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Law Rules

How we resolve our disputes

Entries in neutral (7)

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.

Monday
Dec092013

Practice!

An old joke relates the story of a tourist in New York City who asks someone on the street how he can get to Carnegie Hall. The native New Yorker responds “Practice!” The same can be said for negotiating. Whether you are using a neutral mediator or an advocate (like your attorney or agent), you should never just go to the meeting place and let the negotiations happen. You have to be prepared. Whether it is your job, your business, a real estate transaction, a loan, or some other major sale or purchase, you need to take charge.  And if it is big enough and important to you, get some help.

Attorney and sports agent Ron Shapiro, co-founder of Shapiro Negotiation Institute (SNI), has written books about how to prepare for negotiations.  He calls his most important advice the “three D’s”:

  • Draft — prepare a script for how you would like the negotiations to go. This will help you sort out what is important to you and what your goals are. What issues do you want to cover, how should you present your requests and how will you meet the other party’s potential objections?
  • Devil’s advocate — review your Draft with someone who can help you find the right way to say what you are going to say, as well as to avoid saying anything you might regret saying. Find a person who has been in your situation and can think of problems you might not anticipate.
  • Deliver — practice with a coach so you become confident and comfortable with your message. You never want to let the other side see you sweat.

If you need help preparing for a major negotiation, find someone who has been there and done that before. An attorney who has represented clients in major litigation as well as served as a neutral mediator and arbitrator is well-suited to play that role. Attorney Michael A. Pollack is one such attorney. Whether your goal is a better job, a better salary, a business acquisition or disposition, or an end to an aggravating dispute, let Michael Pollack help you to prepare and practice. Then, as they say in the theatre, “Break a leg!”

Saturday
Apr062013

Neutral evaluation

Sometimes when I am called upon to mediate a dispute, what the parties really seem to be looking for is a neutral evaluation of their legal case or negotiating position. While I am happy to do that for the parties, I make sure to explain to them that this is different than mediation. It requires the parties to present to me, in summary form, most of their case. The parties need to consider whether or not they want to share all of that information with the other side, either directly or through me. If they do, it is really like non-binding arbitration. This can help the parties get a more realistic view of their chances of prevailing at trial and, therefore, promotes settlement. However, if the parties or their attorneys are not communicating well, a mediator may still be necessary to facilitate negotiations. On the other hand, if mediation is attempted and reaches an impasse, neutral evaluation may help to break the impasse.

There are no rules declaring what type of dispute resolution is best for resolving any particular type of dispute. It depends on the nature of the parties’ relationship and the dispute. It also depends on how much time and money the parties want to spend trying to resolve it. All of these considerations should be laid out and discussed before attempting to resolve any dispute. One size does not fit all. Your mediator should be familiar with all of the dispute resolution options and discuss them with you before proceeding. In Wisconsin, the statutes require a judge to discuss with the parties the desirability of alternative dispute resolution before trial. Don’t get tunnel vision and lock in on only one option. As I have said before, options are good. Keep them open.

Sunday
Jan022011

A New Year Wish

In his annual report on the judiciary, Chief Justice John Roberts expressed concern about the “economic downturn that has imposed budgetary constraints throughout the government, and the persistent problem of judicial vacancies in critically overworked districts.”  In most federal districts that I am familiar with, U.S. Magistrate Judges conduct settlement conferences in civil cases.  In state courts, if you want a neutral third-party to facilitate settlement discussions, you hire a mediator.  Why should the federal courts be different?  My wish for the new year is that the federal courts outsource or privatize the settlement function.  Want to save judges’ time and taxpayers’ money?  Let the judges (and magistrates) be judges.  Let mediators mediate.