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How we resolve our disputes

Entries in settlement (18)

Friday
Oct072016

Mediation - the Justice of our Times

In an article about statute of limitations reform for child sex abuse victims, the author notes that Cardinal Timothy Dolan of the New York Archdiocese offered mediation and compensation as a means of resolving the claims against Catholic priests. The article states “Mediation is the justice of our times in the vast majority of cases,” and praises the resolution to the extent that it provides a “more efficient and private path for those survivors who would not choose the legal system.” I haven’t seen any statistics verifying that mediation is used in the “vast majority” of cases but, in my opinion, it should be. 

As an attorney, I have had cases that settled literally on the courthouse steps, sometimes with a jury in the box waiting to hear the case. In retrospect, I believe many of those cases could have been settled long before the trial date with the help of a mediator. Unfortunately, some parties prefer not to think about settling until they have fully prepared for trial. A good mediator should be able to help the parties prepare their cases, or at least to think about what it will take to prepare their cases for trial, and then focus on possible resolutions long before trial. 

As a mediator, I have seen parties come to a realization of the true value of their cases and the true costs and risks of fully preparing for trial well before the court’s trial date. Even if the parties are not fully satisfied with the settlement, at least they are relieved to be done with the costs and risks of going to trial. Sometimes, they are happy to have gotten something they could not have gotten in court, like confidentiality. 

The New York Archdiocese offered mediation as a means to awarding compensation to victims of clergy sexual abuse while at the same time keeping each complaint and award confidential and out of court. The mediation was offered before any pleadings were filed in court, without having to go through lengthy and costly motions and discovery. In my experience, such pre-filing mediation is rare. If it works to the satisfaction of both victims and the church, perhaps this will set a precedent for other potential litigants. Then, mediation will truly become the justice for our times. 

Wednesday
Jun222016

Who wants to go first? 

In mediation, the participants often spend much time trying to get each other to be the first to make a settlement offer. It is understandable that neither wants to be the first because they would both like to see how reasonable or unreasonable the other side is going to be. Then they can respond in kind. Fortunately for the mediator, the parties frequently have had settlement discussions before coming to mediation, and those discussions can help frame the initial offers in mediation. However, if that has not happened, it can be difficult convincing one of the parties to make the first move. 

Likewise, it can be difficult to get the parties to agree to enter into mediation at all. Many people, especially attorneys, see an adversary’s request for mediation as a sign of weakness. If they were prepared for trial and convinced they would win, why would they want to talk about settlement? Where I practice law and have litigated the most cases (Milwaukee County), the standard civil pretrial order requires mediation. It allows the parties to select any mediator they want, but if they cannot agree on one, the court names someone by default. In any event, neither party has to request mediation and appear to be unprepared for trial or less than certain of victory.

Unfortunately, this is not the practice in all counties in Wisconsin. Recently, I attended a “view from the bench” seminar in which trial judges gave tips to trial lawyers. One of the judges said he never ordered mediation unless one of the parties requested it. I believe the judge is missing an opportunity to be of service to the attorneys and their clients. The Judge can avoid the parties’ fear of appearing weak and give the attorneys cover by saying “the Judge made me do it.” The opportunity to settle well in advance of trial also avoids the spectre of one of the parties folding on the courthouse steps immediately before trial, thereby giving away the store or leaving money on the table, and wasting scarce court time. 

So, instead of asking the attorneys if they want mediation, a judge’s default pretrial order should require mediation. The Judge should strike the order for mediation only if he finds some reason not to order it. For example, if the case is one of first impression or if a precedent needs to be set regarding a new statute or constitutional provision, it may not be appropriate for mediation. If the attorneys have tried and settled many similar cases against each other, they may be familiar enough with each other and the process so they do not need a mediator to help guide them through it. Otherwise, the Judge would be doing a favor for the parties, their attorneys and the court system by ordering mediation. 

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.  

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.

Monday
Nov192012

Extraordinary circumstances

In Wisconsin, absent excusable neglect, newly-discovered evidence, fraud, illegality or subsequent change in circumstances, a court can vacate a judgment or settlement agreement only if it finds “extraordinary circumstances” justifying relief from the judgment or agreement in the interests of justice.  In a recent unpublished decision, the Wisconsin Court of Appeals decided that a woman’s subsequent “discovery” of earlier releases she executed with a former business partner prior to entering into a mediated settlement agreement did not constitute such extraordinary circumstances.  The woman admitted that she had effective legal counsel in the mediation and she did not assert that she did not voluntarily choose to participate in the mediation and enter the settlement agreement, rather than to litigate the business dispute.  The mediation was conducted at an early stage of the litigation and the woman asserted that she did not remember or appreciate the legal significance of the earlier releases.  Nonetheless, both the trial court and the appellate court found nothing extraordinary enough to justify vacating the mediated settlement agreement.

I question whether this woman’s legal counsel was truly effective.  Preparation is as important prior to entering into settlement negotiations as it is prior to trial.  If these litigants truly had released their claims in prior documents, this should have been discovered and discussed before or during the mediation.  However, the courts’ decisions in this case, upholding the mediated settlement agreement, are not unusual.  Courts do not exist to extricate people from their own neglect, mistakes or lack of preparation.  This is why it is often just as necessary to have an attorney represent parties in mediation as it is in litigation.  Even so, mediation will usually result in a faster and more economical resolution of the dispute.  Satisfaction with the result depends on the partipants’ and the mediator’s preparation.  There is nothing extraordinary about that.