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How we resolve our disputes

Wednesday
Feb032016

Electronic discovery and mediation

Recently, I attended a seminar sponsored by the American Bar Association and FINRA titled Utilizing Mediation to Navigate the Perils of Electronic Discovery in Arbitration. I have previously written about effect that the effort and cost of obtaining discovery from adverse parties has on litigation and prospects for settlement. Today, with increasing amounts of information being stored in electronic formats, the cost and effort of obtaining that information has soared. Frequently, the parties need to retain an IT specialist to search, find and interpret the records and data. In complex commercial and financial cases, especially when allegations of fraud are involved, the level of distrust between the parties makes settlement and discovery even more difficult. Judges and arbitrators do not like to wade through the reams of pleadings and documents that are often necessary to resolve disputes concerning electronically stored information (ESI). 

Enter the mediator. By focusing the parties’ attention on the specific issues, rather than on allegations of spoliation of evidence and threats of sanctions for discovery abuse, the mediator can help the parties devise a plan to allocate the costs and schedule the timing and manner of production of evidence, thereby maintaining confidentiality and credibility with the court or arbitration panel. A mediator familiar with the concepts of proportionality, privilege and data mapping can help the parties minimize the time, effort and expense they put into discovery. Thus, they can concentrate on prepartion of the case for trial or arbitration. After they obtain the information they feel they need, the parties might then return to mediation to fully evaluate their settlement options. 

It takes more time, effort and money to fully and properly prepare a case for trial or arbitration today than it did before the advent of ESI. The federal courts and FINRA (which supervises arbitration panels in many securities cases) have done much work lately to help the parties and the tribunals minimize the costs and time involved in resolving modern discovery disputes. Attorneys would serve their clients well by becoming adept at using mediation to relieve the parties and tribunals of most of these burdens. 

Monday
Apr132015

All that glitters . . . 

This past weekend, I went to see the movie Woman in Gold. It is based on the true story of a holocaust survivor, Maria Altmann, who convinced a young attorney to help her recover some paintings that belonged to her aunt and uncle before WWII, but were taken by the Nazis in Austria. She tried to get the Austrian government to voluntarily return them to her, but they refused. So she sued the Republic of Austria in the United States. Of course, Austria claimed sovereign immunity. The U.S. District Court rejected Austria’s motion to dismiss, and the Court of Appeals affirmed. The U.S. Supreme Court agreed to review it, and again ruled against Austria. That meant the case would return to the District Court for a trial on the merits. At that point, Mrs. Altmann offered to submit to mediation, suggesting that she might agree to allow one or more of the paintings to remain in Austria on public display, in exchange for a certain sum of money. The Austrians refused to negotiate or submit to mediation. However, they did agree to submit to binding arbitration in Austria. Surprisingly, they lost again, even on their home turf. Finally, if the movie got it right, the Austrians suggested a negotiated settlement. Too late. Mrs. Altmann took the paintings back to the United States, where there are now on display in New York City.

As a mediator, I was pleased to see litigation, mediation and arbitration depicted so accurately. I frequently encounter people who do not know the difference. Litigation and arbitration are win-lose propositions. Mediation can lead to a win-win solution. The Austrians could have kept at least some of the paintings in Austria and saved face, as well as creating some good public relations. Instead, they chose litigation and then arbitration, and lost everything, including some good will and (for them) a bad precedent.

It is not unusual for me to hear people say “why should I mediate when I know I’m going to win in court?” They think agreeing to mediation is a sign of weakness and shows that they have some fear they might lose. My job is to convince people that there is nothing to fear in trying mediation. Normally, nothing that is said or done in mediation is admissable evidence if the case does not settle and goes to trial. Many times, the parties find they have interests that cannot be satisfied by a court, even if they win. Outcomes in mediation are not limited to what a court could do. It can be a very creative process, limited only by the parties’ willingness to search for a win-win solution and to look beyond the immediate legal battle. The things I enjoy most about being a mediator are helping people to put their legal battles behind them expeditiously and finding solutions that both (or all) parties can live with. Saving time and money can often be a pleasant by-product.  

Thursday
Sep112014

Economics, Coase Theorem & Mediation

An excellent article appears in the current edition of the Verdict on Justia.com. It discusses the economic principle that has come to be known as the Coase Theorem in the context of recent reports of disputes about reclining seats on airplanes. Specifically, conflicts arise when people disagree about who has the right to precious space (i.e., in economic terms, a “scarce resource”). More importantly, the absence of a dispute resolution system to handle these conflicts expeditiously has lead to disruptive and sometimes physical altercations. The Coase Theorem says that assigning property rights will lead to an efficient outcome through bargaining and negotiation. However, it also recognizes that transaction costs are ubiquitous and important to consider. These costs include having enforcement and dispute resolution mechanisms in place. The airlines will have to remember this if and when they ultimately establish rules regarding the “right” to recline or to prevent reclining.

The author concludes that “Problems are solved not by assuming them away, but by confronting them and thinking about them clearly.” Indeed, the airlines will have to confront this problem. In order to preserve comfort and peace on airplanes, it is important that they think this through completely and explain their decision coherently. This is what makes negotiation and dispute resolution, and life itself, complex. It is also why I have advocated getting a neutral third-party involved when making such decisions. Things are not always as simple as we wish them to be.

Monday
Aug182014

When is Mediation not Mediation?

Last week, the Milwaukee Journal Sentinel ran an article about the Wisconsin Medical Malpractice Mediation Panels (MMP), with the headline “Medical Mediation Rarely Provides Closure”. The only problem with the article and the headline is that the MMP is not really about mediation.  The Wisconsin Legislature and the Director of State Courts both agree that “[a]lthough referred to in the legislation as ‘mediation,’ the work of the panels is more accurately described as ‘early neutral evaluation.’”  Early neutral evaluation (ENE) is a valid form of alternative dispute resolution, but it is distinct from mediation.  ENE involves an individual or panel giving a valuation of the case early in the process, in order to facilitate resolution.  This is what should take place in the MMP process but it is not what takes place in real Mediation.

True Mediation is one of the most positive developments in modern dispute resolution.  In the truest form of Mediation, the mediator does not decide or force a resolution; rather, using a structured process, a mediator endeavors to work with the parties to develop a resolution.  Mediators have an ethical obligation to provide a process for the informed and self-determined choices of participants.  Self-determination, confidentiality, and creative problem-solving can render outcomes superior to many other dispute resolution processes, including litigation.     

I do not know how effective the MMP is in resolving medical malpractice complaints.  At least one attorney familiar with the process has stated she is unaware of any cases in which the panels were instrumental in resolving the case.  On the other hand, repeated studies have shown that mediation is an extremely successful form of dispute resolution, resulting in a nationwide settlement rate of more than 75%.  Regardless of settlement, over 80% of participants are glad they took part in the process.  True Mediation is highly effective in resolving disputes across a broad spectrum of personal, legal and business conflicts.

Tuesday
Jan212014

How does a mediator spell success?

Like many mediators, I am often asked how many of my cases result in a settlement, as opposed to impasse. The question implies that a successful mediation results in a full settlement of all issues, and that anything less is an impasse, or failure. However, I have found that my clients can get more out of mediation than a settlement or an impasse, if they understand what mediation really is. 

A recent blog post defined mediation as “a negotiation process facilitated by a trusted neutral person having no power of decision.” The key word is “negotiation.” Many times, the parties to a mediation tell me they have already negotiated to no avail, meaning they have not reached a settlement. My question to them, then, is two-fold: First, why not? Why were they not able to agree? And then the finger pointing begins. Each side thinks it is going to prevail at trial, or at least do better than what the other side was offering. And that’s where their negotiations ended. My second question is what did you learn during your negotiations? Frequently, the only thing they learned was what the other party was willing to offer. They were focusing on positions and bottom lines. Of course, neither of them told the other what their bottom line really was, for fear of looking weak or giving away the store. Therein lies the benefit of mediation.

Participants in mediation can tell the mediator what their bottom lines are confidentially, without fear of disclosing their weaknesses to the other side. Thus, a mediator can see whether their is an overlap, or exactly how far apart the parties really are. More importantly, the mediator can focus the parties’ attention on issues rather positions. Who should pay how much to whom is certainly one issue, but there are always others. For example:

  • court costs and attorney fees
  • confidentiality agreements
  • in employment cases — future references, non-compete agreements, or eligibility for unemployment compensation
  • in franchise and dealership cases — the territory definition, accounting requirements, minimum sales or purchase requirements

The list goes on and is limited only by the parties’ lack of perspective and creativity. This is what the mediator must bring to the negotiation process. By opening up the discussion (and making it just that — a discussion, not merely a back and forth volleying of offers and counteroffers), the mediator can focus on all of the issues that might have to be resolved at trial (or even after trial) if the parties cannot agree on a settlement. Then, at a minimum, the parties might at least narrow the list of issues that might have to be resolved by a court.

I measure success in mediation by what the parties get out of it. Sometimes it is a settlement of all of the issues, and sometimes it is merely a better understanding of the dispute — not just the other side’s position, but the strengths and weaknesses of your own case. Like anything else, you get out of it what you put into it. If you go in looking only to find out what the other side is willing offer, that may be all you get out of it. But if you are looking for a better understanding of the issues and interests involved in the dispute, I have found that you can usually do exactly that. And that is what I call success. If that results in an immediate settlement of all of the issues, so much the better. If not, it will certainly lead to a more informed and satisfactory settlement down the road, or a better prepared presentation of the issues at trial.