Saturday, May 22, 2010

Who Needs Mediation?

The practice of going to mediation to resolve a litigated dispute has become routine.  Mediation is now viewed as a planned-for stage in the proceedings where the case is likely to get resolved.  The parties file their pleadings, attend a scheduling conference with the judge, perhaps engage in some motion practice, perhaps exchange some written discovery, but often postpone at least some depositions, expecting to settle the case at a scheduled session with a mediator.  This practice seems all well and good--good for the parties, good for mediators.  But maybe it's too much and not enough at the same time.

If all you want to do is settle the case, there are lots of ways to do that without calling a mediator.  Holding ongoing settlement conversations between the attorneys was the way we always used to do it in the old days before mediation became so prevalent.  Lots of attorneys are able to settle cases by direct communications with opposing counsel.  It is surprising, however, how many times parties and attorneys show up at a mediation without having had a single serious settlement discussion beforehand.  Perhaps the availability of mediation is contributing to a decline in direct negotiations between counsel.

Sometimes the parties themselves circumvent their attorneys and open up a settlement discussion between themselves.  More often than not, however, that avenue is blocked by one or both parties' unwillingness to talk to the other side.

New tools are also becoming available to resolve disputes without mediation, and even without communication of any sort, including on-line services that allow the parties to input settlement demands and offers to a computerized system that simply advises the parties whether they have reached agreement without revealing either side's offers to the other side.  (See also the comments on a post on Peter Phillips's blog where another such provider tried to help me understand such a system.)   Again, if all you need to do is settle the case, and you don't need help understanding the other side's view of the case, and you don't need help overcoming any emotional or other issues that are contributing to the dispute, maybe you don't need mediation.  No one would think of hiring a mediator to help them buy a car for example.  You just go to the dealer, do your best haggling, and agree on a price.  In that kind of negotiation, the mediator's function would be limited to providing a forum for settlement negotiations to take place, and perhaps serving as a negotiation coach for the parties.  Or, especially in settlement conferences conducted by sitting or even retired judges, the mediation functions as a place where people go to get a neutral evaluation of the case, which they can either accept or reject or perhaps modify.  

If people only think of using mediation to conduct a formalized settlement negotiation, they may not be realizing mediation's full potential.  I sometimes ask parties attending a mediation what they think the goal of mediation is, and they usually reply: settlement.  Correction, I say.  Settlement is only one possible by-product of mediation.  The true goal of mediation is enlightenment.  Mediation is the place to allow the parties to understand the other side's motivations and interests.  Mediation is the place to allow the parties to explain their own goals and feelings.  Mediation is the place to gain a better appreciation of the benefits and costs of the parties' alternatives, whether by a negotiated resolution or trial.  Mediation could be a place to narrow the issues in dispute, reduce the costs of litigation, and focus the parties on the most important parts of the case.  Mediation might be a place to explore more deeply the full costs and risks of continued litigation.  And mediation could be a place for obtaining true reconciliation between the parties, or perhaps finding the basis for a new business or personal relationship.  You can't do any of that by just throwing numbers into a hat. 

All this means that mediation could be overkill for some cases that just need a venue for settlement negotiations (although a half-day session with a mediator is not a big price to pay to resolve a dispute that would otherwise consume substantially more than that in legal fees).  On the other hand, mediation is under-utilized to the extent that parties are not always willing to engage in an intense discussion of all of the forces driving the dispute.  Mediation is also seriously under-utilized as a true alternative to filing a lawsuit, either in cases where parties have potential legal claims; or as a means of resolving business or family conflicts that don't belong in court, as I discussed in a previous post.

(illustration from Bovee & Thill Real-Time Updates)

Monday, May 17, 2010

Optimistic Forecasts

A new study published by the American Psychological Association asked lawyers six to twelve months in advance of trial to set their minimum goals for the trial outcome and their predicted chances of reaching that goal.  The largest percentage of lawyers who participated in the survey fell short of their goals, and also expressed over-confidence in their chances of reaching their goals.  Interestingly, the lawyers' level of experience did not produce better predictive results.  Also interestingly, women lawyers were somewhat closer to the mark in their predictions than their more over-confident male brethren.

I don't find these results surprising at all.  Lawyers must project confidence to their clients, otherwise clients will doubt whether their lawyer is on their side.  Lawyers also must believe in their own ability to make a convincing case, otherwise they will not make as strong an impression at trial. On the other hand, lawyers do not want their clients to be angry or disappointed about the results at trial, so they have reason to arm their clients with accurate information about their chances so that clients can make an informed decision about whether to settle the case or proceed to trial.

One of the purposes of mediation is to allow a neutral party to get such a message to the client, a message that the client's own lawyer may be uncomfortable or unable to make himself, but in most cases actually wants the client to hear and understand.  Mediation can also present an opportunity for one party to hear the other side's over-confident assessment of that side's prospects at trial, which can counter-balance the first party's attorney's predictions.  The mediator's challenge is to get the best available information about the value of a case across to each party without undermining the client's relationship with their own attorney.

Tuesday, May 11, 2010

A Mediator on the Supreme Court?

In announcing his nomination yesterday of Elena Kagan for Justice Stevens's seat on the U.S. Supreme Court, President Obama praised not only her achievements and intellect, but also her open-mindedness, and her "skill as a  consensus-builder."  As dean of Harvard Law School, Kagan was known for bringing peace to a famously fractious faculty, and for opening the doors to a variety of political viewpoints.  As solicitor general, she has spent the past year studying the Supreme Court, looking for ways to entice a majority to support the government's position.  This appears to be the training and temperament the President is looking for at this moment on the Supreme Court.

Some on the left are disappointed at this selection, believing that Elena Kagan is too moderate in her political views.  No doubt they would have preferred a liberal firebrand in the spirit of a Justice Douglas or Marshall or Brennan, or even a Stevens.  And a valid argument can be made that the Court could use a voice like that, to counter-balance a number of strong conservative voices.  But with five fairly to very conservative justices on the Court already, adding an ideologically unbending liberal justice would probably only allow that justice to write a lot of stirring dissents.  Expressing strong, principled positions makes people supporting those positions feel better, but those kinds of expressions don't always persuade others of opposing views.  President Obama, as I've said elsewhere, has the instincts of a mediator himself.  For that, he has sometimes been criticized as unprincipled or too willing to compromise. It is not surprising in the least that he would choose someone who also has a reputation as a conciliator and consensus-builder, not just because that choice may feel more natural to him or safer politically, but also because he probably believes that someone with those skills will be better able to craft an opinion in a way that might garner a fifth vote to support a more moderate to liberal position. 

With the retirement of the last liberal Republican on the Court, the Court may take on the appearance of a more partisan political body, its five Republicans and four Democrats forming cohesive blocs and dividing on ideological lines.  There are two ways to approach such a situation fraught with inherent conflict.  One is to let it happen: encourage all nine justices to act on principle, accept no compromise, and let the results be determined by whatever voting power the strong liberal and strong conservative positions can respectively command.  That is the approach that views politics, or litigation, or history, as a dialectical contest between opposing viewpoints.  Another approach is to encourage these justices to listen to one another and make an effort to find consensus.  Obviously, the President believes the situation calls out for a mediator on the Court.

Can a justice who will in most cases side with the more liberal wing act as a "neutral" mediator in the way that people are accustomed to thinking of mediators?    The answer is no, of course, in the sense that no member of the Court with their own vote and their own views on the legal issues can function as a true mediator who has no stake in the outcome.  But a justice's own inclinations should not prevent her from trying to form coalitions or look for common ground with her ideological opponents.  In other words, you would not expect a sitting justice to be neutral in the sense that they have no pre-dispositions on the issues coming before the Court, but you might want to know whether they are capable of finding common ground with positions opposed to their own. (I'll save for another post some thoughts on whether a mediator should be, or can be, a true "neutral.")  Some appellate judges or politicians are temperamentally inclined toward taking strong, "principled" stands in disregard of opposing views; others make strenuous efforts to seek out common ground.  At times many of us would rather lose the fight than sacrifice our principles, while at other times we may be flexible enough to modify our own positions so as to accommodate competing interests.  The latter quality is what enables disputes to be resolved by agreement as opposed to by contest.  As an example, Justice Rehnquist, who remained very conservative throughout his career on the Supreme Court, started out as a strident and often a lone dissenter, but especially after he became chief, was much more inclined to look for ways to put together majorities in support of positions close to his own.  (I recognize that the main reason that Justice Rehnquist found himself more often in the majority was that the entire Court shifted to the right, but Rehnquist still became more of a coalition-builder and less of an iconoclast over the years.)  The President is obviously looking for a justice more in the mold of the later Rehnquist than the younger Rehnquist.

(illustration of Supreme Court argument from Greg Smith website)

Saturday, May 8, 2010

Multi-Party Disputes

This week's parliamentary election results in Great Britain illustrate the complexities of three party negotiations.  The last time elections resulted in a so-called "hung Parliament" was 1974, when the Conservatives failed to put together a deal with the Liberal Party to form a government.  To a foreign observer, it is hard to understand why the Conservatives, who won this year's election, cannot simply offer the Liberals some important ministries in exchange for their support, but British politicians, unlike say Israeli politicians, who are used to a real proportional representation system, seem to have little taste for making the sorts of deals necessary to cobble together a parliamentary majority. The British appear more comfortable with a winner-take-all system, both at the district level and the national level.

Neither the Conservative Party nor the Labour Party seem likely to agree to the Liberal Party's demand to create a true proportional representation system in Britain. They both recognize that proportional representation would probably mean the end of the winner-take-all system forever, and all future governments would require coalitions. So the impasse continues this weekend. Perhaps it will be resolved by a temporary coalition agreement, with new elections scheduled within a relatively short period, in the hope of a more conclusive outcome. Or perhaps the British will have to adapt to a new era.

Litigation is often conceived as a winner-take-all system. Complicating that view in real life, the plaintiff's side recognizes that it may achieve only a partial victory, depending on the size of the verdict. The defendant also rarely obtains a complete victory, since the cost of obtaining a defense verdict is generally very high. In two party mediations arising in the litigation context, the impulse to reach a settlement may arise from both parties' desire to avoid the risk of an adverse winner-take-all result. But the outlines of potential settlement can still be plotted on a single distributive line between the extremes of possible results in only two dimensions. Three (or more) party mediations present qualitatively different problems. The existence of multiple claims creates additional conflicts, and sometimes impedes resolution of the main conflict. I am currently involved in a construction mediation, for example, in which we had to resolve a couple of subcontractor claims before the main dispute between the owner and the general contractor could be considered. I attended a seminar this week in which the instructor described a case involving the opposite situation, where the two main parties had reached an impasse, requiring the smaller parties to put together their own settlement proposal, otherwise they would be dragged along into protracted expensive litigation.

Increasingly we seem to live in a world that cannot be conceived in black and white, us vs. them terms. Instead we must get used to shifting coalitions of interests of different sizes and shapes, re-aligning in different ways on different issues. This is as true in international politics, with an increasing number of powerful players, as it is in national or local politics, as it is in private multi-party disputes. Such a world would seem to require more flexible and adaptive techniques for resolving disputes.

UPDATE (5/13/10):  On my political blog I posted a comment on the surprisingly quick ability of the Conservative and Liberal Parties to form what appears to be a strong coalition agreement.  Not only that, David Cameron, the new prime minister, is promising a new kind of politics:  
"Where co-operation wins out over confrontation. Where compromise, give and take, reasonable, civilised, grown-up behaviour is not a sign of weakness but of strength." 
Music to a mediator's ears, obviously.

UPDATE (5/22/2010): For a good discussion of the risks of settling with only some defendants in a multi-party dispute, citing a recent California Supreme Court case where the plaintiffs had to pay the non-settling defendant's legal fees because they recovered less at trial than the amounts they had previously received in settlement from the other defendants, see this post on Michael Carbone's blog. 

Monday, May 3, 2010

The Meaning of Life

I recently saw the trailer for the Karate Kid remake, which made me wonder if it would match that thrilling moment in the original film where the kid suddenly realizes that all the time he thought he was just being exploited into doing a lot of backbreaking work, he was actually learning karate.



Here is a dream of how I'd like to conduct a mediation: We all sit in a room discussing who knows what, getting to know each other better. All of the discussion seems tangential, even completely irrelevant to the matter the parties are so concerned about. Maybe we tell stories or do some exercises or play some games that people find a little weird or uncomfortable. Or, even if they find the session interesting and enjoyable, they still wonder whether it has anything to do with settling a lawsuit. People might become a bit bored or frustrated. We still haven't talked about the case at all. Finally, when some people can't take it anymore, and are ready to walk out, someone suddenly realizes they have all the tools they need to resolve their dispute, and they are able to do it in about five minutes.

I haven't actually succeeded in conducting this fantasy mediation, but I think about doing it. And I did once participate in a weekend retreat with my former law firm partners that went something like what I am trying to describe. What I do try sometimes in mediations is to avoid talking about the legal and factual disputes involved in the case for as long as we can, because I'd rather talk about the parties' current business projects, or their plans for the future, or their interests and hobbies, or their kids, or anything, really, other than the dispute that brought them to mediation. I find that the further we can take those conversations, the easier it tends to be to settle the case.

I handled a mediation recently between two long-time friends who made an unfortunate decision to become business partners for a couple of years. The dispute that brought them to court was relatively small, involving a customer who had not paid them, but they needed each other's consent or cooperation to resolve it. What prevented them from resolving that dispute were hundreds of grievances they had against each other arising from their failed partnership. Only after they both realized they just had to let go of all those grievances did they both realize how simple it was to resolve the dispute. (The entire mediation took about two hours, and we did the whole thing in joint session, without a lot of discussion of their respective claims in the lawsuit.)

Think of the mediator as a salesman. What are we selling? Peace, enlightenment, fairness, money, maybe all of the above. Sometimes the hard sell approach works, just pounding people relentlessly on the benefits of whatever values might appeal to them, and reminding them of the costs and risks of continued litigation. But other times it is beneficial to pursue the subject a little more indirectly, by contemplating larger issues of life's meaning. Another movie scene comes to mind. Watch how Al Pacino's character conducts his sales pitch in David Mamet's Glengarry Glen Ross, asking his target to think about "what is our life?," drawing him in by making him contemplate crossing the boundaries of middle class morality. Notice how Pacino deliberately downplays and even denigrates the value of whatever he might be selling, at the same time making the Jonathan Pryce character think that the opportunity he is being offered might actually be the key to unlocking the whole meaning of life:



I believe in honesty and transparency, so I don't think I could be as devious as this character, but I also believe that you sometimes have to step back from or circle around whatever it is that most consumes your thoughts in order to put that problem in perspective, and solve it.