Friday, August 22, 2008

Anger Management in Mediation

The best way to control anger in mediation is not to get mad in the first place. And the best way to accomplish that is to come to the table with no preconceived notions or expectations about what the other side is going to do or how long the session is going to take. If you don’t expect anything, you won’t be upset when you don’t get it.

This admonition should not suggest a lack of preparation. As I have indicated in the past (e.g., "To Every Thing There Is a Season"), thoroughly knowing one’s case is crucial to success. But knowing one’s case is not the same as knowing what the other side is going to do.

Some people come to mediation with expectations that are based more on hope than reality. Such folks regard unreasonably high demands or low offers right out of the box as evidence that the other side sees the case so differently that settlement is unlikely. This can be frustrating and often prompts angry reactions — particularly if the parties have allowed only a couple of hours to get the job done. Typical comments are: "They’re obviously not bargaining in good faith!" or "This is a complete waste of time!" or "We might as well end it right now and go home!" or (perhaps worst of all) "I’ll show those cowboys/cheapskates," followed by an equally unreasonable counteroffer.

But unreasonable positions do not always indicate unreasonable expectations. Often the other side is simply trying to find out in what ballpark you think the game ought to be played. Just testing the waters, so to speak. After all, until things shake down a bit, your opponents need to know whether you are more worried about your case than they are about theirs. Most plaintiffs' attorneys, for example, know that if they don’t ask for a lot of money they will never get it.

I generally regard the early stages of a mediation session as a time for testing. Sometimes this phase has a lot of posturing, can resemble a game of "Chicken," and can last for hours before the parties move into settlement territory. For this reason, I have found it best when scheduling mediations to allow plenty of time. Open-ended scheduling is best. When people start looking at their watches, the chances for resolution go down.

When you feel the other side is making unreasonable demands or offers, don’t get mad at them. They have a perfect right to ask for as much or offer as little as they want. If it turns out that they have just been testing you, the case will probably settle. On the other hand, if they really believe in their position and you don’t, the case won’t settle, but nobody will be any worse off for having made the effort. See my earlier post, "The Goal of Mediation Is Not (Necessarily) Settlement," and Chris Annunziata’s on the same subject.

Saturday, August 16, 2008

Don’t Pitch to the Mediator

Remember Milo O’Shea’s character in The Verdict? He played the partisan judge with the Irish brogue who urged Paul Newman to take the offer on the table by saying: "I meself would take it and run like a thief!"

Unfortunately, this is how many — both in and out of the legal profession — still think mediation works. See, e.g., Geoff Sharp’s recent post on mediator blah ... blah . . .. These folks pitch their arguments toward the mediator, rather than the other side. For some reason, they think that the opinion of someone who has only recently been exposed to a brief snapshot of the facts will carry a lot of weight with the opposition.

Such a ham-handed approach often makes the other side respond with its own attempts to sway the mediator, causing the session to become a point-counterpoint debate refereed by the person who knows the least about the case!

The prize that people need to keep their eyes on is making believers out of the opposition. Therefore, it is far more productive for the parties and their advocates to direct their arguments and efforts toward them, rather than to the mediator.

Sunday, August 3, 2008

Lawyers as Peacemakers

Say the word "lawyer," and far more people think of "Whiplash Willie" — the unscrupulous ambulance-chaser portrayed by Walter Matthau in The Fortune Cookie — than of Atticus Finch. Google™ the term "lawyer jokes," and you are rewarded(?) with almost 600,000 hits.

Against this backdrop of popular culture, it may be helpful to remember Abraham Lincoln’s admonition to a group of law students more than 150 years ago:

Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.*

I was gratified to hear one of my colleagues, Rob Howard of Henniker, NH, demonstrate the other day at a meeting of our local Bar Association’s ADR Section that Lincoln’s advice is still followed. The topic for discussion was how to foster a mediation mind set in the public. He stated that he has been counseling his clients to make peace since he started his practice more than thirty years ago. When he said this, he seemed surprised that the concept would be regarded as anything but obvious. As far as he was concerned, this is what lawyers do.

* From The Collected Works of Abraham Lincoln, edited by Roy P. Basler, Volume II, "Notes for a Law Lecture" (July 1, 1850?), p. 81.

Friday, July 18, 2008

Show Me the Money!

Personal injury mediations have a number of characteristics in common which set them apart from mediation of other types of disputes: (a) insurance companies are usually the primary stakeholders on the defense side; (b) typically, the disputants’ only relevant relationship is that of parties to the same lawsuit; (c) the parties are not interested in repairing the relationship, but in ending it; and (d) ending the relationship will, in virtually all such cases, happen when the insurance company writes a check, and the plaintiff deposits it.

Philosophers have decried efforts to reduce human misery to haggling over dollars, but the concept of wergild is firmly embedded in our society. In one form or another, it has been the basis of our Anglo-American tort system since well before the battle of Hastings. Like it or not, this is the planet we live on.

The focus on money, however, does not mean that there is no room for creative value-enhancing ideas in settlement negotiations. Money, after all, has no inherent value; its worth depends on what it will buy. And the value of such "things" is very much in the eye of the beholder. Different people place different values on the same goods and services. These differences, if explored thoughtfully, can often lead to settlement when the parties are close, but not close enough.

For example: years ago, I represented a husband and wife as plaintiffs in an auto accident case. The defendant’s liability was clear, but the injuries were not too serious and resolved within a year or so. The insurance company was not willing to offer enough cash to interest my clients. Rather than give up, the defense attorney and I tried to look beyond the obvious and to find a solution which would benefit the plaintiffs more than it cost the insurance company.

My clients had a young child. Both were employed and, by the time of trial, were earning more money than they ever had before. They did not need more money; what they needed was tax planning. Once my clients’ needs were analyzed, we were able to reach a settlement in which enough money was paid up front to pay my fee, with a little left over for a modest family vacation. The amount remaining (less than $10,000) was used to purchase an annuity that would pay a lump sum in the neighborhood of $200,000 when the couple was ready to retire, or a lesser amount when their child reached college age.

This story should serve as an example of how it is possible to "think outside of the box," even when the case is "only about money."

Monday, July 7, 2008

The Goal of Mediation Is Not (Necessarily) Settlement

To some, the title of this posting will sound like rank heresy. If the goal is not settlement, what is it? Why are we paying this person to shuttle back and forth like Henry Kissinger if we might end the day with an empty sack?

In my view, the primary goal of mediation of a tort case is knowledge, with settlement being a possible byproduct. The idea is to learn whether all sides are close in their thinking on the value of the case. If they are, settlement is likely to follow; if they are not — and cannot be convinced to change — settlement is not likely to follow.

Opposing lawyers who have worked with each other a long time can sometimes "cut to the chase" and determine whether their clients are on the same page without a mediator. For most people, however, the adversary system gets in the way of frank discussion, and the assistance of a third party (i.e., the mediator) is necessary.

I tend to divide most tort mediations into two phases. During the first phase, I try to determine in my own mind whether the parties are actually thinking in the same value range — whether or not their public positions are close. Depending on the facts of the case (and the parties and counsel involved) this process can range from relatively quick to incredibly drawn out. If, in the end, I think the parties really are in the same ballpark, I move the process into phase two and help the parties turn their general understanding into a specific agreement, working to help bridge any remaining gaps.

Where I part company with some mediators is in what I do if I believe that the parties (in their heart of hearts) are not close. In such cases, I do not try to change anybody’s mind or even nudge the parties toward a settlement. It’s their case, not mine. I believe that people should not be pressured in any way by the mediator to change their minds during a mediation. Like most important matters, decisions to settle should not be made until all relevant information has been assessed and each party truly believes that a settlement on the terms available is in his or her best interest. This normally takes time.

If, during the process, the parties learn that they are looking at the case differently, it is appropriate to adjourn the mediation and allow some time for everybody to reevaluate their options in light of new information. Before adjourning, however, the parties should determine what steps need to be taken in the interim before scheduling further mediation sessions. For example, are more depositions needed, or expert opinion necessary to support certain facts being asserted? It is certainly appropriate for the mediator to assist the parties in this endeavor.

Thursday, June 19, 2008

Mediation Is a Process, Not an Event

My family has always enjoyed bicycling, and over the years we have collected a number of books on the subject. One in particular, entitled The Bicycle Touring Book, by Tim & Glenda Wilhelm (Rodale Press, 1980), has a passage with a lesson for those involved in dispute resolution. In describing how bicycle touring, with its emphasis on "smelling the roses," differs from traveling by automobile, the authors (on page 177) state: "For them [motorists], it was just another long day behind the wheel on the way to somewhere else."

For many involved in litigation, mediation is just one event on the road to trial. Mediation is often scheduled only because the court says it must be, or because it is on a checklist prepared by somebody else. The mind set seems to be: "Today we are in a mediation mode; yesterday — and maybe tomorrow — we were/will be in a trial mode." While all litigators recognize that most civil cases do settle eventually, a settlement is usually thought of as a byproduct of good trial preparation; mediation is not considered to be central to their cases.

The skeptic will say, "So what? Strong preparation for trial equates to strong preparation for mediation; the two co-exist very well." I would agree with that statement, as far as it goes. What I am advocating, however, is not a dilution of trial preparation, but an expansion of focus.

Instead of focusing exclusively on how evidence learned in discovery will play at trial, I believe that litigators would be well advised to get into resolution mode right from the beginning. Unless a conscious decision not to settle has been made by the client(s), all actions taken — discovery requested, motions filed, etc. — should keep all forms of resolution firmly in mind.*

One useful approach to take would be to modify one’s visceral responses to questionable discovery requests. Instead of automatically objecting on principle (see, e.g., "I Would Rather be Right than . . ."), consider whether providing the information requested might not further resolution, despite the request not having been "reasonably calculated to lead to the discovery of admissible evidence."†

For example, when I first started practicing law, I was assigned by a senior partner in my firm to defend a personal injury case brought by one of the leading plaintiffs attorneys in my state — one who had been practicing for over 30 years. I suspect that if he had wanted to, he could have eaten me for breakfast. Instead, as soon as he received a copy of my appearance, he called me on the telephone, introduced himself, and invited me to his office to look at his file! When I arrived at his office, the file was waiting for me, superbly organized in a private conference room reserved for that purpose. Just about everything I would have thought to request in formal discovery — including both pre and post accident medical records — was included. As I analyzed the material, I realized that we could bypass a lot of the usual time-consuming pretrial activity and cut right to the chase. My opposing counsel’s act of practical accommodation paved the way to a fair and expeditious settlement. I suspect that 90% of personal injury actions could be handled in just that fashion without any of the parties giving up anything important.

* "Resolution," in this context, includes both trial and settlement.

† Fed. R. Civ. P. 26(b)(1).

Saturday, June 7, 2008

Driving in Germany

Back in the bad old days of the Cold War, I was stationed with the U.S. Army in Germany. When I first arrived at my unit in 1967, the other guys (no women then) did their best to fill me in on the local culture, so I could avoid branding myself as an ignorant Ami (short for "American"). One bit of knowledge deemed especially essential to my survival was that driving in Germany was not like driving in the United States. German drivers were regarded by the average GI as extremely aggressive. This information, combined with the fact that there was no speed limit on the autobahns, required a different mind set from what I was used to. I was told that in anything smaller than a five-ton truck, I would have to make the local drivers think I was completely crazy in order to get their respect. If I showed fear, I would be eaten! From what I could see during the three years I lived there, most soldiers got the same advice.

Not all civil litigation attorneys believe that mediation sessions give us a chance to "come reason together." Some lawyers in personal injury negotiations act like GIs driving on the autobahn: pedal to the metal; lips curled in a snarl; slightly wild-eyed look. Former President Nixon called this approach his "Madman Theory."* The goal: to terrify one’s opponents into submission with threats of annihilation.

When your opponents start yelling in a mediation, you must determine whether they are losing their temper, or using it. Are they really crazy enough to submarine the negotiations? Or are they simply trying to distract you from learning that their case is not the litigation equivalent of a five-ton truck? Your response should avoid extremes either way. Don’t yell back; don’t cave in. Instead, very calmly suggest a break in the negotiations. After the other side’s adrenaline level (if that’s what it really is) has had a chance to return to normal — and you have had a chance to reassure yourself of the strength of your own case — suggest resuming the negotiations. You will soon learn whether your opponents are serious or not, and will be better able to decide how — or whether — to get the mediation back on track.

* Stanley Karnow, Vietnam: A History (New York: The Viking Press, 1983), 582.

Friday, June 6, 2008

I Would Rather Be Right than . . .

One of the most dramatic scenes in United States history was played out in Weehawken, New Jersey, on July 11, 1804. Two long-time political antagonists, Alexander Hamilton and Aaron Burr, faced each other with pistols — then a somewhat popular form of alternative dispute resolution — after what could probably be described as a failed co-mediation. As every student of history knows, Burr walked away afterward; Hamilton was carried.

The events surrounding the duel have been chronicled by Ron Chernow in Chapters 41 and 42 of his excellent biography of Hamilton (The Penguin Press 2004).

Burr, then Vice-President of the United States, knowing he was about to be dumped by President Thomas Jefferson in the upcoming national election, had just run for Governor of New York and lost decisively to Morgan Lewis. Hamilton, formerly Secretary of the United States Treasury in Washington’s cabinet, was trying to re-build his law practice after three years of being off the national political stage following the Federalist defeat in 1800.

The immediate cause of the fight was a letter published by a Doctor Charles D. Cooper, in which the author had attributed to Hamilton a number of disparaging remarks about Burr at a dinner gathering in New York a few months earlier. According to Chernow, after detailing several such remarks, Cooper ended his letter by stating: "I could detail to you a still more despicable opinion which General Hamilton has expressed of Mr. Burr." In a June 18 letter to Hamilton, Burr demanded to know what the "despicable opinion" was. Hamilton rather pedantically responded by objecting that the question was too general for him to answer. The dispute escalated over the next three weeks in a series of letters carried between the two men by their seconds, William P. Van Ness (Burr) and Judge Nathaniel Pendleton (Hamilton). Despite the efforts of these two gentlemen to assist their principals to reach an honorable accord, neither of the antagonists would give an inch.

Technically, by the accepted code of such "affairs of honor," Hamilton was correct in maintaining his legalistic stance. Unfortunately, that didn’t change the fact that Burr was a better shot! As Chernow put it: "In a shockingly brief span, the two men had moved to the brink of a duel and were ready to lay down their lives over an adjective."

Based on my experience, Mr. Chernow should not have been surprised by the way this drama unfolded. Even in this supposedly more enlightened age, many negotiations bog down over "the principle of the thing." Recall, for example, how much time was spent arguing over the shape of the table before serious negotiations between the United States and North Vietnam could even get started. Time and again, matters that seem important at the height of a controversy, but which seem utterly ridiculous in retrospect, will impede a settlement.

Of course, it takes a lot to convince antagonists who have "gotten their blood up" to back off and take a bird’s eye view of the situation. But one possible approach to moving beyond "the principle of the thing" might be to ask the parties to imagine how the dispute will be viewed by objective observers 200 years (or even two months) hence.

Monday, May 26, 2008

The Best Compromise That Never Was?

"All government, indeed, every human benefit and enjoyment, every virtue and every prudent act, is founded on compromise and barter." Edmund Burke, Second Speech on Conciliation with America. The Thirteen Resolutions, March 22, 1775.

In the mediation of most civil disputes, the stakes are not as high as they were for England and its American colonies in 1775. The Boston Tea Party and other acts of defiance had resulted in retaliation by the mother country. The port of Boston was closed, additional troops were assigned to Massachusetts, and public dissatisfaction was at a fever pitch. Colonial resistance was met with indignant intransigence by the Crown and Parliament. The situation was clearly escalating toward armed conflict when Burke gave the speech from which the above-quoted passage was taken. He recognized the effort as an eleventh hour attempt to heal a dispute that was fast reaching irreconcilability. Of course, less than a month later at Lexington and Concord, any chance for a peaceful solution was lost.

There are those today who might argue that the issues facing Parliament and America were so important that — like, perhaps, the later disputes over slavery — no compromise was either possible or desirable, and the bloody conflicts by which these issues were ultimately resolved were cathartic. The difficulty faced by the holders of such views, however, is that we will never know. Would we have been worse off if Burke’s views had prevailed — or if the Civil War had never been fought? Or was the suffering faced by the hundreds of thousands of families who lost husbands, sons and fathers inevitable and more than offset by the good that came to society as a whole from the violence?

Regardless of one’s views on the subject, Burke’s speech is a classic in the annals of political theory, and clearly shows that there can be an approach to the resolution of disputes that is at the same time both pragmatic and principled.

Photo of Burke statue in Dublin, Ireland, uploaded to by Chris Bertram.

Sunday, May 25, 2008

Yes, Virginia, There Is a Plan

James Madison is known as the father of the U. S. Constitution primarily because he is credited as the principal author of the so-called Virginia Plan. This plan consisted of 15 resolves and was presented on May 29, 1787, the fifth day of the Constitutional Convention. Most of the delegates in Philadelphia that summer had only a loose idea of what they were to accomplish, and were willing to structure the debate on the points laid out by Madison. As a result, the plan became the framework around which the final document approved the following September was formed.

What does this have to do with negotiation or mediation? If one studies the Constitutional Convention, it quickly becomes apparent that, from beginning to end, the event was a high-stakes negotiation among many distinct interest groups. Without Madison’s "first draft," it is uncertain whether there would have been a United States Constitution — or a United States. As it was, the final result certainly carried his stamp.

The lesson to be learned: In negotiation, whether mediated or not, those who write the first draft usually get most of what they want.

The photo shown was downloaded from; taken by OZinOH.

Sunday, May 18, 2008

If it Wasn’t for the Honor of the Thing . . .

I have a confession to make. I love to try cases. Most trial lawyers love to try cases. Trials allow us to put aside all of life’s other distractions for the duration, to occupy center stage, and to give vent to our swashbuckling tendencies, all while feeling incredibly pumped. People actually pay us to do this!

But our clients, as a rule, don’t share our passion. Their view of trials coincides roughly with the attitude of the fellow in one of Abraham Lincoln’s anecdotes. Upon being tarred and feathered and ridden out of town on a rail, the gentleman was reputed to have said: "If it wasn’t for the honor of the thing, I would just as soon walk."

By going to trial, plaintiffs are risking everything; insured defendants are taking time away from their businesses or jobs (not to mention facing a potful of bad publicity); and claims reps know that the "meter is running" and the bean-counters in the home office are watching.

We trial lawyers should keep firmly in mind that, while our clients don’t want to settle at all costs, their threshold for an acceptable settlement — once they understand all of the ramifications and risks — is usually different from ours. We are the players; they are the stakeholders.

Because of these differences in outlook, mediation tends to be more productive if it happens well in advance of trial, before the lawyers’ adrenalin kicks in, so long as there has been enough discovery that the clients "understand all of the ramifications and risks." See my previous post, "To Every Thing There is a Season."

Saturday, May 17, 2008

Should Mediation be Mandatory?

Many courts in the United States make participation in some form of alternative dispute resolution mandatory for most civil actions. See, e.g., N.H. Super. Ct. R. 170(A). By far, the method of ADR preferred by the courts is mediation. Since most lawsuits settle anyway, the theory behind requiring the parties to mediate seems to be that the courts might as well nudge litigants in that direction so that settlements will be more likely to occur sooner, rather than later.

There is some force behind this reasoning. Inertia is probably the primary reason why many cases don’t settle until the parties are "on the courthouse steps," and forcing all the litigants to look at their files and sit down together at the same time can often settle cases that would have otherwise gone the distance.

In my view, when the parties want to settle, this imposition by the court does no harm, either to the litigants or to the public’s perception of the legal system. However, as much as I believe in the process of mediation, some cases are just not suitable for it, and it becomes a useless exercise, doomed to failure from the beginning. In my role as volunteer mediator for the New Hampshire Superior Court, I have participated in many like that. One in which I was involved within the last year is fairly typical — damages fairly well established, but hotly contested liability and an insurance company that clearly indicated it would roll the dice if the plaintiff didn’t reduce his demand to a level that would net him a figure roughly equivalent to the price of a case of beer. The plaintiff could afford to roll the dice too. All participants agreed that it would be stupid for the plaintiff to settle within the insurance company’s range, so the case didn’t settle.

Besides wasting the time of all participants, forced mediations where some or all of the parties really do not want to settle also have the effect of undermining the public’s confidence in the neutrality of the courts. Despite official protestations that mediation is an entirely voluntary process, many litigants and their attorneys maintain the rather cynical view that if they are being forced to mediate, they are really being pushed to settle; and if the case doesn’t settle, those whom the judge perceives as "unreasonable" will have cause to regret it.

The right to a trial in a completely neutral forum is firmly imbedded in our national consciousness. Any policy that has even the flavor of abridging that right should be avoided. Mediation as an option for resolving disputes is now well established in the legal community and the insurance industry. All who are motivated to settle cases are fully aware of this option, and need no nudging by the court to exercise it, if they want to. The choice should be theirs, not the court’s.

Friday, May 16, 2008

Mediation as Anti-Social Behavior

Geoff Sharp, of Wellington, New Zealand (mediator blah . . . blah . . .), has provided a valuable service for the mediation community with his posting entitled "Justices Seek Justice, Not Peace." In it, he calls attention to a critical view of mediation not usually given much press in recent years. Geoff’s post focuses on Owen Fiss’s 1984 article, Against Settlement, 93 Yale L.J. 1073, in which the author suggests that the enthusiastic acceptance of ADR, particularly mediation, overemphasizes the role of the court system as a dispute resolution tribunal, to the detriment of its role as society’s primary instrument of justice. Implicit in Fiss’s argument is that litigants who choose to settle, rather than let justice run its course, often cheat society out of the ability to have the court system address and correct societal ills that go beyond the interests of the individual parties. See also, Don Ellinghausen, Jr., "Justice Trumps Peace: the Enduring Relevance of Owen Fiss’s Against Settlement," also referred to in Geoff’s post.

Putting aside for the moment the question of whether individual litigants should be asked to spend their own money to carry society’s banners into battle (presumably for the honor of the thing), one flaw I see in Fiss’s approach is that it seems to ignore the risk that the courts may get it wrong. Major societal controversies presented to the judiciary for resolution usually have passionate advocates on both sides. Convincing arguments are marshaled both for and against, and the outcome of such matters is usually far from certain. One example cited for the idea that settlement would have been bad for society is Brown v. Board of Education (Ellinghausen, pp 30-31); however, I daresay that for every Brown, there is a Dred Scott.

Monday, May 12, 2008

Preparing (Your Opponent) for Mediation

I have been asked to prepare an article on mediation for publication in a forthcoming issue of the Tri-State Defense Lawyers Association’s Newsletter. The Association addresses issues of interest to defense lawyers, insurance claims people and corporate risk managers in northern New England (New Hampshire, Maine & Vermont).

The article points out that to be truly prepared for mediation of a tort case, defense counsel must do some advance work to prepare the plaintiff for the "business realities" of the process. The full article is available here.

Sunday, April 20, 2008

Should a Mediator Evaluate?

One enduring debate in the mediation community concerns whether mediators should provide their own evaluations to the parties/clients. If the case is about dollars, and the parties are at impasse, some feel that the mediator can provide a "dose of reality" by weighing in with his or her own opinion on value. Others feel that this approach represents a retreat from the neutrality that characterizes the role of the mediator and inevitably damages the process.*

While I can agree with some of the points made by both sides, I personally believe that mediators shouldn’t provide their own evaluations. I have come to this conclusion primarily because I do not believe I am any better at determining value than the next person. In the context of civil litigation, evaluations represent an attempt to predict the future after factoring in all sorts of variables: the statistical range of jury verdicts (see, e.g., "Ask Not for Whom the Bell Curve Tolls"); the cost of taking the matter to judgment; the personal aggravation of dealing with a lawsuit; the parties’ personal risk tolerance, etc.

Risk tolerance is particularly important in evaluating civil litigation. It is also completely impossible for the mediator to assess its impact. Because the mediator cannot get completely into a party’s thought processes, all it is possible to do is say what the mediator thinks the assessment ought to be, not what it is.

Look at it this way: I may believe it is foolish to waste money betting on a horse at forty to one odds, or buying a Power Ball ticket. But I cannot say that doing these things would be foolish for the other person. My job as a mediator is not to prevent people from doing things I think are foolish, but only to do everything in my power to make sure that they understand the risks involved and make a knowing decision that takes those risks into account. It is not my job to tell you that you shouldn't draw to an inside straight, but only to tell you that the odds against improving it are eleven to one.

Because each person assesses risk differently, each has a different concept of value. The goal of mediation is not settlement at all costs; it is voluntary resolution. Thus, it is counterproductive for the mediator to recommend a settlement figure that differs from a party’s "eyes open" valuation.

* For a comprehensive discussion on the debate, which tilts toward the judicious use of the technique in some (but not all) circumstances, see Dwight Golann & Marjorie Corman Aaron, "Using Evaluations in Mediation," in American Arbitration Association Handbook on Mediation, ed. Thomas E. Carbonneau & Jeanette A. Jaeggi (Huntington, NY: JurisNet, LLC, 2006), 125-138.

Saturday, April 5, 2008

To Every Thing There Is a Season

Saving the expense of trial preparation is one good reason to settle civil litigation. It does not always follow, however, that more money can be saved when mediation is scheduled early in the process – before suit or soon thereafter. This is because civil litigation settles when both sides are on the same page regarding value. To reach that stage, participants need to have a "feel" for the other side’s case for both liability and damages, and how they are likely to be presented to (and perceived by) a jury. And where there is an emotional component, the parties’ readiness (or lack thereof) to put matters behind them must also be factored into the equation.

Normally, it takes time and effort to reach the stage where enough is known about the facts and the law so that mediation is likely to be fruitful. In civil litigation, this usually means that the following should be accomplished before mediation, either formally through the discovery process, or informally by agreement:
  • Exchange of all documents (e.g., medical records) pertinent to the litigation;
  • Expert disclosures, if issues are likely to turn on expert opinion;
  • Depositions of the parties; and
  • Identification of legal and factual issues likely to be dispositive.
This is not to say that the participants have to act like they are on the same page, or even know for sure whether they are. After all, mediation’s main purpose is to answer that very question. Having the same feel for value does not mean that everybody has to know what the ultimate result will be, but only that they all have a good idea of the risks that will be run if they let twelve strangers decide their case.

Thursday, April 3, 2008

Stakeholder Participation Is Crucial

In a perfect world, everybody with a stake in the outcome of litigation should be physically present at a mediation session. This is particularly true of those who will make the decision whether to settle or not. In civil litigation, this usually means the plaintiff on the one side, and the insurance company’s claims representative on the other. Let’s face it, litigation is more likely to settle before trial when all participants have prepared at the same time, and deal with each other at the same time and the same place.

Sometimes, however, there are pressures, usually economic, that make it difficult to achieve perfection, particularly in the garden-variety auto accident case, where injuries are moderate, liability is fairly cut and dried, and the claims rep’s office is 1,500 miles away in Jefferson Parish, Louisiana.

If you represent a party in such a situation, it is crucial to maintain as much of a communications link as possible between the absent stakeholder/decision maker and the mediator, parties and attorneys on the scene. Since instant decisions must often be made, it is important that all participants be instantly available.

The usual procedure is to have the absent party/ies "available by speaker phone." This can help, but, human nature being what it is, the people who are only peripherally involved invariably are not as focused on the mediation as are those who are physically present. They do not have the same "feel" for the situation. To paraphrase Kenny Rogers: How can they know what the cards are, if they can’t see how the other people hold their eyes? Moreover, sitting at a desk far removed from the action, other work usually intrudes, and events on the other side of the country are sometimes regarded as a distraction or a side show.

If one or more participants cannot be physically present, all efforts must be made to make sure those not present are, nonetheless, as involved as possible. There should be frequent communication between the participants at the mediation and the participants who are not. One hint: Don’t rely on land lines alone. For example, it is too much to expect a busy claims rep on the west coast to go to lunch at the same time as the "live" participants when the mediation itself is on the east coast; there is a three-hour time difference. A party’s representatives, when split in that fashion, should exchange cell phone numbers in advance of the mediation session, so that there will be no delays when decisions are necessary.

Wednesday, April 2, 2008

The "Aha!" Factor

We live in an age of instantaneous perception. By that, I mean that most of the public – those people who make up jury pools – are looking for the simplest path to a solution, regardless of how complex a situation might be.

Thanks to the magic of television, news and political ads are given to us in thirty-second bursts where complex issues are boiled down to their simplest components. Entertainment shows present story lines in half an hour or an hour. Detached reflection on the important issues of the day is rare; people simply do not have time for it.

For those involved in civil litigation, this expectation for instant answers must be factored into the valuation of every case. The side which can explain its position in the simplest terms has a leg up. The side that can present the essence of its case in such a way that people experience an "Aha! That’s it!" moment, will be the odds-on favorite. Such moments can move the value of a case significantly away from the center of the litigation bell curve. Conversely, the more time needed to explain things, the more problematic a litigant’s chances will be.

People tend to be skeptical of lawyers and their clients, so they look for the "common sense" or the obvious answer. "A picture is worth a thousand words," as someone once said. This is why, for example, an objective injury is far more compelling than a subjective one. A broken leg is more convincing than a whiplash.

The effect of this phenomenon is that in a long trial, people on juries are inclined to focus on bits and pieces of evidence, rather than on the big picture. For example, early in my career I was involved in a civil trial arising out of an intersection collision. The plaintiff had the right of way, and the only real question for the jury was the extent of the soft-tissue injuries resulting from the accident. During direct examination of the plaintiff, her attorney introduced as an exhibit a small exercise device that had been prescribed for his client, and she explained how she used it daily. On cross, one of the defense attorneys pointed out that the bag in which the equipment came still had its packing talc, indicating that it had been used only rarely, if at all. That was an "Aha!" moment, which resulted in settlement shortly afterward at a lower figure than the plaintiff and her attorney would otherwise have expected.

Friday, March 28, 2008

Ask Not for Whom the Bell Curve Tolls . . .

There are many differences in the way liability insurance carriers and plaintiffs approach settlement of personal injury cases or other civil claims. One of the more significant has to do with the science of statistics: insurance companies rely on it, while injured plaintiffs, by and large, do not.

For statistics to be useful in estimating the value of a given case, the analyst needs to examine the results from many cases. Insurance companies have many cases; plaintiffs do not. Insurance companies look at norms; plaintiffs typically are concerned with only one case – their own.

To find the "norm" for a given type of case, companies will (either consciously or unconsciously) make use of a normal distribution chart, a/k/a "Bell Curve," similar to the one depicted above. They reason that some 68+% of whiplash cases, say, will fall between a mid-range of values clustered about the mean, or average (represented on the chart as the green area between A and B). Of course, those of us who have been at this business awhile know that there is no such thing as an "average" case. Every case is different; every jury is different. And because of these differences, "normal distribution" is largely a fiction.

But insurance companies are in the business of assessing risk – and the fact that they remain in business means that, for the most part, they are pretty good at it. For them, the statistically small risk that a jury in a given case will come in with a figure in excess of B is offset by the equal chance that it will come in with a figure less than A. And with lots of cases in their file drawers, they can bet their money on those odds.

This means that for a plaintiff to persuade the insurance company to pay more than B, he or she will have to convince the claims rep either that the case doesn’t even belong on the same chart – e.g., that the chart deals with apples, while the case under discussion is chocolate bars – or that there are unusual factors present (an extremely sympathetic plaintiff, for example) that move its value toward the right of the chart.

For settlement negotiations in most cases to be productive, however, plaintiffs need to come to grips with the fact that insurance companies are not likely to pay a figure above their idea of the normal range. Keep in mind that the claims rep will have to explain his or her settlement decision to someone up the ladder. Plaintiffs should, therefore, focus their efforts on showing why a case falls more toward the upper limit of the normal range of values, rather than waste time talking about the McDonald’s hot coffee verdict or other unusual "brass ring" cases that made the headlines. They made headlines because they were unusual, and are largely discounted by insurance companies for the same reason.

Welcome to My Web Log

I know, I know – people don’t say "Web Log" anymore. I suppose eventually I will succumb to peer pressure and call this a "Blog," or worse, a "Blawg." But for now, I am going to resist the temptation. It took me a long time to switch from DOS to Windows, too.

My theme for this whatever-you-want-to-call-it will be on resolution of civil litigation cases – those matters where the primary motivation for the participants is money. There is a lot of literature on resolving disputes where bruised egos, shattered relationships and the like are dominant, but I have seen little out there dealing with situations where the main (if not the only) question is "how much?" and the pie tends to look the same at the end of the process as it did at the beginning.

I have been a New Hampshire trial lawyer since 1978 and have served four or five days a year as a voluntary mediator in our state’s superior courts since 1992. Most of the cases I have mediated fall into the category of personal or bodily injury. For more on my mediation philosophy, check out my article "Of Potted Plants and Personal Injury: a Contrarian View of Mediation," which was published in the Fall 2007 issue of New Hampshire Trial Bar News.

In the months to come, I will try to populate this space with posts focusing on the practical aspects of settling civil disputes over money – those which are, or which could be, the subject of lawsuits.
I will be directing my remarks mostly toward lawyers who represent clients in such matters, because they are the ones who bear most of the responsibility for resolving cases before trial. However, there is a growing trend for people to represent themselves in civil litigation, so my aim is to provide information which will serve the needs of pro se litigants as well.

I am looking forward to this venture, and hope that I will be able to contribute to the dialogue in such a fascinating field.