Sunday, February 24, 2013

The Prisoners' Dilemma

On March 1, 2013, if Congress does not come its senses, the dreaded sequester is going to take effect. For those who do not follow closely all of the machinations of Congressional budget negotiations, here is a brief recap of how we got here:

On August 2, 2011, as a compromise measure to prevent the government from defaulting on its debt obligations, Congress passed the Budget Control Act of 2011. That statute required Congress to agree to certain levels of deficit reduction measures over the next ten years. If they could not agree, a package of automatic spending cuts, half to defense and half to domestic spending, would take effect on January 1, 2013. The important thing to understand about this deal is that the sequester was deliberately designed to be something that almost everyone would hate. The whole, entire idea of the sequester was to force Congress to enact a more sensible deficit-reducing plan, because if they failed to do so, the horrible sequester that nobody wanted would take effect. 

Congress created the so-called super-committee to come up with something better. Naturally, they couldn't agree on anything. So then Congress decided to just wait until after the 2012 election, which both parties thought might increase their leverage. The Republicans lost, and Congress somehow managed to fix some other horrible things that were supposed to happen on January 1 (the so-called "fiscal cliff"), but they still couldn't agree on how to avoid the dreaded sequester. All they could do was agree to extend the deadline to March 1, 2013, in the hope that by separating this sequester problem from all the other "fiscal cliff" problems, maybe we could solve this one down the line.

And that's where we still are today, because essentially no progress has been made on breaking the deadlock in the last two months. Instead, it has become a popular sport of late for all sides to point fingers at each other for creating this problem. But if we go back and look at who voted for the Budget Control Act, we find that in the House, 174 House Republicans and 95 Democrats voted for it. 66 Republicans and 95 Democrats voted against it. In other words, Democrats were split down the middle on the sequester. Republicans were for it three to one. So this is something all of us did to ourselves. In any case, the blame game gets us nowhere. The task now is to avoid allowing a self-created problem, that hardly anybody wants to happen, to go into effect. Sounds easy, right? Congress could just cancel the whole thing if they wanted to. But for some reason this is one of the most difficult negotiations Congress has ever faced. Why?

If the sequester is something nobody wants, wouldn't almost any alternative be better? Shouldn't either side just decide to be the grown up and agree to what the other side wants so as to avoid the sequester? Is this sequester fight just a game of chicken?

In a game of chicken, either party is better off jumping off rather than going over the cliff, and each has the independent ability to make that decision. The only point of the game is to wait until the last possible second to jump off, so that you are not the "chicken." It's a stupid game, because you have to chicken out at some point to survive the game. All you can do is hope that the other guy chickens out before you do. And that is not exactly what is happening in Congress right now, because for both parties right now, the sequester might appear to be a better alternative to giving in to the other side completely. Right now the Republicans are saying to the Democrats, if you don't want the sequester, then you must agree to a different package of spending cuts, cuts that will harm social programs instead of defense and operations. Most Democrats respond that while the planned cuts to defense and other discretionary spending are terrible, cuts to social safety net programs would be even worse. On the other side, the Democrats are saying to the Republicans, if you don't want the sequester, then you must agree to a package that includes some revenue increases. And most Republicans respond that while they agree with Democrats that the sequester cuts are terrible, any kind of revenue increase, even by closing tax loopholes or eliminating deductions, would be worse. So in the case it appears that the sequester is not the worst possible outcome for either side. Each side believes it would be worse to agree to the other side's demands than to allow the sequester to happen.

A better analogy to the sequestration fight might therefore be the classic game theory problem known as the prisoners' dilemma. The prisoners' dilemma goes something like this: the police separately approach two prisoners who are accused of committing a crime together and give each the following choice: you can give evidence against your alleged co-conspirator (defect) and go free if he does not confess, or you can stay silent (cooperate), but if your partner gives evidence against you, you will get a twenty year sentence. If both parties cooperate and stay silent, however, the police only have enough evidence to convict both of a lesser crime, so both will serve only a one year sentence. If both defect, on the other hand, both get put away for five years. Here's a depiction of this typical example of the problem:



Obviously, it is best for both prisoners to cooperate and receive the second best outcome for each, and the best outcome for both, but how can each one learn to trust the other? The temptation is powerful to hope the other party will trust you and stay silent while you rat him out and go free. And that's why parties in early stages of negotiation, before they learn to trust each other, will usually end up with the second worst outcome. The "rational" choice, when each party is thinking only of his own selfish interests, is for both to come to the conclusion that they should rat out their partner, in the hope of going free, but at worst getting 5 years instead of 20. The best choice, on the other hand, is not the same as the rational choice. The best choice requires trust and cooperation, and gives both conspirators a minimal one year sentence.

Can Democrats and Republicans, through a process of trust and cooperation, come up with a better alternative than the sequester? Of course they can, but that alternative must involve some pain for each side. The only alternative to the sequester is a negotiated resolution, in which both sides have to accept a bit of something unpleasant for each that the other side wants. Otherwise they are surely headed for getting a lot of what both sides don't want.

It is rare for Congress to design its own prison, but that appears to be what they have done in this case. It probably seemed to make sense at the time to design a process in which an acceptable outcome could only be reached by a process of trust and negotiation. But as in most prisoner's dilemma negotiations conducted by people who do not trust and do not want to cooperate with each other, we are instead likely headed for a very bad outcome.

Thursday, February 21, 2013

Court Update

Thanks to the Consumer Attorneys Association of Los Angeles and the Association of Southern California Defense Counsel for putting on an informative program tonight detailing changes about to take place in the LA Superior Courts due to budget cuts. Thanks especially for the plug provided for the Southern California Mediation Association's program still in development to provide a referral source for mediators. SCMA's program is intended to make up to some extent for the imminent abandonment of ADR administrative services by the courts.

Neither the court nor SCMA are going to be able to make up entirely for the loss of the court's effective procedures for referring cases to mediation. The court has apparently decided, however, that it can no longer afford to take any steps to push litigants to take advantage of outside mediation services. Mediators are available to assist the court in settling cases, but without some kind of push toward mediation, many cases are likely to remain languishing in the system due to inertia.

Hon. Daniel Buckley
Litigants and attorneys must therefore themselves take some initiative to get issues within their lawsuits, and the lawsuits themselves resolved, with less reliance on the court. That was the message from Judge Buckley, Supervising Judge of Civil, who has been working hard to implement some drastically revised case assignment procedures, in particular the consolidation of certain categories of cases in certain courthouses. One category that is getting this drastic treatment is personal injury cases. In those cases, the court plans to centralize trial assignment, abolish case management conferences, and provide parties at the outset only with a final status conference date and trial date, in the hope that cases will mostly resolve on their own with little court intervention.

Although other civil cases will continue to utilize the individual calendar system, they will still suffer by being given less time and fewer resources to resolve motions and other pre-trial disputes. The court encourages parties to work out those pre-trial disputes themselves, and bother the court less with demurrers, motions to compel discovery, summary judgment motions, and the like. Will this kind of cajoling to undertake voluntary abstinence from motion practice be effective in conserving precious judicial and administrative time? One way that was suggested by the panelists for dealing with the lack of court time to deal with motions and discovery is to hire referees to supervise some of those steps. Another is to try to obtain judicial help with informal resolution of such disputes. These are good ideas, but they still reflect the mind-set of obtaining an authority figure to resolve a problem for the participants.

An even better idea might be to encourage attorneys resolve those kinds of pre-trial issues by themselves, and there was some talk on this panel about better communications between counsel to resolve problems. Another possibility is to call a mediator to help counsel work through issues that they know the court is going to have less time and less patience to resolve for them.  I've handled mediations where the parties felt they did not yet have enough information to settle the case, and in those cases I always encourage them to agree to exchange information and documents voluntarily without the need for formal requests, and come back after they have done that to see if they can settle the case. It usually doesn't take long to get attorneys to commit to reciprocal agreements to exchange information, saving them both the aggravation of of serving and responding to interrogatories and document requests.

Attorneys should try to reach such agreements themselves with opposing counsel, or to call on mediators to help resolve discovery problems, possibly even to supervise an informal exchange of documents without the need for requests, objections and motions. Mediation need not be reserved for a special one day event in which the parties attempt to resolve the entire case. It can be an ongoing process designed to reach agreements on large and small issues on the way to possible overall agreement, or even to smooth the way to trial. That would save the parties time and money, and help unclog the ever more overburdened courts so they can continue to handle the cases that require more judicial attention in a timely manner.

Saturday, February 16, 2013

Traditional Societies

Jared Diamond's new book The World Until Yesterday considers what we in modern societies can learn from the few remaining traditional societies. Most of his examples come from New Guinea, where Diamond has spent a lot of time over many years. Diamond doesn't fall into the trap of romanticizing traditional societies. He reminds us that as horrific as modern warfare can be among "civilized" nations, at least people in the developed world can, for the most part, travel unobstructed almost everywhere without fear of attack by enemies. That is not the case in many tribal cultures, where people live very circumscribed lives, often unable to travel outside their clan's territory, otherwise they are likely to be killed by members of neighboring tribes. These small scale wars can go on for generations, taking a toll proportionately larger that we experience in the modern world even during the worst wars.

On the other hand, traditional societies may have some better ways of resolving disputes than our courts and procedures. In a chapter comparing dispute resolution in modern and traditional societies, Diamond tells the story of how an accident causing a boy's death was handled between the residents of two nearby villages in New Guinea. In resolving this dispute the paramount concern was not determining who was at fault. Instead, everyone in both villages was worried about preventing a blood feud, restoring trust and equanimity between the peoples in the adjoining territories, and compensating the family of the victim. To do that, the families and others involved have to meet. Apologies must be expressed in person. Compensation must be paid.

These concerns are not adequately addressed in modern systems of justice, which are impersonal and rule-bound. Our highly developed legal system has a lot of advantages over the traditional systems that deal with conflict by engaging in endless cycles of revenge, fomenting distrust of those outside the tribe, and elaborate and costly rituals needed to preserve peace and make amends. Our system of justice might keep us from killing the people who have wronged us (most of the time). But it also leaves us with a lot of hurt feelings and resentment. And a sense that we frequently have not solved the underlying problem.

The solution is mediation of course, which tempers the cold calculations of modern legal systems by introducing elements of communication, understanding, agreement, restoring trust, and making amends. We can view mediation as one effort to bring the values of tribal societies, where the ability to get along with one's neighbor's is critical to survival, to the modern world. Mediation can be seen as one example of learning from traditional societies and restoring practices to modern culture that we have almost forgotten and lost.

Saturday, February 9, 2013

Finding a mediator

Assuming the LA Superior Court proceeds with its plan to close its ADR program this spring, the question to ask is not: how will people find mediators? Because mediators are not difficult to find. A web search will turn up hundreds of private mediators in the Southern California region. ADR provider organizations will be only too happy to refer litigants to their panels.  Organizations like SCMA have lists of mediators accessible on their websites. And a number of directories are available in which mediators promote their services.

The real question is whether parties and attorneys are going to continue to seek out the services of mediators after the court stops performing the functions of assigning cases to mediators and following up to make sure that parties complete this step in the process. Assuming that parties and attorneys understand the benefits of ADR and want to continue to avail themselves of it, what obstacles would remain to finding a mediator?

As mentioned in my post on case management conferences, taking the initiative to choose a mediator can be a daunting task. Not because it's so hard to find a mediator, but because choosing a mediator involves a conversation with opposing counsel and some other steps that many attorneys would just as soon avoid.

First, you have to broach the subject of settlement, which many litigators see as a sign of weakness. You have to suggest a time and place for mediation, and consider what information needs to be exchanged in advance.

Then you have to think about the kind of mediator who is best for your case. Do you want a retired judge who will give you an evaluation of your prospects at trial? Do you want a mediator with expertise in a particular area of law? Do you even want a lawyer or judge as a mediator? Do you worry about whether your mediator's background is more defense or more plaintiff oriented? Do you want someone who will give the parties and attorneys the opportunity to meet in a joint session and really hash things out, or do you want a shuttle-style settlement negotiation where the mediator filters all communications between the parties? Should you take into account the mediator's age? sex? political preferences? ethnicity? ability to speak the relevant language? Whatever I say about those factors, they will influence people's choices.

You might have to do some research. Ask your colleagues whom they have used in recent cases. Read some biographies of a bunch of mediator candidates. Compare billing rates. All that could take a while if you want to do a thorough search.

Finally, you have to reach an agreement with the other side on all of these issues: the identity, cost, time and place of the mediation.

I would argue that all of this discussion and research is probably worth doing in a case of any significant size. Choosing a mediator phase is itself an important part of the mediation process. It sets the stage. It forces the parties to think about the process. And it conditions the attorneys to communicate with each other, and reach agreement on preliminary issues. Mediation is more likely to be successful if parties choose the right mediator for the case.

At the same time, I understand why parties often prefer to avoid all the bother. They may be ambivalent about entering into settlement discussions, thinking they are unlikely to bear fruit. They may not want to expose their strategies to the other side. They may have difficulty communicating with the other side at all. And they may not want to incur the cost of engaging in the process of choosing a mediator. If the court sends a case to mediation, attorneys can avoid all that, and just accept the easy option of a panel mediator provided by the court. The cost seems minimal, but because the parties have not been required to think about the person or process that will work best for their case, the court-ordered system is also less likely to be successful.

The challenge for an organization like SCMA, which is working on this problem, will be to design a process that is sufficiently familiar and easy for the parties and attorneys that they will want to continue to avail themselves of mediation. But if parties have to expend a bit of time and effort and money to get to mediation, perhaps they will find mediation even more worthwhile.





Friday, February 1, 2013

Phoenix shooting

The shocking story out of Phoenix this week about a shooting that took place after a mediation session, has understandably made mediators a bit jumpy. The case was the kind of ordinary contract dispute mediators see every day, between a furniture mover/refurbisher and a dissatisfied customer. The amount in dispute might have been less than $20,000.  Reports are that the furniture guy, representing himself, attended the mediation for an hour, and then said he had to get something from his car. What he got was his gun, and then he lay in wait outside the building for the opposing party and his counsel to come out whereupon he shot them both.

Google maps photo
People naturally wonder. Could this incident have been prevented? Do mediators and participants need to take more precautions to protect themselves? Is mediation dangerous? We deal with angry and emotional people all the time in mediation, and sometimes we stir those emotions up. Should we be doing something differently to prevent violence? I hesitate to jump to the conclusion that mediators need to provide better security. First of all, it doesn't appear that better security would have prevented an incident like this one. This guy was waiting outdoors in the parking lot. Metal detectors and even security guards probably wouldn't have stopped him.

The thing that is more likely to prevent violent incidents like this one is mediation itself: The whole purpose of mediation is to teach people how to resolve their conflicts without violence, and even without litigation (a form of non-physical violence) Mediators should recognize, however, that we're not going to be successful in creating peace in every case, and that we do this kind of work at some personal risk, and at some risk to the parties to the mediation. That's what peacemakers are supposed to do.

The U.S. has thousands of troops in Korea. Why are they there? We don't have enough forces to prevent the North Koreans from attacking. But we do have enough to make sure that if North Korea does attack, some Americans are going to get killed, and that is going to insure that our country will defend South Korea. And that is what deters the North Koreans from attacking. That's not a perfect analogy to what mediators do, but it is an example of how part of the job of peacekeepers is to make themselves and others vulnerable for the purpose of making peace.

I'll probably keep a more careful watch on mediation participants after this incident, but I'm also inclined to be somewhat fatalistic about the fairly small dangers associated with this kind of work.  Every day, fire fighters assume the risks associated with the occasional fire getting out of control as the price of keeping us safe from fires. Mediators should be able to assume the risks, and must ask participants to put themselves at risk, of an occasional conflict getting out of control as the price of helping us resolve a lot of conflict.