Wednesday, April 30, 2014

Negotiation ethics

The California State Bar Standing Committee on Professional Responsibility and Conduct has issued a proposed opinion attempting to draw the line between unethical misrepresentations during negotiations, and permissible "puffing." Using this distinction, false statements about, as examples, the existence of favorable witnesses, or about the amount of a party's earnings, or about policy limits, would all fall on the unethical side of the line, and would subject an attorney making them to potential discipline. On the other hand, false statements about a party's "bottom line" of settlement authority, or about a party's willingness to litigate or its plans to file bankruptcy, would be considered mere "puffing," basically the kinds of lies that parties expect the other side to tell during negotiations, and that they should not rely on.

Harvard PON
The distinction at least seems understandable. Material misrepresentations of fact, that are intended to induce reliance, and that parties would reasonably rely upon, are impermissible. But a certain amount of bluffing about the parties' tactics and strategies is still considered fair play.

The proposed opinion could cause potential dilemmas for mediators, if they are asked to participate in impermissible sorts of misrepresentation. An ethical mediator should not commit fraud, and should take some action if the mediator becomes aware that one party is making impermissible misrepresentations. That could include refusing to convey misrepresentations to the other side, or even withdrawal in some cases. Strict confidentiality protections might, however, allow mediators and attorneys to avoid discipline for violating these proposed ethical guidelines when settlement negotiations take place during mediation.

Comments are open until May 19, 2014.

(Thanks to Rande Sotomayor for bringing this issue to my attention.)

Sunday, April 6, 2014

Mediating discovery

At the ABA Dispute Resolution section spring conference, I attended a talk on mediating discovery disputes, a subject that has been of interest to me for a long time, but which should be more urgent given the difficulty traditional court processes and rules have in managing the continuing explosion of data. As Marian Riedy, who has written about the difficulties of retrieving electronic data, pointed out, the enormous costs of discovery of such data make it essential that parties cooperate in crafting agreements on the scope of discovery. Indeed, federal and state rules generally require efforts to resolve discovery issues by negotiation. That being the case, there would seem to be a place for mediators to step in and assist attorneys and parties having difficulty reaching negotiated solutions.

illustration from GreenBook
Even though the idea of bringing more mediation to resolving discovery disputes seems so obvious, it has not really taken hold. Why? Cost might be one reason, though it would seem that in many cases the cost of calling up a mediator should be a lot less than the cost of preparing briefs and affidavits in support and opposition to motions to compel.

Institutional resistance might be another reason, as courts are accustomed to referring discovery problems to magistrate judges or discovery masters for resolution, but have less experience or ability to refer discovery disputes to mediation. One of the panelists, Nancy Greenwald, discussed her experiences as a mediator with a Virginia state court program that has had success in assigning discovery disputes to mediation. That is an encouraging sign that some courts are overcoming institutional resistance.

And the adversarial culture that has existed for decades in both big and small document cases presents another reason for slow adoption of new techniques. Lawyers are trained to leave no stone unturned, and to prepare for every possible contingency at trial. Clients are sometimes reluctant to turn over sensitive data unless they are ordered to do so. Lawyers have accepted mediation as a tool to help settle cases after they have conducted sufficient discovery and motion practice, but have been slower to turn to mediated solutions in earlier stages of disputes. Despite courts' meet and confer requirements, and admonitions to cooperate on discovery issues, many lawyers still view discovery as a battlefield.

There is also a big difference between resolving a dispute over the scope of discovery to which parties are entitled under the liberal standards of federal and state rules, and the discovery parties might need to evaluate a case for resolution. Ideally, mediation should promote informal exchanges of the information parties need to help them settle cases (including an opportunity to find potential smoking guns held by the other side), but that is in most cases still a lot less discovery than the parties are entitled to under the rules. In other words, mediation of discovery disputes ideally should lead to an informal exchange of a limited amount of information helpful to reaching a negotiated resolution of the dispute without protracted litigation. But if the mediation is focused on determining the scope of permissible discovery needed to prepare for a potential trial, then it might be biting off more than it should be chewing.

Friday, April 4, 2014

New name needed

Lots of ideas have been floating around for awhile describing new ways to practice law in light of the rise of alternative dispute resolution and the vanishing trial. These ideas revolve around finding a more cooperative, negotiated approach to exchanging information, evaluating the parties' interests and positions, and preparing a case for early resolution. This approach shares some of the goals and styles of collaborative law, but according to the collaborative lawyers, you can't properly call it collaborative law unless the lawyers and parties are willing to sign a participation agreement that requires the attorneys to withdraw if either party decides to proceed with litigation. Acceptance of that process has taken hold in the family law area, but has not gotten far in other forms of civil litigation. Few civil lawyers are willing to renounce the representation of our clients in litigation if negotiation or mediation fails.

I'm writing from this year's ABA Dispute Resolution Section spring conference in Miami, where a task force presented a proposal for something they are calling Planned Early Dispute Resolution. Since that sounds like a mouthful, they are suggesting the acronym PEDR. It's a variation on another name suggested in John Lande's book, Lawyering with Planned Early Negotiation, which he shortens to another acronym, PEN. The concept has also been called "cooperative" practice. By any of these names, the basic idea is to attempt to resolve a dispute by negotiation or another ADR method before it blossoms into a full-blown adversarial process. This task force has published a handy user guide that explains how lawyers and clients can overcome the "prison of fear" that traps parties into allowing disputes to turn into litigation as usual, and also outlines how to conduct early case assessments, plan for potential disputes, and manage disputes as they arise through negotiation, exchange of information, and the use of third party neutrals such as mediators or arbitrators. But they still seem to be struggling to come up with a catchy name.

Similarly, the International Institute for Conflict Prevention and Resolution (CPR) has promoted for years its ADR pledge that many corporations have signed committing to attempt to resolve conflicts by alternative means prior to initiating litigation. But again, what do you call the lawyers who seek to bypass traditional litigation? They're not exactly trial lawyers, because they don't expect cases to go to trial, and they're not litigators either, because they avoid litigation unless other methods fail.

At the conference, I also had the privilege of meeting Julie MacFarlane, a Canadian law professor who wrote a book several years ago entitled The New Lawyer describing how the adversarial culture has changed in light of litigators' increased focus on settlement. I asked Professor MacFarlane what those of us who are attempting to change the way we are representing clients in conflict should call ourselves. Even when I mostly practiced a fairly aggressive style of litigation, I never much liked the term litigator, since I regard a lot of litigation activity as wasteful, whether or not the case goes to trial. I prefer the term trial lawyer, but it's not accurate either, since so few cases go to trial. At this point, I'd rather present myself as a practitioner of conflict resolution, or a problem solver, but those descriptions are not well understood by clients or the public. MacFarlane told me that some Canadian lawyers she knows have actually borrowed the title from her book and are starting to call themselves "new lawyers." That description does have some appeal, as long as it doesn't turn into something like New Age Lawyer, which would probably scare away some corporate clients. But it hasn't taken hold well enough to be understood either.

Until something better comes along, I'll continue telling clients that I practice conflict resolution in all of its forms, and that I am committed to exploring alternatives to litigation whenever possible. But I don't like defining myself by what I don't do, so I usually just call myself a lawyer/mediator who handles business cases. I'm still waiting for a better handle to describe the new style of law practice to which I and others are committed.

So I'm open to suggestions for a simple and easily-understood label for the field of conflict resolution that a lot of lawyers are already practicing, one that conveys its meaning as easily as terms like "litigator" or "trial lawyer," and one that hopefully does not require an acronym.