Thursday, December 31, 2009

Happy New Year!

I don’t usually tie my posts to special events or holidays, but I think that celebration of the new year is particularly appropriate for dispute resolution professionals. It is a time to acknowledge the inevitability of change. The old year is gone; the new year is bright with promise. The past has passed; the future beckons.

This is not to suggest, of course, that what has gone before has no bearing on what is to come. As Santayana taught us: "Those who cannot remember the past are condemned to repeat it."* Civil litigants, though, must find a way to put the past behind them; to let go of grievances, whether real or imagined, and go forward. While the past must instruct the future, it shouldn’t control it.

People generally sue other people because they perceive themselves to have been wounded — sometimes literally, sometimes figuratively. Resolution won’t happen until those wounds are dealt with in some fashion. An essential step in dealing with wounds, however, is to recognize that they cannot be undone, or even fully healed. All that can be accomplished is to prevent the wounds from becoming more infected.

"Time," as someone once said, "marches on." You don’t have to forget; you don’t have to forgive; but you do have to move on. People cannot control what has happened, but they can and should control what will happen — because it is inevitable that something will.

* George Santayana, The Life of Reason, Vol. 1, Reason in Common Sense, (Dover Publications edition, 1980; originally published by Charles Scribner & Sons, 1905).

Thursday, December 24, 2009

Fear of Being Outfoxed

"Everybody has to save face, and, whether they have to or not, everyone tries to; it’s one of the basic compulsions of men." John D. Voelker, writing as Robert Traver, Anatomy of a Murder (New York: St. Martin’s Press, 1958), 42.

The above-quoted maxim is especially accurate when it comes to lawyers, and even more so when it comes to trial lawyers. Put simply, trial lawyers hate to lose. They are usually willing to moderate their thirst for victory enough to participate in settlement negotiations, but, when the dust settles, they still like to feel they won by doing better for their clients than the other lawyers did for theirs.

In saying this, I do not mean to suggest that it’s all gamesmanship — i.e., the lawyer who dies with the most points wins — or that we trial lawyers are completely driven by our egos. Of course, given Voelker’s observation, there is always going to be some of that. After all, no lawyer worth his or her salt wants to be snookered. But more important than ego to most lawyers is that our clients hire us to get the best results we can. If we take our clients’ money, we’re expected to advocate.

What’s important to most litigants involved in settlement negotiations, assuming the numbers being discussed are in the so-called "zone of possible agreement" (ZOPA),* is knowing that the other side’s best number has been reached. This is why the cautious back and forth negotiation that we call the "mediation dance" happens, and why most people rarely "cut to the chase" right away. The dance is a necessary component in just about all settlement negotiations. Can you imagine two trial lawyers having the following conversation?

Defense Attorney: My client and I think settlement value is between 200 and 250 thousand dollars.

Plaintiff’s Attorney: That’s about where I put it. Want to split the difference at 225?

Whatever the cause of people’s tendency to hide their hole cards, it’s all part of the adversarial process. It has been with us for centuries, and is likely to be with us well into the future, if not forever. It is one of the reasons why it’s wise for parties contemplating mediation to allow for as much time as possible for the process. I have been in mediations where early negotiation results in substantial movement, but hours are spent thereafter in making only tiny incremental changes. Was such extra time wasted? I don’t think so, because when that sort of thing happens, everyone is virtually certain that the other side has reached the end of its rope — and is satisfied that nobody was outfoxed.

* Defined as "the set of all possible deals that would be acceptable to both parties." Deepak Malhotra & Max H. Bazerman, Negotiation Genius, (New York: Bantam Dell, 2007), 23.

Thursday, December 17, 2009


We’ve all seen it. The parties negotiate back and forth all day, only to bog down in the late afternoon, leaving a sizeable gap between demand and offer. All sides announce that they have gone as far as they can and look to the mediator to figure out a way to reach resolution despite the frozen state of negotiations. Sometimes a good mediator can help find a way to create some additional value to bridge the gap. Unfortunately, though, all too often the parties are not looking for ways to close the gap; instead, their view of the mediator’s job is to make the other side see things their way! When the parties feel like this, the result is called "impasse," a/k/a "a predicament affording no obvious escape."*

True impasse comes about because each party believes it is correct in its analyses. The difference usually arises because there are pieces of the puzzle that haven’t yet been found or, if found, have not been fully understood.

John DeGroote, in his Settlement Perspectives web log, observed: "If you and the other side value the case differently, at least one of you is wrong." See John’s November 7, 2008, post entitled "Better Settlements From Better Information: Early Case Assessments IV." Of course, if the only unknown is what the result of a trial will be sometime in the future, you won’t find out for sure who is wrong until the proverbial "twelve [people] good and true" have rendered their verdict. However, since the parties decided at one point to mediate, I will hopefully be pardoned for assuming that they want to avoid that particular risk.†

On the other hand, if pieces to the puzzle are missing because discovery is incomplete, the parties and the mediator may want to consider adjourning and returning later after gathering further information. But the best way through impasse to resolution may not always be to complete the requisite discovery. Discovery costs money, so deciding whether to go ahead with it will require a cost-benefit analysis: is the cost of finding those additional puzzle pieces justified by the amount of money still at stake? And bear in mind that the parties might end up spending the money only to learn that they were both wrong or the results are still inconclusive.

Often the best way through impasse is to simply bite the bullet, recognize that you have pushed the other side as far as you can, split the difference in some fashion, and go home.

* Merriam-Webster Online, accessed December 11, 2009.

† See "Jury Prognostication," posted October 15, 2009.

Thursday, December 10, 2009

When Not to Mediate

I am a strong advocate of settlement. Like Lincoln, I believe that lawyers are at their best when they are advising their clients to make peace.* Having said this, I also understand that peace is not always an option. For true peace to be possible, the parties must want it to be the outcome. If either party — whether plaintiff or defendant — comes to the table with an unshakeable demand for unconditional surrender, there is usually no point in coming to the table at all. See, e.g., "We Got ‘Em Cornered!" posted July 11, 2009.

I know, I know; sometimes such a hard-ball attitude may simply be a ploy, and a skilled mediator may be able to help the parties achieve agreement despite such initial posturing. What I’m talking about, however, are the occasional cases where there is no ploy — i.e., when the "no prisoners" approach is genuine. In such cases, it is unlikely that even the best mediator will be able to truly convince the recalcitrant parties to bend, so it is usually better for the folks who want war to simply say so, and decline to mediate.

This is so because an agreement to mediate a tort case usually implies a willingness by all to compromise to some extent. Therefore, the participants usually expect that the others: (a) want to settle; and (b) are willing bend at least a little in order to accomplish (a). Most people, after going to the trouble of preparing for mediation, tend to react unpleasantly when they show up ready to negotiate only to discover that the others are not. This usually results in more than just a waste of time, because the offended parties can be expected to redouble their efforts to prepare for trial and may end any hope, albeit flickering, of a mutually satisfactory settlement later on. This is one of the reasons I am opposed to mediation being required by the courts. See "Should Mediation be Mandatory?" posted May 17, 2008.

Of course, one doesn’t always know whether a refusal to mediate is itself just another ploy. Many hard-nosed negotiators hold firmly to the belief that you don’t reach agreement without saying "BOO!" at least once. See, e.g., "Driving in Germany" posted June 7, 2008. If you suspect that your opponent’s refusal to participate in mediation is mostly gamesmanship, you might consider unilaterally hiring a mediator to approach the other side and do an independent assessment of the situation before you abandon the effort.

If, however, it is apparent after such efforts that the other side won’t negotiate, don’t keep pushing. Instead, make sure your opponent has your phone number in case he or she has a change of heart, then continue with your trial preparation.

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

Thursday, December 3, 2009

Multi-Party Mediation

One on one mediation — that is, one plaintiff versus one defendant — is familiar to most trial attorneys. Depending on the complexity of the facts and the legal issues involved, such mediations can be difficult or easy, but they usually involve a fairly simple concept: the two parties either ultimately agree on the relative responsibility and value or they do not.

The complexities may increase exponentially when more than two parties are involved. In multi-defendant cases, for instance, the principal difficulties may involve the plaintiff (or plaintiffs) very little, if at all. Often, the defendants will come to a basic agreement concerning the total settlement value of the plaintiff’s case, but disagree strenuously on how that amount should be divided among them. In catastrophic injury cases, differing levels of available coverage, both primary and excess, add further complexity to the mix. A carrier with relatively low primary limits insuring a defendant with only marginal liability, for example, may find itself pressured into paying more than it thinks it ought to by an excess carrier that is also the primary carrier for one of the other defendants!

One technique used in cases with multiple defendants is to gather them together for a preliminary session (or sessions) in advance of the mediation in chief. Sometimes the same mediator may be used for all sessions; sometimes not. The object of this pre-mediation, if you will, is to see how much agreement may be achieved among the defendants without forcing the plaintiffs to sit cooling their heels for hours while the people with the money wrangle among themselves. For an example of a technique that has been used with some success to accomplish such agreement, see Jeff Kichaven’s discussion of the so-called "Surowiecki Ballot" in his October 2008 article entitled "A Tool for Multi-Party Insurance Litigation Mediation with ‘Additional Insureds’." Hopefully, by the time of the main event, the defendants will be prepared (up to a point) to work together in a common cause.

Sometimes, the defendants never reach agreement on the percentage each will be willing to make. If that happens, another technique is for the mediator to meet separately with each defendant and obtain the best offer each is willing to make. At the end of this exercise, the mediator then discloses the total package available from all defendants, but does not disclose the individual contributions each has authorized. Having obtained total authority from the defendants, the mediator will then meet with the plaintiff — or plaintiffs, if more than one — and determine if settlement is possible within the authority given. Of course, if it isn’t enough, step one may have to be repeated.

If, after all is said and done, the mediator cannot get substantial commitment from all of the defendants, he or she can explore whether the plaintiff(s) may or may not be willing to settle separately with some of the defendants, while continuing to pursue the others.

As a last ditch effort to achieve at least a partial settlement, the mediator may seek preliminary contributions from the defendants sufficient to settle with the plaintiff(s), with the defendants agreeing to resolve their final contributions through separate arbitration (or litigation) among themselves. This course of action has the advantage of capping the total amount to be paid to the plaintiff(s), thus protecting the defendants from the consequences of a runaway verdict, while allowing them to fully litigate their final contribution percentage vis a vis each other.