By: Guy O. Kornblum
San Francisco, California
You don’t have to go to the law books to find the basic principles which apply to negotiation and settlement. In fact, these basic principles may be ones you learned growing up, and possibly used before you ever entered law school. They are from clichés that we all have heard and probably used in our personal lives, but do they apply to our work as trial lawyers and litigators? Here are some I apply regularly:
1. You Can’t Get Blood Out of a Turnip.
“‘You can't get blood from a stone.’ You can't get something from someone who doesn't have it. The proverb has been traced back to G. Torriano's ‘Common Place of Italian Proverbs.’ First attested in the United States in the ‘Letters from William Cobbett to Edward Thornton.’ The proverb is found in varying forms: ‘You can't get blood out of a stone; You can't get blood from a rock; You can't squeeze blood from a stone; You can't get blood out of a turnip, etc....’ ” The application to the negotiation and mediation process is that you have to have a flush target as a defendant, either because of insurance coverage or assets that are reachable through any collection effort. This is the third part of the three legged stool analogy of selection of lawsuits: liability, damages and collection!
2. You Get More Flies with Honey than Vinegar.
“...The proverb has been traced back to G. Torriano’s ‘Common Place of Italian ---Proverbs.’ It first appeared in the United States in Benjamin Franklin’s ‘Poor Richard's Almanac’ in 1744, and is found in varying forms....”
The importance of this one is that diplomacy is critical to successfully negotiating a resolution to a lawsuit. Some might thing that the vigorous advocate who attacks like a pit bull will get his or her way. In my experience, that does not work in mediation, and maybe even in litigating a case. The most successful lawyers at negotiation base their “power” in negotiating on a high degree of knowledge about their case and the law and facts applicable, as well as personal skills of persuasion. Those who bang the table, and conduct themselves like attack dogs gain little respect. The diplomatic negotiator gets others to listen, believe and reach agreements. Leave the vinegar bottle at home, and take your biggest honey jar to the negotiation table.
3. It Ain’t Over ‘Til The Fat Lady Sings.
The meaning: Nothing is irreversible until the final act is played out.
“Just to get this out of the way before we start: is it 'til, till or until? You can find all of these in print:
It ain't over 'til the fat lady sings
It ain't over till the fat lady sings
It ain't over until the fat lady sings
“You might even find versions with isn't instead of ain't. Grammarians argue about 'til and till; I'm opting here for till. Okay; so who was the fat lady? If we knew that, the origin of this phrase would be easy to determine. Unfortunately, we don't, so a little more effort is going to be required. The two areas of endeavor that this expression is most often associated with are the unusual bedfellows, German opera and American sport.
“The musical connection is with the familiar operatic role of Brunnhilde in Richard Wagner's Götterdämmerung, the last of the immensely long, four-opera Ring Cycle. Brunnhilde is usually depicted as a well-upholstered lady who appears for a ten minute solo to conclude proceedings. 'When the fat lady sings' is a reasonable answer to the question 'when will it be over?', which must have been asked many times during Ring Cycle performances, lasting as they do upwards of 14 hours. Apart from the apparent suitability of Brunnhilde as the original 'fat lady' there's nothing to associate this 20th century phrase with Wagner's opera.
“All the early printed references to the phrase come from US sports. Some pundits have suggested that the phrase was coined by the celebrated baseball player and manager, Yogi Berra, while others favor the US sports commentator, Dan Cook. Berra's fracturing of the English language was on a par with that of the film producer Sam Goldwyn but, like those of Goldwyn, many of the phrases said to have been coined by him probably weren't. Along with ‘It's déjà vu all over again’ and ‘The future isn't what it used to be,’ Berra is said to have originated ‘The game isn't over till it's over.’ All of these are what serious quotations dictionaries politely describe as 'attributed to' Berra, although he certainly did say ‘You can observe a lot by watching,’ at a press conference in 1963. In any case, ‘the game isn't over till it's over’ isn't quite what we are looking for, missing as it is the obligatory fat lady.
“Dan Cook made a closer stab with ‘the opera ain't over till the fat lady sings’ in a televised basketball commentary in 1978. Cook was preceded however by US sports presenter Ralph Carpenter, in a broadcast, reported in The Dallas Morning News, March 1976: Bill Morgan (Southwest Conference Information Director): ‘Hey, Ralph, this... is going to be a tight one after all.’ Ralph Carpenter (Texas Tech Sports Information Director): ‘Right. The opera ain’t over until the fat lady sings.’
“Another US sporting theory is that the fat lady was the singer Kate Smith, who was best known for her renditions of ‘God Bless America’. The Philadelphia Flyers hockey team played her recording of the song before a game in December 1969. The team won and they began playing it frequently as a good luck token. Smith later sang live at Flyer's games and they had a long run of good results in games where the song was used. Sadly, Ms. Smith sang before games, not at the end. If the phrase were ‘It ain't started until the fat lady sings,’ her claim would have some validity.
“Whilst printed examples of the expression haven't been found that date from before 1976, there are numerous residents of the southern states of the USA who claim to have known the phrase throughout their lives, as far back as the early 20th century. ‘It ain’t over till the fat lady sings the blues’ and ‘Church ain’t out till the fat lady sings’ are colloquial versions that have been reported; the second example was listed in Southern Words and Sayings, by Fabia Rue and Charles Rayford Smith in 1976.
“Carpenter's and Cook's broadcasts did popularize the expression, which became commonplace in the late 1970s, but it appears that we are more likely to have found the first of the mysterious fat ladies in a church in the Deep South than on the opera stage or in a sports stadium.”
Here the application of this phrase to negotiation and mediation is consistent with the meaning set forth above. As long as folks are talking to each other about resolution, there is hope. Thus it is critical in negotiations to keep the dialogue ongoing. I recently was involved with a co-counsel whom I reluctantly let lead the negotiations in one of our cases. Instead of following this principle of continuing to communicate, he consistently dropped the ball and insisted that it was the other side that should call. The dialogue was inconsistent and often nonexistent, and he took no advantage of the momentum that was built up from time to time in the direct negotiations. The case took forever to resolve (several months), when it should have been resolved in a several days of talks, and it took a mediation and more legal fees to finally get it done.
Communication in settlement is the key. Trying to settle cases is no longer viewed as a sign of weakness. Make the overture of, “Let’s talk.” Then keep the talking going until the case is resolved or each side says “I have given you my last, best and final offer,” and the case cannot settle.
4. Know When To Hold ‘Em, and Know When To Fold ‘Em.
This is an expression that emanates from the Kenny Rogers song, “The Gambler.” It refers, of course, to the skill that a successful poker player has in knowing when to stay in or drop out of a hand. We use it in all kinds of business and personal situations to describe the decision to stay in the battle or drop out and fight another day.
The words go:
“You got to know when to hold 'em; know when to fold 'em,
Know when to walk away; know when to run.
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.”
No doubt this refers to the skill of knowing when the right deal is on the table and making the judgment of settlement vs. trial; a skill which all of us wish we had developed to a perfect sense of predicting the future of how a case will end up when it is tried, appealed and the final gavel is dropped and judgment entered. While none of us has the crystal ball to use in advising our clients, we use our education, experience and skills to provide our clients with our best judgment of whether a settlement opportunity provides the preferred result rather than going to trial. The uncertainty of the future and the eventual decision making process emphasizes the need to make a concerted effort to settle.
5. Here Today, Gone Tomorrow.
“This phrase was coined by Aphra Behn (1640-1689) who Virginia Woolf, in ‘A Room of One's Own,’ canonized ‘as the first professional English woman writer.’ From ‘More Than A Woman: A few of our favorite unsung heroines,’ Page 62-63, B*tch - feminist response to pop culture, Issue No. 35, Spring 2007.
“Wikipedia also cites Virgina Woolf in stating this ‘fact’ (she doesn't say it as quoted however, if that's what those quote marks mean (http://etext.library.adelaide.edu.au/w/woolf/virginia/w91r/chapter4.html ).”
The point for us here is that negotiations can get cold and parties can back off if the negotiations seem to be going nowhere, or there is no ongoing communication. Keep talking; try to resolve terms as you proceed. The more you can agree upon as you proceed, the greater the chance there will be success at the end of the discussions. So an offer on the table needs to be answered with an acceptance, counter or some additional basis for discussion.
6. A Bird in the Hand is Worth Two in the Bush.
“This proverb refers back to medieval falconry where a bird in the hand (the falcon) was a valuable asset and certainly worth more than two in the bush (the prey). The first citation of the expression in print in its currently used form is found in John Ray's A Hand-book of Proverbs, 1670, which he lists it as: ‘A [also 'one'] bird in the hand is worth two in the bush.’ By how much the phrase predates Ray's publishing isn't clear, as variants of it were known for centuries before 1670. The earliest English version of the proverb is from the Bible and was translated into English in Wycliffe's version in 1382, although Latin texts have it from the 13th century: Ecclesiastes IX – ‘A living dog is better than a dead lion.’
“Alternatives that explicitly mention birds in hand come later. The earliest of those is in Hugh Rhodes' The Boke of Nurture or Schoole of Good Maners, circa 1530: ‘A byrd in hand - is worth ten flye at large.’
“John Heywood, the 16th century collector of proverbs, recorded another version in his ambitiously titled A dialogue conteinyng the nomber in effect of all the prouerbes in the Englishe tongue, 1546: ‘Better one byrde in hande than ten in the wood.’
“The Bird in Hand was adopted as a pub name in England in the Middle Ages and many of these still survive. The term bird in hand must have been known in the USA by 1734, as that is the date when a small town in Pennsylvania was founded with that name .”
A deal done in negotiations means finality, certainty, and conclusion, rather than no closure, uncertainty and no resolution. You have to consider the impact that money or accepted terms have on the future. Your client can now put his/her/their life back together as best possible, recovery can begin, and the drain of litigation is over. What a relief for most people!
I’ll do a Part II before the year is out.
Let me here your views to gkornblum@kornblumlaw.com.
Good Mediating. . .
Wednesday, May 18, 2011
The Resolution Advocate: Tips on Getting to the Goal Line in Civil Litigation: The Three "C's" of Settlement Negotiations
By: Guy O. Kornblum
San Francisco, California
Three basic principles are at the heart of settlement negotiations, whether they are direct or supervised in the more formal setting of a mediation: candor, communication, and confidentiality.
The level of candor required depends on the parties, their relationship and the forum. That is, the parties may be more guarded in direct negotiations, whereas in a supervised mediation, the presence of the mediator and the use of such as an intermediary may persuade the parties to be more candid about their case during the negotiations.
Communication is critical to the process. Once the parties stop talking, then there is no chance of a settlement even with a mediator. As long as the parties are talking to each other, even if through a third party, there is a chance for a negotiated resolution. Of course, the potential for settlement is advanced only if the communication is diplomatic and professional and not adversarial and hostile.
Confidentiality is also critical to the process. It encourages both communication and candor. The parties must understand that they will not be prejudiced by their exchanges, and that such will not be used against them in subsequent proceedings in the litigation. This assurance of confidentiality is at the heart of negotiations, whether direct or supervised.
These are the three essential underlying principles which allow the parties to reach a point where they together decide if the matter can be resolved. It is the policy that the decision making rests with the parties that requires that the three “C’s” underlie and support the process of negotiation. Without an assurance of confidentiality, the parties are not going to candidly exchange information. Without confidentiality, communication and open discussion are stymied, as the parties will believe that whatever is said may end up being part of the other’s case at trial. The integrity of the process of negotiation in any format can only be assured if the parties are confident that their exchanges, disclosures and bargaining will be protected from being used against them in subsequent proceedings. The parties must believe that they will not be prejudiced if they engage in any settlement exchanges.
The Preface the Uniform Mediation Act states, “. . . [T]he law has the unique capacity to assure that the reasonable expectations of participants regarding the confidentiality of the process are met, rather than frustrated. For this reason, a central thrust of the Act is to provide a privilege that assures confidentiality in legal proceedings.”
The drafters of the Uniform Mediation Act, approved by the American Bar Association at its Mid-Winter Meeting in Philadelphia, Pa., February 4, 2002 [as amended 2003] (“UMA”) refer to these public policies underlying its adoption:
• Promote candor of parties through confidentiality of the mediation process, subject only so the need for disclosure to accommodate specific and compelling societal interests (internal citation omitted);
• Encourage the policy of fostering prompt, economical, and amicable resolution of disputes in accordance with principles of integrity of the mediation process,active party involvement, and informed self-determination by the parties (internal citation omitted); and
• Advance the policy that the decision-making authority in the mediation process rests with the parties (internal citation omitted).
The Federal Rules of Evidence do not contain any specific provision relating to communications during mediation. Rule 408 protects some communications during negotiations, but does not address a mediation itself. District courts have specific rules adopted to protect what takes place during a mediation and serve the purpose of carrying out the policies of encouraging candor and communication in supervised negotiations.
The protection of rules and statutes relating to direct negotiations is narrower than the confidentiality which attaches to the mediation process. For example, California Evidence Code section 1152 applies to an offer for compromise or to furnishing something for value to another person who has sustained, or claims to have sustained, loss or damage, and also applies to “conduct or statements made in negotiation thereof….”
Despite the legal niceties, the parties should approach any negotiations with the understanding that they will all cooperate in implementing a principle of confidentiality so that the negotiations can progress towards an agreed upon resolution of the case.
Good Mediating. . .
San Francisco, California
Three basic principles are at the heart of settlement negotiations, whether they are direct or supervised in the more formal setting of a mediation: candor, communication, and confidentiality.
The level of candor required depends on the parties, their relationship and the forum. That is, the parties may be more guarded in direct negotiations, whereas in a supervised mediation, the presence of the mediator and the use of such as an intermediary may persuade the parties to be more candid about their case during the negotiations.
Communication is critical to the process. Once the parties stop talking, then there is no chance of a settlement even with a mediator. As long as the parties are talking to each other, even if through a third party, there is a chance for a negotiated resolution. Of course, the potential for settlement is advanced only if the communication is diplomatic and professional and not adversarial and hostile.
Confidentiality is also critical to the process. It encourages both communication and candor. The parties must understand that they will not be prejudiced by their exchanges, and that such will not be used against them in subsequent proceedings in the litigation. This assurance of confidentiality is at the heart of negotiations, whether direct or supervised.
These are the three essential underlying principles which allow the parties to reach a point where they together decide if the matter can be resolved. It is the policy that the decision making rests with the parties that requires that the three “C’s” underlie and support the process of negotiation. Without an assurance of confidentiality, the parties are not going to candidly exchange information. Without confidentiality, communication and open discussion are stymied, as the parties will believe that whatever is said may end up being part of the other’s case at trial. The integrity of the process of negotiation in any format can only be assured if the parties are confident that their exchanges, disclosures and bargaining will be protected from being used against them in subsequent proceedings. The parties must believe that they will not be prejudiced if they engage in any settlement exchanges.
The Preface the Uniform Mediation Act states, “. . . [T]he law has the unique capacity to assure that the reasonable expectations of participants regarding the confidentiality of the process are met, rather than frustrated. For this reason, a central thrust of the Act is to provide a privilege that assures confidentiality in legal proceedings.”
The drafters of the Uniform Mediation Act, approved by the American Bar Association at its Mid-Winter Meeting in Philadelphia, Pa., February 4, 2002 [as amended 2003] (“UMA”) refer to these public policies underlying its adoption:
• Promote candor of parties through confidentiality of the mediation process, subject only so the need for disclosure to accommodate specific and compelling societal interests (internal citation omitted);
• Encourage the policy of fostering prompt, economical, and amicable resolution of disputes in accordance with principles of integrity of the mediation process,active party involvement, and informed self-determination by the parties (internal citation omitted); and
• Advance the policy that the decision-making authority in the mediation process rests with the parties (internal citation omitted).
The Federal Rules of Evidence do not contain any specific provision relating to communications during mediation. Rule 408 protects some communications during negotiations, but does not address a mediation itself. District courts have specific rules adopted to protect what takes place during a mediation and serve the purpose of carrying out the policies of encouraging candor and communication in supervised negotiations.
The protection of rules and statutes relating to direct negotiations is narrower than the confidentiality which attaches to the mediation process. For example, California Evidence Code section 1152 applies to an offer for compromise or to furnishing something for value to another person who has sustained, or claims to have sustained, loss or damage, and also applies to “conduct or statements made in negotiation thereof….”
Despite the legal niceties, the parties should approach any negotiations with the understanding that they will all cooperate in implementing a principle of confidentiality so that the negotiations can progress towards an agreed upon resolution of the case.
Good Mediating. . .
The Resolution Advocate: Tips on Getting to the Goal Line in Civil Litigation:
By: Guy O. Kornblum
San Francisco, California
The California Supreme Court, Justice Marvin Baxter, one of the court’s known conservatives writing the opinion, has spoken on mediation confidentiality. The Court held that the mediation privilege prevents a client from using testimony regarding what his lawyer told him or did during a mediation in a legal malpractice case by the client against the attorney. The point is that a lawyer can commit malpractice at a mediation and no one will hear about it! Fair? Unfair? The reaction is divided. (See, Kichaven, “Mediation Confidentiality and Anarchy: The California Nightmare,” The Los Angeles Daily Journal, February 17, 2011, p. 4.) .
In Cassel v. Superior Court, 51 Cal. 4th 113, 244 P. 3d 1080 (January 13, 2011), the client brought an action against attorneys who represented him in a mediation in a malpractice, breach of fiduciary duty, fraud, and breach of contract action. At trial the attorneys made a motion in limine using the statute relating to mediation confidentiality (Cal. Evid. Code §1119(a), (b)) to exclude all evidence of communications between the client and the lawyer that were related to the mediation, including what was discussed in pre-mediation meetings and private communications between the client and attorneys during the mediation. The trial court granted the motion; the client sought a writ of mandate, which a Court of Appeal granted. The Supreme Court granted review and reversed the Court of Appeal.
Essentially the Supreme Court upheld a broach protection of mediation communications between a client and his lawyer: mediation related communications and discussions between a client and his lawyer are confidential, and therefore were neither discoverable nor admissible for purposes of proving a claim of legal malpractice.
It also held that the application of mediation confidentiality statutes to legal malpractice actions does not implicate due process concerns so fundamental that they might warrant an exception on constitutional grounds.
So there; that is that! Done, over.
In so holding, Justice Baxter said up front in the opinion:
“We have repeatedly said that these confidentially provisions [the Cal. Evid. Code cited, supra] are clear and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially crafted exceptions or limitations, even where there is a competing public policies may be affected. (Citations omitted.)”
The ruling also could affect other types of tort or contract claims arising out of mediation practice, including mediator malpractice and insurance bad faith. The ruling has been criticized because it a) prevents the truth from being known, and b) it violates the basic principle that for every wrong there is a remedy. These are points that Mediator Kichaven makes in the cited article.
While Justice Baxter has surrounded the mediation process with an aura of strict confidentiality, his view contrasts with the Uniform Mediation Act (www.nccusl.org). In this Act, a “mediation communication is a privileged.” Section 4(a). However, under Section 6(a)(6), “There is no privilege under Section 4 for a mediation communication that is . . .sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a mediation party, nonparty participant, or representative of a party based on conduct occurring during a mediation.” So, under that approach, the testimony of Cassel, the lawyer, is both discoverable and admissible. It is not protected, and is available in a legal malpractice case, mediator misconduct action or insurance bad faith case. Makes sense to me. It also made sense to the National Conference on Uniform State Laws and those serving on the Advisory Committee on the Uniform Mediation Act and its Reporter, Professor Nancy Rogers of the Moritz College of the Law (a former dean of the law school), and Associate Reporter, Professor Richard C. Reuben of the University of Missouri Law School.
If the rule were otherwise from what Justice Baxter and his colleagues (Justice Chin concurred “reluctantly”) held, would the exception to confidentiality discourage mediation? Mr. Kichaven covers this point and quotes Professors Rogers and Reuben who seem to think not. Also Mr. Kichaven points out that settlement conferences held under the auspices of the court system are not be subject to the mediation privilege in California [although there is a confidentiality as to what takes place which prevents disclosure at trial of the offers, counters and discussions ]. So the lawyer could be sued for malpractice for conduct at a court supervised settlement conference but not a private mediation. That does not seem to be right; it is illogical and cannot be rationally justified.
Coincidently a couple of weeks after this case was handed down, in walks a client with a potential legal malpractice claim against his attorney who allegedly sold the client “down the river” at a mediation, which the client did not find out about until after the deal was done. But the client is now foreclosed from pursuing that claim – or even considering it. An injustice? Who knows as the client will never find out; he cannot.
So what will happen now in California? My sense is that the trial lawyer groups in California will mount a campaign to the California Legislature to amend the statute to overrule Justice Baxter. With a democratic governor, and a lawyer, Governor Brown, there may be a good chance of altering this rule which puts the clamps on claims that arise from a client’s participation in mediation. There is no reason to protect anyone from a sound legal claim if they do not do their job or breach their duties to those to whom they are owed. Professional responsibility is just that – a responsibility to conduct ourselves in any process relating to our representation of a client. What is more important than the mediation process which is designed to allow clients to explore a settlement alternative to trial. There is no reason to allow any protection from professional responsibility and the standards that we must meet in such an important aspect of the overall litigation process.
I agree with Mr. Kichaven: it is a bad decision, is against the weight of thought and analysis as manifested by the Uniform Mediation Act, and needs to be overruled by the Legislature.
Let me here your views to gkornblum@kornblumlaw.com.
Good Mediating. . .
San Francisco, California
The California Supreme Court, Justice Marvin Baxter, one of the court’s known conservatives writing the opinion, has spoken on mediation confidentiality. The Court held that the mediation privilege prevents a client from using testimony regarding what his lawyer told him or did during a mediation in a legal malpractice case by the client against the attorney. The point is that a lawyer can commit malpractice at a mediation and no one will hear about it! Fair? Unfair? The reaction is divided. (See, Kichaven, “Mediation Confidentiality and Anarchy: The California Nightmare,” The Los Angeles Daily Journal, February 17, 2011, p. 4.) .
In Cassel v. Superior Court, 51 Cal. 4th 113, 244 P. 3d 1080 (January 13, 2011), the client brought an action against attorneys who represented him in a mediation in a malpractice, breach of fiduciary duty, fraud, and breach of contract action. At trial the attorneys made a motion in limine using the statute relating to mediation confidentiality (Cal. Evid. Code §1119(a), (b)) to exclude all evidence of communications between the client and the lawyer that were related to the mediation, including what was discussed in pre-mediation meetings and private communications between the client and attorneys during the mediation. The trial court granted the motion; the client sought a writ of mandate, which a Court of Appeal granted. The Supreme Court granted review and reversed the Court of Appeal.
Essentially the Supreme Court upheld a broach protection of mediation communications between a client and his lawyer: mediation related communications and discussions between a client and his lawyer are confidential, and therefore were neither discoverable nor admissible for purposes of proving a claim of legal malpractice.
It also held that the application of mediation confidentiality statutes to legal malpractice actions does not implicate due process concerns so fundamental that they might warrant an exception on constitutional grounds.
So there; that is that! Done, over.
In so holding, Justice Baxter said up front in the opinion:
“We have repeatedly said that these confidentially provisions [the Cal. Evid. Code cited, supra] are clear and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially crafted exceptions or limitations, even where there is a competing public policies may be affected. (Citations omitted.)”
The ruling also could affect other types of tort or contract claims arising out of mediation practice, including mediator malpractice and insurance bad faith. The ruling has been criticized because it a) prevents the truth from being known, and b) it violates the basic principle that for every wrong there is a remedy. These are points that Mediator Kichaven makes in the cited article.
While Justice Baxter has surrounded the mediation process with an aura of strict confidentiality, his view contrasts with the Uniform Mediation Act (www.nccusl.org). In this Act, a “mediation communication is a privileged.” Section 4(a). However, under Section 6(a)(6), “There is no privilege under Section 4 for a mediation communication that is . . .sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a mediation party, nonparty participant, or representative of a party based on conduct occurring during a mediation.” So, under that approach, the testimony of Cassel, the lawyer, is both discoverable and admissible. It is not protected, and is available in a legal malpractice case, mediator misconduct action or insurance bad faith case. Makes sense to me. It also made sense to the National Conference on Uniform State Laws and those serving on the Advisory Committee on the Uniform Mediation Act and its Reporter, Professor Nancy Rogers of the Moritz College of the Law (a former dean of the law school), and Associate Reporter, Professor Richard C. Reuben of the University of Missouri Law School.
If the rule were otherwise from what Justice Baxter and his colleagues (Justice Chin concurred “reluctantly”) held, would the exception to confidentiality discourage mediation? Mr. Kichaven covers this point and quotes Professors Rogers and Reuben who seem to think not. Also Mr. Kichaven points out that settlement conferences held under the auspices of the court system are not be subject to the mediation privilege in California [although there is a confidentiality as to what takes place which prevents disclosure at trial of the offers, counters and discussions ]. So the lawyer could be sued for malpractice for conduct at a court supervised settlement conference but not a private mediation. That does not seem to be right; it is illogical and cannot be rationally justified.
Coincidently a couple of weeks after this case was handed down, in walks a client with a potential legal malpractice claim against his attorney who allegedly sold the client “down the river” at a mediation, which the client did not find out about until after the deal was done. But the client is now foreclosed from pursuing that claim – or even considering it. An injustice? Who knows as the client will never find out; he cannot.
So what will happen now in California? My sense is that the trial lawyer groups in California will mount a campaign to the California Legislature to amend the statute to overrule Justice Baxter. With a democratic governor, and a lawyer, Governor Brown, there may be a good chance of altering this rule which puts the clamps on claims that arise from a client’s participation in mediation. There is no reason to protect anyone from a sound legal claim if they do not do their job or breach their duties to those to whom they are owed. Professional responsibility is just that – a responsibility to conduct ourselves in any process relating to our representation of a client. What is more important than the mediation process which is designed to allow clients to explore a settlement alternative to trial. There is no reason to allow any protection from professional responsibility and the standards that we must meet in such an important aspect of the overall litigation process.
I agree with Mr. Kichaven: it is a bad decision, is against the weight of thought and analysis as manifested by the Uniform Mediation Act, and needs to be overruled by the Legislature.
Let me here your views to gkornblum@kornblumlaw.com.
Good Mediating. . .
Tuesday, November 9, 2010
THE MODERN APPROACH TO RESOLVING DISPUTES – THE CASE FOR MEDIATION
“The odds of a plaintiff's lawyer winning in civil court are two to one against. Think about that for a second. Your odds of surviving a game of Russian roulette are better than winning a case at trial. Twelve times better. So why does anyone do it? They don't. They settle. Out of the 780,000, only 12,000 or 1.5 percent ever reach a verdict. The whole idea of lawsuits is to settle, to compel the other side to settle. And you do that by spending more money than you should, which forces them to spend more money than they should, and whoever comes to their senses first loses. Trials are a corruption of the entire process and only fools who have something to prove end up ensnared in them. Now when I say prove, I don't mean about the case. I mean about themselves.”
Lawyer Jan Schlictman, played by John Travolta, in the movie “A Civil Action.”
Anyone who has been involved in a lawsuit as a dispute resolution mechanism knows what a laborious and often mysterious process it can be. But the process is changing. The public is demanding a user-friendly system that encourages litigants to enter into early discussions about resolution of their dispute and avoid the time, expense and emotional drain of protracted litigation.
It is incumbent upon us as client representatives to promote mediation as a desired alternative to trial, i.e. mediation instead of trial. We need to educate our clients about how this process works and show that there are advantages in this approach to dispute resolution.
The approach to handling a client’s cause and managing litigation has changed. Efforts are in process to develop a more cooperative approach to litigation, particularly during discovery. The Sedona Conference Cooperation Proclamation represents “a coordinated effort to promote cooperation by all parties to the discovery process to achieve the goal of a ‘just, speedy, and inexpensive determination of every action.”
The public has become intolerant of the notion of the trial lawyer as a “warrior” or “combatant.” Lawyers who work in litigation as problem solvers who can penetrate the process and assist in resolving a dispute, not perpetuating it , are what the public wants.
A settlement is the best economic day for a client, considering the present value of money, and the cost of taking a case into the pre-trial and trial states (and possibly through appeal); the client has the use of funds now rather than the hope of some recovery later. The costs of litigation often surprise clients, particularly if expert testimony from physicians or technical experts is needed. The fees for these experts are quite high, usually involving several hundred dollars per hour. Considering the amount of time that experts need to prepare, testify at deposition and then appear in court, several thousands of dollars can be incurred quickly by just this aspect of the case.
In my view, settlement is the ultimate victory. It takes the decision making away from a third-party – a judge or jury – and puts it in the hands of the parties. Settlement results only from consent, so a case is settled when the parties have retained control over the outcome and have carved out a result for themselves. It does not happen unless there is agreement.
Studies have shown that the parties to a dispute risk more by going to trial if they walk away from a reasonable opportunity to settle. In of hundreds of cases in which negotiations have been conducted but the parties have not settled the results reveal a party who rejected settlement often does worse at trial.
Mediation has resolution of a dispute as its objective. The parties in a mediation know they have come to resolve their differences. The intermediary or neutral – the mediator – has the sole job of accomplishing that goal. It is a dedicated forum for closure.
Over the last several years, mediation has become the more popular means of resolving disputes. Mediation is available to litigants to achieve settlement. It is often overlooked by lawyers in the beginning stages of litigation, when mediation can lead to an early— and appropriate— settlement. This is a big mistake, as it is at this early stage of litigation that the “best deal” can be achieved before the expense of protracted litigation.
There is a great deal of confusion among lay persons as to the difference between arbitration and mediation. These are forms of alternative dispute resolution, alternatives to a trial in the courthouse. Court systems are now designed to make sure that parties are advised about these alternatives and how they can expedite the resolution of a dispute and avoid the risks and expense (not to mention the emotional drain) of full-blown litigation. Many court systems have programs for early resolution, including the federal court in San Francisco, which has been a pioneer in these alternatives for resolving disputes without a trial.
Private mediation is a “supervised negotiation” away from the courthouse, with a trained and experienced mediator who has the skills of getting parties to talk and exchange views in an attempt to resolve their differences. This is in contrast to an arbitration in which the arbitrator actually decides the case. Our clients often do not understand the difference and it is our job to educate them on the mediation alternative to trial.
For example, the client must understand that:
• In mediation, the mediator guides the parties through the negotiation process so that any resolution comes because the parties agree.
• The mediator is not a decision maker, but a facilitator.
• The mediator is chosen by agreement only; a party cannot be forced to accept a mediator of a dispute.
• Mediators work in all aspects of litigation: complex civil cases, personal injury, professional negligence, complex insurance disputes and family law matters, particularly divorces and custody matters.
• A mediation is voluntary and is not binding. A settlement is reached only if the parties agree.
• A mediation can last from a few hours to several days (not necessarily in succession). Often the parties exchange “briefs” on their position before the mediation.
• Most important to note is that a mediation is confidential. By law, what takes place during a mediation cannot be used in the lawsuit as evidence. A trial court or jury does not hear about anything that was discussed during the mediation, nor is the subject of the parties’ respective positions at a mediation a proper subject of testimony at trial.
My experience is that the mediation process works well if certain conditions are met. First, the parties must be prepared to mediate. They must know their case well and have discussed their position with their lawyer and set some realistic goals for settlement discussions. Second, the parties must go to the mediation with a good faith desire to resolve the case. Third, a mediator must be chosen who is the right person for the case – someone whose approach to mediation fits the type of case and the parties involved. For example, if the case is volatile, then someone with a low-key style, using diplomacy more than persuasion, may be the right choice. On the other hand, if the parties are at odds, it may take someone with stature (such as a retired judge of some preeminence) to bring the parties together. And fourth, the mediator must be willing to work, to roll up the sleeves and stay the course until all settlement alternatives are explored. The basic rule is to keep the parties talking. So long as the parties are willing to communicate, there is a chance for a negotiated resolution.
As time goes by, our judicial system will rely more and more on courts and counsel directing litigants to a mediation alternative to litigation. The earlier the better.
Lawyer Jan Schlictman, played by John Travolta, in the movie “A Civil Action.”
Anyone who has been involved in a lawsuit as a dispute resolution mechanism knows what a laborious and often mysterious process it can be. But the process is changing. The public is demanding a user-friendly system that encourages litigants to enter into early discussions about resolution of their dispute and avoid the time, expense and emotional drain of protracted litigation.
It is incumbent upon us as client representatives to promote mediation as a desired alternative to trial, i.e. mediation instead of trial. We need to educate our clients about how this process works and show that there are advantages in this approach to dispute resolution.
The approach to handling a client’s cause and managing litigation has changed. Efforts are in process to develop a more cooperative approach to litigation, particularly during discovery. The Sedona Conference Cooperation Proclamation represents “a coordinated effort to promote cooperation by all parties to the discovery process to achieve the goal of a ‘just, speedy, and inexpensive determination of every action.”
The public has become intolerant of the notion of the trial lawyer as a “warrior” or “combatant.” Lawyers who work in litigation as problem solvers who can penetrate the process and assist in resolving a dispute, not perpetuating it , are what the public wants.
A settlement is the best economic day for a client, considering the present value of money, and the cost of taking a case into the pre-trial and trial states (and possibly through appeal); the client has the use of funds now rather than the hope of some recovery later. The costs of litigation often surprise clients, particularly if expert testimony from physicians or technical experts is needed. The fees for these experts are quite high, usually involving several hundred dollars per hour. Considering the amount of time that experts need to prepare, testify at deposition and then appear in court, several thousands of dollars can be incurred quickly by just this aspect of the case.
In my view, settlement is the ultimate victory. It takes the decision making away from a third-party – a judge or jury – and puts it in the hands of the parties. Settlement results only from consent, so a case is settled when the parties have retained control over the outcome and have carved out a result for themselves. It does not happen unless there is agreement.
Studies have shown that the parties to a dispute risk more by going to trial if they walk away from a reasonable opportunity to settle. In of hundreds of cases in which negotiations have been conducted but the parties have not settled the results reveal a party who rejected settlement often does worse at trial.
Mediation has resolution of a dispute as its objective. The parties in a mediation know they have come to resolve their differences. The intermediary or neutral – the mediator – has the sole job of accomplishing that goal. It is a dedicated forum for closure.
Over the last several years, mediation has become the more popular means of resolving disputes. Mediation is available to litigants to achieve settlement. It is often overlooked by lawyers in the beginning stages of litigation, when mediation can lead to an early— and appropriate— settlement. This is a big mistake, as it is at this early stage of litigation that the “best deal” can be achieved before the expense of protracted litigation.
There is a great deal of confusion among lay persons as to the difference between arbitration and mediation. These are forms of alternative dispute resolution, alternatives to a trial in the courthouse. Court systems are now designed to make sure that parties are advised about these alternatives and how they can expedite the resolution of a dispute and avoid the risks and expense (not to mention the emotional drain) of full-blown litigation. Many court systems have programs for early resolution, including the federal court in San Francisco, which has been a pioneer in these alternatives for resolving disputes without a trial.
Private mediation is a “supervised negotiation” away from the courthouse, with a trained and experienced mediator who has the skills of getting parties to talk and exchange views in an attempt to resolve their differences. This is in contrast to an arbitration in which the arbitrator actually decides the case. Our clients often do not understand the difference and it is our job to educate them on the mediation alternative to trial.
For example, the client must understand that:
• In mediation, the mediator guides the parties through the negotiation process so that any resolution comes because the parties agree.
• The mediator is not a decision maker, but a facilitator.
• The mediator is chosen by agreement only; a party cannot be forced to accept a mediator of a dispute.
• Mediators work in all aspects of litigation: complex civil cases, personal injury, professional negligence, complex insurance disputes and family law matters, particularly divorces and custody matters.
• A mediation is voluntary and is not binding. A settlement is reached only if the parties agree.
• A mediation can last from a few hours to several days (not necessarily in succession). Often the parties exchange “briefs” on their position before the mediation.
• Most important to note is that a mediation is confidential. By law, what takes place during a mediation cannot be used in the lawsuit as evidence. A trial court or jury does not hear about anything that was discussed during the mediation, nor is the subject of the parties’ respective positions at a mediation a proper subject of testimony at trial.
My experience is that the mediation process works well if certain conditions are met. First, the parties must be prepared to mediate. They must know their case well and have discussed their position with their lawyer and set some realistic goals for settlement discussions. Second, the parties must go to the mediation with a good faith desire to resolve the case. Third, a mediator must be chosen who is the right person for the case – someone whose approach to mediation fits the type of case and the parties involved. For example, if the case is volatile, then someone with a low-key style, using diplomacy more than persuasion, may be the right choice. On the other hand, if the parties are at odds, it may take someone with stature (such as a retired judge of some preeminence) to bring the parties together. And fourth, the mediator must be willing to work, to roll up the sleeves and stay the course until all settlement alternatives are explored. The basic rule is to keep the parties talking. So long as the parties are willing to communicate, there is a chance for a negotiated resolution.
As time goes by, our judicial system will rely more and more on courts and counsel directing litigants to a mediation alternative to litigation. The earlier the better.
THE OPENING DEMAND AT MEDIATION: HOW TO VIEW THE FIRST SHOT OVER THE BOW
“Or what king, going out to wage war against another kind, will not sit down first and consider whether he is able with ten thousand to oppose the one who comes against him with twenty thousand? If he cannot, then, while the other is still far away, he sends a delegation and asks for the terms of peace.”
Luke 14:25-33
Assessing when and how to approach your adversary about mediating a claim presents a challenge to any of us representing a client in litigation. Even more challenging, I find, is determining what the initial demand should be. As a lawyer frequently representing the plaintiff in litigation, I feel the responsibility to not only provide the opposition with a clear statement of my client’s case but also one that justifies considering settlement. You have to start someplace, and it is customary for me – as is usually the case – for the plaintiff to make the first bid – the initial demand for settlement. I also customarily submit that number in an initial demand package, or if negotiations are focused on a mediation, in the mediation statement which I submit at least two weeks – and sometimes earlier – before the mediation takes place.
The question is what should that number be?
Let’s talk strategy and let’s also talk about how the client views the numbers. First of all, I certainly avoid giving the client a bottom line number before the mediation or even at the mediation -- or a number which I recommend be the “bottom line” for settlement. Negotiations can change the view about a case. That certainly is true about a mediation. Much can be learned during the day about the case which can change its value.
My San Francisco Bar colleague, Michael Carbone, a full time mediator who writes regularly on the topic of mediation, says this about concocting settlement demands and strategies: “Clients are often fixated on what the bottom line should be. This approach is understandable, but should nevertheless be discouraged. A demand number, a target (or ‘wish’) number, and a walkaway number can all be discussed with clients, but with the caveat that one or more of these numbers may need to change during the course of the mediation.” (M. Carbone, “Resolving It,” Vo.l 1, No. 10, October 2010.)
So you have to remain flexible regarding the numbers during the mediation.
But back to the initial demand. If it is too high, it invites resistance to negotiations by the opposition. If it is too low, then, of course, you are essentially bargaining below where you should be to drive the case value to an acceptable settlement point. The initial demand has to leave room for negotiation. We all know it is to get the process started, and is not the number that is expected to be the final settlement number. Similarly, the defense is not expected to put its “last, best and final” number on the table in its first offer.
Here are some thoughts on how to structure that first shot.
• What are the economics of the case? Have you presented a strong case and support for the damages to be claimed at trial? Are there soft spots?
• How does the opposition negotiate? Are they hardnosed or cooperative? Will they listen to the mediator? Is every first demand from a plaintiff considered unreasonable, or are they likely to respond to an invitation to bargain?
• Does your case have aggravated liability facts which adds potential to the outcome?
• Do you need lots of negotiating room?
• Is there an expectation that the plaintiff will show considerable movement during the negotiations?
• Who is the mediator and what his the approach likely to be taken by the neutral? No matter what the initial demand and offer, will the mediator work to get the parties into the “field of play” (aka: the reasonable negotiating range)?
In determining that first demand, first look at the hard economic damages which are likely to be viewed as clearly related to the wrongdoing. Second, if there are soft numbers in addition, which may be questionable or have less evidentiary support, they still should be cranked into the demand to provide negotiating room. Third, in a personal injury case, the claims for future medical expenses, and also impairment to earning capacity should be quantified and supported. Fourth, you have to obviously evaluate the potential for general damages, past and future..
Often I have jury verdicts research done to try to find comparable cases with verdicts that can serve as a basis for evaluation.
Once I pencil out these numbers, I then place a value on the case using a range of a low result, mid result and very good result. After that I decide what additional sum I need to add to this number to negotiate given the factors outlined above. Maybe I need to add 30-50% to give me negotiating room, possibly even more if I think the other side is going to expect more give than take on the plaintiff’s side.
I also need to dispel the notion that the settlement number is mid point between the initial demand and $0, which sometimes suspect is the perception of the defense. That is rarely the situation from my perspective.
The point is that the first demand must have a rational basis in light of the potential damages claims, so outlining those claims first is critical. They have to appear solid, and not unreasonable or if potentially unreasonable, perhaps just above the line of reasonableness.
The defense will likely advise the mediator that the initial demand as way too high in any event (of course it is high, but it is designed to start the bargaining process), so giving yourself some room to come down without compromising your ability to negotiate is important. Remember, you can always go down, but not up! So, if you going to err, be it an err that is high, not low!
Until next time, GOOD MEDIATING. . . .
.
.
Luke 14:25-33
Assessing when and how to approach your adversary about mediating a claim presents a challenge to any of us representing a client in litigation. Even more challenging, I find, is determining what the initial demand should be. As a lawyer frequently representing the plaintiff in litigation, I feel the responsibility to not only provide the opposition with a clear statement of my client’s case but also one that justifies considering settlement. You have to start someplace, and it is customary for me – as is usually the case – for the plaintiff to make the first bid – the initial demand for settlement. I also customarily submit that number in an initial demand package, or if negotiations are focused on a mediation, in the mediation statement which I submit at least two weeks – and sometimes earlier – before the mediation takes place.
The question is what should that number be?
Let’s talk strategy and let’s also talk about how the client views the numbers. First of all, I certainly avoid giving the client a bottom line number before the mediation or even at the mediation -- or a number which I recommend be the “bottom line” for settlement. Negotiations can change the view about a case. That certainly is true about a mediation. Much can be learned during the day about the case which can change its value.
My San Francisco Bar colleague, Michael Carbone, a full time mediator who writes regularly on the topic of mediation, says this about concocting settlement demands and strategies: “Clients are often fixated on what the bottom line should be. This approach is understandable, but should nevertheless be discouraged. A demand number, a target (or ‘wish’) number, and a walkaway number can all be discussed with clients, but with the caveat that one or more of these numbers may need to change during the course of the mediation.” (M. Carbone, “Resolving It,” Vo.l 1, No. 10, October 2010.)
So you have to remain flexible regarding the numbers during the mediation.
But back to the initial demand. If it is too high, it invites resistance to negotiations by the opposition. If it is too low, then, of course, you are essentially bargaining below where you should be to drive the case value to an acceptable settlement point. The initial demand has to leave room for negotiation. We all know it is to get the process started, and is not the number that is expected to be the final settlement number. Similarly, the defense is not expected to put its “last, best and final” number on the table in its first offer.
Here are some thoughts on how to structure that first shot.
• What are the economics of the case? Have you presented a strong case and support for the damages to be claimed at trial? Are there soft spots?
• How does the opposition negotiate? Are they hardnosed or cooperative? Will they listen to the mediator? Is every first demand from a plaintiff considered unreasonable, or are they likely to respond to an invitation to bargain?
• Does your case have aggravated liability facts which adds potential to the outcome?
• Do you need lots of negotiating room?
• Is there an expectation that the plaintiff will show considerable movement during the negotiations?
• Who is the mediator and what his the approach likely to be taken by the neutral? No matter what the initial demand and offer, will the mediator work to get the parties into the “field of play” (aka: the reasonable negotiating range)?
In determining that first demand, first look at the hard economic damages which are likely to be viewed as clearly related to the wrongdoing. Second, if there are soft numbers in addition, which may be questionable or have less evidentiary support, they still should be cranked into the demand to provide negotiating room. Third, in a personal injury case, the claims for future medical expenses, and also impairment to earning capacity should be quantified and supported. Fourth, you have to obviously evaluate the potential for general damages, past and future..
Often I have jury verdicts research done to try to find comparable cases with verdicts that can serve as a basis for evaluation.
Once I pencil out these numbers, I then place a value on the case using a range of a low result, mid result and very good result. After that I decide what additional sum I need to add to this number to negotiate given the factors outlined above. Maybe I need to add 30-50% to give me negotiating room, possibly even more if I think the other side is going to expect more give than take on the plaintiff’s side.
I also need to dispel the notion that the settlement number is mid point between the initial demand and $0, which sometimes suspect is the perception of the defense. That is rarely the situation from my perspective.
The point is that the first demand must have a rational basis in light of the potential damages claims, so outlining those claims first is critical. They have to appear solid, and not unreasonable or if potentially unreasonable, perhaps just above the line of reasonableness.
The defense will likely advise the mediator that the initial demand as way too high in any event (of course it is high, but it is designed to start the bargaining process), so giving yourself some room to come down without compromising your ability to negotiate is important. Remember, you can always go down, but not up! So, if you going to err, be it an err that is high, not low!
Until next time, GOOD MEDIATING. . . .
.
.
Monday, August 23, 2010
More on the Case for Mediation
MORE ON THE CASE FOR MEDIATION: UNDERSTANDING THE PROCESS BETTER
By: Guy O. Kornblum, Esq.
We all realize that mediation as a dispute resolution mechanism has become part of the litigation process in a big way. It should be factored into your client’s Litigation Management Plan. Few cases are not mediated at some point these days. We all have much to learn about this process. The new LCA ADR Institute is an effort to promote a better understanding of the process. The program at the Fall Meeting in October is a first step in creating a forum for a dialogue among the Fellows about how we can better represent our clients in mediations, and take advantage of what it has to offer as a means of negotiating a resolution of disputes in which our clients are involved.
The idea that parties can meet and discuss, in a confidential setting, alternatives for resolving a dispute – large or small – is welcome because full blown litigation, and even working up a case for trial is an expensive and time consuming process as we all know. Economics alone dictates that we explore resolution at a mediation, which provides an opportunity for a day long or more discussion with a neutral who is devoting his or her time to facilitating a settlement. This a far cry from the eve of trial settlement conferences that we used to experience in the “old days” when judges did not manage their calendars, ADR was not even in its gestational period, and sitting judges had precious little time to learn about a case until you entered the courtroom for trial.
The ADR process – particularly mediation – is consistent with the movement for a more cooperative litigation process in which collaborative efforts are being encouraged. See, e.g. “The Sedona Conference Cooperation Proclamation Process,” The Sedona Conference Working Group Series, published in 2008 (www.thesedonaconference.org). As is stated in the report, “The Sedona Conference launches a coordinated effort to promote cooperation by all parties in the discovery process to achieve the goal of a just, speedy, and inexpensive determination of every action.”
When I started law practice in the mid 1960's, the word “mediation” was not commonly used. I am not sure I heard the word more than a couple of times while in law school. As a young trial lawyer, the common practice was that settlement was not really discussed until a mandatory settlement conference right before trial. Before that, if a case settled, it was because the attorneys did so, or the insurance adjuster jumped in and negotiated “the file” directly with the plaintiff’s lawyer. Often the first real opportunity to negotiate a case was the “Mandatory Settlement Conference,” which later became part of the court rules, and which ordinarily was held quite close to trial. Other than direct negotiations, there was little involvement by the court in settlement talks before then. At that time there were no Case Management Conferences.
Courts were ordinarily not very active in the case until a Pre-trial Conference was held, at which time the court might inquire about what settlement talks have taken place, and if the parties were interested in a judge, other than the trial judge, meeting with them to see if some settlement efforts could result in a resolution. The federal courts were required to provide for ADR procedures in civil actions in the Alternative Dispute Resolution Act of 1988 (28 U.S.C. sec. 651 et seq.). Prior to that, in 1985, California provided for Mandatory Settlement Conferences in Rule 222, California Rules of Court.
The words “alternate dispute resolution” or “ADR” were not in our vocabularies. Private dispute resolution services did not exist. Judges were elected or appointed to the bench and stayed to retirement. They did not leave these careers until that time. There were no jobs as private mediators to lure them away or provide employment after retiring. Frankly, as I look back on this, we were wasting a valuable resource in good settlement judges leaving the bench and essentially retiring from the profession altogether.
Now, the situation is much different. Private dispute resolution services and full time mediators abound. There are excellent training courses for mediators and new rules for governing that practice. Certification for mediators may be around the corner. Standards have been set for mediators in the conduct of a mediation. (See, e.g., Cal. Rules Court 3.850 et seq.) While it seems that there are more mediators than lawyers, the litigation process seems to demand this resource for dispute resolution.
We, as lawyers, must rise to the occasion. We need to do a better job of managing litigation especially in the more complex cases, so that resolution and settlement are part of the planning mechanism. This forces the parties to think about where they are going, what the results might be, and how much it will cost. That is, a “cost/benefit” analysis is part of the initial planning process and evaluation of the case.
One of the very important skills of a true trial lawyer or “litigator” is to know how to leverage a case to the point at which the parties are motivated to discuss settlement. I describe this point as a “plateau for resolution.” That is, it is a point where the parties have an opportunity to see what has occurred, evaluate their respective positions, and then look down the line at what will be done as the case progresses towards trial and a “forced resolution.” Does your client want to proceed? Does it know the risks? Is it aware of the significant costs involved? What is the potential settlement range versus the “net” that is likely to result if the case is tried? Recognition of this plateau and then communicating with the client about the case is an essential ingredient to serving the client’s needs. It is our duty to lead our clients through this process of selecting the manner in which the client wishes to reach a resolution.
Consider how it would be if in every case at the outset, a) the case must be set for a mediation no later than 6 months after filing the complaint, unless good cause is shown why this date should be extended, and b) the parties must file with the court a discovery plan that has the objective of allowing them to conduct sufficient discovery to be prepared to discuss settlement at mediation. The federal courts and some state courts have pieces for this in place, but how would our cases be processed if what I have proposed were a firm rule in the court system, which would require a motion on good cause to alter? The pressure would be on, cases would be worked up quickly, and the parties would have a much earlier dialogue than we likely experience now.
As part of the learning process, I highly recommend you obtain and read:
R. Kiser, “Beyond Right and Wrong: The Power of Effective Decision Making for Attorneys, and Clients,” Springer Science+Business Media, www.springer.com (2010);
J. MacFarlane, “The New Lawyer: How Settlement is Transforming the Practice of Law,” UBS Press, www.ubcpress.ca.
By: Guy O. Kornblum, Esq.
We all realize that mediation as a dispute resolution mechanism has become part of the litigation process in a big way. It should be factored into your client’s Litigation Management Plan. Few cases are not mediated at some point these days. We all have much to learn about this process. The new LCA ADR Institute is an effort to promote a better understanding of the process. The program at the Fall Meeting in October is a first step in creating a forum for a dialogue among the Fellows about how we can better represent our clients in mediations, and take advantage of what it has to offer as a means of negotiating a resolution of disputes in which our clients are involved.
The idea that parties can meet and discuss, in a confidential setting, alternatives for resolving a dispute – large or small – is welcome because full blown litigation, and even working up a case for trial is an expensive and time consuming process as we all know. Economics alone dictates that we explore resolution at a mediation, which provides an opportunity for a day long or more discussion with a neutral who is devoting his or her time to facilitating a settlement. This a far cry from the eve of trial settlement conferences that we used to experience in the “old days” when judges did not manage their calendars, ADR was not even in its gestational period, and sitting judges had precious little time to learn about a case until you entered the courtroom for trial.
The ADR process – particularly mediation – is consistent with the movement for a more cooperative litigation process in which collaborative efforts are being encouraged. See, e.g. “The Sedona Conference Cooperation Proclamation Process,” The Sedona Conference Working Group Series, published in 2008 (www.thesedonaconference.org). As is stated in the report, “The Sedona Conference launches a coordinated effort to promote cooperation by all parties in the discovery process to achieve the goal of a just, speedy, and inexpensive determination of every action.”
When I started law practice in the mid 1960's, the word “mediation” was not commonly used. I am not sure I heard the word more than a couple of times while in law school. As a young trial lawyer, the common practice was that settlement was not really discussed until a mandatory settlement conference right before trial. Before that, if a case settled, it was because the attorneys did so, or the insurance adjuster jumped in and negotiated “the file” directly with the plaintiff’s lawyer. Often the first real opportunity to negotiate a case was the “Mandatory Settlement Conference,” which later became part of the court rules, and which ordinarily was held quite close to trial. Other than direct negotiations, there was little involvement by the court in settlement talks before then. At that time there were no Case Management Conferences.
Courts were ordinarily not very active in the case until a Pre-trial Conference was held, at which time the court might inquire about what settlement talks have taken place, and if the parties were interested in a judge, other than the trial judge, meeting with them to see if some settlement efforts could result in a resolution. The federal courts were required to provide for ADR procedures in civil actions in the Alternative Dispute Resolution Act of 1988 (28 U.S.C. sec. 651 et seq.). Prior to that, in 1985, California provided for Mandatory Settlement Conferences in Rule 222, California Rules of Court.
The words “alternate dispute resolution” or “ADR” were not in our vocabularies. Private dispute resolution services did not exist. Judges were elected or appointed to the bench and stayed to retirement. They did not leave these careers until that time. There were no jobs as private mediators to lure them away or provide employment after retiring. Frankly, as I look back on this, we were wasting a valuable resource in good settlement judges leaving the bench and essentially retiring from the profession altogether.
Now, the situation is much different. Private dispute resolution services and full time mediators abound. There are excellent training courses for mediators and new rules for governing that practice. Certification for mediators may be around the corner. Standards have been set for mediators in the conduct of a mediation. (See, e.g., Cal. Rules Court 3.850 et seq.) While it seems that there are more mediators than lawyers, the litigation process seems to demand this resource for dispute resolution.
We, as lawyers, must rise to the occasion. We need to do a better job of managing litigation especially in the more complex cases, so that resolution and settlement are part of the planning mechanism. This forces the parties to think about where they are going, what the results might be, and how much it will cost. That is, a “cost/benefit” analysis is part of the initial planning process and evaluation of the case.
One of the very important skills of a true trial lawyer or “litigator” is to know how to leverage a case to the point at which the parties are motivated to discuss settlement. I describe this point as a “plateau for resolution.” That is, it is a point where the parties have an opportunity to see what has occurred, evaluate their respective positions, and then look down the line at what will be done as the case progresses towards trial and a “forced resolution.” Does your client want to proceed? Does it know the risks? Is it aware of the significant costs involved? What is the potential settlement range versus the “net” that is likely to result if the case is tried? Recognition of this plateau and then communicating with the client about the case is an essential ingredient to serving the client’s needs. It is our duty to lead our clients through this process of selecting the manner in which the client wishes to reach a resolution.
Consider how it would be if in every case at the outset, a) the case must be set for a mediation no later than 6 months after filing the complaint, unless good cause is shown why this date should be extended, and b) the parties must file with the court a discovery plan that has the objective of allowing them to conduct sufficient discovery to be prepared to discuss settlement at mediation. The federal courts and some state courts have pieces for this in place, but how would our cases be processed if what I have proposed were a firm rule in the court system, which would require a motion on good cause to alter? The pressure would be on, cases would be worked up quickly, and the parties would have a much earlier dialogue than we likely experience now.
As part of the learning process, I highly recommend you obtain and read:
R. Kiser, “Beyond Right and Wrong: The Power of Effective Decision Making for Attorneys, and Clients,” Springer Science+Business Media, www.springer.com (2010);
J. MacFarlane, “The New Lawyer: How Settlement is Transforming the Practice of Law,” UBS Press, www.ubcpress.ca.
Monday, July 12, 2010
The Modern Approach to Resolving Disputes-- The Case for Mediation
“The odds of a plaintiff's lawyer winning in civil court are two to one against. Think about that for a second. Your odds of surviving a game of Russian roulette are better than winning a case at trial. Twelve times better. So why does anyone do it? They don't. They settle. Out of the 780,000, only 12,000 or 1.5 percent ever reach a verdict. The whole idea of lawsuits is to settle, to compel the other side to settle. And you do that by spending more money than you should, which forces them to spend more money than they should, and whoever comes to their senses first loses. Trials are a corruption of the entire process and only fools who have something to prove end up ensnared in them. Now when I say prove, I don't mean about the case. I mean about themselves.”
Lawyer Jan Schlictman, played by John Travolta, in the movie “A Civil Action.”
Anyone who has been involved in a lawsuit as a dispute resolution mechanism knows what a laborious and often mysterious process it can be. But the process is changing. The public is demanding a user-friendly system that encourages litigants to enter into early discussions about resolution of their dispute and avoid the time, expense and emotional drain of protracted litigation.
It is incumbent upon us as client representatives to promote mediation as a desired alternative to trial, i.e. mediation instead of trial. We need to educate our clients about how this process works and show that there are advantages in this approach to dispute resolution.
The approach to handling a client’s cause and managing litigation has changed. Efforts are in process to develop a more cooperative approach to litigation, particularly during discovery. The Sedona Conference Cooperation Proclamation represents “a coordinated effort to promote cooperation by all parties to the discovery process to achieve the goal of a ‘just, speedy, and inexpensive determination of every action.”
The public has become intolerant of the notion of the trial lawyer as a “warrior” or “combatant.” Lawyers who work in litigation as problem solvers who can penetrate the process and assist in resolving a dispute, not perpetuating it , are what the public wants.
A settlement is the best economic day for a client, considering the present value of money, and the cost of taking a case into the pre-trial and trial states (and possibly through appeal). From the plaintiff’s perspective, the client has the use of funds now rather than the hope of some recovery later. On the plaintiff and defense sides, the costs of litigation often surprise clients, particularly if expert testimony from physicians or technical experts is needed. The fees for these experts are quite high, usually involving several hundred dollars per hour. Considering the amount of time that experts need to prepare, testify at deposition and then appear in court, several thousands of dollars can be incurred quickly by just this aspect of the case.
In my view, settlement is the ultimate victory. It takes the decision making away from a third-party – a judge or jury – and puts it in the hands of the parties. Settlement results only from consent, so a case is settled when the parties have retained control over the outcome and have carved out a result for themselves. It does not happen unless there is agreement.
Studies have shown that the parties to a dispute risk more by going to trial if they walk away from a reasonable opportunity to settle. In of hundreds of cases in which negotiations have been conducted but the parties have not settled the results reveal a party who rejected settlement often does worse at trial.
Mediation has resolution of a dispute as its objective. The parties in a mediation know they have come to resolve their differences. The intermediary or neutral – the mediator – has the sole job of accomplishing that goal. It is a dedicated forum for closure.
Over the last several years, mediation has become the more popular means of resolving disputes. Mediation is available to litigants to achieve settlement. It is often overlooked by lawyers in the beginning stages of litigation, when mediation can lead to an early— and appropriate— settlement. This is a big mistake, as it is at this early stage of litigation that the best deal can be achieved before the expense of protracted litigation.
There is a great deal of confusion among lay persons as to the difference between arbitration and mediation. These are forms of alternative dispute resolution—that is, alternatives to a trial in the courthouse. Court systems are now designed to make sure that parties are advised about these alternatives early and how they can expedite the resolution of a dispute and avoid the risks and expense (not to mention the emotional drain) of full-blown litigation. Many court systems have programs for early resolution, including the federal court in San Francisco, which has been a pioneer in these alternatives for resolving disputes without a trial.
Private mediation is a “supervised negotiation” away from the courthouse, with a trained and experienced mediator who has the skills of getting parties to talk and exchange views in an attempt to resolve their differences. This is in contrast to an arbitration in which the arbitrator actually decides the case. Our clients often do not understand the difference and it is our job to educate them on the mediation alternative to trial.
For example, the client must understand that:
• In mediation, the mediator guides the parties through the negotiation process so that any resolution comes because the parties agree.
• The mediator is not a decision maker, but a facilitator.
• The mediator is chosen by agreement only; a party cannot be forced to accept a mediator of a dispute.
• Mediators work in all aspects of litigation: complex civil cases, personal injury, professional negligence, complex insurance disputes and family law matters, particularly divorces and custody matters.
• A mediation is voluntary and is not binding. A settlement is reached only if the parties agree.
• A mediation can last from a few hours to several days (not necessarily in succession). Often the parties exchange “briefs” on their position before the mediation.
• Most important to note is that a mediation is confidential. By law, what takes place during a mediation cannot be used in the lawsuit as evidence. A trial court or jury does not hear about anything that was discussed during the mediation, nor is the subject of the parties’ respective positions at a mediation a proper subject of testimony at trial.
My experience is that the mediation process works well if certain conditions are met. First, the parties must be prepared to mediate. They must know their case well and have discussed their position with their lawyer and set some realistic goals for settlement discussions. Second, the parties must go to the mediation with a good faith desire to resolve the case. Third, a mediator must be chosen who is the right person for the case – someone whose approach to mediation fits the type of case and the parties involved. For example, if the case is volatile, then someone with a low-key style, using diplomacy more than persuasion, may be the right choice. On the other hand, if the parties are at odds, it may take someone with stature (such as a retired judge of some preeminence) to bring the parties together. And fourth, the mediator must be willing to work, to roll up the sleeves and stay the course until all settlement alternatives are explored. The basic rule is to keep the parties talking. So long as the parties are willing to communicate, there is a chance for a negotiated resolution.
As time goes by, our judicial system will rely more and more on courts and counsel directing litigants to a mediation alternative to litigation. The earlier the better.
Lawyer Jan Schlictman, played by John Travolta, in the movie “A Civil Action.”
Anyone who has been involved in a lawsuit as a dispute resolution mechanism knows what a laborious and often mysterious process it can be. But the process is changing. The public is demanding a user-friendly system that encourages litigants to enter into early discussions about resolution of their dispute and avoid the time, expense and emotional drain of protracted litigation.
It is incumbent upon us as client representatives to promote mediation as a desired alternative to trial, i.e. mediation instead of trial. We need to educate our clients about how this process works and show that there are advantages in this approach to dispute resolution.
The approach to handling a client’s cause and managing litigation has changed. Efforts are in process to develop a more cooperative approach to litigation, particularly during discovery. The Sedona Conference Cooperation Proclamation represents “a coordinated effort to promote cooperation by all parties to the discovery process to achieve the goal of a ‘just, speedy, and inexpensive determination of every action.”
The public has become intolerant of the notion of the trial lawyer as a “warrior” or “combatant.” Lawyers who work in litigation as problem solvers who can penetrate the process and assist in resolving a dispute, not perpetuating it , are what the public wants.
A settlement is the best economic day for a client, considering the present value of money, and the cost of taking a case into the pre-trial and trial states (and possibly through appeal). From the plaintiff’s perspective, the client has the use of funds now rather than the hope of some recovery later. On the plaintiff and defense sides, the costs of litigation often surprise clients, particularly if expert testimony from physicians or technical experts is needed. The fees for these experts are quite high, usually involving several hundred dollars per hour. Considering the amount of time that experts need to prepare, testify at deposition and then appear in court, several thousands of dollars can be incurred quickly by just this aspect of the case.
In my view, settlement is the ultimate victory. It takes the decision making away from a third-party – a judge or jury – and puts it in the hands of the parties. Settlement results only from consent, so a case is settled when the parties have retained control over the outcome and have carved out a result for themselves. It does not happen unless there is agreement.
Studies have shown that the parties to a dispute risk more by going to trial if they walk away from a reasonable opportunity to settle. In of hundreds of cases in which negotiations have been conducted but the parties have not settled the results reveal a party who rejected settlement often does worse at trial.
Mediation has resolution of a dispute as its objective. The parties in a mediation know they have come to resolve their differences. The intermediary or neutral – the mediator – has the sole job of accomplishing that goal. It is a dedicated forum for closure.
Over the last several years, mediation has become the more popular means of resolving disputes. Mediation is available to litigants to achieve settlement. It is often overlooked by lawyers in the beginning stages of litigation, when mediation can lead to an early— and appropriate— settlement. This is a big mistake, as it is at this early stage of litigation that the best deal can be achieved before the expense of protracted litigation.
There is a great deal of confusion among lay persons as to the difference between arbitration and mediation. These are forms of alternative dispute resolution—that is, alternatives to a trial in the courthouse. Court systems are now designed to make sure that parties are advised about these alternatives early and how they can expedite the resolution of a dispute and avoid the risks and expense (not to mention the emotional drain) of full-blown litigation. Many court systems have programs for early resolution, including the federal court in San Francisco, which has been a pioneer in these alternatives for resolving disputes without a trial.
Private mediation is a “supervised negotiation” away from the courthouse, with a trained and experienced mediator who has the skills of getting parties to talk and exchange views in an attempt to resolve their differences. This is in contrast to an arbitration in which the arbitrator actually decides the case. Our clients often do not understand the difference and it is our job to educate them on the mediation alternative to trial.
For example, the client must understand that:
• In mediation, the mediator guides the parties through the negotiation process so that any resolution comes because the parties agree.
• The mediator is not a decision maker, but a facilitator.
• The mediator is chosen by agreement only; a party cannot be forced to accept a mediator of a dispute.
• Mediators work in all aspects of litigation: complex civil cases, personal injury, professional negligence, complex insurance disputes and family law matters, particularly divorces and custody matters.
• A mediation is voluntary and is not binding. A settlement is reached only if the parties agree.
• A mediation can last from a few hours to several days (not necessarily in succession). Often the parties exchange “briefs” on their position before the mediation.
• Most important to note is that a mediation is confidential. By law, what takes place during a mediation cannot be used in the lawsuit as evidence. A trial court or jury does not hear about anything that was discussed during the mediation, nor is the subject of the parties’ respective positions at a mediation a proper subject of testimony at trial.
My experience is that the mediation process works well if certain conditions are met. First, the parties must be prepared to mediate. They must know their case well and have discussed their position with their lawyer and set some realistic goals for settlement discussions. Second, the parties must go to the mediation with a good faith desire to resolve the case. Third, a mediator must be chosen who is the right person for the case – someone whose approach to mediation fits the type of case and the parties involved. For example, if the case is volatile, then someone with a low-key style, using diplomacy more than persuasion, may be the right choice. On the other hand, if the parties are at odds, it may take someone with stature (such as a retired judge of some preeminence) to bring the parties together. And fourth, the mediator must be willing to work, to roll up the sleeves and stay the course until all settlement alternatives are explored. The basic rule is to keep the parties talking. So long as the parties are willing to communicate, there is a chance for a negotiated resolution.
As time goes by, our judicial system will rely more and more on courts and counsel directing litigants to a mediation alternative to litigation. The earlier the better.
Wednesday, May 26, 2010
SOME BASICS OF NEGOTIATING AT A MEDIATION
When I started law practice in the mid-1960s the word 'mediation' was not commonly used. I am not sure I heard the word more than a couple of times while in law school at Hastings College of the Law, University of California. If I did, it meant something different than it means today – some type of evaluative process that was not necessarily related to bargaining to get a settlement.
As a young trial lawyer, the common practice was that settlement was not really discussed until a mandatory settlement conference right before trial. Before that if a case settled it was because the attorneys did so, or the insurance adjuster jumped in and negotiated the file directly with the plaintiff's lawyer.
The words alternate dispute resolution or ADR were not in our vocabularies. Private dispute resolution services did not exist. Judges were elected and appointed to the bench and stayed to retirement. There were no jobs as private mediators to lure them away or provide employment after retiring. Frankly, as I look back on this, we were wasting a valuable resource in good settlement judges leaving the bench and essentially retiring from the profession altogether.
Now, the situation is much different. Private dispute resolution services and full time mediators abound. There are excellent training courses for mediators and new rules for governing that practice. Certification will soon be available and standards will be set. While it seems that there are more mediators than lawyers, the litigation process seems to demand this resource for dispute resolution as an alternative to plodding through the litigation machinery at the courthouse.
The mediation process is an opportunity – a time for you, as the legal representative of your client, to avoid putting your client through the litigation “mill” (aka: process) and get results. I see mediation as a definite positive process, but only if you, as the lawyer, have the right approach. I enjoy trials and arbitrations, court hearings, and appeals. But, after all these years, I get great satisfaction when I am able to get a good settlement early in the case before we incur large litigation expenses. The client has the money to begin the life restructuring process and has avoided the pressures and uncertainties of litigation, which more often than not would only add to the emotional injury already caused by a serious accident, injury or illness which led to the litigation in the first place.
To put this in perspective, we are talking about how to get your case resolved early in the more formalized process of mediation S the voluntary process in which the parties agree to conduct negotiations of a dispute using a neutral intermediary in a non-binding process. The mediator has no power to decide anything. The job of the mediator is to try to get the parties to agree on the terms of resolving this conflict and disputed matter. While you are an advocate in this process, the advocacy skills that are involved are much different than those that would be used in the courtroom.
Also, lawyers – and courts -- are doing a better job of managing litigation, at least in the more complex cases, so that resolution and settlement are part of the planning and case management mechanism. That is good because it forces the parties to thing about where they are going, what the results might be, and how much it will cost. That is, a cost/benefit analysis is part of the initial planning process and evaluation of the case.
In order to get good results in mediation, there are basic principles that I have found should be followed.
Here they are:
Principle 1: Understand What a Mediation Is All About
Principle 2: Prepare Your Client for the Mediation Process
Principle 3: Put the Pressure on the Defendant to Come to the Mediation Table
Principle 4: Get the Information You Need to Mediate
Principle 5: Get to Mediation Early, Not Late
Principle 6: Use Your Experts
Principle 7: Select the Mediator Best Suited for Your Case
Principle 8: Prepare the Mediator
Principle 9: Be the Diplomatic Advocate at the Mediation: Make “Love” Not War
Principle 10: Know the Numbers and When the Best Deal Is on the Table
Effective resolution of disputes should be our goal. Perhaps that is trial, but more often it will be a negotiated result. And, in most of those cases, from what I can see, there is a mediator who will assist the parties to that end.
I encourage all to make sure that all cases are tested in the negotiations arena.
As a young trial lawyer, the common practice was that settlement was not really discussed until a mandatory settlement conference right before trial. Before that if a case settled it was because the attorneys did so, or the insurance adjuster jumped in and negotiated the file directly with the plaintiff's lawyer.
The words alternate dispute resolution or ADR were not in our vocabularies. Private dispute resolution services did not exist. Judges were elected and appointed to the bench and stayed to retirement. There were no jobs as private mediators to lure them away or provide employment after retiring. Frankly, as I look back on this, we were wasting a valuable resource in good settlement judges leaving the bench and essentially retiring from the profession altogether.
Now, the situation is much different. Private dispute resolution services and full time mediators abound. There are excellent training courses for mediators and new rules for governing that practice. Certification will soon be available and standards will be set. While it seems that there are more mediators than lawyers, the litigation process seems to demand this resource for dispute resolution as an alternative to plodding through the litigation machinery at the courthouse.
The mediation process is an opportunity – a time for you, as the legal representative of your client, to avoid putting your client through the litigation “mill” (aka: process) and get results. I see mediation as a definite positive process, but only if you, as the lawyer, have the right approach. I enjoy trials and arbitrations, court hearings, and appeals. But, after all these years, I get great satisfaction when I am able to get a good settlement early in the case before we incur large litigation expenses. The client has the money to begin the life restructuring process and has avoided the pressures and uncertainties of litigation, which more often than not would only add to the emotional injury already caused by a serious accident, injury or illness which led to the litigation in the first place.
To put this in perspective, we are talking about how to get your case resolved early in the more formalized process of mediation S the voluntary process in which the parties agree to conduct negotiations of a dispute using a neutral intermediary in a non-binding process. The mediator has no power to decide anything. The job of the mediator is to try to get the parties to agree on the terms of resolving this conflict and disputed matter. While you are an advocate in this process, the advocacy skills that are involved are much different than those that would be used in the courtroom.
Also, lawyers – and courts -- are doing a better job of managing litigation, at least in the more complex cases, so that resolution and settlement are part of the planning and case management mechanism. That is good because it forces the parties to thing about where they are going, what the results might be, and how much it will cost. That is, a cost/benefit analysis is part of the initial planning process and evaluation of the case.
In order to get good results in mediation, there are basic principles that I have found should be followed.
Here they are:
Principle 1: Understand What a Mediation Is All About
Principle 2: Prepare Your Client for the Mediation Process
Principle 3: Put the Pressure on the Defendant to Come to the Mediation Table
Principle 4: Get the Information You Need to Mediate
Principle 5: Get to Mediation Early, Not Late
Principle 6: Use Your Experts
Principle 7: Select the Mediator Best Suited for Your Case
Principle 8: Prepare the Mediator
Principle 9: Be the Diplomatic Advocate at the Mediation: Make “Love” Not War
Principle 10: Know the Numbers and When the Best Deal Is on the Table
Effective resolution of disputes should be our goal. Perhaps that is trial, but more often it will be a negotiated result. And, in most of those cases, from what I can see, there is a mediator who will assist the parties to that end.
I encourage all to make sure that all cases are tested in the negotiations arena.
HOW HAS THE ECONOMIC DOWNTURN AFFECTED THE MEDIATION PROCESS?
Have our settlement strategies and alternative dispute resolution programs, which are now part of our courts’ case management system, been impacted by the economic downturn? Do the circumstances pose new hurdles to getting cases resolved by mediation?
I have been moderating a series of Webinars on mediation related topics aimed at the trial lawyer and mediation advocate. I have been joined by several colleagues, including my long time friend, Martin Quinn, who is a full time mediator with JAMS in San Francisco. Martin is an outstanding mediator who came to his second career some 10 or so years ago after serving as a prominent litigator in San Francisco with two of its top law firms. Martin has been a mediator in a number of our firm’s cases.
We discussed a number of issues a few weeks ago relating to the impact the recession has had on the settlement process. I realized several observations as a result of our discussion and our dialogue beforehand. These are my views only, and I would not presume to represent Martin Quinn as agreeing with these comments. The information is anecdotal, i.e. it is based on what I have seen and also what I suspect may be the case. I have not done a survey, except informally with many of my colleagues. Here are a few of my observations:
• Has the recession affected how mediations are conducted? From what I hear, it has. Cases are a bit tougher to settle because carriers are cautious about cash. No surprise there as from what I have read, most everyone, even the well to do, are not spending as much and are more cautious in buying. That means that in mediation, a plaintiff has to have the leverage and information to persuade the insurer to pay monies on behalf of its insured now rather than later. Defense costs are a factor as this represents an ongoing expense that can be avoided. Perhaps more emphasis must be placed on this aspect, as well as the exposure.
• Are litigants showing any reluctance to go to mediation? Are they delaying the process? It appears that this has been occurring. Some defendants are not opposed to mediation but want to wait until there is some turn in the economy to ease the uncertainty that a turn around is headed its way. Earlier in the year, defendants were known to stall in agreeing to mediation if not faced with an immediate trial date, saying “maybe late summer or early fall.” So we are almost there; will the defendant be more willing to mediate now?
• Are the parties engaging in more direct negotiations rather than using mediation? I have heard that is the case. My experience is, however, that mediation is still the preferred mechanism for resolving disputes, and I have seen no change in that approach in the cases we have settled this year.
• How has the recession affected a plaintiff’s practice; what am I seeing as to the a) willingness of defendants to go to mediation, and b) defense counsel’s willingness to recommend mediation? I think I have covered this. But I also believe the reluctance is easing a bit. Still, it is important to have your case ready for mediation before approaching the subject and be prepared to use all leverage you can to bring defendants to the mediation table. You also need to do the economic analysis for settlement vs. trial. “Cash is King,” as the saying goes.
• How are litigants approaching the cost of mediation? Are there deals to be cut with mediators? I have not seen any mediators offer or respond to proposals for reduced fees. But I have noted that pre and post-mediation billings are often underbilled or “light.” My colleagues who are mediators, however, tell me that business is business and “deals” are to be made for reduced fees.
• Are the parties cutting back on discovery before mediation to save money, hoping the case will settle? I have not seen this. Indeed, in some cases I have seen defense firms want to hasten certain discovery before the mediation. No comment.
• How has the recession affected the mediation process? Are cases tougher to settle? Does it take longer? See above.
• Impact on multiple defendant cases? Are they tougher to settle? These are always tougher to settle. My experience this year is that the process takes longer with multiple defendants and that it is more difficult to get the defendants to split the settlement “pot” among themselves. Mediators have told me this also.
• What are your suggestions for getting cases to mediation with the economy likely not to show much real, sustained recovery until sometime in 2010? If you are trying to get your case settled early, that may be difficult because you may not have the leverage and the motivation by the defendant and its counsel may not be present. Thus, it may take more work to posture the case for mediation; that is, written discovery, document review and some depositions may need to be taken to gain the advantage and information which will persuade the defendants that now is the time to get the parties to the table. Also, getting a trial date as quickly as possible is important to put pressure on the defendants to settle. That always helps.
I have been moderating a series of Webinars on mediation related topics aimed at the trial lawyer and mediation advocate. I have been joined by several colleagues, including my long time friend, Martin Quinn, who is a full time mediator with JAMS in San Francisco. Martin is an outstanding mediator who came to his second career some 10 or so years ago after serving as a prominent litigator in San Francisco with two of its top law firms. Martin has been a mediator in a number of our firm’s cases.
We discussed a number of issues a few weeks ago relating to the impact the recession has had on the settlement process. I realized several observations as a result of our discussion and our dialogue beforehand. These are my views only, and I would not presume to represent Martin Quinn as agreeing with these comments. The information is anecdotal, i.e. it is based on what I have seen and also what I suspect may be the case. I have not done a survey, except informally with many of my colleagues. Here are a few of my observations:
• Has the recession affected how mediations are conducted? From what I hear, it has. Cases are a bit tougher to settle because carriers are cautious about cash. No surprise there as from what I have read, most everyone, even the well to do, are not spending as much and are more cautious in buying. That means that in mediation, a plaintiff has to have the leverage and information to persuade the insurer to pay monies on behalf of its insured now rather than later. Defense costs are a factor as this represents an ongoing expense that can be avoided. Perhaps more emphasis must be placed on this aspect, as well as the exposure.
• Are litigants showing any reluctance to go to mediation? Are they delaying the process? It appears that this has been occurring. Some defendants are not opposed to mediation but want to wait until there is some turn in the economy to ease the uncertainty that a turn around is headed its way. Earlier in the year, defendants were known to stall in agreeing to mediation if not faced with an immediate trial date, saying “maybe late summer or early fall.” So we are almost there; will the defendant be more willing to mediate now?
• Are the parties engaging in more direct negotiations rather than using mediation? I have heard that is the case. My experience is, however, that mediation is still the preferred mechanism for resolving disputes, and I have seen no change in that approach in the cases we have settled this year.
• How has the recession affected a plaintiff’s practice; what am I seeing as to the a) willingness of defendants to go to mediation, and b) defense counsel’s willingness to recommend mediation? I think I have covered this. But I also believe the reluctance is easing a bit. Still, it is important to have your case ready for mediation before approaching the subject and be prepared to use all leverage you can to bring defendants to the mediation table. You also need to do the economic analysis for settlement vs. trial. “Cash is King,” as the saying goes.
• How are litigants approaching the cost of mediation? Are there deals to be cut with mediators? I have not seen any mediators offer or respond to proposals for reduced fees. But I have noted that pre and post-mediation billings are often underbilled or “light.” My colleagues who are mediators, however, tell me that business is business and “deals” are to be made for reduced fees.
• Are the parties cutting back on discovery before mediation to save money, hoping the case will settle? I have not seen this. Indeed, in some cases I have seen defense firms want to hasten certain discovery before the mediation. No comment.
• How has the recession affected the mediation process? Are cases tougher to settle? Does it take longer? See above.
• Impact on multiple defendant cases? Are they tougher to settle? These are always tougher to settle. My experience this year is that the process takes longer with multiple defendants and that it is more difficult to get the defendants to split the settlement “pot” among themselves. Mediators have told me this also.
• What are your suggestions for getting cases to mediation with the economy likely not to show much real, sustained recovery until sometime in 2010? If you are trying to get your case settled early, that may be difficult because you may not have the leverage and the motivation by the defendant and its counsel may not be present. Thus, it may take more work to posture the case for mediation; that is, written discovery, document review and some depositions may need to be taken to gain the advantage and information which will persuade the defendants that now is the time to get the parties to the table. Also, getting a trial date as quickly as possible is important to put pressure on the defendants to settle. That always helps.
DOES YOUR ADVERSARY AND HIS/HER CLIENT HAVE THE RIGHT ATTITUDE ON MEDIATION DAY?
What do you know about the other side’s willingness to settle the case and interest in real resolution? He/she may simply be interested in getting “free discovery” or in trying to convince you and your client to take less than the case’s “good faith” value.
Obviously if the opposition – either the client or client representative (aka: claims person) or his/her lawyer—is not fully engaged in the process of mediation, the chances for wasting the day are high. To avoid this, find out beforehand the temperature of your opposition. Will he/she encourage a focused mediation?
Here are some ways to get a read of the folks on the other side:
Direct Contact: There is nothing wrong with a face-to-face discussion or a phone call to discuss how best to approach the mediation. Too often we rely on email to conduct our case discussions. Email is fine for routine matters and confirming dates for case activity and calendar items. I, however, am a bit “old school”; I like to talk to counsel personally face-to-face or by phone to gauge the level of interest. There may be some puffing in the exchange, but if you have a professional relationship with your adversary, you should be able to break through and determine if there is a real interest in settlement.
Talk to the Mediator: Most mediators I know want to settle cases. It is how they gain a reputation as a “closer.” If you have doubts about the sincerity of your opposition in reaching a reasonable settlement, and direct contact is not in the cards, talk to the mediator. I have found mediators willing to contact opposing counsel and have a private and preliminary discussion to test the waters. It may be that scheduling the mediation is an issue, as your opposition may have other work, may be preoccupied with other matters, or simply cannot reach his/her client. Here, a later date than you had hoped for may be preferable.
Talk to Others: Find out who has mediated with your adversary previously and call them. I often use a listserv for the San Francisco Trial Lawyers Association (but make sure your adversary is not tapped into it) or I call colleagues to learn if anyone has some background on my opposing attorney and his/her client.
Read the “Tea Leaves”: Sometimes you can discern an adversary’s interest in a mediated result by reading the papers in your case. If there is hostility, mediation may calm the waters and focus the parties on resolution rather than further fighting. Or it may reveal an underlying resistance that you have to overcome. Briefs or discovery responses can reveal hostility, bitterness, anger or other emotions that serve as a barrier to a fruitful mediation.
Put Some Pressure On: Don’t underestimate the power of pressure – significant written discovery requiring your opposition to reveal its case, focused requests for admission that require the other side to admit or deny key facts (and reveal the facts about any denial), or deposition notices can gain your adversary’s attention. These tactics can result in an enhanced interest in negotiations. Sustained pressure can get a case to mediation quickly, but that pressure must be consistent. If you serve discovery, be prepared to “meet and confer” and file motions to compel if there is unjustified resistance or meritless objections or evasive responses.
Write a Letter or Email: Face-to-face or direct contact may be too aggressive. If so, an email or letter inquiring about a real interest in negotiating the case is worth a try.
Past Experience: Past experience with the defendant or opposing counsel may be telling. We have had cases against various insurance companies on more than one occasion. I have a good sense for how some of them approach litigation— some are willing to explore resolution at an early stage, others are not. Often they use the same lawyers, so past experience in those cases can give you a good read on the prospects for a successful mediation and the timing for such. The timing may be early, after some discovery (such as your client’s deposition has been taken), or after a limited exchange of information.
Check Out Other Mediations Involving Counsel or Parties: I have mediator friends who have experience with insurance company defendants. They often discuss what they’ve heard about those companies’ attitudes and approaches to mediation, without revealing confidences. I frequently talk to colleagues about other law firms and those firms’ dealings with certain clients we see in our financial litigation, wrongful death and injury cases in which insurance companies are heavily involved (and other litigation in which there are repeat defendants).
These are just a few thoughts on assessing how your adversary and his/her client may approach mediation. It is a good idea to assess and discuss this with your client before committing to the process.
Obviously if the opposition – either the client or client representative (aka: claims person) or his/her lawyer—is not fully engaged in the process of mediation, the chances for wasting the day are high. To avoid this, find out beforehand the temperature of your opposition. Will he/she encourage a focused mediation?
Here are some ways to get a read of the folks on the other side:
Direct Contact: There is nothing wrong with a face-to-face discussion or a phone call to discuss how best to approach the mediation. Too often we rely on email to conduct our case discussions. Email is fine for routine matters and confirming dates for case activity and calendar items. I, however, am a bit “old school”; I like to talk to counsel personally face-to-face or by phone to gauge the level of interest. There may be some puffing in the exchange, but if you have a professional relationship with your adversary, you should be able to break through and determine if there is a real interest in settlement.
Talk to the Mediator: Most mediators I know want to settle cases. It is how they gain a reputation as a “closer.” If you have doubts about the sincerity of your opposition in reaching a reasonable settlement, and direct contact is not in the cards, talk to the mediator. I have found mediators willing to contact opposing counsel and have a private and preliminary discussion to test the waters. It may be that scheduling the mediation is an issue, as your opposition may have other work, may be preoccupied with other matters, or simply cannot reach his/her client. Here, a later date than you had hoped for may be preferable.
Talk to Others: Find out who has mediated with your adversary previously and call them. I often use a listserv for the San Francisco Trial Lawyers Association (but make sure your adversary is not tapped into it) or I call colleagues to learn if anyone has some background on my opposing attorney and his/her client.
Read the “Tea Leaves”: Sometimes you can discern an adversary’s interest in a mediated result by reading the papers in your case. If there is hostility, mediation may calm the waters and focus the parties on resolution rather than further fighting. Or it may reveal an underlying resistance that you have to overcome. Briefs or discovery responses can reveal hostility, bitterness, anger or other emotions that serve as a barrier to a fruitful mediation.
Put Some Pressure On: Don’t underestimate the power of pressure – significant written discovery requiring your opposition to reveal its case, focused requests for admission that require the other side to admit or deny key facts (and reveal the facts about any denial), or deposition notices can gain your adversary’s attention. These tactics can result in an enhanced interest in negotiations. Sustained pressure can get a case to mediation quickly, but that pressure must be consistent. If you serve discovery, be prepared to “meet and confer” and file motions to compel if there is unjustified resistance or meritless objections or evasive responses.
Write a Letter or Email: Face-to-face or direct contact may be too aggressive. If so, an email or letter inquiring about a real interest in negotiating the case is worth a try.
Past Experience: Past experience with the defendant or opposing counsel may be telling. We have had cases against various insurance companies on more than one occasion. I have a good sense for how some of them approach litigation— some are willing to explore resolution at an early stage, others are not. Often they use the same lawyers, so past experience in those cases can give you a good read on the prospects for a successful mediation and the timing for such. The timing may be early, after some discovery (such as your client’s deposition has been taken), or after a limited exchange of information.
Check Out Other Mediations Involving Counsel or Parties: I have mediator friends who have experience with insurance company defendants. They often discuss what they’ve heard about those companies’ attitudes and approaches to mediation, without revealing confidences. I frequently talk to colleagues about other law firms and those firms’ dealings with certain clients we see in our financial litigation, wrongful death and injury cases in which insurance companies are heavily involved (and other litigation in which there are repeat defendants).
These are just a few thoughts on assessing how your adversary and his/her client may approach mediation. It is a good idea to assess and discuss this with your client before committing to the process.
Tuesday, April 6, 2010
How does the subject matter of a mediation affect the process? Does it make a difference in how you approach the mediation, select the mediator, and conduct the mediation? I think it does in a number of ways. Here are my thoughts:
Selection of the Mediator
This may be the most important factor relating to subject matter. Mediators with subject matter experience likely have an edge over those who do not. I am not saying that someone who is unfamiliar with the subject matter or law that governs the case cannot be effective; however, in some cases it really helps to have a mediator who knows how an industry works (e.g., insurance) or the law (e.g., intellectual property or employment disputes). I have been involved in many mediations (sometimes I represent the client in insurance issues but there is an underlying case that is the subject matter of the mediation) and it is really helpful to have a mediator who has already developed a body of knowledge and insight into the area of law which is at issue. It can give the parties – all sides – an edge towards resolution to have a mediator with that special knowledge.
Economic v. Emotional Claims
Cases with simply economic damages – a business dispute for example – require a different approach from those which involve emotional claims. Some mediators are very good at evaluating business losses, but lack the ability to connect with wrongful death or serious injury cases or other cases in which there is a high emotional component. I have found that some mediators just do not have sensitivity to emotional claims, while others seem to sense those that have real value and are able to accept monetary evaluations that reflect how a jury might respond to these claims.
Of course, the type of emotional claim is a consideration. For example, a wrongful death claim involving a young widow with three children or the loss of a long-standing spouse; both require serious thought on how to value those claims. And in my insurance bad faith cases there are often serious emotional claims based on an insurer’s refusal to pay, delay in paying, or attempting to “low ball” a claim involving serious injury or the loss of a home in a personal property damage claim. A mediator in these cases must be able to relate to these claims and deal with their compensation as an element of the damages component of the case being mediated.
Business Claims
Business cases require a mediator who has a business sense. Judges and lawyers who have been involved in business litigation while practicing or who have been heavily involved in the business side of the practice normally have a better insight into the these cases. I am not saying that those who do not cannot mediate business disputes, but it makes sense in complex business cases to select a mediator who has a head start on getting educated about the case.
Partnership and Closely Held Corporations and Family Business Matters
I do some mediating from time to time. It is not my regular diet as I still enjoy the advocacy of litigation and the challenge of representing clients. One of my most difficult assignments as a mediator, however, was a family business matter involving a closely held corporation. The sister had founded the company and the brother had come in after some time to run it. The sister was the marketing and sales force, while the brother controlled the financing and administration. The father was also a numbers person and worked with the brother. As time went on, the brother and sister did not see eye to eye about much; they could hardly be in the same room. The dispute threatened to sink the company, and outside investors were involved. I was asked to mediate. What a difficult case. Despite my efforts, I could not bring the brother and sister to a center point. The father refused to help. After premediation exchanges and a full day of mediation, I had to declare an impasse.
My sense is that I would have done better and had a greater chance of success if I had involved another mediator who had experience in family disputes, and perhaps even a non-lawyer. There are professionals out there who specialize in working with families who are wealthy and have ongoing business relationships or who are involved in ongoing businesses in which there are intrapersonal issues that impact the family business.
I tried to get these folks to entertain the idea of involving someone like I have described, but they were so far into the personal issues that it was too late. Had I recognized the severe schism between the brother and sister before the mediation, I may have been able to involve another professional who could help in getting the parties to see the issues and coming to grips with a solution that would save the business.
Next time!
Class Actions
Here, experience counts. There are special issues which arise in these cases, including damages assessments and evaluation of the class claims, administrative issues pertaining to the evaluation of the individual claims of class members and means of distribution, apportioning the payments among various defendants, and attorneys’ fees, just to name a few. While I have not been involved in the mediation of a large class claim, I do know from my colleagues that there are some excellent mediators who have had considerable experience with mediating these disputes. So it seems appropriate to search these mediators out and consider them for class actions.
Injury Cases with Multiple Defendants
I find that injury cases with multiple defendants need a special kind of mediator – one who is skilled in dealing with typical plaintiff/defendant conflicts, as well as disputes between defendants and their carriers. Often there will be coverage issues with some of the insurers for the defendants, so those may be involved as well. Thus, you may have at least three layers of disputes: a) issues pertaining to the value of the plaintiff’s claim, b) issues pertaining to the apportionment of the loss among the defendants based on tort or contract concepts (tort as it pertains to the apportionment of the loss and contract based on contractual obligations among the defendants and indemnity provisions), and c) disputes between a defendant and its insurer.
Mediators in these cases must be able to stay organized, keep dialogue going at all levels, and create a plan for bringing all the disputes to a head and resolving them at all levels. These are very challenging cases, and you need a mediator who is willing to roll of up his or her sleeves and stay with the process. Sometimes, the ultimate resolution may not happen all at once. For example, there can be an agreement to resolve the main case, but disputes remain among the defendants and their carriers. A creative mediator will know how to manage this type of mediation even if the complete resolution is done piecemeal.
Injury Claims with Complex Liens
Lien claims can provide big hurdles to the resolution of an injury case. Workers’ compensation insurers, health insurers, and the government all can stick their noses into a case and stymie the resolution process. I have found that it helps if before the mediation, as plaintiff’s counsel, to have contacted any lien claimants, advised them of the mediation, invited them to attend, and discussed numbers for resolving those lien claims as soon as it is apparent that the parties are headed for a mediation. Once that is done, you should have a discussion with the mediator before the first mediation session about your progress in trying to resolve these claims, and alert the mediator as to the status of your negotiations. If there are anticipated hurdles then the mediator may want to contact that lien claimant or its counsel before the mediation to identify the issues and prepare him or herself for dealing with them at the mediation session.
Selection of the Mediator
This may be the most important factor relating to subject matter. Mediators with subject matter experience likely have an edge over those who do not. I am not saying that someone who is unfamiliar with the subject matter or law that governs the case cannot be effective; however, in some cases it really helps to have a mediator who knows how an industry works (e.g., insurance) or the law (e.g., intellectual property or employment disputes). I have been involved in many mediations (sometimes I represent the client in insurance issues but there is an underlying case that is the subject matter of the mediation) and it is really helpful to have a mediator who has already developed a body of knowledge and insight into the area of law which is at issue. It can give the parties – all sides – an edge towards resolution to have a mediator with that special knowledge.
Economic v. Emotional Claims
Cases with simply economic damages – a business dispute for example – require a different approach from those which involve emotional claims. Some mediators are very good at evaluating business losses, but lack the ability to connect with wrongful death or serious injury cases or other cases in which there is a high emotional component. I have found that some mediators just do not have sensitivity to emotional claims, while others seem to sense those that have real value and are able to accept monetary evaluations that reflect how a jury might respond to these claims.
Of course, the type of emotional claim is a consideration. For example, a wrongful death claim involving a young widow with three children or the loss of a long-standing spouse; both require serious thought on how to value those claims. And in my insurance bad faith cases there are often serious emotional claims based on an insurer’s refusal to pay, delay in paying, or attempting to “low ball” a claim involving serious injury or the loss of a home in a personal property damage claim. A mediator in these cases must be able to relate to these claims and deal with their compensation as an element of the damages component of the case being mediated.
Business Claims
Business cases require a mediator who has a business sense. Judges and lawyers who have been involved in business litigation while practicing or who have been heavily involved in the business side of the practice normally have a better insight into the these cases. I am not saying that those who do not cannot mediate business disputes, but it makes sense in complex business cases to select a mediator who has a head start on getting educated about the case.
Partnership and Closely Held Corporations and Family Business Matters
I do some mediating from time to time. It is not my regular diet as I still enjoy the advocacy of litigation and the challenge of representing clients. One of my most difficult assignments as a mediator, however, was a family business matter involving a closely held corporation. The sister had founded the company and the brother had come in after some time to run it. The sister was the marketing and sales force, while the brother controlled the financing and administration. The father was also a numbers person and worked with the brother. As time went on, the brother and sister did not see eye to eye about much; they could hardly be in the same room. The dispute threatened to sink the company, and outside investors were involved. I was asked to mediate. What a difficult case. Despite my efforts, I could not bring the brother and sister to a center point. The father refused to help. After premediation exchanges and a full day of mediation, I had to declare an impasse.
My sense is that I would have done better and had a greater chance of success if I had involved another mediator who had experience in family disputes, and perhaps even a non-lawyer. There are professionals out there who specialize in working with families who are wealthy and have ongoing business relationships or who are involved in ongoing businesses in which there are intrapersonal issues that impact the family business.
I tried to get these folks to entertain the idea of involving someone like I have described, but they were so far into the personal issues that it was too late. Had I recognized the severe schism between the brother and sister before the mediation, I may have been able to involve another professional who could help in getting the parties to see the issues and coming to grips with a solution that would save the business.
Next time!
Class Actions
Here, experience counts. There are special issues which arise in these cases, including damages assessments and evaluation of the class claims, administrative issues pertaining to the evaluation of the individual claims of class members and means of distribution, apportioning the payments among various defendants, and attorneys’ fees, just to name a few. While I have not been involved in the mediation of a large class claim, I do know from my colleagues that there are some excellent mediators who have had considerable experience with mediating these disputes. So it seems appropriate to search these mediators out and consider them for class actions.
Injury Cases with Multiple Defendants
I find that injury cases with multiple defendants need a special kind of mediator – one who is skilled in dealing with typical plaintiff/defendant conflicts, as well as disputes between defendants and their carriers. Often there will be coverage issues with some of the insurers for the defendants, so those may be involved as well. Thus, you may have at least three layers of disputes: a) issues pertaining to the value of the plaintiff’s claim, b) issues pertaining to the apportionment of the loss among the defendants based on tort or contract concepts (tort as it pertains to the apportionment of the loss and contract based on contractual obligations among the defendants and indemnity provisions), and c) disputes between a defendant and its insurer.
Mediators in these cases must be able to stay organized, keep dialogue going at all levels, and create a plan for bringing all the disputes to a head and resolving them at all levels. These are very challenging cases, and you need a mediator who is willing to roll of up his or her sleeves and stay with the process. Sometimes, the ultimate resolution may not happen all at once. For example, there can be an agreement to resolve the main case, but disputes remain among the defendants and their carriers. A creative mediator will know how to manage this type of mediation even if the complete resolution is done piecemeal.
Injury Claims with Complex Liens
Lien claims can provide big hurdles to the resolution of an injury case. Workers’ compensation insurers, health insurers, and the government all can stick their noses into a case and stymie the resolution process. I have found that it helps if before the mediation, as plaintiff’s counsel, to have contacted any lien claimants, advised them of the mediation, invited them to attend, and discussed numbers for resolving those lien claims as soon as it is apparent that the parties are headed for a mediation. Once that is done, you should have a discussion with the mediator before the first mediation session about your progress in trying to resolve these claims, and alert the mediator as to the status of your negotiations. If there are anticipated hurdles then the mediator may want to contact that lien claimant or its counsel before the mediation to identify the issues and prepare him or herself for dealing with them at the mediation session.
Friday, March 12, 2010
What do you know about the other side’s willingness to settle the case and interest in real resolution? He/she may simply be interested in getting “free discovery” or in trying to convince you and your client to take less than the case’s “good faith” value.
Obviously if the opposition – either the client or client representative (aka: claims person) or his/her lawyer—is not fully engaged in the process of mediation, the chances for wasting the day are high. To avoid this, find out beforehand the temperature of your opposition. Will he/she encourage a focused mediation?
Here are some ways to get a read of the folks on the other side:
Direct Contact: There is nothing wrong with a face-to-face discussion or a phone call to discuss how best to approach the mediation. Too often we rely on email to conduct our case discussions. Email is fine for routine matters and confirming dates for case activity and calendar items. I, however, am a bit “old school”; I like to talk to counsel personally face-to-face or by phone to gauge the level of interest. There may be some puffing in the exchange, but if you have a professional relationship with your adversary, you should be able to break through and determine if there is a real interest in settlement.
Talk to the Mediator: Most mediators I know want to settle cases. It is how they gain a reputation as a “closer.” If you have doubts about the sincerity of your opposition in reaching a reasonable settlement, and direct contact is not in the cards, talk to the mediator. I have found mediators willing to contact opposing counsel and have a private and preliminary discussion to test the waters. It may be that scheduling the mediation is an issue, as your opposition may have other work, may be preoccupied with other matters, or simply cannot reach his/her client. Here, a later date than you had hoped for may be preferable.
Talk to Others: Find out who has mediated with your adversary previously and call them. I often use a listserv for the San Francisco Trial Lawyers Association (but make sure your adversary is not tapped into it) or I call colleagues to learn if anyone has some background on my opposing attorney and his/her client.
Read the “Tea Leaves”: Sometimes you can discern an adversary’s interest in a mediated result by reading the papers in your case. If there is hostility, mediation may calm the waters and focus the parties on resolution rather than further fighting. Or it may reveal an underlying resistance that you have to overcome. Briefs or discovery responses can reveal hostility, bitterness, anger or other emotions that serve as a barrier to a fruitful mediation.
Put Some Pressure On: Don’t underestimate the power of pressure – significant written discovery requiring your opposition to reveal its case, focused requests for admission that require the other side to admit or deny key facts (and reveal the facts about any denial), or deposition notices can gain your adversary’s attention. These tactics can result in an enhanced interest in negotiations. Sustained pressure can get a case to mediation quickly, but that pressure must be consistent. If you serve discovery, be prepared to “meet and confer” and file motions to compel if there is unjustified resistance or meritless objections or evasive responses.
Write a Letter or Email: Face-to-face or direct contact may be too aggressive. If so, an email or letter inquiring about a real interest in negotiating the case is worth a try.
Past Experience: Past experience with the defendant or opposing counsel may be telling. We have had cases against various insurance companies on more than one occasion. I have a good sense for how some of them approach litigation— some are willing to explore resolution at an early stage, others are not. Often they use the same lawyers, so past experience in those cases can give you a good read on the prospects for a successful mediation and the timing for such. The timing may be early, after some discovery (such as your client’s deposition has been taken), or after a limited exchange of information.
Check Out Other Mediations Involving Counsel or Parties: I have mediator friends who have experience with insurance company defendants. They often discuss what they’ve heard about those companies’ attitudes and approaches to mediation, without revealing confidences. I frequently talk to colleagues about other law firms and those firms’ dealings with certain clients we see in our financial litigation, wrongful death and injury cases in which insurance companies are heavily involved (and other litigation in which there are repeat defendants).
These are just a few thoughts on assessing how your adversary and his/her client may approach mediation. It is a good idea to assess and discuss this with your client before committing to the process.
Obviously if the opposition – either the client or client representative (aka: claims person) or his/her lawyer—is not fully engaged in the process of mediation, the chances for wasting the day are high. To avoid this, find out beforehand the temperature of your opposition. Will he/she encourage a focused mediation?
Here are some ways to get a read of the folks on the other side:
Direct Contact: There is nothing wrong with a face-to-face discussion or a phone call to discuss how best to approach the mediation. Too often we rely on email to conduct our case discussions. Email is fine for routine matters and confirming dates for case activity and calendar items. I, however, am a bit “old school”; I like to talk to counsel personally face-to-face or by phone to gauge the level of interest. There may be some puffing in the exchange, but if you have a professional relationship with your adversary, you should be able to break through and determine if there is a real interest in settlement.
Talk to the Mediator: Most mediators I know want to settle cases. It is how they gain a reputation as a “closer.” If you have doubts about the sincerity of your opposition in reaching a reasonable settlement, and direct contact is not in the cards, talk to the mediator. I have found mediators willing to contact opposing counsel and have a private and preliminary discussion to test the waters. It may be that scheduling the mediation is an issue, as your opposition may have other work, may be preoccupied with other matters, or simply cannot reach his/her client. Here, a later date than you had hoped for may be preferable.
Talk to Others: Find out who has mediated with your adversary previously and call them. I often use a listserv for the San Francisco Trial Lawyers Association (but make sure your adversary is not tapped into it) or I call colleagues to learn if anyone has some background on my opposing attorney and his/her client.
Read the “Tea Leaves”: Sometimes you can discern an adversary’s interest in a mediated result by reading the papers in your case. If there is hostility, mediation may calm the waters and focus the parties on resolution rather than further fighting. Or it may reveal an underlying resistance that you have to overcome. Briefs or discovery responses can reveal hostility, bitterness, anger or other emotions that serve as a barrier to a fruitful mediation.
Put Some Pressure On: Don’t underestimate the power of pressure – significant written discovery requiring your opposition to reveal its case, focused requests for admission that require the other side to admit or deny key facts (and reveal the facts about any denial), or deposition notices can gain your adversary’s attention. These tactics can result in an enhanced interest in negotiations. Sustained pressure can get a case to mediation quickly, but that pressure must be consistent. If you serve discovery, be prepared to “meet and confer” and file motions to compel if there is unjustified resistance or meritless objections or evasive responses.
Write a Letter or Email: Face-to-face or direct contact may be too aggressive. If so, an email or letter inquiring about a real interest in negotiating the case is worth a try.
Past Experience: Past experience with the defendant or opposing counsel may be telling. We have had cases against various insurance companies on more than one occasion. I have a good sense for how some of them approach litigation— some are willing to explore resolution at an early stage, others are not. Often they use the same lawyers, so past experience in those cases can give you a good read on the prospects for a successful mediation and the timing for such. The timing may be early, after some discovery (such as your client’s deposition has been taken), or after a limited exchange of information.
Check Out Other Mediations Involving Counsel or Parties: I have mediator friends who have experience with insurance company defendants. They often discuss what they’ve heard about those companies’ attitudes and approaches to mediation, without revealing confidences. I frequently talk to colleagues about other law firms and those firms’ dealings with certain clients we see in our financial litigation, wrongful death and injury cases in which insurance companies are heavily involved (and other litigation in which there are repeat defendants).
These are just a few thoughts on assessing how your adversary and his/her client may approach mediation. It is a good idea to assess and discuss this with your client before committing to the process.
DO YOU HAVE THE RIGHT ATTITUDE ON MEDIATION DAY?
Recently I was contacted by a representative of a local political group that heard some comments I made at a recent luncheon about my frustration with local politics and our City’s government. There seems to be no effort for consensus building and coming to grips with differences of opinion to implement solutions. Each member of our Board of Supervisors seems committed to a particular agenda, with no interest in resolving differences and creatively finding common ground.
The conversation reminded me about how lawyers representing clients in mediation must have a different attitude from that which they carry into the courtroom. As trial lawyers and litigators we emphasize advocacy, putting the right spin on our client’s case to prevail on the issues presented and ultimately obtain the best result in an adversarial environment.
That is not the right attitude for mediation. I have stressed in my writings on this subject the three “C’s” essential to a positive mediation day: Credibility, Confidentiality and Communication. While they are essential you, and your client, need to adopt a different attitude as well – one that fosters the common ground that the San Francisco political leaders seem unable to achieve. In my experience, the “mediation process” begins when the client first meets with our lawyers and staff to discuss the case. It is important that the client understand the difference between advocacy in the courtroom, where we fight hard for our client (taking strong positions on the issues) and the mediation conference room where a less adversarial, and more diplomatic demeanor, is appropriate (while not giving up on the strength of our clients’ cause).
Here are some suggestions:
1. Make sure the client understands the differences of courtroom advocacy and the approach to mediation, where we are trying to get the defendants to pay money to resolve the case. This is the figurative “more with honey” approach.
2. Normally I avoid an opening statement – certainly one that is adversarial. Any initial comments are informational. I say to the defendants: “Here is what you need to hear about our case to evaluate it” or “Here is some additional information about this case that might help you.” No finger pointing, hostility or standing on a soap box. Some lawyers have hostile body language that only raises the room temperature; not good and it sends a bad message to the client.
3. I use the mediator as my advocate. I try to get the mediator to make any adversarial points and be the “Devil’s Advocate” or, perhaps better, the “Angel’s Advocate.” Let the mediator do his/her work by questioning your opposition about its position in the case.
4. I look for deal points we can agree on early in the negotiations to try to move the case to center. No matter how small, if there are points of agreement bring them to the surface early, identify them and paste them into the settlement document that you are crafting (in your mind) as you proceed. Four or five agreed-upon points gets you closer to the final resolution and sets the tone.
5. Make sure the negotiations don’t get sidetracked on a major point of contention. If there is a major sticking point, try to work through it and get as much agreed upon as possible. Be prepared to compromise if the issue is a major one and you know the issue could increase the risk of loss or reduce the client’s recovery.
It is much about attitude. Once the right attitude is embraced by all concerned, the approach focuses on resolution and compromise— and makes settlement more likely.
The conversation reminded me about how lawyers representing clients in mediation must have a different attitude from that which they carry into the courtroom. As trial lawyers and litigators we emphasize advocacy, putting the right spin on our client’s case to prevail on the issues presented and ultimately obtain the best result in an adversarial environment.
That is not the right attitude for mediation. I have stressed in my writings on this subject the three “C’s” essential to a positive mediation day: Credibility, Confidentiality and Communication. While they are essential you, and your client, need to adopt a different attitude as well – one that fosters the common ground that the San Francisco political leaders seem unable to achieve. In my experience, the “mediation process” begins when the client first meets with our lawyers and staff to discuss the case. It is important that the client understand the difference between advocacy in the courtroom, where we fight hard for our client (taking strong positions on the issues) and the mediation conference room where a less adversarial, and more diplomatic demeanor, is appropriate (while not giving up on the strength of our clients’ cause).
Here are some suggestions:
1. Make sure the client understands the differences of courtroom advocacy and the approach to mediation, where we are trying to get the defendants to pay money to resolve the case. This is the figurative “more with honey” approach.
2. Normally I avoid an opening statement – certainly one that is adversarial. Any initial comments are informational. I say to the defendants: “Here is what you need to hear about our case to evaluate it” or “Here is some additional information about this case that might help you.” No finger pointing, hostility or standing on a soap box. Some lawyers have hostile body language that only raises the room temperature; not good and it sends a bad message to the client.
3. I use the mediator as my advocate. I try to get the mediator to make any adversarial points and be the “Devil’s Advocate” or, perhaps better, the “Angel’s Advocate.” Let the mediator do his/her work by questioning your opposition about its position in the case.
4. I look for deal points we can agree on early in the negotiations to try to move the case to center. No matter how small, if there are points of agreement bring them to the surface early, identify them and paste them into the settlement document that you are crafting (in your mind) as you proceed. Four or five agreed-upon points gets you closer to the final resolution and sets the tone.
5. Make sure the negotiations don’t get sidetracked on a major point of contention. If there is a major sticking point, try to work through it and get as much agreed upon as possible. Be prepared to compromise if the issue is a major one and you know the issue could increase the risk of loss or reduce the client’s recovery.
It is much about attitude. Once the right attitude is embraced by all concerned, the approach focuses on resolution and compromise— and makes settlement more likely.
Monday, December 14, 2009
How the Subject Matter of a Mediation Affects the Process
How does the subject matter of a mediation affect the process? Does it make a difference in how you approach the mediation, select the mediator, and conduct the mediation? I think it does in a number of ways. Here are my thoughts.
Selection of the Mediator
This may be the most important factor relating to subject matter. Mediators with subject matter experience likely have an edge over those who do not. I am not saying that someone who is unfamiliar with the subject matter or law that governs the case cannot be effective; however, in some cases it really helps to have a mediator who knows how an industry works (e.g., insurance) or the law (e.g., intellectual property or employment disputes). I have been involved in many mediations (sometimes I represent the client in insurance issues but there is an underlying case that is the subject matter of the mediation) and it is really helpful to have a mediator who has already developed a body of knowledge and insight into the area of law which is at issue. It can give the parties – all sides – an edge towards resolution to have a mediator with that special knowledge.
Economic v. Emotional Claims
Cases with simply economic damages – a business dispute for example – require a different approach from those which involve emotional claims. Some mediators are very good at evaluating business losses, but lack the ability to connect with wrongful death or serious injury cases or other cases in which there is a high emotional component. I have found that some mediators just do not have sensitivity to emotional claims, while others seem to sense those that have real value and are able to accept monetary evaluations that reflect how a jury might respond to these claims.
Of course, the type of emotional claim is a consideration. For example, a wrongful death claim involving a young widow with three children or the loss of a long-standing spouse; both require serious thought on how to value those claims. And in my insurance bad faith cases there are often serious emotional claims based on an insurer’s refusal to pay, delay in paying, or attempting to “low ball” a claim involving serious injury or the loss of a home in a personal property damage claim. A mediator in these cases must be able to relate to these claims and deal with their compensation as an element of the damages component of the case being mediated.
Business Claims
Business cases require a mediator who has a business sense. Judges and lawyers who have been involved in business litigation while practicing or who have been heavily involved in the business side of the practice normally have a better insight into the these cases. I am not saying that those who do not cannot mediate business disputes, but it makes sense in complex business cases to select a mediator who has a head start on getting educated about the case.
Partnership and Closely Held Corporations and Family Business Matters
I do some mediating from time to time. It is not my regular diet as I still enjoy the advocacy of litigation and the challenge of representing clients. One of my most difficult assignments as a mediator, however, was a family business matter involving a closely held corporation. The sister had founded the company and the brother had come in after some time to run it. The sister was the marketing and sales force, while the brother controlled the financing and administration. The father was also a numbers person and worked with the brother. As time went on, the brother and sister did not see eye to eye about much; they could hardly be in the same room. The dispute threatened to sink the company, and outside investors were involved. I was asked to mediate. What a difficult case. Despite my efforts, I could not bring the brother and sister to a center point. The father refused to help. After premediation exchanges and a full day of mediation, I had to declare an impasse.
My sense is that I would have done better and had a greater chance of success if I had involved another mediator who had experience in family disputes, and perhaps even a non-lawyer. There are professionals out there who specialize in working with families who are wealthy and have ongoing business relationships or who are involved in ongoing businesses in which there are intrapersonal issues that impact the family business.
I tried to get these folks to entertain the idea of involving someone like I have described, but they were so far into the personal issues that it was too late. Had I recognized the severe schism between the brother and sister before the mediation, I may have been able to involve another professional who could help in getting the parties to see the issues and coming to grips with a solution that would save the business. Next time!
Class Actions
Here, experience counts. There are special issues which arise in these cases, including damages assessments and evaluation of the class claims, administrative issues pertaining to the evaluation of the individual claims of class members and means of distribution, apportioning the payments among various defendants, and attorneys’ fees, just to name a few. While I have not been involved in the mediation of a large class claim, I do know from my colleagues that there are some excellent mediators who have had considerable experience with mediating these disputes. So it seems appropriate to search these mediators out and consider them for class actions.
Injury Cases with Multiple Defendants
I find that injury cases with multiple defendants need a special kind of mediator – one who is skilled in dealing with typical plaintiff/defendant conflicts, as well as disputes between defendants and their carriers. Often there will be coverage issues with some of the insurers for the defendants, so those may be involved as well. Thus, you may have at least three layers of disputes: a) issues pertaining to the value of the plaintiff’s claim, b) issues pertaining to the apportionment of the loss among the defendants based on tort or contract concepts (tort as it pertains to the apportionment of the loss and contract based on contractual obligations among the defendants and indemnity provisions), and c) disputes between a defendant and its insurer.
Mediators in these cases must be able to stay organized, keep dialogue going at all levels, and create a plan for bringing all the disputes to a head and resolving them at all levels. These are very challenging cases, and you need a mediator who is willing to roll of up his or her sleeves and stay with the process. Sometimes, the ultimate resolution may not happen all at once. For example, there can be an agreement to resolve the main case, but disputes remain among the defendants and their carriers. A creative mediator will know how to manage this type of mediation even if the complete resolution is done piecemeal.
Injury Claims with Complex Liens
Lien claims can provide big hurdles to the resolution of an injury case. Workers’ compensation insurers, health insurers, and the government all can stick their noses into a case and stymie the resolution process. I have found that it helps if before the mediation, as plaintiff’s counsel, to have contacted any lien claimants, advised them of the mediation, invited them to attend, and discussed numbers for resolving those lien claims as soon as it is apparent that the parties are headed for a mediation. Once that is done, you should have a discussion with the mediator before the first mediation session about your progress in trying to resolve these claims, and alert the mediator as to the status of your negotiations. If there are anticipated hurdles then the mediator may want to contact that lien claimant or its counsel before the mediation to identify the issues and prepare him or herself for dealing with them at the mediation session.
Selection of the Mediator
This may be the most important factor relating to subject matter. Mediators with subject matter experience likely have an edge over those who do not. I am not saying that someone who is unfamiliar with the subject matter or law that governs the case cannot be effective; however, in some cases it really helps to have a mediator who knows how an industry works (e.g., insurance) or the law (e.g., intellectual property or employment disputes). I have been involved in many mediations (sometimes I represent the client in insurance issues but there is an underlying case that is the subject matter of the mediation) and it is really helpful to have a mediator who has already developed a body of knowledge and insight into the area of law which is at issue. It can give the parties – all sides – an edge towards resolution to have a mediator with that special knowledge.
Economic v. Emotional Claims
Cases with simply economic damages – a business dispute for example – require a different approach from those which involve emotional claims. Some mediators are very good at evaluating business losses, but lack the ability to connect with wrongful death or serious injury cases or other cases in which there is a high emotional component. I have found that some mediators just do not have sensitivity to emotional claims, while others seem to sense those that have real value and are able to accept monetary evaluations that reflect how a jury might respond to these claims.
Of course, the type of emotional claim is a consideration. For example, a wrongful death claim involving a young widow with three children or the loss of a long-standing spouse; both require serious thought on how to value those claims. And in my insurance bad faith cases there are often serious emotional claims based on an insurer’s refusal to pay, delay in paying, or attempting to “low ball” a claim involving serious injury or the loss of a home in a personal property damage claim. A mediator in these cases must be able to relate to these claims and deal with their compensation as an element of the damages component of the case being mediated.
Business Claims
Business cases require a mediator who has a business sense. Judges and lawyers who have been involved in business litigation while practicing or who have been heavily involved in the business side of the practice normally have a better insight into the these cases. I am not saying that those who do not cannot mediate business disputes, but it makes sense in complex business cases to select a mediator who has a head start on getting educated about the case.
Partnership and Closely Held Corporations and Family Business Matters
I do some mediating from time to time. It is not my regular diet as I still enjoy the advocacy of litigation and the challenge of representing clients. One of my most difficult assignments as a mediator, however, was a family business matter involving a closely held corporation. The sister had founded the company and the brother had come in after some time to run it. The sister was the marketing and sales force, while the brother controlled the financing and administration. The father was also a numbers person and worked with the brother. As time went on, the brother and sister did not see eye to eye about much; they could hardly be in the same room. The dispute threatened to sink the company, and outside investors were involved. I was asked to mediate. What a difficult case. Despite my efforts, I could not bring the brother and sister to a center point. The father refused to help. After premediation exchanges and a full day of mediation, I had to declare an impasse.
My sense is that I would have done better and had a greater chance of success if I had involved another mediator who had experience in family disputes, and perhaps even a non-lawyer. There are professionals out there who specialize in working with families who are wealthy and have ongoing business relationships or who are involved in ongoing businesses in which there are intrapersonal issues that impact the family business.
I tried to get these folks to entertain the idea of involving someone like I have described, but they were so far into the personal issues that it was too late. Had I recognized the severe schism between the brother and sister before the mediation, I may have been able to involve another professional who could help in getting the parties to see the issues and coming to grips with a solution that would save the business. Next time!
Class Actions
Here, experience counts. There are special issues which arise in these cases, including damages assessments and evaluation of the class claims, administrative issues pertaining to the evaluation of the individual claims of class members and means of distribution, apportioning the payments among various defendants, and attorneys’ fees, just to name a few. While I have not been involved in the mediation of a large class claim, I do know from my colleagues that there are some excellent mediators who have had considerable experience with mediating these disputes. So it seems appropriate to search these mediators out and consider them for class actions.
Injury Cases with Multiple Defendants
I find that injury cases with multiple defendants need a special kind of mediator – one who is skilled in dealing with typical plaintiff/defendant conflicts, as well as disputes between defendants and their carriers. Often there will be coverage issues with some of the insurers for the defendants, so those may be involved as well. Thus, you may have at least three layers of disputes: a) issues pertaining to the value of the plaintiff’s claim, b) issues pertaining to the apportionment of the loss among the defendants based on tort or contract concepts (tort as it pertains to the apportionment of the loss and contract based on contractual obligations among the defendants and indemnity provisions), and c) disputes between a defendant and its insurer.
Mediators in these cases must be able to stay organized, keep dialogue going at all levels, and create a plan for bringing all the disputes to a head and resolving them at all levels. These are very challenging cases, and you need a mediator who is willing to roll of up his or her sleeves and stay with the process. Sometimes, the ultimate resolution may not happen all at once. For example, there can be an agreement to resolve the main case, but disputes remain among the defendants and their carriers. A creative mediator will know how to manage this type of mediation even if the complete resolution is done piecemeal.
Injury Claims with Complex Liens
Lien claims can provide big hurdles to the resolution of an injury case. Workers’ compensation insurers, health insurers, and the government all can stick their noses into a case and stymie the resolution process. I have found that it helps if before the mediation, as plaintiff’s counsel, to have contacted any lien claimants, advised them of the mediation, invited them to attend, and discussed numbers for resolving those lien claims as soon as it is apparent that the parties are headed for a mediation. Once that is done, you should have a discussion with the mediator before the first mediation session about your progress in trying to resolve these claims, and alert the mediator as to the status of your negotiations. If there are anticipated hurdles then the mediator may want to contact that lien claimant or its counsel before the mediation to identify the issues and prepare him or herself for dealing with them at the mediation session.
Friday, November 13, 2009
Using Experts or Consultants at Mediation
One of the best techniques for settling cases at mediation is to take a consultant or expert witness with you to the session or at least have them available by telephone. I have used this approach in many cases with considerable success. The manner in which this is done varies depending on the complexity of the case, the extent of the consultant’s or expert’s involvement, and what disputes or unresolved issues depend on expert testimony.
Here are some examples:
• In an insurance long term disability bad faith case, plaintiff suffered from a serious inflammatory bowl disease. There were issues about the nature and extent of her medical problems, and the affect it had on our public defender client, who was frequently under the stress and pressures of her courtroom and client work. Her gastroenterologist was several hours away from the mediation site. We interviewed him on video for the mediation in a mini direct examination and offered the defense the opportunity to talk to him on the phone – with the interview protected by the confidential nature of the proceedings – to ask any questions for clarification. They did. The conversation lasted about 45 minutes, and the case settled well at the end of the day.
• In a complicated tax shelter fraud case involving the use of life insurance in what was touted to be a legitimate tax free deferred compensation program, our life insurance consultant attended the mediation with us to help the mediator understand the case, evaluate the defense’s position, and review the settlement terms. It turns out the representative of the defendant and our consultant had a long time relationship of trust. That certainly helped in achieving a settlement. Even if that had not been the case, our consultant was invaluable in assisting us in getting to a settlement
• In a wrongful death case involving an charming 25-year-old eldest daughter of a Filipino family, we had two consultants – one an “all purpose” coordinating consultant on highway design and other issues (he helped coordinate and interpret the work of the those serving as expert trial witnesses), and another on the Filipino culture and the role of the family in that culture. The second expert was very persuasive on emphasizing the expectations of parents in that culture for the support of their children, particularly the eldest, as the parents grow older and less able to care for themselves. This was an important part of our case for economic and non-economic damages. Both experts were outstanding, and we got an excellent result for our clients in the settlement.
There are other examples of how consultants and experts can be used at mediation. For instance, we often prepare a mediation video with 20-40 minute mini direct examinations of experts or consultants [even if the consultant is not going to be an expert trial witness] to explain our position or provide information to the defense about technical or medical issues in the case. We use consultants in some cases where there may be several expert trial witnesses eventually, but we use a consultant to address multiple expert issues. We have medical consultants who work with our firm who have broad knowledge and can provide an overview of the case without requiring us to call on several witnesses or treating physicians and incur that expense for the mediation. Sometimes the consultant will use the records and reports of the treating physicians or expert trial witnesses (if they have been obtained) to portray the issues and provide an analysis. Again, we use the protection of the mediation’s confidentiality when these consultants are used. In most cases, I get an agreement from the defense that we can bring this consultant to the mediation for this purpose and that the defense will honor the confidentiality protection. I have never had my opposition decline to accept this offer.
To me, using consultants and experts at mediation is a very positive tool in specific cases in which there are medical or technical issues that need to be addressed. In doing so, we need to be efficient so the consultant can provide effective way to assist the mediator and your opposition in understanding your client’s case.
Here are some examples:
• In an insurance long term disability bad faith case, plaintiff suffered from a serious inflammatory bowl disease. There were issues about the nature and extent of her medical problems, and the affect it had on our public defender client, who was frequently under the stress and pressures of her courtroom and client work. Her gastroenterologist was several hours away from the mediation site. We interviewed him on video for the mediation in a mini direct examination and offered the defense the opportunity to talk to him on the phone – with the interview protected by the confidential nature of the proceedings – to ask any questions for clarification. They did. The conversation lasted about 45 minutes, and the case settled well at the end of the day.
• In a complicated tax shelter fraud case involving the use of life insurance in what was touted to be a legitimate tax free deferred compensation program, our life insurance consultant attended the mediation with us to help the mediator understand the case, evaluate the defense’s position, and review the settlement terms. It turns out the representative of the defendant and our consultant had a long time relationship of trust. That certainly helped in achieving a settlement. Even if that had not been the case, our consultant was invaluable in assisting us in getting to a settlement
• In a wrongful death case involving an charming 25-year-old eldest daughter of a Filipino family, we had two consultants – one an “all purpose” coordinating consultant on highway design and other issues (he helped coordinate and interpret the work of the those serving as expert trial witnesses), and another on the Filipino culture and the role of the family in that culture. The second expert was very persuasive on emphasizing the expectations of parents in that culture for the support of their children, particularly the eldest, as the parents grow older and less able to care for themselves. This was an important part of our case for economic and non-economic damages. Both experts were outstanding, and we got an excellent result for our clients in the settlement.
There are other examples of how consultants and experts can be used at mediation. For instance, we often prepare a mediation video with 20-40 minute mini direct examinations of experts or consultants [even if the consultant is not going to be an expert trial witness] to explain our position or provide information to the defense about technical or medical issues in the case. We use consultants in some cases where there may be several expert trial witnesses eventually, but we use a consultant to address multiple expert issues. We have medical consultants who work with our firm who have broad knowledge and can provide an overview of the case without requiring us to call on several witnesses or treating physicians and incur that expense for the mediation. Sometimes the consultant will use the records and reports of the treating physicians or expert trial witnesses (if they have been obtained) to portray the issues and provide an analysis. Again, we use the protection of the mediation’s confidentiality when these consultants are used. In most cases, I get an agreement from the defense that we can bring this consultant to the mediation for this purpose and that the defense will honor the confidentiality protection. I have never had my opposition decline to accept this offer.
To me, using consultants and experts at mediation is a very positive tool in specific cases in which there are medical or technical issues that need to be addressed. In doing so, we need to be efficient so the consultant can provide effective way to assist the mediator and your opposition in understanding your client’s case.
Monday, October 26, 2009
Top 10 Reasons Why Cases Do Not Settle at Mediation
Here are my top ten reasons why cases do not settle at mediation with some brief comments about each. You probably can add more. But give these some thought.
No. 10: You are not ready. This is an obvious reason, so not much need be said. It is better to postpone a scheduled mediation if you believe that you are simply not at a readiness level that will maximize your client’s chance for a productive and successful day.
No. 9: Your client is not prepared. What have you done to educate your client about the mediation process and its important aspects? Is your client prepared to discuss the economics of settlement? Are his/her expectations reasonable? Is your client willing to listen to the other side and the mediator about the issues? Does your client understand this is a non-binding process in which he/she does not have to testify or even say anything, and that the mediator is not a decision maker? Have you explained how the process works, so that your client understands this is not like being in court? Most importantly, does your client understand the concept of confidentiality? Finally, if your client is going to say anything, have you rehearsed what is to be said and planned for it?
No. 8: Your opposition is not prepared or does not understand your case. Sometimes this is difficult to assess. I have on occasion called opposing counsel to determine for myself if he or she understands the case or issues, and also if the claims representative or client representative is well informed on the issues and will be present to participate in the mediation. I want the check writer there. If there are problems in this arena, I call the mediator to see what can be done to insure that the client representative has authority to negotiate in the financial arena into which I believe the case falls.
No. 7: The mediator is not prepared or ineffective. Frankly, I have experienced a few situations in which I was sorry that the chosen mediator was selected. This is particularly true when the mediator a) limits his or her participation in caucuses with your client and you (e.g. does not provide constructive guidance on how to posture demands and responses to offers), or simply wants to be a messenger to transmit demands and offers back and forth. There are some occasions in which the mediator has been ineffective and I have had to guide the mediator during the mediation. Believe it or not, in the couple of instances in which this has happened, we have achieved a settlement. Essentially, however, we were negotiating directly with an intermediary to carry the mail back and forth. That is not my idea of how a mediation should be conducted!
No. 6: The emotions of the parties or their counsel interfere with the process. We all know that in many cases, the emotions of the parties run high. In those cases, a mediation is likely to fuel them despite the best counsel from a lawyer. First, it is important for you to assess if this will be the situation on your client’s mediation day. Second, if that is the case, then obviously you need to counsel the client to see if emotions can be tempered. You might also discuss potential hot points with opposing counsel and involve the mediator so that tensions can be tempered and the day managed with the clients in control. Most important is to be honest in assessing the circumstances so that you can anticipate any problems of this kind interfering with the process.
No. 5: The parties do not understand the economics of the case. This is a common problem in mediation. Clients must understand and be prepared for talk about dollars and cents. What is the realistic potential for damages if liability is found? What are the various scenarios for a jury or court on the damages issues? Given these, what is it going to cost to get there, and what numbers might a party see at the end of the day? The defense must also understand the exposure. I respectfully refer you to the September 2008 Journal of Empirical Legal Studies (Vol. 5, No. 30, pp. 451-491), a joint venture of Cornell Law School and the Society of Empirical Studies, in which there are published results of a quantitative evaluation of “the incidence and magnitude of errors made by attorneys and their clients in unsuccessful settlement negotiations.” The study entitled, “Let’s Not Make A Deal: An Empirical Study of the Decision Making In Unsuccessful Settlement Negotiations,” was done by two faculty members and a graduate student from the Wharton School of Finance, University of Pennsylvania. The study analyzed 2,054 California cases in which the plaintiffs and defendants participated in settlement negotiations unsuccessfully and proceeded to arbitration or trial, and compared the parties’ settlement positions with the award or verdict. The study “reveal[s] a high incidence of decision-making error by both plaintiffs and defendants in failing to reach a negotiated resolution.” I discussed this study in my December column last year.
No. 4: The parties lack credibility. The Three C’s of mediation are: Credibility, Confidentiality, and Communication. I work very hard to gain the confidence of my opposition and avoid hostilities. Our clients may disagree, vent, and be angry during the litigation, but counsel must establish a credible basis for dealing with each other. If so, there is a high chance that the mediation day will be successful. If not, then the mediator should know that the parties are having difficulty communicating, and the lawyers are too!
No. 3: The parties are not candid with each other and the mediator. Misleading a mediator or an adversary will only lessen the ability of the parties to work together. Advocacy at mediation is different from advocacy in the ordinary process of litigation. I don’t mean to suggest that being dishonest is acceptable in any way at any time. However, the spin doctors don’t do well at mediation. It is important to recognize the issues, and discuss them candidly and honestly with the mediator and even the opposition. Open discussion leads to a fair assessment of the case which leads to resolution.
No. 2: Client expectations are too high. This is a corollary to the principle that the parties understand the economics of the case. A plaintiff may have expectations of a recovery which are not justified given the picture regarding liability, causation and damages – and maybe even collection. A defendant may believe that a mediation is a “fire sale” for the plaintiff. On both sides the costs of proceeding must be assessed. Without a clear understanding of the economics of the case, the parties cannot bargain responsibly.
No. 1: Counsel is unable to control the client. We have all had experiences in which a client simply will not process the information we provide, as well as our advice and counsel. Each of us all has ways to get around and pierce through the stubborn exterior of a client. But sometimes we are not as successful as we would like. I do not hesitate to have a private conversation with our mediator about the expectations for client behavior. Often I find a mediator can have a great influence on a client by repeating – perhaps in different words – the message about the case that the client seems to resist hearing.
No. 10: You are not ready. This is an obvious reason, so not much need be said. It is better to postpone a scheduled mediation if you believe that you are simply not at a readiness level that will maximize your client’s chance for a productive and successful day.
No. 9: Your client is not prepared. What have you done to educate your client about the mediation process and its important aspects? Is your client prepared to discuss the economics of settlement? Are his/her expectations reasonable? Is your client willing to listen to the other side and the mediator about the issues? Does your client understand this is a non-binding process in which he/she does not have to testify or even say anything, and that the mediator is not a decision maker? Have you explained how the process works, so that your client understands this is not like being in court? Most importantly, does your client understand the concept of confidentiality? Finally, if your client is going to say anything, have you rehearsed what is to be said and planned for it?
No. 8: Your opposition is not prepared or does not understand your case. Sometimes this is difficult to assess. I have on occasion called opposing counsel to determine for myself if he or she understands the case or issues, and also if the claims representative or client representative is well informed on the issues and will be present to participate in the mediation. I want the check writer there. If there are problems in this arena, I call the mediator to see what can be done to insure that the client representative has authority to negotiate in the financial arena into which I believe the case falls.
No. 7: The mediator is not prepared or ineffective. Frankly, I have experienced a few situations in which I was sorry that the chosen mediator was selected. This is particularly true when the mediator a) limits his or her participation in caucuses with your client and you (e.g. does not provide constructive guidance on how to posture demands and responses to offers), or simply wants to be a messenger to transmit demands and offers back and forth. There are some occasions in which the mediator has been ineffective and I have had to guide the mediator during the mediation. Believe it or not, in the couple of instances in which this has happened, we have achieved a settlement. Essentially, however, we were negotiating directly with an intermediary to carry the mail back and forth. That is not my idea of how a mediation should be conducted!
No. 6: The emotions of the parties or their counsel interfere with the process. We all know that in many cases, the emotions of the parties run high. In those cases, a mediation is likely to fuel them despite the best counsel from a lawyer. First, it is important for you to assess if this will be the situation on your client’s mediation day. Second, if that is the case, then obviously you need to counsel the client to see if emotions can be tempered. You might also discuss potential hot points with opposing counsel and involve the mediator so that tensions can be tempered and the day managed with the clients in control. Most important is to be honest in assessing the circumstances so that you can anticipate any problems of this kind interfering with the process.
No. 5: The parties do not understand the economics of the case. This is a common problem in mediation. Clients must understand and be prepared for talk about dollars and cents. What is the realistic potential for damages if liability is found? What are the various scenarios for a jury or court on the damages issues? Given these, what is it going to cost to get there, and what numbers might a party see at the end of the day? The defense must also understand the exposure. I respectfully refer you to the September 2008 Journal of Empirical Legal Studies (Vol. 5, No. 30, pp. 451-491), a joint venture of Cornell Law School and the Society of Empirical Studies, in which there are published results of a quantitative evaluation of “the incidence and magnitude of errors made by attorneys and their clients in unsuccessful settlement negotiations.” The study entitled, “Let’s Not Make A Deal: An Empirical Study of the Decision Making In Unsuccessful Settlement Negotiations,” was done by two faculty members and a graduate student from the Wharton School of Finance, University of Pennsylvania. The study analyzed 2,054 California cases in which the plaintiffs and defendants participated in settlement negotiations unsuccessfully and proceeded to arbitration or trial, and compared the parties’ settlement positions with the award or verdict. The study “reveal[s] a high incidence of decision-making error by both plaintiffs and defendants in failing to reach a negotiated resolution.” I discussed this study in my December column last year.
No. 4: The parties lack credibility. The Three C’s of mediation are: Credibility, Confidentiality, and Communication. I work very hard to gain the confidence of my opposition and avoid hostilities. Our clients may disagree, vent, and be angry during the litigation, but counsel must establish a credible basis for dealing with each other. If so, there is a high chance that the mediation day will be successful. If not, then the mediator should know that the parties are having difficulty communicating, and the lawyers are too!
No. 3: The parties are not candid with each other and the mediator. Misleading a mediator or an adversary will only lessen the ability of the parties to work together. Advocacy at mediation is different from advocacy in the ordinary process of litigation. I don’t mean to suggest that being dishonest is acceptable in any way at any time. However, the spin doctors don’t do well at mediation. It is important to recognize the issues, and discuss them candidly and honestly with the mediator and even the opposition. Open discussion leads to a fair assessment of the case which leads to resolution.
No. 2: Client expectations are too high. This is a corollary to the principle that the parties understand the economics of the case. A plaintiff may have expectations of a recovery which are not justified given the picture regarding liability, causation and damages – and maybe even collection. A defendant may believe that a mediation is a “fire sale” for the plaintiff. On both sides the costs of proceeding must be assessed. Without a clear understanding of the economics of the case, the parties cannot bargain responsibly.
No. 1: Counsel is unable to control the client. We have all had experiences in which a client simply will not process the information we provide, as well as our advice and counsel. Each of us all has ways to get around and pierce through the stubborn exterior of a client. But sometimes we are not as successful as we would like. I do not hesitate to have a private conversation with our mediator about the expectations for client behavior. Often I find a mediator can have a great influence on a client by repeating – perhaps in different words – the message about the case that the client seems to resist hearing.
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