford when times are good, let alone when times are bad
taking advantage of another's weaknesses tears at the social fabric
it makes us all more watchful and less productive
it doesn't actually feel good to line your pockets with the misery of others
sometimes the downtrodden rise up -- every couple of centuries or so, creating an entirely new order -- the generous man and woman will not be on the wrong side of that revolution
global warming -- think about it -- the order will change as will the countries who will be asking for favors
you reap what you sow (I'm pretty sure I learned this in Sunday School)
social relations do not exist "out there" -- they are co-created by one person's relationship with every other person -- the society you inhabit is the one you create -- if you don't want your neighbor taking your last dime, don't take his
collaborative effort results in greater progress than individual activity -- if you decrease trust, you impede advancement in business, the arts and science
Readers! Can I count on you to give us all more reasons?
I'm tempted to just import Geoff Sharp's entire post on joint session vs. separate caucus mediation or, as Joe McMahon positions the split in current mediation practice in Moving Mediation Back to Its Historic Roots, "dialogue-based" v. "separation-based" practice.
I will give you a few excerpts, though, both Geoff's own thoughts and those of McMahon quoted by him (thanks to our mutual friend Stephanie West Allen at Idealawg).
If denial and avoidance are thought to be the most universal responses to conflict, it is important to consider whether separation-based mediation merely plays into and enables such a response to conflict. If so, it is time to evaluate whether mediation and facilitation were really intended to provide support for such denial...
Support for the market model of mediation ("the market knows what it needs and what it needs is the settlement conference") is claimed in the high settlement rates in commercial settlement conferences. However, a high percentage of civil cases always have settled, even long before mediation was in vogue...
McMahon asks of mediators; 'are you fully satisfied with the quality of dialogue among conflicting parties in the mediations in which you participate?'
What a wonderful question! In my case however, only occasionally.
As McMahon says, 'By broadly considering conflict and mediation, it may be possible... to move these processes back toward their historic roots—that being processes based on parties telling their stories in face-to-face dialogue aided by a mediator who can guide them to more effective communications.'
And though it is, as Geoff says, about the "timbre and tone of resolution," it is also about obtaining more satisfactory resolutions -- resolutions that not only satisfy more party needs, interests and desires but which invariably leave less value lying unused on the table when all parties leave the room.
I'll grill Geoff about this over dinner tomorrow night and get back to you on all of this.
Here, then, is the weakness of shuttle negotiation. The parties' attention is fixated on money. A fixation that neuroscientists tell us makes us ungenerous and anti-social -- the worst possible context for a successful settlement.
The next time you're facing a difficult negotiation or mediation, remember the salutary effect of small talk in helping yourself and your opponent focus on the commercial and human situation that has brought you to the table so that you can more easily resolve the business and the people problem at the heart of the litigation.
Whether justice and fairness are, at some level, hard-wired into us (see Brain reacts to fairness as it does to money and chocolate) or culturally controlled, it seems that Rawls' conception of "justice and fairness" based upon reasonableness and enlightened self-interest might flow more or less naturally from a mediated dispute resolution forum where the parties, rather than the mediator, are in control.
Emotions in litigation -- and at the negotiation table -- often run extremely high. It is for this reason that so many lawyers want to avoid joint sessions altogether and conduct their entire bargaining session in separate caucus with a "shuttle" mediator.
What I can tell you from three years of full-time mediation practice, however, is this -- when business people -- properly coached -- are finally willing to sit down and speak to one another, to explain their circumstances rather than their legal and factual position -- cases get settled rather quickly. (See Geoff Sharp's In Praise of Joint Sessions here)
Because they have more in common with one another -- including most particularly the dispute -- than with anyone else.
If you serve a 998 offer on the Plaintiff, say $5,000, and Plaintiff's judgment is reduced to zero after set-off for settlements, is the Defendant entitled to recover the costs permitted by 998 if the judgment against it is reduced to zero after the court deducts from the jury verdict the amount of pre-trial settlements paid by others?
Well, yes and no.
If the Plaintiff's recovery at trial would have netted it more at the time of the 998 offer than the 998 offer itself, 998 does not shift post-998 fees to the Plaintiff. If the 998 offer was $5,000, the jury verdict is $10,000, and no settlements had been paid to Plaintiff at the time the 998 was served, Plaintiff's failure to accept the 998 does not shift post-998 costs to it. If, however, the Plaintiff had already received $10,000 in settlement at the time the $5,000 998 was made and the jury renders a $10,000 verdict that is reduced to zero, 998 will shift the post-998 costs to the Plaintiff.
I get stuck in position-based negotiations as well. It remains a challenge for me, after 25 years of litigation practice, not to be sucked into the attorneys' arguments about why they are right. To help all of us in the mediation room . . .
[h]ere is a list of 8 questions you can ask yourself when you suddenly realize that you have to prepare for a negotiation. Use these to generate quick preparation for any negotiation.
1. What are my intended outcomes and interests?
This is about having your goal in mind but also about thinking about the bigger picture at the same time - if you're goal is to get to work on time, speeding to get there might seem like the right choice until the cop pulls you over.
2. What are their possible interests and outcomes?
Look at the negotiaion from their point of view. What do they really want from this?
3. What are some of the options of agreement?
Where are the points of agreement? Focusing on this beforehand will set a tone of reaching agreement rather than a tone of conflict.
4. What is my Plan B?
Once you've thought through the first three questions, what's your fall back position? Having your Plan B in mind gives you a feeling of options so if the deal goes to far against you, you are comfortable with your option B.
5. What is my worst case scenario?
Answering this question sets your "don't cross" line. You've predetermined what you're willing to give up and more than that is a deal breaker… that means you can negotiate confidently, since you know your direction.
6. What are some possible external standards?
External standard are outside measures that can move the negotiation away from personal stakes to measures from an outside authority. Examples might be interest rates, rate of exchange or time frame.
7. What is or are my reserve price / terms / limits?
Knowing what your limits are and then not not going past them results in more useful and enjoyable negotiation.
8. What is my game plan?
Map it out. What do you want and how are you going to get there?
One of the reasons I began this series was to explore the type of professional behavior that tends to trigger professional malpractice litigation -- and how that litigation might be avoided.
As you may recall, my first post cited a study finding that the top three reasons for filing litigation against a medical provider were:
so that it would not happen to anyone else . . . 91%
I wanted an explanation . . . 91%
I wanted the doctors to realize what they’d done . . . 90%
In that same study, only 66% of respondents said they'd brought suit because they wanted money.
Other studies have found that the failure to health care professionals to effectively communicate with patients and their families give rise to more litigation than negligence or bad results in treatment. As reported in the March/April issue of Patient Safety and Quality Healthcare
ineffective communication with patients and families, rather than quality of care, was the underlying cause of patients' and families' decisions to file suit against their caregivers (Vincent et al., 1994; Hickson et al., 1992). Other researchers found that most patients would be less angry and less likely to sue if physicians honestly and compassionately disclosed medical errors that occurred, admitted responsibility, took steps to reduce the chances of repeat errors in the future, and offered sincere apologies for the suffering that may have resulted because of the bad outcomes (Gallagher et al., 2003). Similarly, research on apologies suggests that individuals receiving a full apology that both expresses sympathy and takes responsibility by the person who wronged them are more likely to accept settlement offers and negotiate towards a resolution rather than going to trial (Robbennolt, 2003).
Someone once told me that a divorce is a hologram of the marriage -- that all of the marital dynamics that have never been resolved -- or even surfaced -- by the divorcing couple -- take shape and form in one way or another in the course of the divorce. Not surprisingly, the "weapons" of marital dissolution are its most precious assets -- relationship and children -- and its most symbolic -- money. /*
So it is that historic family dynamics (rife with unresolved conflict) will more or less naturally play themselves out around the bed of a loved one who is -- or may be -- dying.
MAIN RESULTS: At least 1 health care provider in 78% of the cases described a situation coded as conflict. Conflict occurred between the staff and family members in 48% of the cases, among staff members in 48%, and among family members in 24%. In 63% of the cases, conflict arose over the decision about life-sustaining treatment itself. In 45% of the cases, conflict occurred over other tasks such as communication and pain control. Social issues caused conflict in 19% of the cases.
CONCLUSIONS: Conflict is more prevalent in the setting of intensive care decision making than has previously been demonstrated. While conflict over the treatment decision itself is most common, conflict over other issues, including social issues, is also significant. By identifying conflict and by recognizing that the treatment decision may not be the only conflict present, or even the main one, clinicians may address conflict more constructively.
It's Not About Money But it Will Become About Money if Conflict is Not Treated at the Source
I have much more to say about this but I need to get out to the Valley to see my dad who is -- amazingly (to me at any rate) -- surviving without food or water into Day Nine.
For now, I will simply remind my readers of the following:
Why the Coming Crisis and Likelihood of Litigation?
The parents' of the baby-boom are dying. Extraordinarily high levels of conflict in health care settings are associated with dying. Hospitals and health care professionals are not yet up to par in resolving conflict at its source. In the absence of programs to assist the families of the dying negotiate their way through this traumatic experience, people will seek out attorneys; attorneys will, as the law does, monetize pain, suffering, and injustice.
The research is in. The solutions are available.
It's up to us.
*/ Money is symbolic? Yes it is. As my longer article on the many meanings people give to money notes:
It is money’s nearly infinite plasticity that makes exchange of unlike things not only possible, but nearly effortless. Unlike barter, which famously requires a “double coincidence of wants,” money creates a bridge to the future; permits trade at a distance; allows the exchange of durable objects for perishable goods; and, is capable of reducing nearly every human activity into a quantitative monetary value.
Although contemporary money seems to have shed all of its qualities except its quantity, “its oneness or fiveness or fiftyness,” we do not in fact use money as if it were fungible. We experience the value of a dollar earned differently from the way we experience one that is stolen or given to us as a gift and we spend it differently as well.
Let's for a moment assume that I had not surrendered the control of Dad's final days to his wife, into whose hands he has so indisputably placed them.
If you've been following this series, you may have concluded that my Dad's immediate family (step-children; my sister) are likely indifferent to, uninterested in or incapable of dealing with the end of Dad's life. My compassionate default is that these blood- and step-siblings are neither uninterested nor callously indifferent to my father's fate, but simply incapable of responding to this intensely emotional experience for family-historical, social, psychological, emotional or practical reasons.
Let's assume, however, that surrounding my father's hospital bed is a clamorous family, all expressing different concerns, desires, options, solutions and resolutions to the question whether to insert, or later remove, a feeding tube, remembering Ken Cloke's observation in his new book, Conflict Revolution, that a dispute occurs
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.
[These] conflicts were often fueled by different perceptions of the medical facts, different understandings of the prognosis, different interpretations of patient behavior (generally relating to whether the patient was experiencing pain and suffering) and different personal value hierarchies. As we searched for ways to help patients, family members, and staff understand the clashing cultures and discordant assumptions that animated their arguments, we realized that the substantive parts of our interventions were more than outweighed by the process elements. Searching for the right theoretical model steered us to the frame and the techniques of mediation.
The mediators in my readership will not doubt the efficacy of neutral-intervention in these decisions. As my own experience demonstrates, however, no one sends a mediator or even the palliative care nurse or social worker to your loved one's hospital room unless someone has "hipped" you to the fact that they are available to you.
Listen, my first husband was a social worker and it wouldn't have occurred to me to ask for one at the hospital unless my health care executive friend had told me to do so. Nor would I have known there was a palliative care nurse on staff unless my friend the hospital hospice director hadn't told me her name and how to contact her.
So What, if Anything, Could a Mediator Do to Assist the Family in the Circumstances Outlined in My Hypothetical?
Cohen has systems in mind, not merely interventions, so he begins his proposed five-step model with training (echoing my question to the social worker -- "don't they train these doctors in active listening?")
Much of what we have said before about managing emotions [/*] is relevant here, as is the clarification of "professional emotions" on the part of doctors. Negotiation training for doctors is a must. . . . Already the negotiation field is beginning to tailor training programs to health care professionals by using narratives and cases developed by doctors for doctors. , and discussion of appropriate techniques with simulation, exercises and feedback." . . . . .
More specifically, [others] identify five types of ADR training and education: marketing efforts (convincing stakeholders to buy-in),awareness education (informing users what ADR is and what role it plays in the organization),conflict management and communication training (generic training not geared towards a particular type of ADR, [r]ather, it is focused on increasing participants' understanding and acceptance of conflict and on improving their communication skills, including active listening and direct communication"), consumer/user training (focusing on what to expect in the ADR proceeding, how to prepare for ADR, how to identify interests, options, etc.),and training of third-party neutrals.
*/ But please don't let the family know that is what you are trying to do, i.e., manage, rather than support, their emotional responses to a loved one's final days.
[A] bioethical mediator [would] help to identify all the parties and their interests, and develop a common understanding of the medical facts and options. For instance, consultants might be called in to finely tune a prognosis.
When coming into [a case], the [bioethical mediation] team asks: Who are the parties to this conflict? What are their interests? Are those interests in conflict and, if so, how might the conflict be resolved or consensus forged? This formulation grew out of the clinical finding that most of the events labeled "bioethical dilemmas" were really "conflicts" that pitted members of the hospital team against each other, or members of the team against some or all of the patient/family constellation.
The Creation and Use of an ADR-Oriented Ethics Committee
Membership: . . . . What is indispensable is that the panel not be insiders. If having physicians sit on the panel is seen as essential, it may be useful to use physicians who teach at local medical schools or who do not practice at that particular hospital. . . . . .
Initiation: In keeping with the sequencing of low- to high-cost methods of dispute resolution, the process should be initiated at the request of the patient, her family, any member of the health care team, or the bioethical mediator if he or she is unsatisfied with the resolution at Step 2.
Methodology: Here there is a spectrum of formality that will depend on the individual hospital and its resources, ranging from advisory arbitration to mini-trial. In principle, there is no reason why the Committee might not offer multiple options along the spectrum of formality at the election of the parties. Depending on the level of formality chosen, the parties might represent themselves or seek legal representation.
Opinion: This should be delivered in writing, be well elaborated, and be the kind of opinion that can give the parties information relevant to how a court might decide the dispute.
Bindingness: What is essential is that someone present at the arbitration process has the authority to bind the hospital. If power imbalances favoring the hospital are a concern in the process, one possibility to "retilt" the system might be to make the arbitration "asymmetrically binding," making the hospital abide by the arbitration decision while the opposing parties are not equivalently bound. If there are concerns about this, some kind of safety valve could be provided. For instance, the binding nature of the Ethics Committee decision could be overruled by a majority vote of the Hospital's board of directors.
Having used Terri Schiavo's case as a jumping off point, Cohen suggests that the experience of her care-givers, elevated for a time into a national controversy (see Cloke above)
highlights what each of us fears about our own deaths: that we will not die with dignity, that our wishes may not be followed, that decisions on our treatment may tear apart our families and bring rancor to the lives of those we love. Terry Schiavo's case also shows that in quelling our fears, the adjudicatory model offers scant succor.
While in theory, advanced directives offer a promising resting point for American jurisprudence's unsatisfying oscillation between full-on adjudication and completely private determination, in practice they have never caught on. The ideas and techniques ADR has
cultivated over the last thirty years offer us, and our families, a chance to do better. ADR can:
Help to resolve "misunderstandings" that the adjudicatory model tends to treat as full-blown "disputes;"
Identify intermediate options that satisfy both parties and remove the need for rights-oriented dispute resolution;
Offer a lower-cost form of rights-oriented adjudication when a dispute must be "decided;"
Enable the patient and free him from the debilitating "object" status accorded to him by adjudication; and
Offer emotional settlement lacking in the typical litigation process.
Concerns about cost, due process protection, and institutional resistance to implementing such an approach add complexity, but this article has suggested possible approaches to solve those problems. Moreover, these concerns have to be compared to those attaching to the status quo regime that consists of large amounts of "lumping" it. While the details of an appropriate ADR framework will vary from institution to institution, this article has offered a five-step model for implementing an ADR-informed approach to end of life decision-making, as well as discussing alternative options at every stage. It is only by
combining the work of fields such as medicine, law, and organizational development that we are able to provide a thing of major concern to the aging population of America: the assurance of dying well.
Dr. X promptly sent me a social worker who was willing and able to answer all of my questions about my father's present condition; the common courses end-stage Parkinson's takes; and, the options available for his care -- aggressive treatment; tube feeding with hydration; palliative care; and, in-home hospice services.
I left the hospital that evening feeling not just better informed but comforted knowing there were people who were educated, trained, skilled, and talented at helping families make the type of decisions we were struggling to make with integrity and compassion.
"This Man is Nowhere Near Death's Door"
I was awoken from a light and troubled sleep by a telephone call from my step-mother, who was now just as agitated with a physician as I had been the previous afternoon.
She spoke with urgency.
"That doctor you fought with," she said, "he sent a neurologist to your father's room at midnight. Some woman I'd never met before. I think I might have insulted her."
"Good for you," I responded, thinking it progress for Juanita to question authority.
"It's your doing," she said flatly.
I was uncharacteristically silent. I couldn't tell if she was expressing gratitude or blame.
"It's because you yelled at Dr. X. He wouldn't have sent that woman unless you'd done that."
I still couldn't tell. It didn't really matter. We were both doing the best we knew how.
I asked for the story of the new neurologist as I slid out of bed to avoid waking my husband.
Juanita was huffy. "She examined your dad for an hour and then said his medication was completely wrong. She prescribed him new medication and I don't know what right she has to do that."
"What did she say about his condition?"
I could hear Juanita take control of the conflicting emotions this doctor's diagnosis must have raised in her.
"That doctor said, 'this man is nowhere near death's door.'"
The Parent Trap -- Hey, Hey, Hey
My parents' divorce in 1961 coincided with Walt Disney's upbeat movie about marital collapse and child custody -- The Parent Trap. The brilliant Hayley Mills, squared into twins separated in infancy, divided like community property between the beautiful Maureen O'Hara and dashing Brian Keith upon their divorce, and re-united as teens to heroically reignite "their" parents' romance, was as far from my own experience as possible. Children aren't capable, really, of processing this particular complex set of emotions: relief that a violent father and physically fragile mother will no longer be scaring the wits out of their children; and, the aching loss a father leaves behind when he believes that divorce means removing from his life everyone associated with his marriage -- including his children.
In other words, at nine years old, I didn't know whether to be happy or sad; guilty or justified, in response to my Dad's sudden departure. But the idea of wilfully re-uniting this mismatched pair -- though perhaps some other child's Disney fantasy -- was not my own.
Nearly forty years later when my father, in his first semi-psychotic episode, left and later divorced his second wife, his second set of children abandoned him.
By the time my father lay in his hospital bed last week -- either "on the brink of" or "nowhere near" death -- the person with the absolute legal right to decide his fate was his wife of a mere five years duration. And the only "child" with any interest in stepping forward to help make that decision was me.
(left: Dad, middle, after the dust bowl in Julian, California)
I am told that my father is dying. This is not news. Dad has a progressive disease that ordinarily results in death only after years of suffering.
I'm telling you this story (which will be the subject of several posts) because it's been suggested to me that I lodge a complaint with the local community hospital dad was checked into last week. Or that I sue the doctor who will play a large role in this story. I'm thus reminded of the type of conflict that causes people to go to the considerable trouble of finding and hiring legal counsel. The experience I am about to relate considerably deepens my empathy for those people.
Before I tell this story, I caution my readers not to take the easy way out. These feelings accompany every kind of conflict -- personal and commercial.
Essential Familial Tremor
Most of us on Dad's side of the family have something called Essential Familial Tremor. That means our hands shake for reasons the medical community doesn't understand.
Because denial was and remains my family's primary response to ill health , I was not diagnosed with this condition until I graduated from law school even though I began to suffer its effects at age 14. When your primary family dis-ease is denial, it's more than a little painfully ironic to have a shared medical condition that quite visibly signals fear. But wesurvivedthe American dust bowl. We do not complain. And we do not seek medical treatment.
EFT and Parkinson's
I digress to EFT and denial because the "benign symptom" of EFT -- shaking -- is the same as one of the early symptoms of the disease Dad is dying from. Parkinson's.
For as long as I can remember, Dad's hands shook though my my step-mother (welcome to the family!) vehemently denied it. "He doesn't shake," she'd snap if we noted dad's inability to get liquid from one container into another without spilling a fair part of it onto the dining table.
So I can't say when Dad began to show the earliest signs of Parkinson's disease. I can, however, say when it became undeniable.
"I Left Your Step-Mother,"
dad is saying into a telephone I've just learned is located on the night-stand next to his bed in a Las Vegas hotel. "She's sleeping with the gardener," he insists without a trace of skepticism at the fantastic idea that his second wife -- a woman ten years his senior -- has fallen into trampy ways with the "help" at 85 years of age. "I think my phone is tapped," he continues without interruption. "I'm going to fly to Sacramento to see my sister Lucille."
This is the point at which my family is generally willing to first seek medical treatment. Unmitigated disaster.
So I sought and was granted (against strenuous opposition, I might somewhat irritably add) a continuance of a trial date that was breathing hot down the back of my neck, boarded a plane for Sacramento and got dad to doctors, psychologists and neurologists.
Parkinson's is treatable and the dementia abated for a sufficient amount of time to allow dad to pretty cogently divorce his second wife of 35 years and marry the woman who served as his court clerk when he'd been on the bench two decades earlier.
announced Monday a bipartisan agreement on the broad elements of a plan to avoid foreclosures and speed the refinancing of mortgages for roughly 500,000 troubled homeowners without taxpayers footing the bill.
Political deal making showcases high-level bargaining skills at the intersection of interest- value- and rights-based negotiation paradigms. No one files lawsuits against their Senators (well, no sane person). But in the midst of an economic crisis, political representatives might just as well be defendants. As Reynolds explains, the forclosure legislation "deal" reached in the U.S. Senate reflects the election-year pressure that lawmakers feel to find common ground on one of the most pressing issues facing the country.
Some theorists define conflict as a "crisis in human interaction" which the parties need help to overcome for the purpose of restoring constructive interaction.
A stakeholder in a conflict is anyone who might be positively or negatively impacted by the crisis and its potential resolution. In this case, the L.A. Times identifies the entire economy as a "stakeholder." As Ms. Reynolds explains, the "housing collapse"
has inflicted pain on thousands of families, dealt the economy a major blow and ignited a fierce controversy over what -- if anything -- the government should do about it.
The stakeholders to whom elected representatives must answer are, of course, those who elect them -- voters and taxpayers -- as well as those corporate and individual contributors who fill their election coffers. When selling a public good, however, it is best to acknowledge your allegiance to "the people." As one Senator explained:
My primary consideration during negotiations on this package has been to protect the American taxpayer, and I believe we've made significant progress toward that goal.
National Resolution to Public Problems Must Reflect the Voters' Interests and Values
Unlike a lawsuit, where the parties are fighting over existing (or hoped for) rights and obligations, in economic, social or political crises the "fight" is not about "rights" but interests and values. The right to declare bankruptcy aside, no one has a legal right to be "bailed out" of a financial crisis. Nevertheless, a bail out may be necessary if elected officials are to serve the "interests" of their constituents according to those voters' "values."
As Reynolds explains, the lead Republican on the Senate Banking Committee, Sen. Richard C. Shelby, suggested that consensus among law makers could not be achieved if the proposed solution to the foreclosure crisis were seen as a "bail out" of "speculators" or of "borrowers and lenders who made bad decisions out of carelessness or greed." These are the "value" concerns that are part and parcel of any potential resolution of a community-wide conflict.
Because we perceive money to be a scarce resource, we presume that its delivery to Interest Group A will deprive Interest Group B of funds necessary to serve Group B's needs or desires. This is a "zero sum" view of economics. For individuals and many businesses, however, this is often not only perceived reality, but the actual fact of the matter.
If mom and dad bail Billy out of jail for drunk driving, they may not have sufficient resources to pay his brother's room and board at Ivy League U. Not wishing to "reward" bad behavior (a "value" metric) may be only part of the calculus, however. If the family is capable of satisfying both brothers' interests, they may or may not decide to be guided by their "values." They could act out of helpless parental love or simply compassion. If the parents do not have sufficient resources to satisfy both brothers' needs at the same time, their decision about who to benefit will almost always reflect family values (little "F" little "V").
How national problems should be solved within federal budgetary constraints is not so different from the family drama hypothesized above.
The foreclosure crisis is not only about American values such as independence, thriftiness, caution, and hard work. It is also about stakeholder interests. As Reynolds reports:
Some Republicans have supported other versions of the legislation, citing the severity of the housing crisis and the escalating number of foreclosures in some regions of the country, including parts of California. They argued that the foreclosure crisis would damage entire communities and pull the economy toward recession.
If larger societal interests -- like the economy itself /** -- are at risk, a "bail out" plan that "rewards" even the careless and greedy may be palatable to voters, particularly when, as Reynolds reports, "at the luxury end, home prices are falling." In other words -- if this crisis is not addressed by our elected representatives (who are also stakeholders in this crisis) not only voters, but contributors to political campaigns might retaliate against them.
In acknowledging the need for action, Senator Shelby positively "frames" the crisis as one affecting "struggling homeowners" who "should" be assisted so long as "American tax payers" don't have to foot the bill. Others appeal to market and voter fears that the foreclosure crisis might "pull the economy toward recession" (if it has not already arrived there). In all events, a majority of stakeholders in any democracy must feel satisfied that legislation addresses both their needs and their fears.
The Proposed "Deal"
The proposed Senate "deal" to aid borrowers, lenders, and "the economy" is described by the Times as follows:
The Senate plan announced by Shelby and Banking Committee Chairman Sen. Christopher J. Dodd (D-Conn.) is similar to the House-passed bill in that the centerpiece of each is an expansion of government mortgage insurance. Under both proposals, a borrower facing foreclosure could refinance into a government-guaranteed mortgage under certain conditions, including that the home is the owner's primary residence and that the holder of the existing mortgage accepts 85% of the home's current appraised value as payment in full.
The House bill calls for using about $1.7 billion from the federal budget to set up the program, which would be administered by the Federal Housing Administration.
Under the Senate deal, the start-up funds would come instead from an affordable-housing fund capitalized by mortgage giants Fannie Mae and Freddie Mac, which were created by the government but are owned by public stockholders.
This plan satisfies American "self-help" values by requiring borrowers to refinance. It attempts to exclude "speculators" from the benefit created by requiring recipients of the government-guaranteed mortgages to affirm that the home is their primary residence. And it "punishes" imprudent lenders by requiring them to accept 85% of the home's current appraised value as payment in full. Finally, whereas the House would spend $1.7 billion in federal funds, the Senate hopes to tap the resources of Fannie Mae and Freddie-Mac, government created but privately owned lenders.
Selling the Deal
Whatever deal is crafted to address a national financial crisis or to settle a piece of commercial litigation, it must be sold to all stakeholders. Here's a classic "win-win" pitch based on interests and values.
"This legislation is good news for both the markets and homeowners," [Senator] Dodd said. "The bill addresses the root of our current economic problems -- the foreclosure crisis -- by creating a voluntary initiative at no estimated cost to taxpayers, which will help Americans keep their homes." Dodd told reporters the measure would speed the correction of housing prices to return stability to the market as soon as possible and prevent further damage to the broader economy. "Obviously, we want to keep as many people as possible in their homes. But the second goal, as important as the first, is to get to the floor" of the housing correction, Dodd said in a conference call. "Until we get to the floor, none of this is going to get better." "We have a lot of confidence that this is what the market is waiting for," Dodd said.
Deconstructing consensus-building in the political arena should help anyone who is making an effort to settle commercial litigation -- or simply a family dispute over the deployment of family resources.
We thank Times staff writer Maura Reynolds for the depth and breadth of her reporting on this issue.
Nearly every condominium complex harbors an outlaw -- the man, woman, couple or family who refuse to follow the rules. The young couple who blasts the woofers off their stereo system at 3 a.m. The elderly woman who doesn't clean up after her dog. The raucous family that plays "Marco Polo" in the community pool after midnight.
Offended and outraged, other homeowners make demands on their volunteer board who contact the (often unresponsive) management company. The HOA board does its best. It issues warnings to procure compliance. To no avail. Eventually, someone reads the CC&R's. They learn that the Board has enforceable legal duties and the homeoweners actionable legal rights.
Welcome to community mediation -- the non-zero sum, value-based, rights-seeking, joint session transformative dispute resolution process. We're well trained and we're free.
But can we deliver justice?
Attorneys, the Law, Mediation and Justice
Maybe it was just my G-g-g-generation, but I went to law school primarily because I was interested in the delivery of justice. Although my primary involvement in the 20th Century 's civil rights movements was as a Vista volunteer at an activist women's center in San Diego in the early 1970's, I wasn't simply pursuing my own narrow self-interests when I applied to law school.
As early as I can recall -- long before I'd conclude that 1950's and '60s women were oppressed -- I'd already developed a deep longing for the reconstruction of adult relationships along the lines of fairness. This must be atypical childhood longing premised upon our predicament of being physically small and powerless. An "unjust" world that rewards only power would not ensure our survival while a world in which everyone is valued and treated fairly would.
Couple a child's sense of justice with televised images of "the law" aiming fire-hoses at peacefully demonstrating "Negroes" and you get a life-long commitment not simply to the "rule of law" but to the necessity for that "rule" to be premised upon justice.
Are Negotiated and Mediated Resolutions Trumping Justice?
These are just a few of the reasons it troubles me so when scholars suggest that mediated and negotiated resolutions to litigated disputes are unjust. Seeyesterday's post here and the article that prompted it, Justice Trumps Peace (etc.) here. If mediation is truly what its critics contend it to be -- a full-frontal assault upon the rights gained by marginalized citizens during the Civil Rights era -- I'm in serious moral trouble here.
Consider this contention in Justice Trumps Peace:
“ADR rhetoric” reinforce[s] a conservative challenge to “the law and reform discourse of the 1960s, a discourse concerned with justice and root causes, and with debates over right and wrong.” “The rights theme, consistent throughout earlier debates over legal resources,” was conspicuous by its absence in “the policy discussion on alternative dispute resolution.” . . . .
Laura Nader . . . not[ed] that ADR’s “process of communication” ethos took necessary rough, ideological edges off claims, and fostered what she called “coercive harmony.” Nader argued that ADR was permeated with “conformist ideology,” which was employed to “suppress the realities of class, gender, and racial antagonism” endemic to American society, and as such, it comprised an “unreal law movement.” Nader contended that ADR’s emphasis on conciliation meant that critical considerations of “blame or rights” were “avoided and replaced by the rhetoric of compromise and relationship.” She concluded that “cultural notions of justice are factored out.”
This tendency to screen-out unpleasant, divisive, but nonetheless vital social concerns supports Fiss’s characterization of ADR as a “sociologically impoverished universe,” in which critical issues of class, race and gender are subsumed to construct “a world composed exclusively of individuals.”
Rawls asked us to think of justice as a matter of agreement. He suggested that we think of the principles guiding a just society as the ones that individuals would agree to -- with the crucial proviso that they do not know where they themselves would end up in society, on the top or the bottom. They would thus act from behind a "veil of ignorance . . . Given this constraint, no individual could tailor the principles of justice to his or her special talents or circumstances, which is why Rawls called this approach "justice as fairness." Rawls suggested that the principles that would be agreed to would be ones that were deeply committed ot basic human rights and had a strong presumption in favor of economic equality. Inequalities would only be tolerated if they most greatly benefited the least well off.
According to Ryan, Rawls concluded in his later writings that the reciprocity inherent in bargained-for resolutions and negotiation's search for mutual advantage were insufficient to ensure justice. Rawls therefore shifted the basis of his theory from the search for rational resolutions to the implementation of reasonable ones. "The question to ask of principles of justice," posited Rawls, was,
what were the most reasonable ones for people to agree to given the nature of our society and the nature of who we are? Justice, thus reconceived, lost the harsh individualism that Rawls' earlier theory seemed to possess. The stress on reasonableness meant that people taking others into account was an essential part of what justice was all about. His theory also moved away from his earlier hyper-abstraction, insofar as we talk of what is "reasonable" invariably refers not to some hypotheitcal persons with hypotheical aims but to real people -- in this case, us, here and now.
John Jones had practically memorized the CC&R's governing the Board's duties and the homeowner's rights. His wife repeatedly broke into tears as she described sleepless nights spent on the living room couch where the upstairs neighbor's early morning antics were the least disturbing. The volunteer Board member was sympathetic but at a loss for solutions. She'd contacted "management" and sent warnings to the miscreants, all to no avail.
Only punitive measures would do at this point, said Jones. The CC&R's called for sanctions to be imposed on rule-breakers but lacked a means of implementation and enforcement. The HOA representative indicated that she not only had the Board's authority to settle the matter, but to impose any necessary and reasonable rules to flesh out the CC&R's inadequate policies.
"We want monetary sanctions imposed," Jones was saying, "sanctions that can be made liens against the property just as HOA dues can be."
"What about notice?" I asked. "And a hearing? There's nothing in the rules about the procedure for imposing sanctions."
"24 hours!" shouted John. "If they don't comply, a $500 sanction to be made a lien against their property. And another $500 for every day they continue to violate the noise restrictions contained in the CCR's."
Not knowing about Rawls' veil-of-ignorance-just-rule-making principle, I nevertheless wondered aloud whether Mr. and Mrs. Jones understood that the bylaws they were suggesting could be used by their scofflaw neighbors as easily as they could be pursued by the Jones.
"What set of rules do you think would be fair?" I asked.
Two hours later, we had achieved what my Con Law professor would have called "procedural due process" -- a set of rules that would likely pass Constitutional muster that camefrom the parties -- not from the mediator.
Whether justice and fairness are, at some level, hard-wired into us (see Brain reacts to fairness as it does to money and chocolate) or culturally controlled, it seems that Rawls' conception of "justice and fairness" based upon reasonableness and enlightened self-interest might flow more or less naturally from a mediated dispute resolution forum where the parties, rather than the mediator, are in control.
Agree with Fiss, Ellinghausen, Laura Nader and Carrie Menkel-Meadow or not, there shouldn't be a mediator practicing who is unaware of these serious criticisms of the mediation process. If we're not aware of them, we can't avoid the potential for "muscle" mediation to prevent even the aspirational goal of delivering justice without regard to gender, color, power, social status, wealth and all the rest of the social markers the law has been so careful to avoid paying obeisance to.
My readers will recognize many of the tips included in this article published last week in the Los Angeles Daily Journal -- Bullying, Rigidity Are Surefire Negotiation Deal Breakers. Read it by clicking on the link above or below -- to enlarge page on the document embedded below, click on right-hand arrow and scroll down to
Malhotra and colleagues suggest that an adrenaline-fueled emotional state [which they] call competitive arousal, often leads to bad decisions.
Negotiating litigators may want to note that all of the conditions giving rise to "competitive arousal" are the day-to-day conditions in which litigation is conducted, i.e., intense rivalry, especially in the form of one-on-one competitions; time pressure . . . ; and being in the spotlight—that is, working in the presence of an audience.
Sound familiar? Take a look at the consequences and the potential solutions below.
Individually, these factors can seriously impair managerial decision making; together, their consequences can be dire, as evidenced by many high-profile business disasters. It's not possible to avoid destructive competitions and bidding wars completely.
But managers can help prevent competitive arousal by anticipating potentially harmful competitive dynamics and then restructuring the deal-making process. They can also stop irrational competitive behavior from escalating by addressing the causes of competitive arousal.
When rivalry is intense, for instance, managers can
limit the roles of those who feel it most
reduce time pressure by extending or eliminating arbitrary deadlines
deflect the spotlight by spreading the responsibility for critical competitive decisions among team members.
Decision makers will be most successful when they focus on winning contests in which they have a real advantage—and take a step back from those in which winning exacts too high a cost.
Recently, I excerpted the expressed concerns of in-house counsel about ineffective mediators. Among the complaints was some mediators' refusal to see or acknowledge the other side's "irrationality" As Where's the Magic from the U.K. online Mediator Magazine noted:
It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'
Helping litigants and their attorneys reassess their case is one of the mediator's greatest challenges. The mediator intervenes only after the parties' dispute has reached stalemate. Each party to a stalemate has negative attitudes about his adversary that are maintained and prolonged by three psychological mechanisms: selective perception, self-fulfilling prophecy, and autistic hostility.
Selective perception: people tend to select those perceptions that tend to confirm their existing attitudes, and ignore or discount information that would disconfirm their existing attitudes.
Self-fulfilling prophecies: people with negative attitudes about their adversary engage in conduct that provokes the adversary's "expected" response, which confirms the party's original expectation, and a vicious cycle ensues.
Autistic hostility: Parties in litigation have stopped talking with one another about their dispute, communicating only through their attorneys. The social scientists would say that such people are "stuck in autistic hostility, that is, their hostility is perpetuated by their refusal to communicate."
Robinson answers his own rhetorical question in this fashion:
When talking to the UFO-guy, I am totally with him. Listening, asking questions, trying to understand whether his delusion actually has some hidden meaningthat might suggest a way to resolve the dispute without asking the other party to "buy in" to the UFO story.
After giving Mr. UFO an opportunity to have his say and to experience -- perhaps for the first time ever -- another human being's willingness to temporarily suspend his disbelief -- I begin to gently "reality test." To do so, I do not have to doubt Mr. UFO's story. I can suggest, however, that not everyone is as understanding as I am.
"Have you told this story to many people?" I might ask. "And what has their response been?" Do you have any reason to believe that a judge or jury might be more likely to believe this narrative of events more than, say, your mother, sister, cousin, wife, best friend, etc. were?
Robinson's suggested action between the rock of understanding and the hard place of consensual reality is shrewd and effective. It neatly avoids the problem recently raised by my friend and colleague Jeff Kichaven who has likened piling rationales atop one another for the purpose of changing another's mind to raising your voice for the purpose of communicating with a deaf man.
Harvard Business School professors Deepak Malhotra and Max H. Bazerman address the irrationality problem in another fashion in their tremendously useful book Negotiation Genius.
"Whenever our students or clients tell us about their 'irrational' or 'crazy' counterparts," they write, "we work with them to carefully consider whether the other side is truly irrational. Almost always, the answer is no."
Malhotra and Bazerman list the mistakes that lead us to call our negotiating partners "nuts," "delusional" or "evil" as follows:
Mistake No. 1: They are Not Delusional, They are Uninformed.
If you can educate or inform your bargaining partner, say Malhotra and Bazerman
about their true interests, the consequences of their actions, the strength of your BATNA, and so on - there is a strong likelihood they will make better decisions . . . [I]f someone says "no" to an offer that you know is in her best interest, do not assume she is irrational. Instead, work to ensure that she understands why the offer is in her best interest. She may simply have misunderstood or ignored a crucial piece of information.
Mistake No. 2: They are Not Irrational; They Have Hidden Constraints
In negotiation, a wide variety of possible constraints exist. The other side may be constrained by advice from her lawyers, by the fear of setting a dangerous precedent, by promises she has made to other parties [this is a particularly common constraint in IP infringement actions] by time pressure and so on. [D]iscover these constraints . . . and . . help other parties overcome them . . . rather than dismissing others as irrational.
Mistake No. 3: They are Not Irrational; They Have Hidden Interests
[P]eople will sometimes reject your offer because they think it is unfair, because they don't like you [or are tired of feeling as if you don't like them] or for other reasons that have nothing to do with the obvious merits of your proposal. These people are not irrational; they are simply fulfilling needs and interests that you may not fully appreciate. . . [I]nvestigate: "What might be motivating her to act this way? What are all of her interests?"
But What if They Really Are Irrational
If your counterpart truly is irrational -- in other words, he is determined to work against what is in his best interest -- then your options will be fewer. You can try to push through an agreement despite his irrationality, you can try to "go around him" by negotiating with someone else with authority who seems more willing to listen to reasons . . . or you may decide to pursue your BATNA because his irrationality has eliminated all hope of creating value.
I have a friend who is, literally, a rocket scientist. He says that there are no problems which cannot be solved -- only problems that we don't yet understand. This is as true in negotiation as it is in rocket science. In both cases, the wisest course is to assume you know nothing and begin asking the type of questions that would help learn something.
Thanks to Geoff Sharp at mediator blah blah for directing us to this great U.K. Mediation resource, The Mediator Magazine which is great to poke around in a little when you're home for mother's day and mom's gone off to bed. Here, for instance, are some well taken criticisms of mediation practice by in-house counsel from the article Where's the Magic?
Top of the list of issues which invite scorn is perceived weakness on the part of the mediator. Giving palpable nonsense and well documented fact equal air-time in the interests of appearing open-minded has backfired for a number of mediators. 'It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'
One public sector lawyer, though generally more favourably disposed towards mediation, shares a sense of frustration with the purely facilitative model: 'If a mediator is too passive,' he says, 'there isn't going to be any realignment of expectations, there isn't going to be the refocusing of the parties on the strengths and weaknesses of their own and the other party's case. It's simply not going to happen. You're not going to facilitate the movement.'
Naturally it is all a question of degree, but frustration with a style perceived to be 'slow', 'wet', 'namby-pamby', or worse, 'like therapy' is real, and stands in the way of mediation increasing its meagre market share.
It is also evident that some mediators have failed to manage the process with sufficient vigour, fuelling comments like 'I've been at quite a few [mediations] and question what the mediator actually does.' No doubt they've had to spend all their time working with the other side, but if so, this needs to be communicated.
This lack of robustness which for many is synonymous with mediation has bred the widespread belief that mediation only works when both sides want to mediate. And where that's the case, without prejudice discussions will do the job. Until mediation's image hardens to the point where people realise that great mediators can deal with the shirty, dismissive and gratuitously rude types, mediation will remain in the shadows. . . .
These criticisms are real and require attention. I'm uncertain of the state of "professional" mediation in the U.K., but here in California, its all over the board. For the mediation advocate and his client, finding the right mediator for the right case at the right time is not only more art than science, it's often more guesswork than art.
I'll be dealing with the issues raised by this U.K. article in the coming weeks. For the full article, click on the link above.
The friendly bailiff unlocked the small courtroom. After telling me to make myself at home, he pointed to a small red button on the wall. “If you need me, just press that button and I’ll be in here faster than you can blink and eye. It’s an emergency button.”
“Ok, thanks,” I replied, and began to unpack my briefcase.
“I mean it,” he said. “Just press the button. Maybe you should set up your chair so you’re near it.”
I gave him a long look. “You seem to want me to know about that button. Is there something else you want to tell me?”
I'm asked this morning by an ADR colleague whether we can criticize diversity without sounding like racists. The question itself is problematic because it not only assumes a racial divide, it places "us" on the "white" side of it.
introducing supplier diversity to the ADR profession [by] extend[ing] business opportunities to certified minority and women ADR neutrals. These efforts, coined as "second tier," allow Shell to influence prime or majority ADR firms, with whom they do business, to also contract with minority and women owned ADR firms within the business community.
In the upcoming months Shell will be targeting . . . ADR services to participate in second tier efforts. Shell astutely recognizes that by embracing the concept of inclusion, the company will rise to a higher level, reflecting its belief that it "will benefit from diversity through better relationships with customers, suppliers, partners, employees, government and other stakeholders, with positive impact on the bottom line."
I'm assuming that my questioner does not agree with the "affirmative action" aspect of this program. Having debated the affirmative action issue since I began law school at U.C. Davis where the Supreme Court Bakke decision originated, I know well how divisive this issue can be. But it is an important issue -- an issue critical to a nation not only "conceived in liberty" but "dedicated to the proposition that all men (sic) are created equal."
So Let's Take a Look at ADR and Diversity
I'll ask the academics over at the ADR Prof Blog to correct me if I'm wrong.
I understand the academic criticism of mediation to be this: in the immediate post-civil rights era while greater legal protections have been afforded to women and under-represented minorities, the "people" have been channeled into a system -- mediation -- that lacks the prejudice-flattening constraints of the rule of law. More disturbing, say critics, is the fact that this "lawless" system is largely presided over by -- excuse me if this offends anyone -- OLD WHITE MEN.
I've learned more about racial bias talking to my liberal (white) "unprejudiced" friends this election season than I have since I participated in the "second wave" women's movement in the early nineteen seventies (remember consciousness raising?) I do not judge them, nor myself, for our necessarily limited view which just happens to be that of the dominant culture.
I know we still have a serious racial divide because when I talk to my educated and liberal African American friends they say things that shock me. Things like -- the U.S. may have started the AIDS epidemic to rid the world of Africans. OK. I get it. There's something about their experience of America that is so radically different from mine that I think their point of view is, frankly, just a little nuts. This is what I do know -- I will never truly be able to see the world from their point of view.
That said, I do think we can criticize people for taking advantage of "diversity" issues to forward an agenda -- or their own personal advancement -- other than forwarding diversity itself. We can criticize those who would deepen the divide to profit from it.
If I could write a sentence in a circle at this point, instead of linearly as the language requires me to do, I would do so. Here is what I understood Obama's response to the question of the racial divide in America to be.
Acknowledge it Heal it Move on Heal it Move on Acknowledge itMove On Heal it Acknowledge it
There are no periods in this sentence because this activity needs to be constant and on-going. Because we will always be stuck in our own point of view. Because in-group and out-group prejudice will always be with us. And because the more visible markers there are for "otherness" in others, the more prey we are to the error of dividing the world into "us" and 'them."
The answer? Diversity. Vigilance. Education.
Toward that end, here are some ADR Diversity resources:
Center for Dispute Resolution, whose mission is to "to promote and provide education and comprehensive approaches to dispute resolution that constructively serve the needs of our culturally diverse society."
A friend and former legal partner was fond of saying that the biggest lie in the business was I don't take it personally. After four years of full-time mediation, I have another "Big Lie" to add – it’s only about money.
The social scientists who sutdy these things say that the way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected.
Conversely, research shows that business people are reluctant to recommend legal action if they believe that they and their company have been treated respectfully. Although this is particularly true of fiduciary and special relationships such as lawyer-client and business partnerships of all kinds, it also applies to arm's length business transactions.
Every commercial interaction, we are told, "represents a social exchange and every form of social behavior represents a resource." Id. People's satisfaction with the outcome of a commercial transaction therefore "depends highly, and often primarily, on their perception of the fairness of those outcomes." Id.
When we, as litigators and counsellors, actively listen to what our clients and our adversaries are saying about the rights and responsibilities of all participants in an ethical business community, we stand the best chance of engendering mutual trust and respect among the parties. In that atmosphere, the probability of becoming embroiled in litigation decreases precipitously. When the parties believe that their concerns are being heard and respected, losses that might otherwise become lawsuits, are far more likely to be addressed as the understandable consequence of the inevitable mistakes and miscommunications that attend all human enterprises.
As much as we'd like to believe that we don't take it personally or that it's only about money, the good news for all of us is that we do and it's not.
My first day of mediation training progressed in somewhat the same fashion as my first few weeks in Civil Procedure. I remember struggling with the theoretical bases of jurisdiction in Pennoyer v. Neff one day only to be told the following week that Pennoyer was no longer the law. “Why,” I remember thinking, “did we even bother with Pennoyer when this Buckeye case about an exploding boiler now seems to be the law? Or would it be replaced next week as well?”
Law school, which taught me to “think like a lawyer,” was the precise opposite of my new mediation studies. Now, it seemed, I was being trained to stop “thinking like a lawyer.” Still, mediation, like the law, was full of conflicting ideologies from which it appeared I was required to choose.
It was easy for me to be evaluative: I had 25 years of legal practice in my backpack. I learned Dr. Cialdini’s “Principles of Ethical Influence”—Reciprocation, Scarcity (the rule of the rare), Authority, Commitment, Empathy, and, Consensus. These power principles helped the mediator to “make the other side see reason” when called upon to do so.
But the evaluative style was not the only prescribed route to mediation mastery. There were many who favored facilitation. The facilitative mediator first creates an atmosphere of hope and safety before helping the parties locate areas of agreement and mutual benefit. Here, the mediator is a follower or helper on the path to resolution, like the protective figures who appear early in a hero’s journey to enlightenment.
You can’t immerse yourself in mediation for long before you hear the clamor of the transformative crowd. Facilitative mediators, say the transformative folks, too often present themselves as wizards who intrude upon the parties’ conflict with their own agenda—usually “resolution be damned, let’s settle this darn thing!” The transformative mediator lets the session wheel out of control if that is where it is eager to go. Conflict is not seen as a state to be avoided or suppressed. Like a loving mother following the course of her child’s flu, the transformative mediator provides the parties with encouragement, opportunities to rest, lots of fluids and a metaphoric place to lay their heads as the conflict runs its natural course.
When I first brought this tangle of methodologies to the few master mediators I know, they all made short work of it with the scalpel of experience. “You are the technique,” they instructed. “Just stay in the process. Don’t guess. Ask questions. Listen. Don’t give up before the miracle of mediation happens.”
Now, four years into a full-time ADR practice, I am still struggling to embrace the entire dispute—the business or people problem that found its way to an attorney because of the justice issues with which it was burdened. I often feel that I’m walking a razor’s edge. I will never stop “thinking like a lawyer.” Nor will I stop pursuing this new way of thinking—one that looks for the opportunity to finesse the legal impasse by using the problem itself as an opportunity to broker a deal.
Why mediation? For me, it’s simply a broader canvass on which to paint a new picture. How mediation? In baby steps, one after the other, in just the same way I learned to be a litigator and trial attorney. How can the Human Factor help with your own life and legal practice? Stick around. Miracles are common here. We think you’ll enjoy the ride.
In this part of the new series on getting the parties to the bargaining table, I interview former in-house Chrysler counsel and former Hogan & Hartson partner, Lew Goldfarb, who now has his own full-time outside settlement counsel firm.
what's the difference between outside settlement counsel and a mediator?
Settlement counsel is an advocate for one side, in my case, that's usually the defense. While the mediator is a neutral who tries to facilitate a compromise, settlement counsel attempts to achieve better outcomes for his clients for two reasons: (a) I have a complete understanding of the full range of my clients' interests, many of which are often not communicated to litigation counsel; and, (b) it is easier for me to learn the true motivations (if not the bottom line) of plaintiffs' counsel than it is for litigation counsel to do so.
In class actions, which are my specialty, I strive to craft a solution that responds to plaintiffs' counsel's needs while imposing minimal costs on my client. There are numerous, creative ways to settle class actions that accomplish both objectives effectively.
I sometimes find that the parties for whom I mediate have not confided in the litigation team all of the corporate interests that are propelling the client toward settlement. I found this to be true in litigation practice and as a mediator. Do you encounter this as outside settlement counsel and, if so, how do you serve the client's interests without stepping on the toes of litigation counsel and vice verse.
There's always a bit of a communication gap between litigation counsel and the client. When clients hire me as settlement counsel it's in their interest to provide me with complete information in order to get them the best possible outcome, so they rarely withhold any important information fro me. In a recent case, I was not only invited to speak at several client board meetings, I was also asked to spend several days in the field on sales trucks to observe the client's franchisees that were the subject of the lawsuit. As a mediator, I usually only see the information that the litigation counsel provides as part of his client's submission, which is probably much more selective.
Now that I've been mediating full time for four years, I find I'm much more prone to ask the parties interest-based questions than I was as a litigator. When I say "interest based," I mean corporate realities such as chain of command; upcoming mergers or acquisitions; a new management team; quarter- or year-end financial planning; divisional loss history; and, the like. If you find that to be true as outside settlement counsel, what do you think accounts for corporate counsel keeping their litigation team largely in the dark about issues that might have a substantial impact on the ultimate resolution of the matter?
Since I have always approached litigation with a view toward early resolution, either as in house counsel, outside litigator or mediator, I would usually make the same inquiries regarding the client interests that you do as a mediator. My only explanation as to why corporate counsel may withhold such information from their litigators may be that they are not seeking a negotiated outcome. In that case, they may believe that their litigators will be more effective and focused without being encumbered with "interest-based" information.
My peers in the mediation world are fond of saying that litigators have to "churn" cases before settling them. I find that a shockingly cynical attitude. I often found that clients were more settlement averse than their litigation counsel. What is your experience in that regard?
I have to admit that I am more on the side of the cynics. I've had this longstanding belief that the legal profession imposes enormous economic costs on society without a commensurate benefit to the public, all in the name of providing access to the legal process. (See Goldfarb v. Virginia State Bar, 423 U.S.886 ) I believe that litigators tell themselves that they were hired to litigate not settle the case. I think it's less a matter of "churning" than it is the litigators' belief believe that "early" resolution means winning a dispositive motion, even if it takes a year or more to get an outcome. (See my article "Litigate it or End it" which discusses this issue.)
While there are always legitimate corporate reasons for not settling a case, litigators are reluctant to discuss early settlement with their clients for two reasons: (1) loss of fees; and, (2) fear of showing any lack of resolve to win the case. My experience is not that clients are settlement averse, rather that litigation counsel convince their clients to hold off on settlement for one more dispositive motion.
How did you come to champion the use of settlement counsel?
I honed my skills as settlement counsel while serving for 16 years in house at Chrysler. When I arrived at Chrysler in 1985, the company was engaged in costly litigation with GM over a GM/Toyota joint manufacturing venture in Calif. The General Counsel asked me to look for alternatives to the litigation, which is when I found an article by Roger Fisher of Harvard promoting the use of separate settlement counsel. Chrysler did so and settled the case within a few months. I was then placed in the role of overseeing all class action litigation and serving as settlement counsel as well. Most in house counsel are not sufficiently immersed in the litigation, however, to serve as settlement counsel or simply do not have the time.
As a former litigation partner in an AmLaw 100 law firm, do you wish you'd had inside settlement attorneys working side by side the litigation team?
Because of my experience as in house counsel settling cases, I was always the partner urging my fellow litigators to evaluate settlement possibilities. For all the reasons set forth in my answers above, most large law firms do not embrace the idea of institutionalizing an in-firm settlement section. One exception was Wilmer Cutler in DC which did set up an ADR group within the firm with the idea that clients would make use of it. I don't know whether it still exists. I still think it is a great idea, although not as effective as the hiring of a completely separate firm or individual to explore settlement.
Doesn't it take outside settlement counsel an unnecessarily long time to "get up to speed" on a major piece of litigation -- thereby making it less cost effective than simply hiring a mediator to help the litigators settle their own cases?
Not at all. When I take on an assignment as settlement counsel I provide the client with a budget that includes a separate breakdown for "up to speed" time. While I need to understand the merits of the client's defense I do not need to read all the briefs since I generally am not called on to argue the merits of the case. Most importantly, I must fully understand what the client's interests are and what it is willing to offer up in settlement. For better or worse, what I offer is a very low cost, low risk means of exploring and settling complex litigation.
Thanks Lew! I can think of a couple of complex anti-trust, securities and IP cases I could have used your services for. I hope this interview gets the word out to attorneys feeling pressured to settle a difficult case but unable to get the other side to the bargaining table.
I give you only the article's conclusion, daring you to click on it without reading it to the end.
The overarching question of why the bank didn’t settle remains a puzzle.[The Bank's counsel] thought he gave the bank solid advice. All the lawyers who joined in the bank’s defense hold to that position: Legally, they contend, the bank was within its rights in seizing the $1.7 million.
But the case ran away from them. It got bigger and bigger and worse and worse. And there was no stopping it. One defense lawyer observed, “It went to hell in a handbasket.”
Maurice Mitts says his client is willing to call it quits for the $56 million. But First Union still isn’t willing to pay a big number. Mitts isn’t surprised.
“ ‘We know the law, we are the law, and too bad for you,’ ” Mitts said. “That’s been their attitude all along.”
Thanks to the Philadelphia law firm of Mitts Milavec, LLC for fighting the good fight and posting this dynamite legal tale.
On North Korea: "We should negotiate with the North Koreans. We should be tough. We should require that they stop their nuclear development program. We should have the absolute ability to verify that that has occurred."
On the Middle East: Has said that he believes "a two-state solution is ultimately the answer" but would not negotiate with Yasir Arafat. (before Arafat's death, obviously) Would send an envoy to the region.
Sixty-four percent of Israelis say the government must hold direct talks with the Hamas government in Gaza toward a cease-fire and the release of captive soldier Gilad Shalit. Less than one-third (28 percent) still opposes such talks.
I could go on but you get the point. The first decision any negotiator must make is whether he's willing to negotiate with the "opposition." And the second is on what terms.
That decision -- and the many ways in which you can bring your opponent to the bargaining table any time you wish -- with the expectation that your negotiations will either successfully resolve your dispute or drastically limit the amount of time you spend litigating it before settlement will be the subject of this week's posts.
Along the way, we'll talk about the many ways in which the masters of international diplomacy manage to take advantage of favorable negotiation conditions and to finesse unfavorable political climates for the purpose of getting warring parties to meet in an attempt to reach accord..
Penelope suggests the weakest strategy available -- exchange power for sympathy. "If one person has a great BATNA," writes Penelope, "and the other has a terrible one, it’s not really negotiations; it’s trying to get a little something extra. It’s asking for a favor. If you approach negotiations from this perspective then you are much more likely to get a little bit of what you want."
Two of the savviest negotiators around Deepak Malhotra and Max Bazerman in their tremendously practical book Negotiation Genius have devoted an entire chapter to Penelope's problem called, not surprisingly, Negotiating from a Position of Weakness. Their recommended strategies include the following:
Don't Reveal that You Are Weak
[H]aving a weak BATNA is not terribly problematic if the other side does not know that your BATNA is weak. If you have a weak BATNA, don't advertise it!
Overcome Your Weakness by Leveraging Their Weakness
[W]hen both parties have a weak BATNA, it means that the [Zone of Potential Agreement] is large. In other words, a lot of value is created when the two sides reach an agreement. Who claims more of this value? . . . [T]he one who fares better is the one who makes the other side's weakness more salient throughout the negotiation.
Identify and Leverage Your Distinct Value Proposition
[V]ery often, you do bring something to the table that distinguishes you from your competitors. This is your distinct value proposition (DVP), and it need not be a lower price. You may have a better product,, a higher-quality service, a good reputation, a strong brand, or a host of other assets that your [bargaining partner] values and that you can provide more effectively or cheaply than your competitors.
If Your Position is Very Weak, Consider Relinquishing What Little Power You Do Have (This was Penelope's strategyin the Yahoo negotiation subject of her post).
[I]f you can't out muscle the other side in a negotiation, you may want to stop flexing our muscles and, instead, simply ask them to help you. When negotiators try to leverage their power, others reciprocate. This pattern can be disastrous when you are the weaker party. But when you make it clear that you have no intention of fighting or negotiating aggressively, others also may soften their stance.
Strategize on the Basis of Your Entire Negotiation Portfolio
[A]udit the implicit assumptions you make when formulating your negotiation strategy. You may perceive yourself as being "weak" if you only measure strength as the ability to push hard in any given negotiation without losing the deal. But you may discover that you are actually quite "strong" once you begin to think about your ability to withstand losing some deals because you are maximizing the value of your entire negotiation portfolio.
Increase Your Strength by Building Coalitions with Other Weak Parties
In the realm of international relations, a vivid example of the power of coalitions surfaced during the 2003 World Trade Organization negotiations in Cancun, Mexico. Disgruntled by the continued lack of attention paid to the issues of concern to developing nations . . . twenty-one "weak" countries banded together to create the Group of 21. This group is now in a much stronger position to negotiate for the interests of its members than any member nation would have been on its own.
Leverage the Power of Your Extreme Weakness-They May Need You to Survive
[I]t is often useful to tell the negotiation "bully" that an overly strong show of force can be counterproductive: "If you push me too hard, you'll destroy me -- and lose a value-creating partner."
Understand -- and Attack -- the Source of Their Power
A number of Planned Parenthood clinics around the country have adopted a particularly creative strategy for fighting back [against protesters], usually referred to as the "Pledge-a-Picket" Program. Here's how it works: The clinic asks its supporters to pledge donations to the clinic on a per protester basis. The more protesters that show up to picket the clinic, the more money the clinic raises in donations! . . . The Planned Parenthood of Central Texas in Waco has even posted a sign outside its clinic that read: "Even Our Protesters Support Planned Parenthood."
Once the Planned Parenthood clinics understood that the source of their opponents' power was the ability to draw large numbers of protesters outside the clinic, they were able to think of a novel way of diminishing the benefits of doing so.
Malhotra and Bazerman conclude their chapter on Negotiating from a Position of Weakness by noting that
while being in a position of weakness is sometimes unavoidable, you will negotiate most effectively when you leverage the fundamentals -- systematic preparation and careful strategy formulation.
The provocative comment we're following is Jay Welsh's remark that to settle most cases the Plaintiff has to accept a lot less than he wanted to recover and the defendant has to pay a lot more than he ever imagined paying. And the response we're replying to is Canadian lawyer Michael Webster's:
When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.
The reason litigators settle law suits is because the outcome of litigation is uncertain and its pursuit expensive. But that just states the problem. How do you "tell" a client in the midst of expensive litigation that he's going to have to pay way more or accept way less than his attorney predicted (with appropriate disclaimers) long, long ago?
First, let me provide a checklist for success in commercial mediation:
Bring the real deal-makers to the mediation or settlement conference for it is they -- not their attorneys -- who will make the decision to pay way more or to accept way less than they had previously imagined.
Bring the parties back into the conflict as participants in its resolution again. Businesses have commercial problems that have business solutions. Litigation is often just the stick to force the continuation of commercial negotiations that broke down in so spectacular a way that the parties stopped talking to one another, hired lawyers, and began to fight over legal issues the parties neither care about nor understand. The parties have now experienced how surreal their negotiation becomes when it's conducted in the courts. They're probably ready to deal again. Let them.
Permit the parties to discuss all aspects of the conflict whether they are relevant to the legal issues or not. The reason one party initiated litigation against the other party is not because he wanted to create precedent. And if precedent is what a party wants, money might but often cannot settle the matter.
Bring the experts along and let them talk to one another about the ways in which the matter might be resolved or even why their expert opinions are diametrically opposed.
Address the parties' justice issues. People seek out lawyers for one reason and one reason only. Because they believe themselves to be the victims of an injustice. And if its the defendant you represent, the injustice visited upon it is the litigation itself. I spend a significant amount of time during a mediation discussing justice issues with the parties.
they're being extorted
they're being low-balled
they were defrauded
their trust and confidence was betrayed
their competitor's market tactics have been unfair and violative of any number of state or federal laws
their intellectual property was stolen
etc., etc., etc.
Let the mediator talk with the parties about what the justice system can do, what it should do, what it most likely cannot or will not do. Most parties will not be happy with their attorneys if their justice issues are not addressed at the time of settlement. And its my job to make clients happy with their attorneys.
Let the mediator help the parties understand that their case has -- with no one's fault -- gotten worse rather than better over time and why.
When all else fails, blame the "system."
Why Parties Pay More or Accept Less than They Want To
Jay Welsh is right. If the parties have hired a mediator to settle complex commercial or mass tort litigation, they have done so because they need to pay more and accept less than they are prepared to do. Otherwise, they'd settle without the assistance of a mediator.
This does not mean that the mediator bangs heads or twists arms. There are hundreds of reasons why parties do not continue to trial and thousands of good excuses for corporate counsel to stop the bleeding. They include:
the witnesses on the other side performed better in pre-trial testimony than expected
the Judge made pre-trial rulings that cut the heart out of your case
the Supreme Court (state or federal) just over-turned a hundred years of precedent making one party's legal case far worse and the other's far better than expected
it's the economy, stupid
the client realizes during the course of the mediation that there's more than one way to organize the facts and apply the law -- something lawyers are trained to do and even sophisticated clients find hard to swallow. Having had an "aha" experience during the mediation, the client realizes there's more (or less) at risk than he's been thinking and the offer/demand now on the table looks pretty darn good after all
the other side becomes un-demonized during the course of the mediation, making it easier to part with money for the purpose of resolving the one thing both sides have in common -- a difficult, uncertain, expensive, dangerous lawsuit.
one side simply out-negotiates the other (it happens)
one or both sides lose heart for the battle when they see that the delta between the their bottom lines is not as great as they expected it to be
the parties manage to "expand the pie" (more about this later) such that the plaintiff does not have to accept that much less nor the defendant pay all that much more than each anticipated (it happens)
one party genuinely develops an understanding of and empathy for the other side's position and changes a hard line attitude against settlement as a result (it happens)
Canadian Lawyer Michael Webster asks about Jay Welsh's comment (see videos) that "in a mediation the plaintiff has to settle for far less than they thought and the the defendant has to pay far more than they ever thought."
"So," asks Webster, "this would be the lose/lose theory of mediation?"
I know when Michael's being sarcastic but decided to respond seriously by noting that Jay himself used the phrase "lose-lose."
I went on to say that the most valuable service I can often perform is to "break through confirmation and other biases/ ** that have interfered with case analysis and caused impasse."
Michael's reply was important:
When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.
Though I'm a little tempted to be flip ("this is why they pay me the big bucks") Michael's question nails one of the most difficult issue attorneys must deal with in settlement negotiations. It is certainly one of the most delicate tasks a mediator is called upon to perform.
First Let's Re-Visit Interest-Based vs. Distributive Settlement Negotiations, Asking Ourselves Whether There's Really Such a Thing as a "Pure" Money Case
My husband, with 35-years of complex commercial litigation practice under his belt is my attorney-mediator-communication weather-vane. So I asked him over pancakes this morning, "Honey, do you think there's any such thing as a 'pure' money case?"
Two months ago, he would have said "yes," and given me that "you've changed too much" look. I don't know why he said "no" this morning. But here was the gist of his response.
"Every case involves someone's interests, whether it's the GC or a company executive, or even a 'little guy' down the management chain who made a decision that impacted the course of the dispute four or five years ago. So of course there are innumerable non-monetary concerns that impact why the case is settled and when and for how much. Then again, maybe I've just been living with you for too long."
So let me first say that there is no such thing as a non-interest based negotiation. There are only negotiations in which we ignore the fact that party interests are at play.
This is one of those nature/nurture mind/body duality questions. Yes, it's "just" about money. And yes, the money represents party interests. It's nature and nurture, mind and body, budgetary constraints and party goals and relationships.
Here's another thing. Although the disputing parties may never again be in relationship with one another, the people on each side of the conflict-fence are not only in daily contact, their well-being, livelihoods, self-respect, reputation, promotions, demotions, and salaries depend upon their on-going relationships with one another, which are all in play in every negotiation of every commercial dispute.
And one more thing. Conflict cannot arise in the absence of a relationship. Even though the disputing parties may never again be in relationship, they're sure the heck in relationship now. And the relationship of the disputing parties from the moment conflict arises to the minute it settles has everything to do with its resolution.
There is no "zero-sum" game outside the realm of the virtual or the hypothetical. There is no "rational" man. People -- messy, conflicted, emotion- and interest-driven people -- are the necessary pre-requisite to conflict. How we deal with apparent lose-lose conflicts, "manage" party expectations and deliver bad news in a way our clients can hear it in the next post. Immediately hereafter.
It is a truism that litigation tends to get worse rather than better over time. This is as true in the law as it is in physics -- things fall apart. Your client's clean and righteous narrative tarnishes over time; grows more complex and filled with contradictions. It's a little like a political campaign. Barack's ground-breaking race relations speech and Hillary's single tear aside, Clinton and Obama tend to look worse, not better, over time. We all do.
Whether the value of your legal "case" is up today or down tomorrow turns not only upon the most recent documents produced, pre-trial motion won or witness deposed, it also turns on those things that fall apart over time -- including currency exchange rates.
The micro-economics of settlement timing include corporate events such as quarterly and year-end financial reporting requirements; potential mergers and acquisitions; and, how much financial bleeding your client's divisional president can take this year before worrying about demotion.
In international disputes, currency exchange rates loom large in the macro-economics of settlement timing. My own last really "big" case before I left practice was potentially worth a quarter billion dollars in "hard" damages -- the total projected clean-up costs for 500 toxic waste sites in every Canadian province.
The Canadian dollar was not only weak at the time, it was weakening. Though the question of whose currency would control was contested, my client was confident that Canadian dollars would eventually govern since clean-up costs by the American plaintiff would be paid in Canadian dollars. I remember a time when the Canadian dollar was tumbling in value so rapidly that every time I saw opposing counsel in court I'd remind him of the day's exchange rate with a warning that "your case isn't getting any better over time."
Settlement timing in that case was motion-driven, however, and the matter did not settle until after the entry of a pre-trial judgment in my client's favor pending appeal.
Though I was (and would continue to be) driven by pre-trial losses and victories, savvy settlement counsel would be keeping an eye on macro-economics -- which would, in any international litigation, require someone to be tracking currency exchange rates.
I promised you a series of posts on mediating complex and sophisticated commercial mediation.
Here's what I'm really most interested in doing -- starting a high level conversation among commercial litigators and commercial mediators about the best way in which we can help one another help your clients to achieve the best resolution possible to their commercial dispute and the legal problem/solution associated with it.
I'm always looking for the smartest guy or gal in the room because. I'm just a geek who really enjoys spending time with people who are savvy, astute, original well-read, and, well-spoken. These people tend to see things more clearly than I do and that clarity of vision often results in a way of approaching problems that generates better results in a shorter amount of time than is the norm.
One of the smartest guys in any room is AAA arbitrator and Judicate West mediator, Jay McCauley. O.K., he's Harvard Law and I'm just a state university girl. But pedigree doesn't matter to me. Brilliance and creativity does. Jay and I have recently spent a lot of time talking about the way we feel that we're sometimes talking past our attorney clients and they us. So we have plans to write some really interesting articles that we hope will help both mediators and attorneys achieve better results more consistently when they decide to settle, rather than to try, a case.
Jay's written a lot already. And because I'm now getting around 11,000 hits/month (!!yay!!) I've decided to simply pull up his existing articles on mediating particular commercial disputes before launching our jointly written posts. If any of those 11,000 monthly "hits" come from commercial litigators, we'd LOVE to hear back from you on this series.
That said, here's Jay's article on Wage and Hour Class Action Mediation.
There is no such thing as a "cookie cutter" mediation. Nonetheless, most mediations have, among other things, the following general characteristics:
At least four participants whose interests are not naturally aligned - Plaintiff, Plaintiff's counsel, Defendant and Defendant's counsel.
Little or no genuine concern that a settlement will foster future claims.
Some prospect of integrative, or "value adding," resolutions.
A rich body of applicable case law to serve as the empirical basis for risk-based claims valuation analysis.
A virtually unrestricted free market where almost any resolution agreeable to the parties can be turned into a contract fully enforceable by the courts.
Wage & hour class action mediation, by contrast, has none of these characteristics.
Mediating with Only Three Participants
All fictions aside, there are three, not four, interested participants in a wage & hour mediation. They are the defendant, its counsel, and the counsel for the class. Plaintiffs themselves (including the named representatives) are literally absent from the negotiation altogether, and are typically absent physically from the mediation sessions.
Any imbalance resulting from the absence of plaintiffs themselves is, in theory, "corrected" by an institutional device unique to class actions: the fairness hearing, in which a court imposes outside boundaries on the settlement for the protection of the plaintiffs.
Nonetheless, the absence of the plaintiffs themselves is significant. The court is not, in any sense, a substitute negotiator for the plaintiffs. It simply either approves or rejects the settlement agreement, in accordance with reasonably well-established standards, after the settlement has been negotiated by plaintiffs' counsel and the defense team.
The actual negotiators have a common interest in avoiding agreements so extreme that they will be either rejected by the court, or undermined by excessive "opt-outs" from the plaintiffs themselves. But subject to these outside limits, the three players at the negotiating table have an interest in maximizing two things: the portion of the settlement funds that goes to plaintiffs' counsel as approved fees; and the portion of the settlement funds available to be returned or otherwise used by the defendants.
The upshot is this: Plaintiff's counsel seek, and usually get, one third of the settlement funds as fees; amounts unclaimed by class members revert to the defendant to the extent the court permits ; and the stated settlement amounts include the resulting social security and FICA charges the company will have to bear as a consequence of the settlement - an amount that turns out to be 13.85% of the total paid to the class members. These terms are easily arrived at because those at the negotiating table can "give" each other these benefits, without cost to themselves.
The absence of the plaintiff also eliminates one of the most common challenges a mediator has to face in "ordinary" litigation - the challenge of plaintiffs resisting economically advantageous proposals because of a desire to use the courts to obtain perceived benefits that go beyond economics: retribution for perceived wrongs; public vindication; and principled refuge in the Rule of Law.
This not to say that the issues addressed in wage & hour class action mediations are entirely economic. But the non-economic issues characteristically arise from the defense side, and tend to break down into two categories. The first category is the common "principled" resistance to a fairly rigid statutory scheme that typically strikes defendants as entirely inconsistent with the statutory purpose and with common sense. Specifically, those rationally thought to be managers cannot be treated as exempt in California if the time they spend in identified categories of non-exempt functions (e.g. sales) happens to take up more than half their time. The "player-manager" may be thought of as a manager, but there will be exposure if he is paid like a manager, and that fact is a hard-to-swallow surprise for many companies.
The Defendant's Need to Deter Future Claims
Then there is the second form of defendant resistance to otherwise attractive settlement opportunities. This one is born of a genuine dilemma: the company concludes it cannot "turn managers into foremen" without losing the critical work incentives or esprit-de-corps or "company culture" that it concludes comes with classifying class members as exempt; but to "buy off" the class action claim through settlement without also turning class members into non-exempt workers for the future would be to inspire, by that act, endless waves, every three or four years, of new wage and hour claims.
These claims would come from new employees who are not collaterally estopped or otherwise bound by the class action judgment supporting the settlement. It would also come from its current employees, class members, who have a basis to argue their release can only apply to past "wrongs," but cannot release the continuing "wrongs" that take place after the release is entered into. Such companies are sorely tested take their chances at trial to escape the dilemma. The prominence of that question is an unusual hallmark of wage & hour mediations. And much of the focus of mediations I have handled has involved finding creative solutions to this very dilemma.
The Absence of Integrative Bargaining Opportunities
While there is a need to find creative techniques to subdue extraordinary needs for deterrence that wage & hour defendants will often have, there is a curious absence of opportunity to employ another form of creativity - that of finding integrative (rather than purely distributive) resolutions to the dispute. With one obvious exception , the "Jack Sprat" non-monetary exchanges that are the special joy of mediators - where parties give what's cheap to get what's dear, and thereby optimize the likelihood, as well as the quality, of the resolution - are not to be found in this arena.
The reason is not that negotiators in this specialty are not creative, but simply that the inherent nature of class actions virtually eliminates any prospect that the form of any exchange will be anything other than money. Specifically, one stricture of class actions is that similarly situated class members be treated uniformly, and the only uniform needs the members will have is the presumptively universal need for money. As a result, the nature of class action bargaining is heavily distributive, not integrative.
The Absence of a Rich Body of Case Law to Support Risk-Based Claims Valuation Analysis
It is a bit of an irony that a field which is so tilted toward distributive bargaining is also one in which mediators are essentially deprived of a major tool used to facilitate such bargaining - a substantial body of actual outcomes at trial in analogous cases to provide a realistic assessment of the actual risk of trial, and therefore the reasonable settlement value of a release. Because the large volume of wage & hour class actions is historically new, and because so few that do exist go to trial, little such evidence of likely outcomes in fact exists.
What girds the negotiation in the absence of that evidence? It is four things. First, the statutory scheme in this area is fairly administrable, and results are arguably more predictable for this reason even in the absence of extensive actual results.
Second, there is an extensive and ever increasing body of evidence of actual class certification decisions, and the factors relevant to class certification decisions in wage & hour actions are more closely related to the ultimate issues at trial than they are in other actions (compare, for example, securities fraud class actions, where the class certification issues have almost nothing to do with the significant issues at trial).
Third, some narrowing of the range of potential settlement is achieved by the fact that extreme low ball offers typically are not made, even preliminarily, because both sides know (or can be reminded) that there is a certain threshold that will not survive a fairness hearing, nor sustain the plaintiff's counsels basic need to preserve reputation in the context of a settlement record that (unlike the settlement of individual claims) is always public.
Finally, and perhaps most importantly, parties tend to be guided by a kind of "market price" for these claims - settlements tend to fall within a fairly well defined band established by publicly available information of what other cases have settled for relative to the total potential exposure in the case.
What is notable is that, given the fairly strict and administrable standards of liability set forth in the statutes, the market price of the claims is probably materially below the amounts that a standard risk-based discounted claims valuation analysis would yield. This probably makes sense in light of the various incentives of the participants. Defendants need attractive offers (relative to exposure) to overcome both non-economic resistance factors as well as the lack of extensive palpable evidence of trial results. Defense counsel, paid hourly, have, if anything, an economic advantage to honor the client's resistance, as well as reputational and self-fulfillment benefits to keeping at least some quota of cases to try.
Plaintiffs' counsel, particularly specialists in demand, reach a certain threshold where the economically optimal course is to declare the offered amount to be enough and free up their time to fry another fish. And that threshold, in turn, need be no greater than a respectable outcome as compared only to the settlement market price itself. The Court, for its part, is institutionally loath to second-guess the norm, and institutionally dependant on most large cases settling in any event. Finally plaintiffs, themselves, are, for all practical purposes, absent from the process. They can opt out, and thereby preserve the right to bring claims on an individual basis, but the value of individual claims is rarely enough to warrant the transaction costs.
Role of the Mediator
It helps immensely for the mediator to have substantive familiarity with the rhythms and restrictions of class actions generally, and specific familiarity with the rights and duties of employers regarding wage and hour matters. That is the environment in which the mediator is applying his or her skills. But the mediator's primary contributions come from the use of more general "process skills" to anticipate, analyze and avert impasse in the negotiation process. Those skills are not unique to wage & hour mediations.
Some taste of the actual process of analyzing and averting impasse may be provided by an actual example of an email I sent to defendant's counsel to overcome an impasse in a wage & hour class action I was mediating. The text - attached as "Attachment 1" - has been left in its raw form, with one exception: all names appearing in the original have been made generic so as to fully protect confidentiality. The case settled shortly after the email was sent.
John (Jay) McCauley is a mediator who also serves as an arbitrator on the Complex Commercial Panel of the American Arbitration Association and an Adjunct Professor at the Straus Institute for Dispute Resolution at Pepperdine University School of Law. He is also a hearing officer for the ADR firm Judicate West.
It Pays refers to recent work done by Kellogg School of Management Professor Adam Galinsky, who has demonstrated (with colleagues William Maddux -- (INSEAD -- Debra Gilin -- St. Mary's U. -- and Judith White -- Dartmouth) that success in negotiations depends on focusing on the head and not the heart. In other words, it is better to take the perspective of negotiation opponents rather than to empathize with them. (You may remember Galinsky as the academic responsible for demonstrating that the person who makes the first offer will (nearly) always get the larger share of the delta between the two parties' "bottom lines." See Making the First Offer here).
Now Galinksy and friends inform us that we are far more likely to reach a negotiated resolution to a conflict if we use our heads rather than our hearts. As It Pays reports:
Perspective-taking, according to the study published in the April 2008 issue of Psychological Science, a publication of the Association for Psychological Science, involves understanding and anticipating an opponent's interests, thoughts, and likely behaviors, whereas empathy focuses mostly on sympathy and compassion for another.
"Perspective takers are able to step outside the constraints of their own immediate, biased frames of reference," wrote the authors. "Empathy, however, leads individuals to violate norms of equity and equality and to provide preferential treatments."
The researchers performed a total of three studies designed to assess the relationship between successful negotiations and perspective-taking and empathy tendencies. In two of the studies, the participants negotiated the sale of a gas station where a deal based solely on price was impossible: the seller's asking price was higher than the buyer's limit. However, both parties' underlying interests were compatible, and so creative deals were possible. In the first study, those participants who scored highly on the perspective-taking portion of a personality inventory were more likely to successfully reach a deal. In contrast, higher scores on empathy led dyads to be less successful at reaching a creative deal.
Why Enlightened Self-Interest Trumps Sympathy
Just when you were about to stereotype "negotiated resolutions" as commie-pinko limp-wristed new age aquarian left-of-liberal kum-by-ya marshmellow toaster solutions to the problems of (excuse me fellas) real men -- along comes new research once again demonstrating that negotiation requires hard heads rather than soft hearts.
Because our competitive natures ("I need my stuff to survive") will almost always trump our collaborative inclinations ("we need each other to survive"). If this weren't so, the world wouldn't be divided into its current "pie pieces" -- the first, second and third worlds for instance.
More particularly, because distributive non-interest based bargaining is all about getting "our share" of a fixed pie while interest-based or integrative negotiations require the parties to: (1) learn about and attempt to satisfy their bargaining partners' often non-apparent needs and desires; and, (2) to collaborate in an effort to find ways to satisfy those needs and desires in novel and creative ways, reaching an integrative agreement becomes much more likely than reaching a purely distributive one.
Because the integrative deal will -- by its very nature -- serve more of both parties' interests than would its distributive counter-part.
Perspective-Taking, Sympathy and Foreclosure
I don't know my neighbors well. They have a small family with very young children and keep pretty much to themselves. I understand from the local grapevine, however, that they're selling their house because one of them lost their job and they can't make the mortgage payments.
If we lived in another country or if the neighborhood belonged to certain religious sects that make it their business to take care of their own, we might all come together to help the neighbors save their house. But we don't.
We have and express a lot of sympathy when we discuss our neighbors' plight. "Must be hard for the kids," we say, "and the parents have worked so hard to improve the property. It would be a shame if they lost their equity."
Our sympathy, however, does not lead us to trump our self-interest (which includes simply "keeping to ourselves") in favor of the interests of the neighbors.
If, however, we learned that the neighbors were about to sell the house to a local fraternity, you can put easy money on the neighborhood mobilizing into action to find a solution. And once the neighborhood starts looking for an affordable solution to a neighborhood problem, the chances that the interests of the distressed family and their (temporarily) better-off neighbors will intersect and that new resources will be brought to the table ("hey, George, I know a lawyer who specializes in these things" or a banker or a politician or a journalist for the L.A. Times) increase exponentially.
Heck, instead of hiring lawyers to stop the sale to the fraternity, we might put together an emergency neighborhood loan-fund. Or simply help find the unemployed neighbor a new job. There are a lot of resources in my neighborhood. And many good-hearted people. But I'm afraid modern American folk-ways just don't allow for a neighborhood solution to one of its member's problems. Until, that is, our own self-interests are threatened.
So it might seem counter-intuitive to say that mentally putting ourselves into another's shoes to ascertain their interests needs and desires (perspective-taking)is more likely to create a "deal" between people than simple sympathy.
But we didn't survive as a species because we're particularly loving. We survived as a species because its in our best interest -- our only interest -- to cooperate with one another.
As I promised last week, we'll be providing our readers with a series of posts about the use of settlement counsel in sophisticated and complex commercial litigation.
While searching the internet for pertinent articles, I came upon an interview with a New York attorney, Lew Goldfarb, whose entire practice is devoted to settling cases for clients already represented in litigation by other law firms. Mr. Goldfarb's credentials are impressive, his observations shrewd and his opinions about the use of settlement counsel closely match those of our colleague Jay McCauley whose article we published earlier today here.
Typically, I am retained by the defense side as part of a dual-track approach. The litigation continues on one track, while I advise the plaintiffs' lawyers that I have been retained by the defense to take a look at the possibility of settlement. At the outset, I make it clear that I have been given only a 30 day window to attempt settlement and that my involvement should not be construed as a lack of resolve to litigate the case.
Following this initial dialog, I review the strengths and weaknesses of defendant's position. Class action litigation often produces a contentious dynamic that polarizes positions based more on emotion than factual disagreements. One of my most important tasks is to identify the true elements of disagreement. When I have a good understanding of these factors, I make recommendations to my client and obtain parameters for my discussions with plaintiffs' counsel.
I then meet with the plaintiffs' counsel, preferably one who is not involved in the litigation, to focus on ways to settle the case. Plaintiffs' lawyers are usually receptive to this approach, because they are looking for ways to get relief for their clients and to get their legal fees without the costs and risks of further litigation.
In some cases I am first approached by plaintiffs' counsel who are interested in settling a case and who know me from years of litigating class actions. I will then take this overture to the corporate defendant who will decide whether to retain me to attempt a settlement. I have resolved a number of cases in this manner.
I have also found success in ending class actions by combining the resolution of a government investigation with additional relief to class members. Very often class actions follow on the heels of a government investigation. In negotiating a settlement with a government agency, it is often possible to synchronize the remedies that the government wants with those that plaintiffs' counsel is seeking and put them all into one package. This serves not only to end the government's involvement, but also to satisfy the claims of the plaintiffs, and provide a compelling argument for ending the class action. I would then go back to the plaintiffs' lawyers, demonstrate how their clients' claims have been fully satisfied, and offer them appropriate attorneys' fees.
In some cases plaintiffs' counsel demand greater relief for the class, in part, to justify higher attorneys' fees. If agreement is not reached, the client can attempt to persuade the court that the relief to the class is adequate. If the court agrees, the lawsuit becomes a catalyst case where the only issue is whether the plaintiffs' lawyers are entitled to attorneys' fees for achieving results for the class. The defendant often is in a much stronger position arguing this issue rather than the merits of the case.
As information is learned in a given case, great trial lawyers also tell their client the truth. They give an opinion about whether to make, accept or reject a settlement proposal, or indicate that the proposal is so within the range of reason to make it a toss-up. They give these honest opinions whether the client likes the advice or not, and explain the basis for the opinion.
A great trial lawyer will not hesitate to tell a client that the client is making a mistake by not taking a recommendation of the lawyer, but then will follow the client's wishes so long as the course of action is legal and ethical.
In other words, great trial lawyers understand that client is the boss, and unless the client is demanding illegal or unethical action or the relationship between lawyer and client has become so impaired that the lawyer cannot adequately represent the client, the lawyer yields to the client's wishes.
If the point of litigation is winning what is the point of settlement negotiations? Winning, right?
Wrong. The point of settlement negotiations is to create durable agreements that sufficiently serve the parties' interests so that they will either stop bothering one another -- for which the LawGod created iron-clad releases -- or flourish in their mutual business venture.
I mention The Google Story in this post because it contains a small narrative about a business deal that killed its host.
In Google years, this story arises at the beginning of time -- the year 2000. Back then, Google was renting space by the square foot in the air-conditioned warehouses that store online company "servers." Google's stripped-down, high-powered hardware was so small (took up so few square feet) and so powerful (used so much electricity) that its lessor's electric bills drove the warehouse out of business. The narrative doesn't suggest that Google intentionally negotiated this deal to "get the better of" its bargaining partner. Nevertheless, a truly competitive negotiator, on hearing this story, would likely experience a little adrenalin rush -- the agreement being quite literally a "killer deal."
I tell this story because I want to begin a series of posts about competitive and collaborative negotiation in the context of "bet the company" commercial litigation. At the same time, I want to suggest the need for specially designated 'settlement' counsel to work alongside of (but not with) the litigation team. The Google story will have relevance to those issues as we proceed.
If I can free up a little of the time of my friend and colleague, AAA arbitrator and Judicate West mediator Jay McCauley to help me out, you'll be hearing from him on these topics during the next several weeks as well.
Competitive negotiation yields winners and losers and reduces the likelihood that losing parties will be fully committed to the resulting agreement. If the agreement falls apart, the negotiation must be deemed a failure. If parties are compelled to fulfill their part of the agreement but end up with a bad taste in their mouths, they will approach future negotiations with the winner with reluctance, paranoia, and distrust. The long-term consequences of competitive negotiation are unfavorable, yielding reduced enthusiasm and commitment as well as damaged relationships. Negotiation is about how the parties are going to bring about added value from having worked together. It is not a competitive sport.
we assimilate information based on our existing biases (remember the OJ verdict);
even when told we're doing so, we continue to organize information in such a way that it supports our existing opinions;
the receipt of additional information, without more, will simply "confirm" existing biases; and,
to make a difference in the parties' views of the merits of their case, mediation practices must include techniques for de-biasing the parties.
Research subjects were given the identical "case" materials and randomly assigned roles as "Plaintiff" or "Defendant." The subjects were put into bargaining pairs and asked to: (1) estimate a "fair" award by a Court to the Plaintiff; and, (2) to attempt to settle the dispute.
The experimental results and their implications were reported as follows:
Plaintiffs' predictions of the [probable award] were, on average, $14,527 higher than defendants'.
Mean plaintiffs' fair settlement values were $17,709 higher than defendants'.
Not surprisingly, the settling parties' assessments of what a fair settlement would be and what a judge would likely award were closer together than were those who did not settle.
Among the 59 pairs who settled, the mean difference between the plaintiffs' and defendants' predictions of the judge's award was $9,050.
For the 21 pairs who did not settle, the average difference was $29,917.
The strong correlation between the magnitude of the bias in a bargaining pair and non- settlement supports the conclusion that the self-serving bias often prevents parties from settling disputes at the most advantageous time and for optimal mutual benefit.
Even when asked to tell the "other side's" story in an essay before predicting possible awards or when told about the existence of the bias, the subjects continued to evaluate the case according to their own material interests.
Only in one experimental setting where subjects were both informed of the bias and made to write an essay substantiating the other side's case was the effect of the bias mitigated.
That subjects were unable to rid themselves of the bias when informed of its existence demonstrates that it is not a deliberate strategy.
Other findings of the experiments point to biased assimilation of information as the likely psychological mechanism underlying the self-serving bias.
When subjects were presented with eight arguments favoring the side they had been assigned (plaintiff or defendant) and eight arguments favoring the other side and were asked to rate the importance of the arguments as perceived by a neutral third party, there was a strong tendency to view the arguments supporting one's own position as more convincing than those supporting the other side, suggesting that the bias operates by distorting one's interpretation of evidence.
This study suggests that litigants may not be seeking to maximize their own payoff, but are rather trying to obtain what they deem to be fair.
Conclusions from the Experimental Data
The application of the self-serving bias to bargaining behavior led the authors of the study to tentatively conclude that
exchanges of information are not in themselves necessarily conducive to settlement, i.e., obtaining more discovery before the dispute is "ripe" for settlement may be neither cost-efficient nor an effective settlement strategy;
the importance of information exchanges to the settlement of a dispute can only be analyzed in terms of how that information may effect preexisting biases, which suggests that attorneys pay greater attention to their opposition's case theories when analyzing information obtained during discovery; and,
to act as an effective counter to the self-serving bias of both "sides," mediation practices should be, at least in part, directed at de-biasing parties rather than simply facilitating information exchange.
This post was originally meant to highlight Allstate's (or its consultant's) unfortunate use of the term "Zero Sum Game," when discussing claims handling procedures. My original comment was that "those who continue to play it often get their . . . uh . . . soft parts caught in a wringer."
The Slabbed post highlights the damage done to an admitted "Zero Sum Game Player" who is engaged in a human-harm-cost-benefit analysis. The Pinto punitive damages award came readily to mind because the case was decided while I was in law school learning about negligence.
For my non-attorney readers, I need to stress that it's not wrong to engage in a cost-benefit analysis for the compensation of injury under a negligence system. In fact, this is what the law itself (and injured Plaintiff's attorneys) do, i.e., "calculate" the risk of harm + the potential severity of the injury against the cost of avoiding that harm.
People react badly when they see that type of calculation being applied to human injury or the loss of human life because those losses are considered to be "incommensurable," i.e., no amount of money can recompense someone for, say, the loss of a child. For an excerpt from my own article discussing the concept of incommensurability -- The Cost of a Thing is Your Life, click here.
I'm hoping my non-attorney readers will understand that these formal monetary calculations are routinely made by businesses and governments when making decisions about how much risk to human life is worth taking when they engage in potentially dangerous activities for the purpose of creating a significant benefit for many.
In a previous post that received a notice in the Silicon Investor BB I spoke of insurers and their lawyers using the court system as instruments of institutionalized bad faith. Indeed Allstate has taken much criticism for ignoring lawful subpoenas over these documents as well as substantial fines as noted by Ms St John. This brings me to the beginning of the main story.
For more than a decade, Allstate Insurance Co. kept a secret from its auto policyholders — a national strategy to force customers to accept reduced cash payouts or face years in court.
Thousands of pages of Allstate documents reviewed by the Herald-Tribune detail how the nation’s second-largest insurer systematically cut payments to customers as a way to boost profits.
The documents describe a two-pronged strategy.
First, the company evaluates claims with a computer program designed to reduce payouts by as much as 20 percent of what the company once paid for the same injuries.
Second, Allstate pushes policyholders to accept quick settlements without the help of lawyers. Policyholders who try to fight for more money face Allstate attorneys coached to refuse to negotiate and to drag out litigation.
The approach often forces car accident victims to take what Allstate offers right away or spend years in court while their bills go unpaid — a strategy Allstate spelled out in guidelines for claims adjusters that “forces the claimant and attorney to think about the obstacles they must overcome …”
Indeed it appears we have a road map of how tort reform is being used against us. Limits on damages only make it easier for these large insurers to get away with outrageous behavior. The story continues:
It was a “Zero Sum Economic Game. Allstate gains … others must lose,” declared a consultant’s PowerPoint slide from a 1994 presentation to executives.
During the next five years of Allstate’s claims overhaul, the same consultant, New York-based McKinsey & Co., chose confrontational words to describe the new system. In PowerPoint presentations and discussion papers drawn up for Allstate executives, McKinsey used “boxing gloves” to characterize how Allstate should treat policyholders who balk at settlements. For customers who hired lawyers, McKinsey urged, “align alligators,” adding these instructions: “sit and wait.”
The documents also show:
Allstate removed much of the discretion of local claims agents to set payouts, requiring them to base their recommendations on a computer program called Colossus. Under that program, average payouts for bodily injuries dropped more than 20 percent in the first few years, internal documents show, a big step toward reaching McKinsey’s goal of “establishing a new fair market value” of such injuries.
Allstate recognized that when an injured driver hired a lawyer, the insurer lost money. In repeated presentations to Allstate executives, McKinsey coached tougher and increased legal action. By 1996, Allstate had doubled its legal force, hiring 225 more lawyers. “The bottom line is that Allstate is trying more cases than ever before,” a corporate newsletter said . . .
Allstate Corp., the second-biggest U.S. home and auto insurer, released 150,000 pages of documents sought by opposition lawyers and company critics related to McKinsey & Co.'s review of claims-handling practices.
McKinsey suggested strategies for the company to become more profitable by paying less in claims, according to videotaped evidence presented in Fayette Circuit Court in Lexington, Kentucky, in a civil case involving a 1997 car accident. Lawyers for policyholders said Allstate's previous refusal to release the documents showed the company wasn't treating its customers fairly. The insurer has said the documents include trade secrets.
``Public criticisms by people with a vested interest in creating an inaccurate picture of the company's claim practices have been based unfairly on only snippets from the documents taken out of context,'' the Northbrook, Illinois-based insurer said in a statement today. ``Because of the need to address misunderstandings resulting from the growing misplaced focus by our critics on very small pieces of the whole, we have decided to make the documents public.''
One slide the consultant prepared for Allstate was entitled ``Good Hands or Boxing Gloves,'' and recommended the insurer put on ``boxing gloves'' to deter about 10 percent of claims deemed to be exaggerated, padded, or fraudulent, according to portions of the report shown to the Kentucky jury. For more than 50 years, Allstate has advertised its employees as the ``Good Hands People,'' telling customers they will be well cared for in times of need.
The strategy proposed by McKinsey would ``send a message to the attorneys of our proactive defense stance'' in cases dealing with minor impact soft tissue injuries, the consultant said in the document. Lawyers would have to ``think about the obstacles they must overcome to recover significant settlement or the benefits of a smaller, walk-away settlement.''
Allstate implemented the plan in the 1990s because studies showed more people were submitting claims even though accident rates were declining and cars were safer, Allstate lawyer Floyd Bienstock told the Kentucky jury. The McKinsey report found Allstate was overpaying bodily injury claims by 16 percent, Bienstock said.
``It was never a plan to intimidate people,'' he said.
Though I don't often avert to religion or spirituality, my own values are firmly grounded in mid-century mainstream Protestantism -- most prominent of which are compassion, tolerance, apology, forgiveness, reconciliation and the very real and ever present potential for the redemption of the human spirit.
Resentment, bitterness, anger, vindictiveness and the desire for retribution are all emotions that interfere with the expression of the forgiving side of our spirits.
More than one friend has likened the holding of resentments against others to "drinking poison and expecting the other guy to die." Because I have personally reaped the soul-soothing benefits of the challenging practice of apology and forgiveness, my posts on apology -- though calculated to ease business negotiations -- are as grounded in reconciliation's spiritual as well as its material value.
To forgive is to let go of a form of anger – specifically, resentment. Even more specifically, the resentment we feel toward someone who has wronged us is a deep and long-lasting blame. Blame is based on judgment: he or she shouldn’t have done that because they should have known better; or because it was unjust; or because, in the same situation, I wouldn’t have done that…
In most cases where we struggle with the issue of how to forgive someone, the primary motive is our own peace of mind, not how to help the person who has wronged us. This is because the odds are that we, as the wronged party, remain disturbed over the incident long after the person who wronged us has moved on.
Forgiveness is related to love. To understand just how, we’d need to know just what we mean by love – a big topic. But to briefly mention one angle on this, we can easily see that forgiveness is related to self love when we realize that to forgive someone else is to promote our own mental health and spiritual peace.
When we're exposed to a famous logo for even a microsecond, [researchers have] concluded [that] we act out the qualities we've learned to associate with that picture. . .
[R]esearchers [asked] subjects [to] watch a screen explaining what they were supposed to do -- but also on the screen, too fast for them to notice, corporate logos flashed momentarily. When subjects turned to the assigned task, which logo they'd seen made a difference:
Subjects who saw the Apple logo, symbol of creativity, thought of more possible unusual uses for a brick than did subjects who saw the IBM logo, symbol of corporate sameness.
Subjects who saw the Disney logo, which we associate with earnestly pure things like Mickey Mouse and Snow White, confessed to more bad behavior (like calling in sick) than did subjects who saw the E! network logo, which we associate with celebrity gossip, honest or not.
What it means in real trials
Can lawyers use this? I say yes, but maybe not in the way you think.
There are trial lawyers out there who can use priming to underscore ideas and themes in trial, while still keeping track of where their cross-examination outlines are and whether the client understands what's going on and who's doing the jury instruction argument and whether they brought enough matching socks. . . .
For the rest, here's a message from priming research we can all use. Jurors make decisions without knowing why.
And here's what in means to mediation advocates
Attorneys' initial contacts with the mediator are more important than many realize.As are mediation briefs. But not to persuade the mediator of the rectitude of your position. To "prime" the mediator to be more part of your negotiation team than your adversary's. Of course we're neutral. But, like research subjects and jurors, we make decisions (and form alliances) without knowing why.
What are your mediator's interests? To settle the case, of course. But to do so in a way that makes all parties and all attorneys satisfied with the result and with the mediator's services. So what subliminal messages do you want to send to the mediator before negotiations begin?
I'm reasonable, as is my negotiation strategy
I understand that there are weaknesses in my case, which I'll admit to you, Ms. Mediator, for the purpose of attempting to resolve this lawsuit
I'm bringing my client, who is prepared to re-engage in the conflict, understanding that defensiveness and self-righteousness are not attitudes calculated to achieve peace in the Middle East nor to settle commercial litigation.
I'm having trouble with my client (for a pre-mediation telephone conference only) and would like you to help me coach him/her/it on any of the following:
the merits of the case
the dangers of proceeding to trial
the unredeemably evil nature of the opposition
the art of haggling
the genuine interests -- needs, desires, fears, etc. -- underlying the client's negotiation position
I understand a little bit about my adversary's
position and would like to help you work with him/her/it effectively.
I'll be prepared to make the negotiation moves necessary to settle the matter without fruitless bargaining in the nano- or strato-spheres.
I recognize that a handshake, a conciliatory manner and the expression of genuine empathy by my client for the party on the other side can dramatically effect negotiations and have alerted my client to the benefits of setting aside rancor, suspicion and judgment for at least a few hours on the day of the mediation.
If you're interested in what shame and guilt have to do with moral development as a preclude to recognizing the difference between guilt-ridden and shame-infused apologies, read on. (and yes Janis, I'm working on it!)
A SHORT PRIMER ON SHAME, GUILT AND MORAL EDUCATION
A. The Origins and Effects of Shame.
The word shame is derived from the Indo-European skem which means "to hide." Shame makes us want to hide - from ourselves, our God and our peers - making shame an existentially isolating state of mind. Feeling shame makes a person "dejection-based, passive, or helpless," causing the "ashamed person [to focus] more on devaluing or condemning his entire self" than upon his behavior. He sees himself "as fundamentally flawed, feels self-conscious about the visibility of his actions, fears scorn, and thus avoids or hides from others."
The shamed individual wants "to undo aspects of the self" whereas the guilt-ridden one wishes to undo aspects of his behavior. It is therefore not surprising that guilt tends to motivate restitution, confession, and apology, whereas shame tends to result in avoidance or anger.
The psycho-biology of the constellation of emotions we call "shame" is innate. It produces a sudden loss of muscle tone in the neck and upper body; increases skin temperature on the face, frequently resulting in a blush and causes a brief period of incoordination and apparent disorganization. No matter what behavior is in progress when shame affect is triggered, it will be made momentarily impossible. Shame interrupts, halts, takes over, inconveniences, trips up, makes incompetent anything that had previously been interesting or enjoyable.
A state of cognitive shame follows this initial cluster of feelings. After the painful jolt of shame, we begin to search our "life scripts" for some way to integrate the shameful experience with our prior experiences, to make sense of the pain and disorientation caused by the sudden upset of a positive emotional state.
Because our earliest experiences of helplessness relate to our size, strength and intelligence, only anger and its explosive cousin, rage, allow us to prove to ourselves and others that we are powerful instead of weak, competent rather than stupid, large rather than small. Thus do many shame-suffused individuals respond to chronic shame in an attack mode, particularly those who feel "endangered" by the depths to which their self-esteem has been reduced. Such individuals experience shame as a threat to their physical well-being and lack the ability to trust and rely upon others.
Shame thus serves as a barrier to one's capacity to achieve empathy and develop conscience.
ChangingMinds.org is a web site covering “all aspects of how we change what others think, believe, feel and do.” Go there and wander around a bit; you’ll probably learn something you didn’t know. (Hat tip: Visual Thesaurus.)
Using Your Case Management Order or ADR Panel to Convene Your Mediation
There are many reasons you may not wish to initiate mediation. Many lawyers justifiably do not wish to appear overly desirous of settlement. Others are discouraged because their opponents
long ago indicated their client would not consider paying/accepting anything less/or more than $X, which is a non-starter;
say they won’t consider settlement until after some key event; or,
insist their client will “pay millions for defense but not a penny in tribute.”
The best way to encourage settlement discussions without any loss of face is to agree upon a mediator (or mediation services provider such as Southern California’s Judicate West) at the commencement of the case, authorizing the neutral to suggest mediation at any time without prompting by the parties. This is the general practice in most multi-party construction defect cases and there's no good reason to limit the benefits of this practice to complex litigators.
This strategy permits one party to suggest mediation to the neutral who can then initiate a negotiation session without divulging who, if anyone, sought the mediator’s assistance.
Any mediator worth her salt will be trained in and skilled at convening mediations without party pressure.
Some, but not all, mediation service providers also possess these skills. Judicate West’s case managers, for instance, are all skilled professionals with a minimum of five-year’s experience convening mediations for the parties.
At the commencement of your action, ascertain whether a neutral or ADR service provider in your locale specializes in the art of convening. A service provider like Judicate West will often know more about your opposition than you do, particularly in large legal markets like Southern California where you may well not “do business” with your opponent on more than one occasion.
"A man likes to make his own decisions," she says as she sends John off to the Continental Congress to seek men and arms (and help from the French) in Massachusetts' recent violent confrontations with the British Army.
Abigail takes a breath to make sure her head-strong husband can hear her.
"Men," she concludes, "do not like to have their decisions made for them."
Still, it wasn't until we reached the movie's scenes dramatizing the delegates' after-hours meetings in the local public house that my husband finally turned to me and said "they're mediating in separate caucus."
The Unity Necessary for Political Change Requires Mutual Self-Interest and Common Ground
The unity necessary to make the agonizingly difficult 1776 decision for independence, revolution and war was not achieved by persuasive argumentation, but by the alignment of each state's self-interest with the self-interest of each other state. This was Franklin's brilliance as international ambassador and as one of the founders of our unprecedented and improbable political enterprise - the united states.
I want to tell you all about Ken's revolutionary shift from rights and power on the one hand to mutually beneficial interests on the other, but I've got work to do. For now, I'll leave you with a snippet from his last chapter which should whet your appetite for more.
Political theorist John Schaar wrote:
“The future is not some place we are going, but one we are creating. The paths are not to be found, but made. And the activity of making them changes both the maker and their destination.”
Ultimately, we are the social, economic, political, and environmental impediments we are seeking to overcome. All the problems and conflicts we want others to resolve are already present within us. The systems, paradigms, cultures, and environments we regard as dysfunctional exist not just around and between, but within each of us. They are us, even if we have devoted our lives to changing them, and must be transformed both within and without.
Systemic, paradigmatic, transformational, revolutionary changes therefore require personal as well as social revolutions. These revolutions do not happen merely by participating in recycling efforts to reduce environmental pollution. At their deepest level, they require us to actually experience ourselves as no different from the plants and animals we are destroying and, more problematically, from the people who are doing the destroying. Only by accepting personal responsibility for global problems on this scale can we discover where they begin inside us, and identify the practical steps we can take to stop them at their source.
Consequently, we not only need to transform the dominating and coercive nature of social, economic, political, and environmental power, and dismantle them at their systemic source by expanding the use of interest-based alternatives and increasing the ability of civil society to solve problems collaboratively. We also need to refuse to participate in them personally, even when they are dedicated to achieving “good” ends. This is no easy matter, both because a great deal is at stake and because domination and coercion are not just large-scale events, but small, barely noticeable everyday behaviors whose origin lies in all of us.
Appellate judges may have a draft opinion prepared, and may rarely change their minds due to oral argument, but — according to at least one justice I’ve spoken to — sometimes they are actually looking for the appellate advocate to give them a reason to change their mind.
So, hey Greg!! My readers, who are looking to change their opponent's case evaluation, would like to know your techniques for: (1)ascertaining what the appellate panel most likely wants to know; and, (2) addressing their concerns in a way that would allow the Justices to reach a decision other than the one they are leaning toward!
Take a look at Geoff Sharp'sMediator Blah Blah post today about mediation coaching. Here are five different ways in which a mediator can coach a party to achieve more from the negotiation than he might otherwise be able to achieve without assistance:
1. Talk to [the] parties about who is the best person in the group to make the offer to the other side and . . . . [which of their negotiating partners] they might want to look at when they do...
2. [P]resent a worst-case settlement offer first then contrast that with their present, and more favourable, offer.
3. [Make] their suggestion as if] they were planning . . . .
4. Point out the hot buttons for the other side and assist a party to make symbolic offers that will have a favourable psychological impact . . . .
5. Suggest and then assist one party to restate all the interests that have been identified in the mediation so far (with the other party's first) - then present a proposal and identify how it meets those interests [in a manner that is] mutually beneficial for all.
Sometimes reading my statistics page is the best way I have of taking the pulse of my readers and diagnosing the current actual rather than the aspirational state of settlement and mediation practice.
Listen. Only the squeakiest client or party wheel will tell you that he is feeling coerced into settling the litigation that has become a millstone around your neck.
I'm talking to attorneys here -- but settlement officers, judges and mediators should pay attention as well. Whether you're representing the CEO of a Fortune 500 Company or the 60-year old man who slipped on the iconic darkened bananna peel in the produce section of the local Ralphs, at some point during settlement negotiations your clients are going to suspect one or more of the following:
you're tired of his case and want to get rid of him
you're in cahoots with opposing counsel, with whom, frankly, you have a far more enduring if not affectionate relationship than with your client
you and your old buddy the mediator or settlement judge/officer have joined forces to to compel him to give up his legal rights in exchange for less money than you, his attorney, told him he was likely to recover two years ago
despite his protests, you, the mediator and opposing counsel keep saying the fact most important to his case is "irrelevant" to his chances of recovery
when you talk to opposing counsel or the mediator about the case, he doesn't even recognize what you're talking about -- this is not the same case he brought to you to try two years ago
he feels extorted and no one is paying any attention to that
he feels like he's being sold down the river and no one is paying any attention to that
he paid his you and your law firm tens of thousands, hundreds of thousands, millions or tens of millions of dollars in attorneys fees and he thinks he could have settled the case for the sum that's being offered/demanded now before he paid you to litigate this case to the settlement conference.
he's really really irritated now -- angry even -- though he doesn't get angry; he gets even, and he'll have no trouble spending another few million on attorneys fees so show that lying, cheating so and so in the other caucus room a thing or two
he's a successful business man and he's never been treated with so little respect before.
Now let me tell you something else. If these thoughts are some of those which race through your clients' minds during settlement conferences, your mediator should be sufficiently alert to the changing temperatures in the room to address them.
Because the mediator's job is not to settle the case.
The mediator's job is to:
assist you in helping your client understand the options available to him
assist you in delivering bad news to your client in a way your client can hear it
assist you in negotiating as good a settlement as possible for your client without making your client feel as if he has no other options
assist you in resolving for your client the justice issues that your client originally brought to you to resolve
assist you in helping your client recognize and set aside the emotional experience of the settlement conference for the purpose of doing a sober cost-benefit analysis
assist you in helping your client recognize that legal cases change over time; sometimes getting better and sometimes getting worse, usually both in the discovery process -- this is not the case your client originally brought to you -- untarnished by the harsh adversarial systems but puts "facts" to a more exacting test than any other process in business, political or social life
assist you in helping your client recognize his own fallibility, potential for error, and accountability for his part of the harm for which he is seeking recompense
assist you in helping your client recognize that the other side -- evil, destructive and hateful as it may well be -- also has a few items of "truth" and "justice" on its side of the balance sheet
assist you in helping your client make an informed decision without pressure from anyone whether he wishes to accept less than he wants to or would like to take his chances at trial
assist you in walking away from the mediation or settlement conference with your client clapping you on the back and saying, "great work, John. If I'm ever in need of a litigator again, rest assured it's to you I will come. I'll tell my friends on the block or on the Board of Directors that you're the man.
How do we accomplish these ten aspirational goals together -- attorney and mediator and client? Stay tuned.
The Jerry McGuire video above is for our clients -- with whom we do not share just how hard we are working and what a toll it takes upon us because that's what they've paid us to do -- and paid us handsomely I might add.
Compare the hilarious Bob Newhart routine above (from Mad TV) with any episode whatsoever of HBO's new series about psychoanalysis The Treatment.
In legal/mediation terms, Bob Newhart's "treatment" -- "just stop it!" -- is akin to the mediator's refrain -- "move past it," "get over it" or simply "move on."
Gabriel Byrne's methodology in The Treatment, on the other hand, is more akin to the process of complex commercial litigation. The litigator, like the analyst, doesn't focus so much on the "patient's" described experience as he does upon his own interpretation of that experience. We litigators -- like the chair-bound analyst -- too often ignore our client's actual, multi-dimensional, ambiguous and self-contradictory experience in favor of the form of their "problem" -- the size and shape it must take to fit the "remedy" we are capable of providing.
In either case, the patient/client too often feels like he is being treated like a child -- a child whose possession of a problem seems to give the designated authority figure the right to tell him what to do -- "just stop it" -- or to re-interpret, shape, edit or "spin" his very personal story into a "form of action" the law will recognize.
Take a look at how unhappy Gabriel Byrne's patients are. They're not unhappy just because of the problems they had when they first stepped through the therapist's door. They're agonizingly unhappy because "the doctor" infantalizes and objectifies them; tells them they don't know what they're really thinking; suggests that they don't know what's best for them; and, then "hides the ball" while he lets them drift around without mooring.
The Mediation Story
The "mediation story" excerpted below -- like last week's litigation story -- is not the client's story but the lawyer's or the mediator's preferred narrative. Here, we tell our clients to "get over it. Fix the future. Don't obsess about the past. Just stop it!"
But some clients are not going to want to "get past it." Some want to, need to, maybe even should "right the wrong." Others want to, need to, maybe even should put the past behind them and problem-solve the future.
What do we do?
We listen with as little judgment and as few pre-determined "solutions" as possible. Then, we outline for our clients what we can do to help them solve their problem with our particular skill-set. Then we tell them about the myriad other solutions available to them. Preferably, we have a referral list in our desk drawer so we can provide them with the names of people whose skills and solutions best suit what they want.
What we shouldn't be doing is selling our process.
[The mediation] narrative profoundly differs from that of litigation. The engine that drives litigation's morality tale is that conflict resolution is a contest between parties, one of whom necessarily represents good and the other necessarily represents bad. As a result, litigation seeks to designate who has committed moral transgressions by breaching legal norms (or, from the perspective of the defendant, who wrongfully accuses others of having done so).
The Story of Mediation subverts these norms by transforming this familiar morality tale into a story of collaboration. This subversion begins through how mediation conceives of conflict itself. Implicit in the Story of Litigation is that conflict represents a breach of the norms of conduct, thereby ripping the social fabric in some way large or small. In contrast, in mediation, conflict is a norm of conduct, a necessary byproduct of humans having distinct experiences and personalities and needs. Conflict is thus not necessarily a disruption of the moral order, and, indeed, can sometimes be productive. . . . . .
[T]he meta-narrative of mediation seeks to map the [parties'] "strivings" and "vanquishings" onto a collaborative struggle to resolve conflict. This narrative casts all participants as players in a process - collaboration - that is focused on reaching the common goal of successfully resolving or transforming a dispute. This story has moral entailments because collaboration is accepted as a social and moral good. Unlike litigation, however, this story does not generate a binary moral universe that divides the good from the bad, but, rather, a universe that values collaborative striving to achieve common ground and resolution.
This story places mediators in a role that is very different from the role played by decision-makers in litigation. Rather than being heroes of moral vindication to whom wronged parties appeal for justice, mediators promote and model collaborative striving to overcome conflict. This plays out in many accepted techniques in mediation. Mediators, for example, often seek "commitment" from participants to the process of mediation, although mediators are careful not to extend this commitment to a commitment to agree.
This commitment to process is a proxy for a commitment to collaborate to seek to resolve conflict, thus incrementally moving participants away from contested litigation and towards collaborative problem solving. Similarly, mediators often "reframe" participants' statements in order to emphasize "common ground." This is also an effort to move parties away from a morally charged contest and into collaboration. Finally, mediators encourage and model collaboration through a positive message of optimism and progress towards resolution, even when (or, perhaps, especially when) impasse appears likely.
Moreover, mediation approaches the narrative movement from Efforts to Restoration of Steady State in a very different way than litigation. . . . . The very language through which litigants seek redress of grievances - to "be made whole," "to pay your debt society" (with its implication that payment of the debt would return the ledger to balance), even the word "remedy" - implies Restoration.
In contrast, mediation tends to reject Restoration as a state to which the parties (and society as whole) should or even can return. Rather, mediation seeks Transformation on the part of all disputants so that conflict is resolved. It does so by embracing the notion that perceptions of the world (including perceptions of the actions of others) are unstable, thus enabling parties to appreciate alternative perspectives as a way to promote resolution of conflict. Mediation, therefore, does embody a plot that adheres to the narrative movement described by the Austere Definition, albeit in ways that are utterly alien to the morality tale of the story of litigation. The story of mediation can be characterized as follows:
Steady State: Whatever Each Party Views as Pre-Conflict
Trouble: Whatever Each Party Views as Constituting Conflict
Efforts: Collaborative Striving To Overcome Conflict as Modeled and Promoted by Mediator
Transformation of Steady State: A New Relationship Among Parties
Two short-short stories. Both to acquaint you with who I was as a litigator and how I can help you as a mediator.
A Born Moralist
I was on the telephone with my client talking about a Rand Corp. statistical study that was originally prepared as answers to contention interrogatories (!!) but eventually became the centerpiece of Plaintiff's proof that my client had engaged in a massive conspiracy to drive the Plaintiff out of business. Claimed damages soaking wet: $250 million.
I was talking about how wrong the opposition was on so many levels -- evidentiarily, practically, legally and, yes, morally.
My client said, "I've finally figured out what you are."
"You, Vickie, are a born moralist."
And I took that to be a compliment.
Anything You Can Get Away With
Toward the end of my career all my cases seemed to hover around the quarter-billion dollar mark. This one was an environmental coverage suit for a major petroleum company's potential liablities for 500 + toxic waste sites in every Canadian province. This is one of the few cases in which the insurance carrier can wear a "white hat." My client -- Lloyds of London.
This stuff is complicated. It involves coverage across a couple of decades and up the ladder of excess policies to the billion dollar mark. We use "coverage charts" -- often color coded -- to understand the policy profile at a glance.
At every oral argument in the trial court -- up to the winning summary judgment motion -- I arrived with a clutch of color-coded coverage charts that supported my client's position. On every occasion, plaintiff's counsel complained about the charts. But he never brought competing charts with him. The Judge -- one of the best on the Superior Court bench -- really wanted to understand the issues and get it right. So she spent each oral argument listening to both parties while scrutinizing my coverage charts.
I genuninely believe that this is why I won.
What Does This Have to Do with Mediation Advocacy?
First, if you believe in the very depths of your soul that your client is right -- as I always did -- your mediation advocacy will improve if you begin to understand the principles of mediation advocacy. It's banal, already, to say that these principles are non-adversarial. Yet few litigators are able to shift from a litigation to a mediation model in circumstances in which making the shift would dramatically improve their mediation outcome.
Most attorneys are likely to settle this case at the mediation if they've brought the right stakeholders, properly prepared their strategic and tactical moves, and counseled their clients appropriately. Yet they take their summary judgment briefs or demurrers or complaints, change the title to "Confidential Mediation Brief," make a few editorial changes -- primarily by removing references to the Judge granting their motion or providing them with relief -- send these briefs to the mediator, arrive with one (or more) bottom lines and, too often, a "prove you can settle this case" attitude toward the mediator.
This is not an indictment of the litigation bar nor even a complaint from a mediator. This is the beginning of a series of posts about helping me help you help your client help you win the mediation.
Stay tuned. Really. Your mediation practice is about to go thermo-nuclear. Take it from the "born moralist" who did whatever was (ethically) necessary to win. Usually with pretty darn good results.
Stephen King wrote the Shining here, not in my room, but right down the hall. The book was Inspired by the Stanley. Hence the picture of Jack.
What's most exciting, however, is that I'm attending the Founding Congress of Mediators Beyond Borders; seeing old friends and meeting for the first time people I've long known at a distance; and getting to know an incredibly diverse and fascinating group of people dedicated to bringning conflict resolution techniques to international conflict.
More of that later.
Before getting to the "money shot" about changing the other guy's mind, I want to share with you Ken Cloke's12 Ways Systems Resist Change from his lecture yesterday: Mediators as Global Citizens: How Mediators Can Change the Planet.
I start with resistance because you can't even begin to think about change until you understand why it is you're not getting past opposition's door. You might most readily notice in the following list the ways in which your workplace (or your government!) supports its dysfunction.
You'll also recognize your opponent's opposition to you and perhaps even yours to him.
Marginalization: Making ideas, people, perspectives, or insights that could threaten the system appear unimportant, irrelevant, irrational, or impossible to achieve.
Negative Framing: Using language that frames new ideas and critics negatively so that nothing that threatens the system can be thought or communicated successfully.
Exaggeration: Stereotyping or exaggerating one part of an idea in order to discredit the other parts and the whole.
Personalization. Reducing ideas to individual people, then discrediting or lionizing them.
Sentimentalization: Using sentimental occasions, ideas, emotions and language to enforce conformity and silence criticism.
Seduction. Describing the potential of the existing system in ways that unrealistically promise to fulfill people's deepest dreams and desires and blame the failure to achieve them on others.
Alignment: Communicating that in order to exist, succeed, be happy or achieve influence, it is necessary to conform to the system regardless of its faults.
Legitimization. Considering only existing practices as legitimate an all others as illegitimate.
the plaintiff [in that case] argued that the judge's encouragement of settlement talks demonstrated bias; the court strongly disagreed. It is entirely appropriate for a judge to suggest that parties resolve their claims through mediation. . . "No less renowned a figure than Abraham Lincoln recognized the desirability of settlement when possible...it borders on the offensive for a party to claim that a justice should be recused for adhering to this policy [of encouraging settlement]."
As "amusing" as this might first be to lawyers, I don't want to let it pass us by without pausing a moment to consider the possible communication gap between Judges and lawyers -- on the one hand -- and people seeking justice -- our clients -- on the other.
People Seek the Services of Lawyers to Solve a Justice Problem
Having recently earned my LL.M and taught a semester of ADR theory and practice to law students, I can report back from the law school trenches that cynicism about justice is not limited to old dogs like me. By their second year in law school, most aspiring attorneys have narrowed their view of justice/injustice to those wrongs the law will remedy. See Writing on a Piece of Rice in a World of Injustice. More troubling, they've narrowed to a vanishing point their former hopes, if any, to be part of a system that delivers justice.
When I ask defense attorneys in settlement conferences why they think their opponent filed the lawsuit against their client they answer with a single voice: MONEY!
"But why do you think they hired a lawyer," I persist.
"Money," they respond again, as if I'd suddenly lost all reason.
"But why did Mr. X even think of seeking resolution in Court . . . under the law . . . why did he turn to the justicesystem?"
Losses the Law Will Redress
People suffer losses every day of the week. They lose their luggage in Madrid. They don't get a raise or a year-end bonus. They slice off the tip of their finger while chopping onions for Sunday dinner. If they are lawyers of my generation, they got a 610, instead of a 700 on their LSAT -- thereby losing any hope of attending an Ivy League law school.
The cynical persist. "People have been known to sue for those losses too," they say.
True, but they are among the very very very few. Most people who undertake the considerable effort to find an attorney willing to take their case do so because they believe they have been treated unfairly. They believe themselves to be victims of an injustice.
And attorneys, not clients, are the first ones who monetize injustice for their clients. Still, years after that injustice has been monetized, right before trial when most mediations and settlement conferences take place, the clients continue to long for justice.
A Monetary Solution to a Justice Problem
So we should pause before we give in to the temptation to make light of the client who must have urged his lawyer to recuse the Judge for even suggesting that he not immediately be given access to justice -- a jury trial. A client who likely feared he'd be strong-armed into accepting injustice in a Court suggested mediation.
Our clients are speaking and we are not listening. We are in danger of processing monetary claims rather than helping our clients come to terms with the justice issues they brought to us to resolve.
As a mediator, I can tell you that most clients need to have monetary resolutions framed as "fair" or "just" results. And if that is impossible, they need -- at a minimum -- to have the injustice they are suffering acknowledged by the mediator.
As to those Judges who "encourage" mediation, I suggest that the directive be framed as an attempt to achieve, through settlement, that which it may not be possible to achieve in Court. I would, in all events, assure the people seeking justice who appear before me, that I will be there, ready and able to try their case -- happy to serve their justice needs -- if the mediation I suggest they pursue fails to deliver the fair result they are seeking.
Trial attorneys, negotiators, mediators and settlement judges all share the same essential concern -- how to reach and persuade our audience.
Trial lawyers have a product to sell -- their client's narrative -- which is always just one version of the "truth." Negotiators are also selling -- a business proposition their bargaining partner will find attractive. Settlement judges who have not been trained as mediators are generally selling fear -- the uncertainty! the expense! the delay!
And mediators? What's on display at our hot dog stand? The needs and desires of the parties, certainly. Many arrive at the mediation without having given any thought to their own true wishes at all. We tend to go a little deeper than the negotiators, who are selling the future rather than also attempting to repair the past. We try not to be fear mongers like some of the worst settlement head-bangers we remember from our own legal practice. And, unlike trial lawyers, we straddle the "truth," attempting to harmonize the parties' narratives rather than selling one version as superior to the other.
So what are we mediators really selling? Reconciliation. Accountability. Understanding. Consensus.
And this Bears Upon Political Campaigns and Jury Trials in What Way?
I don't subscribe to many blogs, diverting the few dozen that capture my interest to my news reader. I do subscribe to Anne Read's Deliberations, however, because she really "gets" people's pre-dispositions -- the ones I need to understand for the purpose of helping my clients to comprehend -- appreciate even -- the other guy's point of view.
Today, for instance, Anne reminds us that we are in the midst of a Great National Jury Seminar. All we have to do is click on the campaign news. As usual, Anne is looking past the easy answers -- race, gender -- in favor of exploring the deeper reasons we might vote for someone of our own nationality or hair color -- shared stories. Here, for example,
What do race and gender really mean? Most studies of jurors conclude that juror demographics don't directly affect verdicts -- with the important exception that jurors lean toward parties of their own ethnicity. (That's from Devine et al, Jury Decision Making: 45 Years of Empirical Research on Deliberating Groups, 7 Psychology, Law, & Public Policy 622 (2000)). But at the same time, we know that people of different races and genders often have shared experiences. Since experiences in turn shape attitudes, race and gender matter in ways that go beyond loyalty, but are difficult to define.
Trial lawyers have long wanted to understand this better -- and these days, so does every news organization in America. One fascinating piece of this is how individual one's group identity can be, as Newsweek explains in an article that's well worth reading in full:
Which candidate a voter identifies with is one of the most important gut-level heuristics, since it is tantamount to deciding that someone is enough like you to "understand the concerns of people like you," as pollsters put it. "If you feel a candidate is like you racially or by gender, you're more likely to believe that that candidate will support what you support," says [Harvard political scientist Pippa] Norris. But with a white woman and a black man vying for the Democratic nomination, where does that leave black women? Whom they most identify with depends on which aspect of their own identity dominates their self-image. . . . .
So are we all just Willy Lomans, carrying our self-esteem, our hopes and dreams, our successes and failures in our sample cases -- to display -- or not -- when a customer calls? I think we are. And the mistake we make, when we make one, is to direct our customers' attention only to the glittering lures -- the "sales" talk -- the promises of a brighter future, a better marriage, a faster car.
If we take a deep breath from time to time and listen to ourselves instead of pontificating and persuading, we'll be reminded that we're all seeking the same thing. Community. Belonging. Understanding. Even shared sacrifice. Every negotiation, every mediation, every trial represents a human relationship in crisis. If we really get that, we can start working together again, in the same general direction, even when our ideas about how to accomplish that differ.
An Unpaid Political Stream of Consciousness
Listen. No one will gasp in surprise when I say I'm a lifelong Democrat. Nor will my readers likely be surprised to hear me articulate my fondest election year desire -- that Hillary and Barack -- sooner rather than later -- will find a way to join experience with vision for the purpose of leading this country out of the long season of division that, let's be frank, began in the sixties and has never healed. That they will together lead this country back to what it's truly best at -- uniting a diverse, fractious, irritable, needy, greedy, fearful, hopeful people into a single nation with a higher purpose than our own individual and narrow interests. The UnitedStates.
If both candidates could put their campaigns -- their money; their volunteers; their momentum -- together for the purpose of healing discord and revealing a new national consensus -- we would not simply feel great about our country again, we'd actually begreat again.
I was a commercial, antitrust, IP and securities litigator long before I devoted nearly a decade of my practice to environmental coverage litigation. In the process, I learned enough about Comprehensive General Liability ("CGL") coverage to make me worry about how well I'd served my commercial clients in regard to the insurance coverage potentially available to them.
If you are a commercial litigator -- or any type of litigator who defends your clients against claims for damages or for injunctive or other equitable relief -- you must
ask your clients for all of their insurance policies, even those that seem unlikely to provide coverage;
carefully review the precise wording of the insuring agreements and research the case law in the relevant jurisdiction to determine how the courts have interpreted those insuring agreements under facts similar to those your client's case presents;
except for some narrow additional protections provided to insureds, be aware that there is no such thing as "the law" of coverage under any particular type of policy -- all coverage flows directly from the precise language of the insuring agreement
in most jurisdictions, that language -- if ambiguous -- is interpreted in favor of the insured's objectively reasonable expectations; and,
in most jurisdictions the rule of contra proferendum will require a court to construe any ambiguity in an insurance policy against the insurance carrier
carefully review the exclusions contained in those policies and research the relevant state's case law (as well as federal cases applying state laws) interpreting those exclusions;
before concluding that there is no coverage, read available treatises as well as recent law review articles that may well suggest creative ways of distinguishing adverse authority or extending existing principles to bring your client's claims within the terms of the policy or outside of pertinent exclusions;
if you have any doubt whatsoever about the existence of coverage, tender the claim to your client's carrier and let the carrier do the analysis;
if the carrier denies coverage, read the reasons for denial critically and respond with any reasonable interpretation of the policy that will support a claim of coverage;
if the carrier continues to deny coverage, keep the carrier informed of the progress of the litigation and invite the carrier to respond to all settlement demands and to attend all mediations and settlement conferences.
If the cost of the lawsuit is beyond your client's means or will deprive it of capital necessary to meet its business goals for the next few years, retain coverage counsel for a second opinion.
Have I mentioned that my beloved husband is one of the best coverage attorneys in the country -- having litigated the World Trade Center coverage action on behalf of Larry Silverstein's lender GMAC? And that I formed my opinion about his brilliance while I was representing the London Market Insurance Carriers and he was representing the policy holder? Even if your case does not justify hiring someone like my husband to give you a second opinion, there are lots of good coverage attorneys out there who can so that you can complete your coverage "due diligence" for your client.
At last, to the 2007 Fifty State Environment Coverage Analysis
If your clients have been hit with demands to clean up toxic waste, this is an invaluable resource. A specialist in the field, however, should be consulted to maximize the chances that coverage will be provided.
Have I mentioned that I'm on the Insurance Coverage Mediation Panel of Neutrals with the International Institute of Conflict Prevention and Resolution ("CPR")?And since I'm a former defense coverage attorney currently married to policy holder counsel, you're unlikely to find many other mediators who are both extremely knowledgeable about the law of coverage and deeply neutral!
Evaluative mediators provide the parties with an evaluation of the strength and weaknesses of their legal positions, usually in separate caucus. If asked, the evaluative mediator will give his/her opinion about what verdict a jury would likely deliver. Though I've co-mediated with sitting Judges quite a lot (the paradigm of evaluative settlement officers or mediators) I rarely see them tell the parties what to do -- see DIRECTIVE MEDIATION below.
Evaluative mediators often end a session with a mediator's proposal, i.e., the mediator chooses a number he/she believes would be acceptable to all parties (not necessarily what he/she believes the case is "worth") and tells the parties. If both parties accept, the deal is done. If either rejects, neither will know if the other party accepted.
I rarely make a mediator's proposal -- preferring to help the parties move toward resolution so long as no one is walking out. They really do feel better making their own decisions. That's why they've come to mediation and not arbitration. So long as I believe the parties' differing "bottom lines" might overlap, I encourage continued discussion even when the parties are feeling exhausted and cranky. Persistence and optimism about resolution in equal measure. Sometimes the process just needs a cheerleader.
Faciliatative mediators assist the parties, again often in separate caucus, to decide how the bargaining session will proceed, i.e., how high a first offer or demand should be; which party might benefit the most from making the initial offer; how many concessions the parties should consider making during the course of the negotiation; and, what reasoning might spur their opponent to make another concession. Once again, I rarely see the mediator, settlement officer or Judge tell the parties what to do. But see DIRECTIVE MEDIATION.
Transformative mediators strive to empower the parties to express their true needs and desires; to shift from self-concern to understanding of the other and to move from entitlement and blame to accountability. Transformative mediators do not direct the process of the mediation, which is always held in joint session.
Transformative mediators encourage the parties to set their own ground rules; state what their own desires and interests are; and, express themselves as fully as they wish, even if that includes persisting through angry outbursts, tears, recriminations, and the like.
In its pure form, the mediator acts something like a therapist. Uh, huh, uh huh, anything else? Have you said everything to Jim or Julie that you want to say? Uh, huh, uh huh? Jim/Julie, what do you want to say back to Julie/Jim about that? The purpose of transformational mediation is to resolve the conflict completely to the parties' mutual satisfaction even if that does not settle the actual dispute. See Bush and Folger, The Promise of Mediation.
DIRECTIVE MEDIATION -- Once again, I've never see Judge or mediator tell the parties to do anything other than to bring all the stakeholders and their insurance carrier representatives. I have, however, seen and done the following:
I need $X from you to settle the case -- $Y is not going to do it. Please talk to you client/carrier and bring me back that number if you want to settle the case today.
This directive usually occurs very late in the proceeding and most often in a multi-party mediation in which a dozen or more defendants are contributing to the settlement. I also call this type of mediation FUND RAISING MEDIATION. I've never seen anyone do this better than Judge Victoria Chaney in the Complex Court in Central Civil West, Los Angeles.
My own "directive" suggestions to the parties generally concern the need for at least one party to step up to the line of impasse. If I believe the parties are bargaining in the nano-and stratospheres and are not getting within a hundred yards of where they'd really settle the case, I'll generally tell them so -- i.e.,
someone needs to step up to the line of impasse for this case to settle. If you don't do it, you'll likely lose your opportunity to resolve the matter today.
That's about as "directive" as I get, although I have been known to say I need $5,000 or $500,000 or $1 million more NOW. Or, I need you to drop your demand by $10K or $500K or $50 million NOW.
You can only do this if you have established a strong relationship of trust and confidence with both sides. Each side needs to know that you are not simply carrying the other side's bluff to them with your extra weight behind it. So directive and evaluative techniques -- I don't know their bottom line but I believe we're getting pretty close to it -- go hand-in-glove.
Ideologies aside, here's the real reason to probe party interests -- i.e., their genuine desires, expectations, fears, business needs, financial situation, lines of authority, reserves, reporting relationships, etc. -- it's the only way you can offer, with any credibility, your opinion about the "temperature" in the "other room" and the likelihood that party A might settle the case somewhere in the range of $X and party B somewhere in the range of $Y.
get the Plaintiff to concretize his monetary expectations, i.e., what he might do with the money to take the Court-as-Gambling-Casino element out of the process;
ask the Plaintiff to imagine the offered sum sitting on the table before him -- to see it as a stack of cash or a thing or services or an improved quality of life he might purchase with it -- this makes the money real and more difficult to literally "leave on the table;"
assist the defendant to:
subtract "sunk costs" from his/her/its calculations when considering the "body blow" that paying money to their opponent will be;
brain-storm about business interests that could be satisfied by using the litigation as an opportunity to make a business deal;
come to grips with the loss that settling the litigation will inevitably entail, dealing directly and honestly about the issues of unfairness and injustice that must often be accepted to justify paying even a reasonable sum.
don't let the parties leave until they've had principal-to-principal discussions -- the parties are often able to resolve a matter that their lawyers cannot because their lawyers are acting on instruction (I don't have the authority to settle for that) whereas the principals have more flexibility on often arbitrary "bottom lines" -- this also helps humanize the opponent who has been thoroughly demonized by the process of adversarial litigation (see autistic hostility)
Listen, if corporate entities believed they couldn't overcome juror bias, they would never try a case. How to accomplish that feat is the difficult task of every great trial attorney who represents a corporate defendant.
Despite the research cited below, I do not suggest that plaintiffs' attorneys, as a matter of mediation strategy, suggest to corporate defendants that they will lose at trial because of juror bias. Why? Because it more or less enrages people, including corporate representatives, to be told that they must pay more money than they believe a case is worth because the system is unjust.
The report on juror bias -- particularly so-called CSI juror bias -- below.
The good news is that the bad news comes from one of the best jury consulting firms in town -- Jury Impact. What's so good about that? Jury Impact doesn't simply report bias, its people understand bias and are prepared to combat it. Without consultants like Jury Impact's Chris St. Hilaire, however, a corporation's best alternative to trial may well be a reasonable settlement that serves its commercial rather than its justice interests.
The Jury Impact report below:
In a question we’ve asked in several surveys, approximately 62% of prospective jurors say they would ignore the law in order to hold a corporation financially responsible, if they thought the individual was sympathetic.
While this is a general bias, among . . . “CSI jurors” [those who watch crime/medical drama TV shows] it’s consistently worse. Approximately 72% of the “CSI jurors” said they would ignore the law and hold a corporation responsible.
Why is this? A Hollywood producer recently gave us a pretty succinct and convincing explanation: “Look at the plotlines in these shows. Is the corporation ever the good guy? The jurors are using confirmation bias to build the storyline they want to believe…the one they’re familiar with.”
You don't have to be an expert in this -- your mediator is.
To the degree you "get" this, you will form a far better negotiation team with your mediator to obtain the best deal possible for your client in any settlement or commercial negotiation.
Principled negotiation is the name given to the interest-based approach to negotiation set out in the best-known conflict resolution book, Getting to Yes, first published in 1981 by Roger Fisher and William Ury.
The book advocates four fundamental principles of negotiation: 1) separate the people from the problem; 2) focus on interests, not positions; 3) invent options for mutual gain; and 4) insist on objective criteria.
Separating the people from the problem means separating relationship issues (or "people problems") from substantive issues, and dealing with them independently. People problems, Fisher, Ury and Patton observe, tend to involve problems of perception, emotion, and communication.
Perceptions are important because they define the problem and the solution. While there is an "objective reality," that reality is interpreted differently by different people in different situations. When different parties have different understandings of their dispute effective negotiation may be very difficult to achieve. (This is what we have been calling framing problems.) Fisher, Ury and Patton suggest seven basic strategies for handling problems of perception. [go to linked article for further explanation]
People problems also often involve difficult emotions — fear, anger, distrust and anxiety for example. These emotions get intertwined with the substantive issues in the dispute and make both harder to deal with. Fisher, Ury and Patton suggest five tactics for disentangling and defusing emotional problems in the negotiation process. [Click on the link for further explanation]
Fisher, Ury and Patton consider communication problems to be "people problems" as well. They list three types of communication problems.
First, disputants may not be talking to each other. While their comments are formally addressed to the opponent, they are actually addressing some outside audience. They are grandstanding, or playing to the crowd.
A second communication problem arises when parties are not listening to each other. Rather than listening attentively to the opponent, parties may instead be planning their own response, or listening to their own constituency.
Finally, even when parties are both listening and talking to each other, misunderstandings and misinterpretations may occur. Fisher, Ury and Patton suggest techniques for minimizing communication problems. [Click on the link for a description of these techniques.]
Negotiating about interests means negotiating about things that people really want and need, not what they say that want or need. Often, these are not the same. People tend to take extreme positions that are designed to counter their opponents’ positions. If asked why they are taking that position, it often turns out that the underlying reasons--their true interests and needs--are actually compatible, not mutually exclusive.
By focusing on interests, disputing parties can more easily fulfill the third principle--invent options for mutual gain. This means negotiators should look for new solutions to the problem that will allow both sides to win, not just fight over the original positions which assume that for one side to win, the other side must lose.
The fourth rule is to insist on objective criteria for decisions. While not always available, if some outside, objective criteria for fairness can be found, this can greatly simplify the negotiation process. If union and management are struggling over a contract, they can look to see what other similar companies have agreed to use as an outside objective criteria. If people are negotiating over the price of a car or a house, they can look at what similar houses or cars have sold for. This gives both sides more guidance as to what is "fair," and makes it hard to oppose offers in this range.
We will continue with this series: What Mediators Wish Lawyers Knew in subsequent posts and encourage our lawyer-readers to please let us know what they wish mediators knew.