Tuesday, December 27, 2011

Optimism

There is a lot in Daniel Kahneman's book Thinking, Fast and Slow of interest to mediators and other people involved in conflict. The book sums up a lifetime of work in psychology and economics, and serves almost as a catalog of cognitive biases we encounter in business, the legal system and elsewhere.

One chapter describes the optimism bias, which may be essential to making capitalism function, but which also leads to many costly decisions for individuals. For example, the optimism bias leads entrepreneurs to expect success in opening their own small business such as a restaurant, despite the knowledge that the majority of such businesses fail within a few years. Kahneman also describes a similar bias he calls the planning fallacy, which leads groups planning many kinds of projects to underestimate the time required to complete the project and overestimate the likelihood of its success. People simply cannot see, and therefore cannot plan for, unexpected obstacles or problems they may encounter in completing their project.

As an example, Kahneman describes a curriculum development project he was involved in years ago which aimed to produce a new course and textbook. At one point when the work seemed to be proceeding well, he asked the other members of the team to estimate how long they thought it would take to complete the project. Their estimates averaged about two years. Only then did he think to ask a co-worker about the success rates of projects similar to theirs, and learned that such efforts had a 40% risk of failure, and generally took 7 to 10 years to complete. The most amazing part of this story is that this information, while slightly discouraging, had no effect on the group's plans. They still thought they would complete their work within the time frame they estimated, and chose not to abandon the project. They of course encountered numerous unforeseen obstacles, took eight more years to complete their textbook, and it was never used.

Parties involved in lawsuits or other kinds of conflict exhibit these same biases. People tend to think their situation is unique, and are not dissuaded by statistics applicable to similar cases. They believe in the rightness of their positions. They therefore frequently overestimate their chances of success. They also underestimate the costs and risks of pursuing their claims because many of these costs and risks cannot be discerned until they arise.

We can avoid some of the mistakes caused by cognitive biases simply by becoming more aware of them, which is the purpose of Kahneman's book. We can try to avoid the optimism bias and planning fallacies specifically by taking what Kahneman calls an outside view, that is by considering the base rate of success or failure that others experience in similar situations. Sometimes that kind of information is brought to bear in a mediation. But Kahneman's work suggests that hearing this information will have limited impact on parties involved in conflict. People resist applying statistical data to their own unique situation. And often, information about the success rates of similar cases may be unavailable or for some other reason is not taken into account. (Personal injury lawyers and insurance adjusters often rely on statistical jury verdict information, but lawyers in business cases tend to find that kind of information less available or applicable.) Another suggested idea is called a "premortem," in which someone practices giving an explanation of how the project at hand could ultimately fail. I would be cautious about trying that in a mediation, because people generally resist the idea of explaining how they might lose a case. In that setting, sometimes the only counter to one side's overly optimistic view of their position is hearing the overly optimistic view of the other side.

Kahneman's work also provides a good explanation for why many disputes do not get resolved until after parties have directly felt some of the costs and setbacks and delays that people typically encounter in the legal system. We are most impressed with what we experience ourselves, and apt to think that what happens to all the other fools who get involved in legal disputes has little bearing on us. It is usually only after parties have actually received court rulings that do not go 100% their way, and after they have had to pay some of the costs and fees associated with continued conflict, that they become receptive to the benefits of settlement.

Friday, December 16, 2011

Prospects for World Peace

The recent decision by the Lakers player formerly known as Ron Artest to change his legal name to Metta World Peace opens up immense possibilities for sportswriters and commentators to add layers of irony and nuance to their coverage. I'm not sure the sports community is ready to rise to the challenge. For example, although today's LA Times story, about Coach Mike Brown's decision to shift World Peace from the starting lineup to the second string, did lead off by saying that the coach is "giving World Peace a chance . . . to come off the bench," the article otherwise left these possibilities largely unexplored. Never fear. I am fully prepared to leap into the breach.

What kind of message does it send to bench World Peace? We have reason to be disappointed in such a conventional-seeming strategy of turning to World Peace only after exhausting the aggressive efforts of the Lakers' starters. Think about how much excitement the team could create if they instead activated World Peace at the beginning of the game.

Wouldn't we prefer to see the Lakers fully embrace World Peace by placing World Peace at the forefront of their strategy this season, instead of holding World Peace in abeyance? Wouldn't we rather hear the announcer herald the arrival of World Peace at the outset of every game, rather than bringing World Peace in as an afterthought? Don't we want to encourage fans to think of World Peace first, rather than calling for World Peace only after other resources are tired?

We all want World Peace to succeed. Fans should be urging the Lakers to exploit the full potential of World Peace. Of course we understand that the Lakers have to consider what World Peace can do to help the team, but they should also be thinking of what the team can do for World Peace. We have reason to worry now, at the start of this new season, whether the team will truly stand up for World Peace, or whether it will only turn to World Peace on rare occasions.


Friday, December 9, 2011

Mediation Confidentiality in California

 You know that mediation has hit the mainstream when the cover story of the Los Angeles Lawyer magazine (published by the Los Angeles County Bar Association) is about mediation confidentiality.  The scope of mediation confidentiality is not only a hot issue in the field, but important to every lawyer who encounters mediation, which is getting close to everyone nowadays.


Retired Judge Michael Marcus, now a practicing arbitrator and mediator, has published a helpful summary of the development of the law regarding mediation confidentiality in California in both the state and federal courts. I won't try to summarize his summary here, but am posting this for my own benefit and for anyone else who needs a handy link to all the main cases on this issue. There is even a quiz included for MCLE credit.

Saturday, December 3, 2011

Hybrid Proceedings

One of the touted benefits of ADR is that it allows parties to design their own dispute resolution process specially suited to their needs. Problems can arise, however, if a court is subsequently called upon to try to figure out what to call the process the parties have invented. A court might need to do that to decide what rights and obligations the parties have assumed under their process. A recent Federal Circuit case, Kimberly-Clark v. First Quality Baby Products, provides a nice illustration of this problem. (Thanks to the Disputing blog for bringing it to my attention.) In a series of patent infringement disputes between two consumer products giants Kimberly-Clark and Proctor & Gamble, the parties crafted a series of dispute resolution agreements whereby they submitted issues for hearing before panels of arbitrators. Unlike an arbitration, however, the panels' decisions were non-binding and were designed to facilitate settlement. Their decisions did have certain legal consequences, though, such as obligating the "losing" party to pay the arbitrators' fees. Those ADR proceedings apparently worked, enabling Kimberly-Clark and Proctor & Gamble to settle.

The issue before the Federal Circuit was whether to allow discovery in a subsequent case involving a different party (First Quality), of these panel decisions and the underlying proceedings in the disputes between Kimberly-Clark and Proctor & Gamble. Kimberly-Clark attempted to rely on a "mediation privilege" to prevent disclosure, but the Court of Appeals held that these proceedings were arbitrations, not mediations. On that basis, the Court affirmed the order requiring disclosure, and did not need to decide whether there is a federal mediation privilege.

This case points up the need for the Federal Courts to define more clearly the confidentiality rules pertaining to mediation. In the Central District of California, for example, local rules have recently been revised to more closely resemble the confidentiality protections protecting mediation proceedings in California state courts. But a lot of uncertainty still remains.

This case also might serve as a cautionary tale for parties designing their own dispute resolution procedure. As a practical matter, parties who get as creative as Kimberly-Clark did about their dispute resolution needs still probably can't think of every possible contingency. To do that might require them to re-invent their own complete code of civil procedure for every case. Parties should realize that if a court ever needs to interpret what they have done, the court is going to need to pigeon-hole their designer process into categories that a court can understand. In the Kimberly-Clark case the court had to consider proceedings that combined some aspects of arbitration and some aspects of mediation, and decide whether they were one or the other. It might have helped if the parties had better labeled their own process and had included provisions on the confidentiality rules and other rules that should apply if a court ever had to interpret their agreement.

(Liger photo from Listverse)

Monday, November 28, 2011

Truth and Settlement

(Wikimedia Commons)
Judge Jed Rakoff of the Southern District of New York today rejected a proposed consent judgment and  $285 million settlement of an SEC enforcement action against Citigroup. The SEC alleged that Citigroup had defrauded investors in a fund comprised of toxic assets, but was willing to accept a monetary settlement and injunction without requiring Citigroup to admit the truth of these allegations. In this case, the court disapproved this longstanding practice, in its words, "hallowed by history, but not by reason." The court's opinion determined that
the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest. Most fundamentally, this is because it does not provide the Court with a sufficient evidentiary basis to know whether the requested relief is justified under any of these standards. Purely private parties can settle a case without ever agreeing on the facts, for all that is required is that a plaintiff dismiss his complaint. But when a public agency asks a court to become its partner in enforcement by imposing wide-ranging injunctive remedies on a defendant, enforced by the formidable judicial power of contempt, the court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance.
In my practice both as an advocate, and as a mediator, I always find it somewhat disconcerting when a judge takes it upon himself to impose a result on the parties that neither side sought or wants, in this case forcing both parties to assume the extraordinary costs and risks of trial in a case that both sides would prefer to settle. At the same time, I do understand that the court must consider the interests of the public as well as the parties. Evidently, this has been deemed one of those cases where the public is entitled to a public accounting of Citigroup's conduct. This decision could therefore be justified as a means of educating the public about the complexities of these financial transactions, as well as satisfying the public's need for the cathartic experience of seeing banking officials called publicly to account for their actions.

On the other hand, the court may simply be questioning the amount of the monetary settlement in relation to the scale of the investors' losses, and Citigroup's profits. From the perspective of a mediator, I prefer to assume the parties to a negotiated agreement are in the best position to assess the strengths and weaknesses of their case, and that such an agreement is generally going to represent a fair approximation of the costs and risks to both sides of going to trial. To assume otherwise, as Judge Rakoff does, amounts to second-guessing the careful calculations of what are most likely, in such a high profile case, some very competent attorneys.

Mainly I have to question the assumption, repeated several times in the court's opinion, that a public trial is going to allow the public to know "the truth," as well as the assumption that knowing "the truth," if indeed truth is ascertainable at trial, is a more important value to the public than peace. Many factors at trial can impede the discovery of "the truth." What if, for example, a crucial witness for either side presents a poor appearance? Or an especially strong appearance? What if a crucial witness disappears? What about the contradictory comments that always show up in the voluminous documentation involved in a case like this one? There may be other important considerations that militate against pressing forward with a full-blown trial, even in a case as important to the public as this one. Think, for example, of potentially millions in costs and legal fees each side must now incur. Would it be more productive for Citigroup to avoid those costs? Does the government have other more pressing priorities to devote its scarce enforcement resources? Then there are the delays inherent in insisting on a full-blown trial. Is finding out "the truth" worth the wait until next summer's trial? Not to mention potentially years of appeals after that.

Even when a case settles for a much different amount than an outside observer expects or thinks should be justified, nobody--not even the judge--should assume that the parties have miscalculated the value of the case. Instead, it makes more sense to assume that the parties are each aware of factors that could cause their case to blow up. Maybe we think this particular case should be worth a billion dollars, not a paltry $285 million. But suppose the parties know of potential defenses that might allow the defendants to walk away scot free. Given that risk, a $285 million verdict could represent a much better result for the government, and the public, than at least some of the possible outcomes at trial. (See this Wall Street Journal piece quoting the SEC's own assessment of some of these costs and risks.)

It is because these kinds of weaknesses and uncertainties are present in every case, that parties are generally encouraged to settle for a sum that attempts to weigh the likelihoods of a whole range of possible outcomes at trial. If the parties make a reasonable effort to negotiate a resolution, I as a mediator am reluctant to question their result, because I am often not privy to the parties' knowledge of all of the strengths and weaknesses of their case.

And it is because a whole range of outcomes is possible at trial that I also have to question whether a trial can be assumed to allow "the truth" to emerge, as Judge Rakoff assumes. Certainly, a public trial will allow the public to make its own assessment of a mountain of possibly conflicting facts and competing versions of the truth. But we have also seen plenty of very public trials where most of the public's assessment of "the truth" turns out to be directly contrary to the jury verdict. In those cases, what trials prove to the public is that they are exactly the opposite of a method for finding "the truth." When this particular trial is over, my guess is that the public will still be arguing over the meaning of "the truth" of this matter.


Monday, November 21, 2011

Numbers

Numbers are endlessly fascinating. Sometimes numbers take on mystical significance. Often numbers can mislead us. The number 99, for example, seems to be an order of magnitude less than 100, while a number like 22 seems almost equivalent to its neighbor 23 (even though the difference between the two smaller numbers is proportionately almost five times larger).  Ones and twos sound smaller than sevens and eights, meaning that a number like 31 can sound smaller than a number like 28. In negotiations, people place so much significance on the magic properties of numbers that they can declare victory if they obtain a slightly larger value than they expected, and feel defeated if they settle for a tiny bit less (or vice versa for the defendant).

People rely on the properties of our base 10 system, and our ability to picture certain values, to set up artificial boundaries--"I won't take a penny less than $100,000," or " I'll pay anything in the $40,000's, but won't go into the $50,000's."  Those numbers make sense to us, but imagine how those values would look if we translated them into computer language (base 2): Instead of saying $100,000 is my bottom line, which somehow appears logical, I would be saying that I won't go below 11000011010100000, which sounds completely arbitrary and absurd.

We also use numbers to measure the distance each side has traveled toward the other side's position. Parties in negotiations say things like "They only came up $10,000, but I showed good faith by dropping $50,000 from my opening demand." Is that meaningful? That might depend on how reasonable your opening demand was.

Numbers can also allow us to represent parties' negotiating positions in a pictorial fashion. We can depict their opening bids as the goal posts on an imaginary football field, for example, and tell them they get to kick the ball toward their goal, but then the other team is going to run it back somewhat. (That way they understand that if they do well in the negotiations, they might end up on the other side's 30 yard line, but if the other side is more powerful, they might end up on their own 30.) Or we can draw graphs representing the probability of various outcomes at trial (the curve drawn by the defendants generally bulges up on the left, close to a zero verdict, while the plaintiff will usually draw a curve skewed way to the right, representing the high probability of a million dollar verdict). We can draw a zig-zag pattern tracing the parties' offers and demands. We can also draw partially overlapping circles to represent possible areas of overlap in the parties' predictions or positions, or potential settlement ranges. (I also like bar graphs and pie charts, but unfortunately don't find much use for them in mediation.)

In mediation, after we spend a while talking about facts and issues and problems, we sometimes end up spending a lot of time talking about numbers. Especially when the dispute is difficult to resolve, for whatever reason, the discussion of numbers can also become protracted. This discussion can serve as a shorthand for expressing the strong feelings the parties still have not resolved. One side doesn't want to move down from their eight: that's because they feel strongly about their position or interests. Or they feel insulted by the other side's three. Why, I might ask, when someone is offering you money, do you feel insulted? You don't have to accept it. What does that number represent for you that makes you want to head for the door?

During the negotiation end game, when the numbers get reasonably close to each other, there may be no material difference between the parties' positions. Yet even when both sides already know they are probably going to settle, and cannot explain why one side's number makes any more sense than the other's, it can still be difficult to bridge that last remaining gap. Why? Maybe because there's still a final reluctance to let go of the dispute. Or maybe because whichever side can make the other side blink last will feel like they "won." People sometimes care about doing well in the negotiation as much as they care about resolving the dispute.

I remember one of my former New York law partners telling me about a big Wall Street player he used to run into on the train platform from their Westchester suburb. Once he asked the guy, "Why do you do it? What motivates you to keep going to work, when you have already put away enough to retire and live however and wherever you want?" The player answered that it was all a game to him at that point. He enjoyed the game, and money was how you keep score. We care about numbers because that's how we keep score. People aren't content just to say they achieved peace, and feel much better now that they have eliminated a troublesome dispute from their lives. Even if that is how they feel, they still have to answer the inevitable question: How much? (How much did you get? Or how much did you have to pay?) We need to quantify the result. Maybe we learned how to do that way back when the teachers first started handing out our test scores. Or when we argued about the results of baseball or basketball games.

I handled a mediation recently in which the defendant asked me at one point, why do you keep trying to get me to pay more? As if my request showed that I doubted the soundness of his calculations, or the strength of his arguments. I had to explain that that was my job: to use all the tools the other side was giving me, and all my persuasive powers, to get him to pay more. But I also assured him that when I went to talk to the other side, I would use all the tools he was giving me, and all my powers, to persuade the other side to take less. Then I told him it was all the same to me whether he paid 5 or 6 or 7 (put whatever suffix you want on these made-up numbers).  Any of those numbers to me seemed better than the alternative of spending a lot of money on nasty litigation. A light seemed to go on when this guy realized that it didn't matter to me what number the case settled at. And another light popped on in my head as I realized that that particular case was about to settle. Because now this guy wasn't so invested in his particular boundary line either. He just had to decide the simple question of whether he wanted to resolve the dispute or not. (It settled very close to 6.)

Thursday, November 10, 2011

Mediate / Collaborate

As a new feature this year, the SCMA fall conference sponsored two institutes the afternoon before the traditional Saturday conference. The one I attended was on the interaction between collaborative law and mediation. I probably have no business writing a blog post on collaborative law, because I know very little about it, but in the course of acting as devil's advocate and class trouble-maker at the institute, I did learn a few things. One is that collaborative law is becoming more widely accepted in divorce proceedings. Another is a little bit about how it works, most notably that all professionals must operate under what is called a participation agreement that requires them to disqualify themselves if the matter goes to court. That gives everyone involved a powerful incentive to work towards an agreement, while diminishing the participants' ability to threaten a lawsuit if the negotiations fail.

The presenters of this program, mediators Woody Mosten and a group assembled by Diana Martinez, talked about how mediation and collaborative law interact, and the similarities in values between mediation and collaboration. They also explained how other professionals, such as therapists or counselors or accountants can be employed in a collaborative setting to put together divorce and custody agreements.

I had to admit that the whole idea made me a bit uncomfortable, but that is probably because I am so used to working in the business litigation context, whether as a trial attorney or as a mediator, and I have less experience with family law. To me, it feels more comfortable to have the attorneys playing their traditional roles as zealous advocates for each side. Indeed, one of the benefits of mediation is that it frees attorneys to continue to play the role of fierce advocates for their clients, which clients generally appreciate, rather than putting the attorneys in the position of having to remind their clients of the weaknesses of their positions. The mediator can then assume the role of pointing out the strengths of the other side's position, and the costs and risks of litigation.

On the other hand, as collaborative law was explained to me, it didn't seem all that radically different from the way I have come to practice litigation, a style that tries to avoid acrimonious and counter-productive fights along the way to resolving a dispute, saving the zealous advocacy for when it becomes important to arguing the client's substantive position in court. And when I act as a mediator, the thrust of my efforts is often to help the attorneys for the warring parties, and the parties themselves, work together to solve their common problem (the dispute), rather than work at cross-purposes to try to allow one side to prevail over the other. Collaborative lawyers remain advocates for their client's positions, just like traditional attorneys, but do so in a more cooperative and a less adversarial manner. The difference between collaborative lawyers and those traditional litigators who have also learned to avoid unnecessary acrimony is that the traditional litigator retains the option of taking the case to trial, while the collaborative lawyer must drop out if that is the route the parties choose to take.

What I haven't seen yet is what a mediation would be like with collaborative rather than traditional litigation attorneys. But now I'm curious to try it.

More resources:
International Academy of Collaborative Professionals
Los Angeles Collaborative Family Law Association 
Mosten Mediation
West Coast Mediation 


(photo from Divorce Tips Site)


Sunday, November 6, 2011

Imagining the Future

Congratulations to my fellow SCMA board member, and new president Barbara Brown, for pulling off a very successful SCMA fall conference at Pepperdine this weekend!

Forrest (Woody) Mosten led a presentation yesterday called Mediation in the Year 2030, imagining what the world of ADR might look like 20 years from now. Apparently, in the courthouse of the future, there will be 10 mediation rooms for every traditional courtroom. All judges and staff will be trained in mediation. Mediators will be credentialed, and highly skilled. Clerks will be helpful and friendly, seeing themselves as consumer representatives. Many disputes will not even enter the courthouse. Mediators will be the first point of contact in resolving many disputes, and will assemble the necessary team of professionals appropriate to address each conflict. The values of mediation will pervade business and government, indeed all of society. We will have a Department of Peace, in addition to the Department of Defense. All in all, a very encouraging and hopeful picture for those of us interested in expanding the role of mediation.

This vision, which might seem a bit utopian, is actually only an extrapolation of current trends in ADR, and is not too different from ideas others, including myself, have advanced for the dispute resolution systems of the future. I asked the judges on the panel I moderated later in the day whether they agreed with this vision of the future, and while a bit skeptical of all the specifics, they agreed that ADR has an expanding future.

The talk that was really eye-opening for me, however, was one by Colin Rule, who has been building an online dispute resolution system for eBay and Pay Pal, that now handles many thousands of transactions. (He now heads his own online dispute resolution company.) Because the amount in controversy in these disputes is small--often less than $100--and because they involve buyers and sellers in different jurisdictions, often on opposite sides of the world, they are completely beyond the capacity of any "earth-bound" judicial system to administer, and they are also of no interest to lawyers. These disputes can only be resolved in the virtual world. The system that Rule and others have developed demonstrates that by allowing needed communication between the parties to occur, the vast majority of these disputes can be resolved satisfactorily by negotiated agreement. One thing that seems to make such a system work, without any need for courts, or agreed-upon rules, or enforcement mechanisms, indeed without any of the trappings we traditionally think are needed for a legal system to operate, is that eBay has built powerful incentives into its system to encourage sellers to worry about preserving their online reputations. In this age of social networking, online reviews, and other kinds of easily-accessible public information about all of us, everyone now has to be concerned about protecting their reputations. That should create opportunities to use these same kinds of incentives to build dispute resolution systems of much broader application.

What struck me was not so much the online aspect of this new dispute resolution system--the high techiness of it all--but the possibility it demonstrates for creating a new alternative dispute resolution community in a globalized economy that is beyond the control of any nation, and that has no need for police officers, or authority figures wearing robes, or jails, or courthouses, or law books. Such a system of conflict resolution might work for many kinds of disputes, because it is based on forces that might be just as powerful as the powers of the traditional justice system: our common desire to get along with one another, our shared humanity, our wish to avoid the strife of conflict, and our self-interest in preserving our reputations as decent and fair people. I don't think that such a system is going to replace the courthouse anytime soon, but it is still amazing to watch how fast it is growing.

(Still from Back to the Future: not destroying the courthouse, but giving it a necessary jolt)

Friday, October 28, 2011

Court panel panel

It's not too late to register for the SCMA fall conference at scenic Pepperdine Law School in Malibu, worth driving up to for the view alone. The program promises to be just as spectacular as the setting, with two institutes, on elder mediation and collaborative family law, scheduled for Friday, November 4, before the main conference on November 5. A few of the Saturday panels include online dispute resolution, intercultural mediation, confidentiality and ethics, ombuds programs, conflict management coaching, and more. To top it off, we will have a keynote speech from Father Gregory Boyle, founder of Homeboy Industries.

I am excited to have the chance to moderate a discussion on developments in court ADR programs, featuring the administrators of both the Federal District Court and LA Superior Court programs, as well as two judges. I was originally supposed to help put together a panel featuring the producer and possibly the star of the TV mediation show Fairly Legal, but that unfortunately fell apart due to circumstances beyond our control. No matter. The three women (and one man) I'm sharing the stage with are going to be even more dynamic and interesting than the TV people would have been. Seriously! This main topic of this entire blog is figuring out how to integrate mediation into the court system. What could be nearer and dearer to my heart, then, than to have the chance to address that topic for over an hour with the very people who are trying to make that happen? Everyone within driving or flying distance who is reading this should plan to attend and come armed with good questions.




Sunday, October 23, 2011

The Illusion of Validity

Today's New York Times Magazine had an article about the hazards of confidence, by Nobel Prize-winning psychologist Daniel Kahneman, adapted from his forthcoming book Thinking, Fast and Slow. Kahneman describes some team-building exercises he engaged in many years ago in the Israeli Army, that were used to predict the leadership qualities of soldiers. It turned out that these exercises had no predictive power whatsoever, yet those who participated and evaluated the results continued to believe in their value, even after seeing their lack of predictive power. It must just seem intuitively obvious that those who exhibit the most skill at such tasks as figuring out how to get the team over a wall, would perform best at leadership tasks in the military. Kahneman calls this cognitive fallacy, the illusion of validity.

Kahneman noticed a similar phenomenon in studying the work of stock traders. He discusses studies showing that stocks that traders sell actually out-perform the stocks they continue to hold. It seems that a lot of stock traders would show just as good or better results if they didn't even bother coming to work. Kahneman once analyzed the performance of a group of investment advisers, finding that none of these advisers managed to out-perform the others when their results were compared over a number of years, suggesting that theirs is a game of chance more than skill. Yet every year, bonuses were awarded based on individual performance, and the best-performing advisers each year no doubt congratulated themselves on the results they had achieved for their clients. These economic and psychological studies show that it is difficult to shake people's belief in their own powers of prediction, or in the validity of the tools they use to make decisions, even when those tools are shown to have no predictive power.

In mediation, we see these kinds of cognitive fallacies, and others, all the time. Parties and their attorneys make predictions of success based on inadequate or even misleading or worthless information. Parties believe, understandably, in the validity of their positions; and attorneys are expected to show confidence in their clients' cases, as well as in their own skills. Part of the mediator's job may be to shake people's confidence in their predictive powers, something that Kahneman's work suggests may be impossible to do. It is also a tricky thing to attempt when the mediator is at the same time trying to show empathy and understanding for each party's predicament. So I might tell a party that they should place great reliance on their attorney's evaluation that they have a 75% chance of winning their case at trial. But they might also want to take into account that the other side's attorney thinks their side has a 75% chance of winning. It's not that either attorney is wrong, it's that the outcome of cases might be a bit harder to predict than people think it is.

(Tim Enthoven illustration from NY Times article)

Sunday, October 16, 2011

Don't Shoot.

Last week I heard David Kennedy (author of the new book Don't Shoot) and LA Police Chief Charlie Beck talk at the Aloud Program about reducing gang violence. Kennedy's theory, which has been implemented successfully in a number of cities, including Los Angeles, sounds almost too good to be true. As I understand it, the approach has several parts. First, recognize that the number of people responsible for the vast majority of violence in most cities is relatively small. So concentrate on those people. Next, let the street gangs know that violence will no longer be tolerated. The police will keep track of which gangs are responsible for the most violence, and will make life as miserable as possible for those particular gangs. That gives each gang a powerful incentive to lower their violence profile. Finally, and perhaps most importantly, utilize other forces in the community--peer groups, families, other community institutions--to pressure gang members to put their guns away. What happens? Everybody starts to understand that they are safer and better off if they stop resorting to shooting one another to solve their disputes. And dramatic reductions in gang violence start to occur.

In the question and answer session, audience members kept trotting out one after another pet theory for reducing crime (in this audience mostly liberal pet theories): What about reducing poverty? How about gun control? Why not legalize drugs? The chief and the author acknowledged each of these issues, but showed how none of these approaches has as much effect on the specific problem of gang violence as the so-called "ceasefire" approach. It turns out that if your goal is to reduce gang violence, you just need to focus on that. That means that the conservative nostrums for crime reduction, which Chief Beck recounted with a brief history of the LAPD's various militaristic responses to gangs over the last couple of decades, don't work either. Young men pay more attention to their mothers than to the police. Who knew? And if you enlist all available forces in the community to communicate the message that gang violence is no longer acceptable, people get that message.
 
Can this theory be applied to other types of conflict resolution?  The speakers talked about using the ceasefire approach to address problems like terrorism, or to the drug wars in Mexico. The theory probably has even more applications than that.

Think about a continuum of dispute resolution procedures, from the most to the least violent (from outright murder, to a duel, to a fistfight, to a trial, to a dialogue). Progress in reducing violence is represented by making each successive adversarial method of conflict resolution less socially acceptable. For example, the United Nations is supposed to operate on the principle that war is no longer acceptable, and provides a forum for an alternative form of dispute resolution. We haven't yet succeeded in eliminating war, but we might have had some success in reducing it. The courts were devised for the purpose of eliminating endless blood feuds, and have succeeded in making private revenge less common. Mediation can be thought of as a means of avoiding litigation, in other words, a movement from an adversarial, though non-violent, means of conflict resolution, to a more cooperative approach. To resolve conflict through mediation, we need to persuade people that conventional adversarial methods are wasteful and destructive. But if logical persuasion was not enough to make gang members understand that it is better not to resolve their quarrels with guns, then logic is is probably insufficient to help litigants understand the value of mediation. Eventually, we may need to change the social norms in the community to dissuade people from suing one another. In time, filing suit in court may come to seem as barbaric as calling out an opponent to a gunfight.

(shorter version originally posted here.)

Sunday, October 2, 2011

Switching modes

Imagine if one could flip a switch that would cause all the parties to a conflict to change their approach from an adversarial mode of conflict resolution to a problem-solving, or negotiation mode.  In other words, stop arguing with one another, and start talking and listening to one another. That is one way of thinking about what mediators do, and of course it is never as easy as flipping a switch. On the other hand, it doesn't necessarily even require a mediator to make the transition.  On my political blog, I posted something--inspired by my rabbi's Rosh Hashanah sermon--about the difference between a crisis model and a values model. He was talking about Israel, but the concepts apply to any conflict. The crisis model, which we seem to adopt in times of war or stress, is built on suspicion and distrust, does not tolerate dissent, and seeks to de-legitimize and defeat the other side. By contrast, what my rabbi was calling a values model, and what those in the mediation business generally call an interest-based approach, is built on trying to understand the other side's concerns, encourages communication among people of divergent views by appealing to shared values, and seeks a mutually satisfactory solution.

Why is it, whether we are talking about international political disputes, or business disputes, or even family disputes, that people seem to reach instinctively for the crisis model? Some would say it's because we respond to conflict with the more primitive parts of our brains. Others might say it's rational to react in a hostile manner to those who are manifestly out to get us. It could be our well-developed sense of justice and injustice that causes us to react with outrage whenever we feel wronged. Or we could be victims of our own biases, prejudices, and misunderstandings. I still make most of my living from the conflict model, even though the vast majority of litigated disputes eventually end by negotiated resolution.

It is possible to settle a lawsuit without ever letting go of an adversarial approach. But we are more likely to find peace if we can trade in the crisis model for an approach based on shared values, empathy, and an effort to accommodate divergent interests. Mediators usually encourage the parties to change their approach to conflict, but parties can make the switch with or without the help of a mediator. How do we make that switch?

I remember once in my early days of practice strategizing about our response to an eviction case. We needed to stay that case so we could litigate other claims against the landlord, and immediately started talking about the extensive set of papers we would need to prepare in support of that motion. At some point I suggested simply calling the landlord's attorneys to see if they would agree to a stay, and everyone else thought that was a crazy idea. With nothing to lose, however, we decided to try it, and to our surprise they agreed. Since then, my first impulse in encountering any problem in a case, is generally to call the other side to see if we can resolve it, something that the rules now usually require counsel to do (a requirement often honored in the breach). But if we make a genuine effort to resolve an issue that would otherwise require a motion, we will find workable negotiated solutions more often than we think.

I have often had to prepare cases for trial, while simultaneously attempting to settle them. The first time I remember being in that situation, I was in the office late in the evening drafting witness outlines for an arbitration hearing, while waiting for a call back from opposing counsel to find out if they would accept our last offer. While in the middle of that settlement discussion, knowing that the case was probably going to settle (it did), I not only lost some of my motivation to continue doing the preparation work, I also noticed that the outlines I was working on started to look rather pointless and absurd. (Parties to a lawsuit should consider having a settlement team different from their trial team, to keep the trial lawyers focused. Even then, however, trial lawyers just have to live with the reality that their work may come to an end at any moment.)

I remember a deposition I took of a witness associated with a production company in the entertainment industry. The witness, who was not a party to the case, seemed amused by all the squabbling between opposing counsel and myself. During a break, when we managed to have a more civil conversation, the witness asked both counsel for the warring parties how we could stand all the negative energy we were creating. This question, coming from someone whose business depends on fostering creativity and positive energy, made me realize how heedless litigators can be of the poisonous atmosphere we often purposefully foster, and how such an atmosphere can impede resolution of the dispute.

In each situation, what enabled me to make the switch was examining whether what I was doing was wasteful and/or counter-productive to the goal of resolving the dispute. Sometimes you have no alternative but to keep fighting, but many times all you find that you are doing is banging your head against a wall without making much of an impression on the other side. That is the time to consider communicating instead of more banging. Even in a dispute that appears to be a zero-sum game, parties often find that they have shared interests. At the very least, they have a shared interest in resolving the dispute. They may also have a shared aversion to the costs and risks of litigation. They probably both dislike the atmosphere of hostility and distrust engendered by the the crisis model, but they think it's all the other side's fault. If they can put aside the crisis model, and switch to  a values-driven approach, they might find they have even more shared interests or values in common.

Monday, September 19, 2011

Robot Negotiators

With computers already able to replicate a number of routine tasks performed by lawyers (e.g., basic will drafting, document review in discovery), can negotiation be far behind?  A recent article in the Economist talks about how game theory can help design computer programs that, for example, can help couples negotiate divorce settlements. All the parties need do is secretly assign their own personal values to the assets that need to be distributed in a divorce, and the machine will spit out the solution for them, saving them the trouble of figuring out how to conduct the tricky back-and-forth negotiations that would otherwise be necessary.

There are also on-line programs available to assist parties in conducting various kinds of business negotiations as well as settlement of legal disputes. These programs enable each side to input their bottom line numbers without revealing them to the other side, allowing parties to find out relatively quickly and painlessly if an agreement can be reached.

Does this mean, as a post on ADR Prof Blog asked, that we don't need to teach negotiation skills to young lawyers anymore? Does it mean that mediators will soon be replaced by computers? Perhaps I should be worried about these innovations, but I'm not. In fact, I think it's probably a good thing that some of the game-playing aspects of negotiation can be emulated by computers. Those are the parts that make a lot of participants uncomfortable anyway, and lead some participants to question the legitimacy of mediation. Some people distrust mediation because the process has no rules, and because its results seem to depend too much on the negotiating skills of the participants and their attorneys. In contrast, the court system at least aspires to produce results that accord with the law, and protect litigants' rights. (Of course the results in court are also affected by the respective skills of each sides' attorneys, and a lot of other extraneous factors, but that's a whole other story.) What we're talking about here is whether the process of mediation itself can be made more predictable and fair. If the game-playing aspects of negotiation can be more regularized, for example by teaching everyone some basic negotiating skills, or by turning over some of the back-and-forth to a machine, participants might feel reassured that the playing field has somewhat leveled, and results made more routinized and fair.

If we decide that it would be a good thing to take some of the mystique out of negotiations, does that mean that mediators and parties' attorneys are soon going to be out of a job? I think not. Even if we could program machines to weigh all of the values that people assign to their interests, and produce a fair result, professionals are still needed to help the participants identify the goals that are most important to them in the first place, as well as to help parties evaluate the costs and risks in pursuing their claims through whatever means are appropriate. Discussing the Economist article, a post on Associate's Mind glosses over this problem, suggesting that it is inevitable that computers will simply take over the whole negotiation process:
What if parties could merely input points of data at the beginning of filing a law suit, and let a computer decide what is a fair outcome?  Would clients prefer that to years of discovery and legal bills, all purely for jockeying and better positioning during settlement negotiations? (emphasis supplied)
I'm sure many clients would prefer that a black box provide the answer to their conflict, rather than years of expensive litigation. But the rub is in that "merely." To suggest that inputting the "data" relevant to a conflict is a trivial task is like suggesting that all a baker needs to do to produce a perfect cake is merely to combine all the ingredients into the pan, and then leave it to the oven to produce the correct result. The oven's part in that process is important, of course, but it is purely mechanical. The part that needs human creativity and ingenuity lies in figuring out the right proportions and the right ingredients, before the baker even puts the cake in the oven. That part resembles the story that the client tells the lawyer at the beginning of the case, which the lawyer then has to form into the initial pleadings. The dispute resolution process is even more complicated than that, because it requires further rounds of re-analysis and re-processing as parties to a dispute and their attorneys learn more facts, and are compelled to take the other side's view of the dispute into account in trying to predict how the legal system might resolve it.

How are computers supposed to tell people what matters to them the most, or what is fair, or what is really bothering them about the other side's conduct, or how another group of human beings (the jury) is likely to evaluate their claims? Answer: they can't. Perhaps someday we will invent a computer that can do all that, but until then, human beings will still play the most important roles in the dispute resolution process. That is the role that lawyers and neutrals have always played and will continue to play: helping clients sort out what is important and what is relevant; helping them present their story in an effective way; and trying to predict how the legal system is likely to evaluate their claims. So it's fine with me if computers can be programmed to manage the game-playing aspects of negotiation. Because the more interesting parts, the parts that require human help, are the parts where people "merely" input all of the "data" that is important to them. And where more humans are needed to figure out what all that "data" might mean.


(photo: KAIST)

Sunday, September 18, 2011

All or nothing?

In contrast with previous dealings with Congress, President Obama's recent introduction of the American Jobs Act presented a bill already drafted by the administration, and demanded that Congress simply pass the president's whole bill, right away. Some have viewed this new approach as a recognition of the limitations of the administration's previous negotiating strategies, in which the President often let Congress take the lead, left the details of legislation up to Congress, and signaled his willingness to compromise in advance. I'm curious whether other mediators think that the administration has been deficient in negotiation skills previously, and whether this new approach is likely to be more effective.

I think the new "get tough" attitude might in part represent an attempt by the president to resuscitate his image with voters who think the president has been too weak or compromising in the past. But I also think that the administration can afford to take such an attitude with the jobs bill, whereas such as strategy might have been too risky in prior negotiations with Congress.  As I mentioned in a another post, the jobs bill is similar substantively to previous Obama initiatives (like those initiatives, it starts off incorporating a lot of Republican ideas). But there is a crucial difference between this jobs bill and previous efforts to pass important bills through Congress--I'm talking especially about the stimulus bill, the health insurance reform bill, the financial regulation bill, and the debt ceiling increase. And that difference may explain the change in negotiating strategy. In all of those previous cases, the administration felt it simply had to get something passed, and by necessity all those bills had to contain substantial compromises given the composition of Congress. The price of refusing to compromise in each of these cases was considered too high. In the case of the debt ceiling increase, the alternative to compromise would have been an unprecedented default which could have caused another recession. That was unacceptable. In the case of health care reform, the alternative was no reform, and maybe another 15 or 20 year wait before another attempt could be made. That was also considered unacceptable. As for the stimulus bill, given the dire state of the economy at the beginning of the Obama administration, their economic team felt they simply had to pass whatever stimulus they could get through Congress as quickly as possible. And financial regulation was also considered something the administration simply had to do, even if the bill were weakened to get it through Congress.

In the case of  the new jobs bill, however, President Obama may finally be in a no-lose situation. The jobs bill is being presented with a fierce urgency--the administration is demanding that it be passed right away--but they know it is not the end of the world if it doesn't pass in toto. If the bill passes, the administration can take credit for bold action, and it stands an excellent chance of achieving some positive economic results. If the bill does not pass, we just have to live with a continued sluggish economy, and the president can blame Congress for refusing to do anything to help reduce unemployment. Congress will then have to at least share responsibility for the continued bad economy. If Republicans in Congress accept only parts of the bill, it will be interesting to see if the Democrats in Congress allow only those parts to pass, and whether the president would veto a bill that only does part of what he is demanding (presumably the tax cut part without the infrastructure spending part). But regardless of how the Democrats in Congress and the administration handle those tactical questions, they can still claim a political win from a partial bill. Democrats running for election next year will in that case be able to blame Republicans for insufficient action.

Given that the jobs bill is not seen as a do or die piece of legislation, despite its importance to the economy, it makes perfect sense for the administration to adopt a no-compromise approach to it. This is basic Negotiation 101. If you MUST make a deal, you are going to have to compromise, because the other side knows you must make a deal. And therefore you probably won't get your best deal, but you will get something accomplished. On the other hand, if you can afford to walk away from a deal, you can also afford to be uncompromising, because you win either way. Either you make the deal you want, or you blame the other side for the failure to conclude the negotiation. I think it is the nature of the jobs bill, as much as any change in strategy to bolster the public's perception of the president, that explains President Obama's changes in tactics.

(AP Photo/Tony Dejak)

(adapted from a post on my political blog

Sunday, September 11, 2011

1000 tables

If you've been paying attention to the news from the Middle East lately, you've probably read about large peace demonstrations in Israel, as well as the violent attack earlier this week in Egypt against the Israeli embassy. You might not have heard about a more hopeful event in Israel this week organized by some of these peace movement leaders. I saw something about this on David Harris-Gershon's blog on conflict resolution in Israel and the Middle East. The event was called 1000 tables.  The organizers set up roundtables in town squares in about 30 different cities, each table holding 10 chairs, and each group led by a moderator who might be a coach, group leader or mediator.

Participants had the opportunity to meet strangers, express their views, and listen to a variety of other perspectives. The contents of the conversations will be published in various social media. Traditional media doesn't seem to know quite what to do with a story like this one, perhaps because it lacks a traditional narrative. It has no winner or loser. There is only . . . talking, and perhaps a little more understanding. That does not fit in with story-telling conventions that require heroes, villains, and dramatic conflict. So a story about a peace protest would be more likely to make the front pages if it inspires violence or confrontation of some kind. Note that the Jerusalem Post story about this event focused on a minor confrontation that occurred when the mayor of Tel Aviv dropped by, rather than on the content of the conversations. By looking for that type of incident, the paper might have missed the excitement inherent in the spectacle of hundreds of people, in a contentious society, just sitting around tables talking and listening to one another.

Think about this: Isn't the whole idea of a PEACE MARCH somewhat of an oxymoron?  Any march or demonstration is just a group of people inspired by a particular cause presenting their cause in a forceful, in your face way that is likely to inspire counter-marchers and confrontations with those of opposing views. Sometimes that might be the most effective way to promote a cause, even the cause of peace. But if people really want to promote the idea of peace, they need to organize more events like the 1000 tables event, that actually embody peace and are intended to inspire dialogue rather than confrontation.
 
(See also another report in Haaretz)


(cross-posted on my political site)
 

Wednesday, August 31, 2011

How Litigators Negotiate

I've been working on a case lately with a corporate lawyer, and we've been trading war stories about various negotiations in which we have participated. Most of the deals that this corporate attorney negotiates are deals for buying or selling properties or companies, but he has also been involved in some negotiations to settle lawsuits. He can't believe the difference. He is astounded that a plaintiff might start off a settlement negotiation in a litigated case by demanding, say, $2 million, while the defendant offers $25,000 for the same case. He can't believe that litigators make such off the wall opening bids, and are thereby forced, if they want to settle, to make tremendous concessions from their opening numbers. To him, it all seems like a ridiculous game, and calls into question the credibility of the negotiators for both sides. Litigators, however, know that this pattern is common.

In a business negotiation, parties are probably more likely to start the negotiations closer together, and are therefore forced to move proportionately less. This makes sense when you consider that when you are buying a business or a piece of property, both sides should walk in with a pretty good idea of its value. You can look at an appraisal. You can look at a business's profit and loss statement. In a lawsuit, on the other hand, the defendant may legitimately feel that the case is worth absolutely nothing, while the plaintiff feels it is worth millions. That is because there may be a real possibility of either a defense verdict, or a multi-million dollar verdict, in the same case.

I wonder whether the culture of litigation also contributes to some of the game-playing that is so astonishing to corporate lawyers. Do parties in litigation just like to posture more? Have they developed a different style of negotiation that lends itself to making grossly overvalued demands, and paltry offers, just to mess with the minds of their adversaries? Because even though a claim in litigation might be more difficult to value than a piece of property, both sides interested in settling a lawsuit should still be able to arrive at an approximation of the probabilities of winning and losing, and a realistic range of possible outcomes. It just seems to take more work to get to that point in litigated disputes.

Of course, it would be an over-generalization to characterize all business negotiators as reasonable, and all litigators as posturers.  There are plenty of people in the corporate world who approach negotiations with a lot of swagger, and who start off with wildly off-the-mark numbers to try to gain some advantage. (See my prior post on the subject of anchoring.) And there are plenty of litigators who believe in presenting a reasonable number in a settlement negotiation to let the other side know that they are very serious about their number, and they are not likely to move very much. Both approaches can work in either context. My point is more about the clash of expectations when a negotiator who favors one style meets a negotiator with the opposite style. 

If you walk into a negotiation to settle a lawsuit with the expectation that both sides should start with numbers that bear some relation to reality, you may encounter frustration and delays. You might think it makes sense to offer a number that is close to the actual value of the case, and not move very much from that position. You might think that offering a number that is highly skewed in your own direction is a waste of time, and would reflect badly on your credibility. But if you do that, you run the risk that the other side perceives your initial offer or demand as something much further from the ultimate outcome than you do, and expects much more movement than you are prepared to make. To make the negotiation work in that scenario, you have to make the other side understand that your initial offer was not intended as an expression of your most optimistic forecast of the case. It has to be conveyed with the appropriate message about your intentions and seriousness. Otherwise, closing the deal may prove elusive.

Wednesday, August 17, 2011

War is over!

Joshua Goldstein has an article in Foreign Policy (and apparently a book coming out on this topic) in which he proves that, as President Obama announced in June, and contrary to popular belief, the tide of war in fact is receding, and has been for some time. Compared even to the 1990's, we are seeing about half the number of deaths worldwide from war. The U.S. has substantially reduced troop levels in places like Korea and Europe, and when withdrawals from Iraq and Afghanistan are finally complete, will have fewer troops abroad than at any time since the 1930's. There are far fewer civilian casualties from war than in decades past. Some intractable conflicts (e.g., Northern Ireland, Bosnia, Kashmir) have subsided. The great powers have essentially renounced wars with one another. And the UN seems to have figured out how to make peacekeeping work in some areas. Obviously, there is still a lot of war going on, and too much death and destruction from war, but we are so focused on all that conflict, that we might not realize just how greatly the scale of war in general has been reduced compared to past decades.

I remain fairly pessimistic on this subject, because it's hard to imagine that with expanding populations and increasing resource competition, we will not be facing some substantial man-made cataclysms and conflicts in this century. Perhaps we are only enjoying a temporary, and relative, lull in war activity. But Goldstein's thesis is still fascinating, because it goes so much against conventional wisdom. And it's probably disconcerting to a lot of people in the hate and fear business, those who have been trying to promote the fearsomeness of some new enemy or other ever since the end of the Cold War eliminated our most powerful enemy. The idea that we can actually measure progress away from war provides hope that mankind might finally be learning how to resolve at least some large scale conflicts without the waste and destructiveness, of war.




Wednesday, August 10, 2011

Mediation briefs

I received a mediation brief a few weeks ago from the plaintiffs' side in a contractual dispute. The brief contained a detailed description of the parties' agreement, a recitation of the elements of each one of the various causes of action in the complaint, a calculation of the damages due under the contract, including precise interest calculations, and an explanation of why attorneys' fees were recoverable. It also attached the relevant contractual documents as exhibits. Sounds like as much as any mediator could wish for, right? What else would I possibly want to know about the plaintiff's position? It turned out, however, when I saw the defendant's brief, that nothing in the plaintiff's brief was seriously contested. The real problem was that the defendant simply could not pay what was due under the contract. In fact, the defendant was contemplating filing bankruptcy.

Are mediation briefs important? I will admit that I find most of them less helpful than they could be. A lot of the briefs I get don't even seem to be written for the purpose of mediation, and don't address some of the questions that I am interested in, as a mediator. I appreciate that attorneys may have a legitimate, even commendable desire, to spare their clients from being billed a lot of hours for writing a pre-mediation brief.  They also frequently believe that what they say in the brief is not going to affect the mediation very much. They know that it is ultimately the parties, not the mediator, who are going to determine whether or not to settle the case. So why bother trying to influence the mediator, who is not a decision-maker anyway? If those are the dominant considerations, then it is easy to understand why a lot of mediation briefs look like a cut-and-paste job from the parties' pleadings, or the most recent motion filed in the case.

In the example I started with, the problem was not so much that the attorneys were trying to cut corners, or treat the briefs as unimportant. And after reading both briefs I got a clear picture that the plaintiff had a fairly airtight case but was going to have difficulty collecting a judgment. The problem was that the plaintiff's brief never really addressed the issue that was going to be critical in determining whether the case could be settled or not.

So let me suggest a couple of ways in which parties might make their briefs more effective, and why it might be worthwhile to put a bit more thought into this aspect of the mediation. First, consider writing a brief that is going to be persuasive to the other side. Even if you think that there is no point trying to influence the mediator into a more favorable view of your side of the case before you show up in his office, it is usually worthwhile to try to influence the opposition. Isn't that the whole purpose of a negotiation? Look at the mediation brief as another opportunity to affect the other side's thinking. Make them aware of facts and arguments that should make them reluctant to proceed to trial. Show them why settlement on the terms your side is looking for is in their interest.

If you are writing with the other side in mind as the audience, you should probably plan to exchange briefs with the other side. Speaking for myself, I wonder why many lawyers prefer to file briefs for the mediator's eyes only. When you do that, you are putting the mediator in the difficult position of needing to ask permission to share any information in the brief with the other side. Most of the time, the information in your brief does not come as news to the other side anyway. And if the information is not shared, one has to wonder what use it is in a negotiation. I understand when parties do not want to share their bottom line figures with the other side at the outset of a mediation. But they probably shouldn't divulge that information to the mediator either. What parties going to mediation should be trying to do is affecting the thinking of their adversary. Try writing a brief with that purpose in mind. Think about how the other side views the case, and try to write something that addresses those concerns.

Second, try to include information in the brief that directly addresses the considerations most applicable to settlement, as opposed to the issues that a judge might need to understand prior to trial.  It is of of course of some value for the mediator to know what the case is about, and the contentions of each side. But a mere recitation of the various legal theories being advanced by each side, and their respective damages calculations, might only be the first step in the analysis. What is of more benefit to the mediator, and to the parties, is understanding what obstacles have prevented settlement of the dispute. If there is a legal issue that the parties disagree about, identify that issue. If there is a factual dispute, identify that. If the lawyers simply have different views about the range of possible outcomes at trial, that is helpful to know. If the main problem is the defendants' ability to pay, both sides' briefs should address that problem. It is also useful for the mediator to understand the nature of the relationship between the parties. Were they friends at one time? Do they have any future prospects of doing business together? Did some other problems arise between the parties, or did someone else add an element that has contributed to the conflict?

If parties take the time to answer these kinds of questions in their briefs, they will not only put the mediator a couple of steps ahead in being able to conduct an effective mediation, they will also help move their own thinking, and that of their adversary, closer to a possible resolution.

(photo from the Eyeglass Shop)

Friday, August 5, 2011

The Blame Game

A cartoon in the New Yorker a couple of months ago showed a family lost in the jungle. The father, scratching his chin, is saying, "OK, I admit it, we're lost. But the important thing is to remain focused on whose fault it is." I'm thinking of getting a framed copy to hang in my caucus room. Frequently the task in a mediation is to get the parties away from focusing on recriminations and blame for how they got themselves into their situation, and toward focusing on possible solutions to their conflict. It might be helpful for people to look at this picture, which enables us to see how obviously ridiculous it is for a family lost in the jungle to spend their time arguing about who was mainly responsible for getting them there, instead of working together to find a way out.

I love doing mediation because it is designed for the sole purpose of helping people trapped in conflict find a way out. People usually arrive at my office for a mediation because they need a way out, not only of the underlying conflict, but also out of a new legal conflict in which they find themselves embroiled after they went to court to try to resolve their dispute. There they learned that the courts are not designed primarily to help people find a way out. The courts are designed for assigning blame. One reason people are naturally inclined to go to court to resolve a dispute is that they think like the family in the cartoon, that the way to resolve their conflict is to figure out whose fault it is. Now if your object is to punish your adversary, and you believe you need all the trappings of the justice system to establish who is right and who is wrong, or if your adversary gives you no other choice, then court is the place for you. But even if that is your intent, you quickly find out that the cost of that system is rather high, and the results are not always what you were hoping for.

For those seeking a principled resolution of their dispute, mediation can still serve as a useful shortcut, to obtain a better approximation of the results that might be reached in court, at lower cost. I prefer, however, to think of mediation as the anti-court, in part because in mediation it is not always even necessary to assign fault, or accept blame. Mediation works best when it allows the participants to work together to design a solution to their common problem. 


What prompted this post (which is adapted from something I posted on my political site), was reading some of the reactions people are having to the debt ceiling deal from last week, and also to the stock market crash this week. We seem to be stuck in a continuing, and perhaps deepening, economic quagmire, and we don't seem to know how to get out of it. So we spend our time blaming one another for the mess we are in. In part, politicians may feel compelled to do this for their own survival. But it does seem like a colossal waste of energy, that could be put to better use in designing solutions to our economic and political problems. Maybe we have to engage in finger-pointing, because we just don't know how to get out of the mess we find ourselves in. Even to the extent some of us think we know, we can't agree on solutions. And that leaves us no alternative but to play the blame game.

Sunday, July 31, 2011

Deal or No Deal?

We're starting to hear outrage from both the left and the right in response to the debt ceiling deal that leaders of both parties have made on Sunday.  We're being assured by the usual gang of pundits that this outrage from the most partisan members on both sides demonstrates that the deal is probably fair. It reminds me of something that a lot of mediators like to say, which is that if both parties are unhappy with a proposed settlement, that probably means that it is fair.

As a mediator, I never like to use that line. Why would I want people to leave unhappy?  I prefer to try to persuade parties to a conflict that they should feel good about the settlement they are making. I would rather tell them that I hope they are going to get a good night's sleep, that I hope they feel that a weight has been lifted from their shoulders, and that there is a lot of value in putting a dispute behind them. When I have to resort to logic, I try to persuade people that they should not compare the deal on the table with the deal that they wanted or believe they deserve.  The only thing they should be comparing a deal to is the alternative of no deal. What that means is that litigants have to compare the offer being made by the other side, with the alternative of proceeding with a costly and risky lawsuit. They should not compare the offer being made by the other side with what they believe they are entitled to in some ideal system of justice.

In evaluating the debt ceiling deal, politicians and their constituents should compare the deal on the table, not with what either side wanted to achieve in these negotiations--for Republicans bigger spending cuts and a balanced budget amendment, for Democrats some increase in revenues. They have to compare this deal with the alternative of no deal. No deal means the Treasury runs out of cash on Wednesday, and then the President has to decide whether to ignore Congress and unilaterally order the Treasury to borrow more money anyway. And that probably causes a constitutional crisis as well as an economic crisis.  Alternatively, the President and the Secretary of the Treasury have to decide to stop issuing checks to a lot of government contractors, federal employees, veterans, seniors, people on disability, and a lot of other people who depend on government checks to live. There are only a small number of Congressmen who actually want to play out either one of those scenarios.

Let's compare that to the deal. The deal prevents a default, and commits Congress to enact some substantial spending cuts and possibly some revenue increases, most of which won't kick in for quite some time, maybe five or ten years from now.

Which means that, even if people don't like the plan for handling these deficit issues in the future, right now this deal is still way better than no deal. The only difficult part is persuading a lot of politicians who have to answer to a lot of very partisan constituents that they have to settle for something different from what they wanted. And why they should be happy about that.

(adapted from a similar post on my political blog)

Wednesday, July 27, 2011

The Joys of Settlement

Judge Martin J. Sheehan of the Kenton Circuit Court, Kentucky, penned this ode to the joys of resolving an apparently acrimonious and well-litigated case. I wonder if the clerk actually has to take seriously the part of the order that requires him to engage the services of a structural engineer to make sure his office is able to hold the case file. After all, it is a court order. (Clicking on images below should work to enlarge them. If not, go here.)



Tuesday, July 26, 2011

Dialogue

One of the reports I was reading about the Norway shooting incident this past weekend mentioned the difficulties police have in trying to prevent such violent events. In the past, it might have been easier to infiltrate and keep tabs on hate groups because they used more traditional means of organizing themselves. Now that such people congregate primarily on the internet, it may be more difficult to penetrate their activities and predict when they will become violent. This suspect in particular was sending out somewhat ambiguous signals, which might not have provided sufficient clues to allow law enforcement to act.

One problem with modern forms of communication is that they encourage people to interact mainly with like-minded individuals, and to filter out views that differ from their own. We see this tendency on cable news, and on websites that cater to particular political viewpoints. We see it on both the left and the right and in between. People prefer to listen to viewpoints they already agree with, and they often try to exclude those who disagree with them from the conversation. When there is dialogue, it tends to consist of confrontational rhetoric that does nothing to encourage people to listen to and try to understand opposing points of view. It's ironic that the most universal and powerful communication tool in history can have a tendency to insulate people from differing ideas, and can reinforce prejudice and hate. The internet starts out as an open system, but allows groups to build walls where they can demonize other groups that they define as the "other."

What is needed is to create more safe spaces where people are obliged to consider opposing points of view in a respectful way. That is the only way people can learn to communicate with one another without feeling the urge to silence those whose views differ from their own.

On my political bog, where I also posted the first version of this piece, I have offered some rules for conducting such a civil dialogue.  My suggestions include refraining from name-calling, from questioning other people's motives, from exaggerating, from misrepresenting, and from blaming. On that website, even though my posts maintain a definite point of view, I have also attempted, in my own modest way, to create a safe space for people of differing viewpoints to disagree and argue with one another, and I appreciate comments from people of all political stripes, especially the ones who disagree with me, so long as they are willing to engage in a civil conversation.

This terrible incident in Norway also made me think about the work of Ken Cloke, who believes that mediation can go a long way toward solving a lot of the world's political and social problems, including the problems of evil, injustice, war and terrorism. One object of mediation is to create a safe space where conflicts can be addressed in a non-threatening way, and people learn to understand and attempt to reconcile opposing points of view. 

Obviously, some points of view are difficult to include in a civil dialogue. If somebody thinks we need to round up and expel or kill all the Muslims, or all the Jews, or all the blacks, that viewpoint is impossible to accommodate. But we can still have a reasonable debate about immigration policy, or religious tolerance, or education, that includes concerns about national identity and culture, without allowing for extreme solutions that would deny the legitimate rights of others. The haters need to be included in that dialogue, so they feel they have an alternative to congregating only among themselves, and plotting violence. 

Sunday, July 17, 2011

Sanctions and Mediation

Those who take mediation seriously want to encourage parties to participate in good faith, and to prepare properly for mediation sessions, so that the process can achieve maximum benefit. We have to recognize, however, that there can be a tension between the desire to make sure that the parties don't waste each others'--and the mediator's--time, and the need for confidentiality, safety and flexibility in making mediation work. In other words, how do you promote the most effective use of mediation without slipping into exactly the kind of rules and sanctions-based world that mediation was designed to escape?

Don't ask the courts to resolve this dilemma, because they don't see it. Courts are entirely comfortable operating in the world of rules and sanctions. Here's an example from the Nevada Supreme Court. In the case of Pasillas v. HSBC Bank, arising out of Nevada's statutory foreclosure mediation program, the Court mandated that sanctions be imposed based on the mediator's (required) report that the bank failed to bring required documents to the mediation, and failed to negotiate in good faith. The bank may also have failed to make a person with authority available. I imagine most mediators are of two minds about a case like this one. On the one hand, we want to make sure parties participate in good faith, and bring the information and people necessary to increase the chances of success. But we are less comfortable being thrust into the role of adjudicator, or even reporter, of whether one party or the other has complied with those conditions. Most mediators prefer to act as facilitators, not adjudicators. In fact, the whole regime of rules and sanctions is antithetical to the voluntary spirit of mediation, and to the feeling of safety and confidentiality that we want to encourage participants to rely on.

Fortunately, in California I don't face this problem because we operate under different rules. When I have to deal with situations such as parties failing to show up for mediation, or failing to come prepared, or failing to show any willingness to negotiate, my inclination is to find out from the parties whether they think there is any point in continuing. If they think we can still accomplish something useful, I am usually inclined to go forward regardless of whether or not one side or the other is in default of some obligation. But if somebody is in default, and the parties prefer not to go forward, and I also don't think it would be productive to proceed, I am probably just going to report to the court that the mediation did not take place. In fact, at least in state court, the confidentiality rules may prohibit me from saying much more than that. Then it is up to the parties to ask the court for whatever sanctions might be appropriate. Courts are in the sanctions business. Mediators are in the agreement business.

(Thanks to Heather Kulp at Just Court ADR for drawing my attention to this case.)