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How we resolve our disputes

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. 

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.