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How we resolve our disputes



Mediators frequently complain that parties to mediation do not come sufficiently prepared to reach a settlement. But preparation is a two-way street. Mediators also need to prepare for each session. I prepare by reviewing any information sent to me by the parties, as well as reviewing my mediation training. Some of the things I have learned are recorded in my previous posts. Recently, I have read two excellent articles that help refresh me before each mediation encounter.

The first comes from FINRA’s current newsletter. (You don’t have to be FINRA arbitrator or mediator to subscribe.) The article contains nine tips for a successful mediation. One of those tips is to “be prepared,” but following all of the other tips is the best preparation.

The other article comes from the ABA and discusses 10 things lawyers love and hate about mediators. According to the author, one of the things lawyers love is when mediators prepare beforehand. Seems obvious, but again the other items listed in the article provide fertile ground for preparation by a mediator.

If you are a mediator and have any favorite lists that help you prepare for a mediation session, please leave a comment and let me and my readers know what they are.


An ounce of prevention . . . 

Maybe it’s the economy. Or maybe it’s the latest negotiation tactic. Lately, I have conducted several mediations in which one party claims that it will file for bankruptcy if it does not prevail in the pending litigation. Collectibility is frequently an issue in mediation, but the spectre of bankruptcy raises it to a higher level. If a settlement is reached and the party who pays money then files for bankruptcy protection, will the recipient have to pay it back to the trustee to be distributed equitably to all creditors? In one case, the plaintiff alleged its business losses were due to conversion by a business partner — an intentional tort that could not be discharged in bankruptcy.

Of course, many business disputes, especially between partners, can be avoided with carefully worded contracts, partnership agreements or corporate documents. Unfortunately, in the recent cases I have mediated, the contracts and other documents were not carefully worded. In some instances, they were non-existent or, at best, inartfully drafted. Maybe the parties did not feel the need for written agreements, or maybe they were too cheap to pay attorneys to draft them. But I suspect that well-drafted legal documents would have come in handy when it came time to end the relationships or resolve disputes. In the absence of such documentation, the litigation became a he said/she said affair. And the mediation boiled down to “give me what I want” or “accept what I am offering” or else I’ll file for bankruptcy.

A transactional or business attorney’s best marketing tool is to tell a client to “pay me now or pay the litigators later.” In the cases I have seen, parties who scrimped on business planning and documentation have gotten what they paid for. Trouble.


Back to School

It is the end of August, the “back to school” time of year. Yesterday on the radio, I heard a discussion of what parents need to do to prepare their children for the new school year. The participants began talking about the usual books, pens, paper and other supplies, technology, clothing, etc. Fortunately, before I tuned out, they turned to the more important question of how you prepare children mentally. How do you put them in the right frame of mind to learn both the substance of what is being taught as well as how to interact with teachers and other students? It was good to hear a discussion that encouraged parents to get involved with their children’s education. Too many parents these days use the schools merely as babysitters, to take care of their children while the parents are at work. Education should continue at home, not just in the classroom.

The discussion soon focused on problems that arise at school that can turn children off to education, like bad teachers and bullies. What is a parent to do? How involved do they need to be? What lesson should parents give children to prepare them for obstacles at school? The answer was a pleasant surprise to me. In an age where some parents are too uninvolved and others are over-involved (so-called “helicopter parents” who hover over their children), I expected to hear something about finding the middle ground or happy medium. Instead, what I heard was elegantly simple: “Work it out!” The participants in this discussion did not urge parents to monitor every problem, call school to complain about bad teachers or bullies, or help their children out of every difficulty. Rather, they urged parents to tell their children that problems and conflicts will occur, and children must be prepared to work it out and resolve the problems themselves. Of course, this requires children to know how to stand up for themselves and be their own advocates, without resorting to violence. This is something both teachers and parents should help children do. It is a skill that will help them throughout their lives. Sometimes, they will be able to do it themselves and other times they will not. But if they try, they will at least learn when they need to seek help and who to seek it from.

This discussion should be required material in business schools. I have seen people turn their business problems over to lawyers and tell them to “handle it,” when the parties themselves could have worked it out more efficiently if they knew how to communicate and advocate for themselves effectively. Fortunately, many attorneys are skilled negotiators and advocates in and out of the courtroom. But it certainly makes the attorney’s job easier if the client is also involved in and adept at the process. That is a skill that can and should be learned in school. When parties in dispute cannot get the other side’s attention or have trouble focusing on the issues, that is when attorneys or mediators need to be called in. And then it is time for everyone to go back to school and find a way to work it out.


Lost in translation

In the 2003 film Lost in Translation, actor Bill Murray’s character frequently listens to one of his Japanese hosts or directors ramble on for at least a minute in Japanese only to have a translator explain it in English in a few seconds. Murray looks at the interpreter incredulously and says “Is that really all he said?” Obviously, the interpreter greatly oversimplified what was said and omitted any implication the Japanese speaker’s tone or inflection might have conveyed.

In my mediation training, we were taught to try to restate participants’ concerns in other words, showing both concern and understanding. However, even when all the parties are speaking the same language, this technique runs the risk of misstating or oversimplifying a participant’s concerns or interests. This does not mean that a mediator should not try to restate the concerns and interests. Rather, the mediator must understand that the opposing sides in a dispute frequently have different understandings of the facts based upon their own narrative. Even when speaking the same language, something can be lost in translation. As George Bernard Shaw noted, “England and America are two countries separated by a common language.” Similarly, business partners, competitors, buyers and sellers, and even spouses can speak in jargon or terms that are unfamiliar to others. Sometimes, this is what causes the dispute or conflict. Finding common ground requires the parties to be speaking the same language and understanding each other’s terminology.

In one recent mediation, the participants were arguing about whether a computerized system was defective. One party referred to a pass code. The other said there was no such thing, but there was a registration key. Ultimately, it appeared they were talking about the same thing but they thought it was different. Helping them realize what the other was talking about, even in the same language, became my most difficult challenge. Without a mediator, they might never have reached an agreement. I’m not bilingual, but it seems I can help translate English to English.


Uncertain certainty

In my last post, I noted that predictability was not a hallmark of trial by jury. Long ago, I gave up predicting what a jury would do. Perhaps this is what utilitarian philosopher Jeremy Bentham was thinking when he said “The power of the lawyer is in the uncertainty of the law.” Negotiators for NFL players and owners may also have recognized the risks in predicting the future when they recently settled their contract disputes.

Meanwhile, our nation’s capital seems to be filled with those who are certain that they know what the future holds and what is best for the country. The problem is that at least two groups are so certain, and their proposed policies are mutually exclusive. One side believes we can reduce our deficit (if not balance the budget) strictly by making cuts in expenditures. The other believes that both expenditure cuts and revenue increases are necessary. No one believes that Congress and the President will risk ruining the nation’s credit rating by defaulting on the national debt, but they are playing a dangerous game of chicken. Someone has to blink.

In litigation, many cases settle on the courthouse steps, with a jury in the box, ready to decide the case. These last minute settlements frequently occur because one side finally realizes a flaw in its case or a mistake in assessing the risk of an adverse decision. Settlements made under such circumstances are rarely favorable to the panicked party. Such outcomes are bad enough when they involve private parties involved in civil litigation. They can be catastrophic when the nation’s finances and economy are at stake.

Unfortunately, no independent, impartial mediator appears to be ready and able to save our elected leaders from themselves. The President cannot be mediator-in-chief because he, too, is a politician with a dog in the fight. We can only hope that the impending debt ceiling deadline provides the necessary reality check that brings the warring factions to their senses and produces a solution we can all live with.