Mediation Resolution: Settlement Agreement Challenges and Opportunities

These were the best of times. These were the worst of times. Ten hours of mediation slogging through issues, concerns and positions. Multiple threats to walk out on all sides. Intense hallway conversations. “Arm twisting” by the mediator and even your own lawyer. Gut wrenching calls to others to secure different settlement authority. Yet, somehow, some way, resolution has been achieved in this “unsettleable” case.

You just need to write up the settlement terms when the adversary includes a confidentiality clause in the settlement. The last 5 hours of your negotiation have been premised on use of the settlement in press releases and by your sales force. The adversary responds to your objections with a claim that it always includes confidentiality and such was assumed in all proposals. The entire settlement blows up.

We have all been there. Instead of a confidentiality provision, insert scope of indemnity or release, dates of payments, non-competes, or any other type of provision one party assumed was integral to settlement which the other party may never have considered. Not only has the settlement fallen apart, accusations of bad faith negotiating tactics enter the equation while relationships become further strained. Any trust developed in the process is lost. Resolution now appears a distant objective.

While seasoned mediators and skilled attorney-practitioners may work diligently to save settlement (and have their clients avoid significant future costs and risks), this scenario should arise sparingly as long as the mediator and lawyers consider potential settlement terms and structure well in advance of the actual mediation. This article addresses both the mechanics and structure of settlements achieved through mediation as well as challenges arising in that process. This article culminates a series of “nuts and bolts” mediation process writings which have covered many topics including pre-mediation considerations, negotiating methods, and now settlement structures.

Foremost, all practitioners must not merely recognize, but embrace the dynamic that the entire mediation process remains privileged as a settlement effort. This confidentiality protection extends to discussions and exchanges of information prior to the actual mediation sessions. This reminder is raised as so many of the practice tips detailed below necessitate raising issues and concerns in advance of the mediation session to allow parties the ability to consider, value and properly address proposed settlement terms. If settlement structure issues are more timely raised, parties may understand and appreciate that different decision makers may need to be involved or different approvals secured which would otherwise not be available during mediation itself.

Think Through Potential Settlement Structures

Typically, attorneys at mediation are well prepared to address amounts of settlements. This basic economic term has been fairly vetted between attorney and client. Authority and approval levels have been established premised on the proposed amount of settlement. With this process to establish potential worth of claims, the attorney better sets client expectations.

Yet, this same pre-mediation analysis is not always applied by practitioners to issues beyond monetary worth. As an initial step, discuss with your client that which is necessary and that which is desired in any settlement. Determine whether the settlement structure will address issues and concerns beyond the four corners of asserted legal claims. Determine whether the interests of third parties may be impacted. For corporate and insurer clients, have them detail essential agreement conditions which they desire to include in all settlements.

My experience is that attorneys, in general, are problem solvers. Once concerns are identified beyond the pure economic issues, attorneys can work to develop a settlement structure to achieve most goals. If the issue cannot be addressed due to legal or ethical hurdles, the attorney can counsel the client early in the process in order to reset expectations and redirect efforts. Once identified, the parties can begin to place value on the issue. The key remains to understand such essential settlement terms in advance to avoid surprises for all.

Further, careful consideration of settlement terms and structure in advance of mediation should provide new and different tools in negotiating. In a number of instances, parties at mediation recognized that they could mutually benefit from a new or different business arrangement with this new relationship serving as part of the resolution of the pending dispute. However, such consideration proves short-lived as the necessary business personnel are not present at the mediation. If such matters had been explored in advance, a potential path to settlement may have developed.

Think Through the Economic Settlement Terms

Economic settlement terms and structure issues include, but are not limited to:

Amount
Timing of Payment
Goods/Services in Lieu of Payment
Classification of Payments
Annuities

While the amount of settlement is obvious, the parties need to evaluate and be prepared to address additional economic terms in any settlement structure. The timing of payment may be critical for one or all parties. One party may require prompt payment terms. That party may not always be the party receiving the funds. There may be financial accounting reasons for quick payment. There may be undisclosed potential transactions in play which require a clean balance sheet. Alternatively, for similar reasons, payment may need to be delayed or spread over time. Each of these valid concerns needs to be considered and then valued economically by the parties.

A more complex economic term for settlement presents itself where goods or services are exchanged in lieu of direct payments. For the parties, detail and clarify control over that arrangement. If dispute arises in the on-going transactions, will the parties be guided by the settlement agreement, new contractual arrangements, or other agreements? Clarity is essential in creating alternate compensation processes.

Classification of payments may provide flexibility to the parties. Employment cases routinely involve claims where a portion of settlement proceeds is deemed wages. Use that concept in other circumstances where it may benefit the parties. There may be financial benefits in dedicating a portion of settlement proceeds to an adversary’s legal fees. One party may cover expert or other costs. One party may contribute more toward the ever reasonable mediation costs. Each of these examples illustrates a method to increase the absolute value of settlement for one party even if not deemed a settlement payment.

If the parties seriously consider annuity payments, that issue should be raised in advance. The annuity brokers should provide alternative structures, or better, be in attendance to participate in the mediation. There always exist tension between use of an annuity and a contingent fee arrangement. Nonetheless, as a settlement tool, annuities can demonstrate the reach of a modest amount of money over time. Annuities may serve as a convincing tool to address unreasonable expectations by some parties.

In sum, the economic settlement terms broadly include many topics well beyond the simple issue of “How much?”.

Think Through the Non-Economic Settlement Terms

Non-economic settlement terms include, but are not limited to:

Confidentiality
Indemnities
Releases
Non-Competes
Non-Disparagement
Injunctive Relief
Modified or New Business Relationships

Certain non-economic terms remain case-specific such as forms of injunctive relief or new/modified business relationships. In terms of addressing such matters in the settlement, the key point remains to provide clarity and certainty to guide future conduct or relationships. Any settlement should be designed to eliminate and prevent disputes, not further entangle the parties.

Other terms such as confidentiality or non-disparagement clauses might be viewed as a ”given” settlement term. Do not assume that points have been accepted even if it is your typical practice. Raise the issues early in the process to avoid later dispute.

Non-compete clauses may carry significant value for parties, but must be carefully approached. One party, with no current plans to remain in a particular business, may be entirely willing to sign off on a broad and far reaching non-compete proposed by an adversary. Business plans change in the future. New business owners may seek to enter new business areas. The non-compete may be challenged. More so than the litigants, the audience to think about on non-competes should be a court sitting in critical review of the scope of the non-compete in some future action.

Releases and indemnities oft-times present challenges for parties. Typically, parties are prepared to release all claims and all issues related to claims “from the beginning of time until the end of time”. A corresponding limited indemnity usually presents little difficulty. However, once a release or indemnity seeks to include other potential claims and even other parties, the parties need to carefully review the scope and determine the worth of settlement with this transfer of risk. When parties remain entrenched in demanding a broad form release and indemnity for any and all claims, related or unrelated to the underlying facts, they should carefully consider the alternative of proceeding to finality in the courts. At the conclusion of a case, claims asserted in the litigation, and nothing more, will be dismissed. No other claims will be released. There will be no indemnity of any nature available.

Use of non-economic terms and structure in settlements remains limited only by the parties’ and mediator’s creativity. The structure of any settlement is not constrained by the underlying pleadings, claims asserted, or defenses presented. In evaluating different or less than traditional approaches, the parties may discover alternative and beneficial paths toward settlement.

Proper consideration of settlement agreement terms and structure in advance of mediation proves beneficial on many fronts. The attorney can better ensure that all issues the client needs to get addressed are included in the agreement. Expectations can be better managed and reset as required. Proper approvals can be secured from the appropriate personnel. Advance notice of select issues to an adversary will not be “tipping your hand”, but rather a privileged communication to make certain that your issues are fully and properly addressed in a settlement agreement. The adversary may require different approvals, especially where non-economic relief is in play. The advance notice allows such authority to be secured, if appropriate.

If followed, this process focuses the parties on concerns meaningfully in dispute or those considered vital in resolution. The process establishes defined goals and may present new paths toward agreements. The process should illustrate the points where the parties actually agree or on which there is no dispute. Indeed, quite often, the parties recognize that they are actually close to settlement.

No Surprises for Brett Kavanaugh

First, a disclaimer. I write this article a few days before the initially scheduled Senate Committee vote on US Supreme Court Nominee Brett Kavanaugh. The nomination has been thrown into turmoil over the past few days. I do not know whether Kavanaugh will be confirmed, whether he will withdraw his nomination, whether his nomination will be withdrawn, or whether a complete circus sideshow will unfold in the Senate. I offer no opinion on the merits of Kavanaugh’s nomination. I am merely amazed by the politics surrounding these developments and write on issues related to political games being played to decide Kavanaugh’s future and Kavanaugh’s own (ironic) role in setting the stage for his own potential downfall.

Something funny happened on the way to the coronation. Supreme Court Nominee, Brett Kavanaugh, on track for Senate confirmation one week before the scheduled Senate Committee vote, had survived the Senate hearing process and emerged relatively unscathed. He dutifully avoided answering questions as have all nominees since Robert Bork. Kavanaugh well understood the political gauntlet he had to run and played the game perfectly. At worst, he appeared set for Senate confirmation along partisan lines.

But wait, in a Perry Mason “aha” moment, after the hearings and before any vote, allegations of physical sexual abuse from Kavanaugh’s past rise up to take center stage. The allegations are more than 35 years old and involve alleged actions by Kavanaugh while a 17 year old high school student. The allegations are quite serious in nature. As a consequence, events continue to unfold in real time with the nomination potentially in jeopardy and uncertainty all around. The only sure thing is that political maneuvering by all will be on steroids over the next few days, or more.

I have been fascinated by the politics of Supreme Court appointments since Robert Bork’s nomination in the 1980s. Judge Bork was the last nominee to actually provide his views and opinions on certain matters in response to Senate inquiries. He was torched in the nomination process and defeated by Senate vote. In response, every nominee since Bork, regardless of political leanings or views on the law, responds with one of the following to nomination process questions: “I respect precedent of the Supreme Court and recognize it as the law of the land.”; “I believe in the Rule of Law.”; and “Each case must be addressed on its own merits, I cannot speculate.”. We learn nothing with such general statements.

As a result, the Senate confirmation process for Supreme Court nominees has become an event for Senators to grandstand, knowing that the nominee is trained to avoid the questions. The nominee is compelled to play this political game with no new information learned directly from the nominee. The only enlightening information appears to be from the nominee’s past writings and activities. There may be judicial opinions, law review articles, and other publications which can be dissected to determine actual views. Previous positions and jobs provide insight into the person as well. Senators, both in support of and opposed to a nominee, will place a spin on these data points to score political points in the process. The nominee must be careful to avoid any of these political pitfalls.

Of all recent nominees, Kavanaugh appeared the most knowledgeable of the politics involved in any Senate confirmation process. Indeed, his entire professional career has tracked toward this moment. Kavanaugh graduated from an Ivy League law school, clerked for a Supreme Court Justice, served as prosecutor and even with Special Prosecutor Kenneth Starr seeking to impeach President Bill Clinton, served as part of the legal team representing George W. Bush in Gore v. Bush, served in the Bush administration, and has been a federal judge. Since graduating law school in 1990, Kavanaugh has been a “Washington Insider” not with a front row seat for the extreme politics, but as an actor on the stage itself. He has been part of the politics.

The reward Kavanaugh sought was provided with the recent nomination to fill Justice Kennedy’s seat on the Supreme Court. The Senate hearings concluded. The parade of character witnesses served him well. All appeared in place with a little work to be done to secure the votes of a few key Senators. Enter college professor, Christine Blasey Ford. Professor Blasey Ford alleges sexual abuse by Kavanaugh while they both were in high school in the 1980s. Let’s be clear. IF TRUE, such events are horrifying at any time. IF TRUE, Kavanaugh would have lied with his denials of the events. IF TRUE, such matters would be fatal politically for Kavanaugh in the midst of the #MeToo Movement, weeks before the midterm elections, and while a record number of women seek political office.

Within 48 hours of this revelation, pushed by political supporters of Kavanaugh, the news cycle turned from “Are the allegations true?” to “Is it fair to dredge up 35 year old allegations?” In the abstract, perhaps there exists legitimate reason to debate whether new allegations of conduct from decades ago constitute fair game for consideration. After all, the allegations have not previously been raised even when Kavanaugh held very public and prominent positions. The allegations were presented a few weeks ago to a Senator who did not disclose them until this late stage. The timing of the disclosure appears to be strategically calculated to place maximum political pressure on Senators to turn on Kavanaugh or force withdrawal of the nomination.

For Kavanaugh himself, however, the response undoubtably is that this gamesmanship involving such serious allegations, and how it plays out, remains entirely fair in his own nomination process.

Recall that Kavanaugh served on Kenneth Starr’s legal team to investigate and pursue President Bill Clinton regarding perjury for the Monica Lewinsky affair. Kavanaugh was among those who advocated that prior alleged inappropriate actions and relationships of Clinton were relevant to the investigation, even where the allegations involved decades old actions. Kavanaugh also argued that all specifics of the affair between Clinton and Lewinsky be explored to make Clinton’s “pattern of revolting behavior clear — piece by painful piece.” Kavanaugh continued: “[t]he interests of the Office of the President would be best served by our gathering the full facts regarding the actions of this President so that Congress can decide whether the interests of the Presidency would best be served by having a new President. More to the point: Aren’t we failing to fulfill our duty to the American people if we willingly “conspire” with the President in an effort to conceal the true nature of his acts?”

Kavanaugh may now confront the type of very personal, embarrassing inquiries he advocated. Kavanaugh advanced that every graphic detail of the Clinton-Lewinsky relationship be explored including the number of times they engaged in activities, the precise nature and type of activities, the locations of the encounters, etc. According to Kavanaugh, Congress and the American people had to understand these details in order to render judgment about Clinton. Welcome to the hot seat Nominee Kavanaugh where your personal life may unfold “piece by painful piece”.

Kavanaugh argued that the Presidency itself demanded that these inquiries be made. We all need to have faith in the integrity of the office itself. That thinking applies even more so to uphold the integrity and faith in the Supreme Court. There are no term limits or elections for Supreme Court Justices, just lifetime appointments. What follows is that a complete vetting of Kavanaugh’s alleged physical sexual abuse is demanded in order to protect the integrity of the Supreme Court itself. Kavanaugh himself demands no less.

Kavanaugh set the standard to judge others in these circumstances. To be plain, he sought to solicit explicit details of sexual encounters, in part, to embarrass Clinton so that the President “(i) resigns or (ii) confesses perjury and issues a public apology to [Kenneth Starr].” Some Senators, politically motivated, may now seek the details of Kavanaugh’s past actions to embarrass the nominee.

As a career Washington Insider, Kavanaugh consistently used the politics of the day to achieve his goals. He has used the political machinery masterfully in order to advance from prosecutor to administration official to federal judge. Now that he can almost grasp his ultimate goal of becoming a Supreme Court Justice, the same political machinery may turn on him. The one person who had to see this coming was Brett Kavanaugh.

Again, I offer no judgment about Nominee Kavanaugh. I recognize the “fairness” arguments being raised about last-minute, emotionally charged allegations. I understand the points about relevance of issues from decades ago. In this circumstance, we need not address such arguments or debate the merits as Nominee Kavanaugh himself set the bar for any such investigation and inquiry. He has deemed all such matters completely relevant. Simply apply the standard which Kavanaugh advocated.

Nominee Kavanaugh may squeak through the confirmation process as did Justice Clarence Thomas (52-48 vote). Kavanaugh may withdraw his nomination. I know not. But I do know that Kavanaugh will now be subject to political gamesmanship, the likes of which he has known and engaged in since 1990. Now that is fair.

Americans Own Less Stuff – What Does That Mean for Us?

With the infiltration of the internet and software in our lives, we necessarily own less stuff. We consume books on Kindle. We rely on Netflix for our movies. Spotify provides our music. These, and similar, service sites own the entertainment which we lease. Actual books and compact discs are becoming relics for which a modern times Indiana Jones may soon search. Many (most) appear OK with this arrangement.

Noting such changes in our approach to ownership, Economics Professor Tyler Cowen observed that the younger generation even avoids the one American Dream of car ownership in favor of urban living with reliable mass-transit, cycling, Uber and Lyft options. Cowen acknowledges that such changes provide benefits. Yet, he opines that Americans are “losing their connection to the idea of private ownership.” (See Professor Cowen’s full article at: httpss://www.bloomberg.com/view/articles/2018-08-12/american-ownership-society-is-changing-thanks-to-technology). Professor Cowen then questions what this new societal approach which avoids direct ownership means for capitalism. In part, Cowen concludes that owning less stuff serves as a reason to be nervous for our economic system.

I am no economist and cannot meaningfully wade into the fray on the strength of the underpinnings of capitalism. I do agree that our increasing reliance on on-line service providers results in less ownership of “stuff”. My 20-something-year-old kids clearly view the significance of ownership differently then the generation above. They want just what they want and no more; they want to use it when they want it; and they see no need for ties to it when done with it. As a result, there is less ownership of stuff and we can even have less stuff. My kids look in bewilderment and amazement at my collection of CDs and, dare I say, record albums.

But, is less “stuff” good or bad? Just help someone move from their house. When you find boxes of manuals and instructions relating to appliances which were left behind in prior houses from previous moves, ask whether we need that “stuff”. Are the slightly broken desk chair and plastic containers with no lids the “stuff” we treasure so dearly we must keep? Look through your attic and storage spaces at all the “stuff” you have not used in years, if not decades. Could any of this “stuff” possibly be donated to those in need? Do we need these grand living spaces for us, or as a nice setting to keep our voluminous “stuff”? This younger generation may be on to something about owning less stuff and living in tiny houses.

When we got married, our first house was 100 years old with tremendous character and charm. In its original design, it could not be filled with too much “stuff” as it had but two small bedroom closets and no other storage areas. Some time during the 20th Century, our society developed a great need to collect and retain stuff. We were not always this way.

I admit to my own guilt in having too much stuff. I am not a fan of clutter and try not to collect too much stuff. However, I find it quite challenging to let go of books. I have read them and enjoyed them. They should be shared with others. When my much better half starts to box up books to donate to an old folks home, I cringe at the prospect even if done for such a good cause.

Perhaps this younger generation which presently views little need to own stuff represents the pendulum swinging back in the other direction. Give this new generation ten years and we will see what happens when partners are found and children enter the picture. Maybe the need for ready transportation and desire for a permanent home base may develop. We will see.

Regardless, whether we have too much stuff or avoid ownership of stuff, litigators and mediators should be cognizant of this shift in thinking with the new generation entering the business world. So many litigation disputes center on ownership rights. Estate litigation essentially argues over who owns or controls the stuff. Business dissolution cases involve directly competing ownership claims over stuff. Remove children from the equation and family law principally focuses on who gets the stuff. Intellectual property law raises questions about who invented and owns the stuff as well as who can use the stuff. The list can go on.

College students and 20-something-year-olds constitute a significant portion of potential jury pools. As a group, they present few viable excuses to avoid serving on juries. They will bring with them their refined views of property ownership. I am not certain what these views may mean during deliberations, but I am certain that their views will be expressed for consideration. Ignore this group at your own risk.

In the most fundamental manner, there exists a new risk calculus for litigants. Trial attorneys should strategically think through case presentations and themes to be advanced in light of different views of property ownership. Litigants should not dismiss the younger generation as sheep or simple followers on juries where deliberations will include ownership rights. Mediators and ADR professionals should educate themselves to better understand and be prepared to use this new dynamic in settling cases. At a minimum, less than traditional views of property ownership represent an unknown factor. “Unknowns” translate to greater litigation risk for all. Mediators should stress this new, unquantifiable risk.

As for Professor Cowen’s analysis, there may be less direct ownership of stuff in today’s society, but the capitalistic business models of service providers such as Apple, Netflix, Google and Kindle appear to be well intact. The 20-something-year-old crowd may not “own” these services, but I would not be the one to attempt to take them away from that generation. Less “stuff” translates to a change in societal thinking and approach. We need to recognize and work with the new approach. And maybe, just maybe, we do not need so much stuff.

Mediation Goes to the Movies

One of my boys recently observed that there are plenty of lawyer movies. He questioned why there are no mediator movies. As explained below, the answer to that question is simple. Nonetheless, with too much time on the beach during vacation, I pondered the “what ifs” of mediating some iconic movies. Can this hypothetical cinematic exercise teach us anything? Or, does it merely prove that I need more to do while on vacation? I recognize that those conclusions may not be mutually exclusive.

First, the answer. Lawyer and legal movies incorporate built in conflict. Whether against each other in court or within the confines of a law firm, lawyers clash. They argue. They stake out positions and defend them. Litigation compels parties to fight. The litigation process, by definition, remains adversarial.

This “conflict” serves as a ready-made plot device. The underlying movie plot could be the legal battle itself (e.g., To Kill A Mockingbird, A Civil Action) or the vehicle to move the story along (e.g., 12 Angry Men, My Cousin Vinny). It is easy to create heroes and villains where there exists conflict. In sum, the conflict represents tension from which the story evolves.

Compare lawyer and litigation conflict to mediation. Mediation remains a voluntary process where all agree to attempt to seek resolution of conflict. Mediation participants want peace and finality to claims. They want to terminate battles. One need only look to two fundamental mediation training books to sum up mediation: “Getting to Yes” and “Getting Past No”. A movie about people cooperating and inching toward handshake and a settlement agreement, quite simply, is not an action thriller which will fill up the seats of a movie theater. For cinematic purposes, mediation is boring.

Nonetheless, my son’s observation got me thinking about what might happen if mediation were introduced into movies. For these purposes, I eliminated from consideration all lawyer and legal movies as such films already begged for some alternative dispute resolution. I sought to focus on the classics and well-known movies. I selected an unlikely trio of movies as mediation candidates: The Wizard of Oz, Casablanca, and Animal House.

The Case of The Wizard of Oz or Who Owns the Shoes

The essence of the dispute in The Wizard of Oz boils down to who has a legitimate or better claim to the ruby slippers. Dorothy Gale was thrust into the fray after her well-crafted Kansas house left the Wicked Witch of the East “not merely dead, . . . really most sincerely dead”. Without consultation or consent, the good witch transferred the ruby slippers to Dorothy. Dorothy remained in possession of the fancy shoes as, at best, the recipient of a gift. Pretty slim legal entitlement claim to the shoes for Dorothy.

However, the claim of the Wicked Witch of the West does not appear much more sound upon examination. We know of no will which bequeathed the ruby slippers to the Wicked Witch of the West. The Wicked Witch of the East clearly did not give the slippers to her sister as evidenced by the fact that the Wicked Witch of the East had been using them upon her demise. The simple fact that the Wicked Witch of the West claimed to be aware of the powers granted by the ruby slippers and that she knew how to use such powers fails to constitute a valid legal claim of ownership.

With each party presenting tenuous legal claims for the ruby slippers, the dispute cries out for compromise and mediation. But wait. Can this dispute truly be resolved with only Dorothy and the Wicked Witch of the West? As we learned, the Wizard of Oz himself may be required for transportation back to Kansas as well as the Good Witch of the North. Sounds as if they should be included in the mediation. Perhaps the Good Witch of the North herself possesses a claim for the shoes. If the Wicked Witch of the West ultimately retains powers from the ruby slippers, would not the Munchkins be entitled to a seat at the mediation table to ensure the peace they gained when the Wicked Witch of the East got squished? This mediation covering footwear suddenly became quite complex and crowded.

A critical point for mediators and participants is to identify necessary stakeholders in order to completely resolve a dispute. The stakeholders may be parties to the litigation or even third parties with some interest. Seek to identify any such stakeholder prior to mediation and resolution efforts. Otherwise, your mediation could be derailed by a pack of Munchkins at your door.

The Case of Casablanca or Rick vs The World

It is no wonder that Rick often acts as if the weight of the world rests on his shoulders in so many scenes of Casablanca. He feels directly responsible for the well-being of Sam and all employees at Rick’s Cafe. He believes he must protect them from all external influences. He loved and lost only to confront this love again in his own gin joint. He constantly battles the only other, well-connected bar owner for supplies, customers and control over corrupt local officials. He secretly anguishes over perceived injustices in local and world conflicts while stating that he will “stick his neck out for no one”. He then must overcome possible jealousy of a true freedom fighter who happens to be married to the love of his life. Rick is fairly miserable for the one who possesses German letters of transit which ensure freedom to the bearer. At least Rick need not worry about Ugarte.

How can mediation help in Casablanca? Initially, we might need a family law mediator to assist with the Rick vs Ilsa and Victor Laszlo scenario. Rick needs help with all his feelings of revenge while Victor desperately needs the letters of transit to continue the resistance fight.

Just who deserves the letters of transit would be a fascinating mediation. Rick possesses them. The German officers assert some level of ownership as the letters were stolen from a German courier. Ilsa and Victor seek them citing the moral high ground of the need to continue resistance efforts. We should not forget Captain Renault who ordered the search of Rick’s Cafe looking for the letters of transit due to their monetary value in Renault’s corrupt enterprise.

While Rick is on the way out of town, he sells Rick’s Cafe to his business opponent, Ferrari. One cannot help but think that Rick and Ferrari, both practical business owners, would have benefitted from a pre-arranged, mediated business solution in the very likely event one of them had to expeditiously get out of town.

Perhaps mediators might not have been able to assist in resolving Rick’s internal moral struggles or the spread of Nazi control in the region. However, given the number of distinct conflicts presented by Rick, mediation could have been used to bring Rick and all these other parties closer on a host of disputes. But, one mediation could not address the family law, business divestiture, and letters of transit disputes, among others. The parties and mediator would need to define the issue(s) being addressed. Only then could the necessary parties focus on the core disagreements and work toward solutions.

The Case of Animal House or The Merits of Double Secret Probation

At first glance, Animal House may be a questionable mediation candidate. Yet, the plot provides various disputes which could benefit from mediation efforts, both within and involving the Delta Tau Chi fraternity and Faber College. The long-standing and numerous disputes between the Deltas and the Greek Council are primed for resolution discussions rather than formal hearings. Instead of penalties, solutions could be crafted to better encourage rule-abiding conduct by the Deltas. Dean Wormer placing the Deltas on “Double Secret Probation” without notice or advice of consequences may be an area where emotions are ratcheted down and common ground reached. Finally, the Deltas insisting on a Roman Toga Party in response to disciplinary steps could possibly be avoided with a better understanding of the positions of all involved.

The challenge with each dispute from Animal House remains the unreasonable expectations of each party. For the Greek Council, the only acceptable solution is taking away the Delta’s Charter. For Dean Wormer, anything short of expulsion of the Deltas from Faber is a failure. For the Deltas, any response not including an over-the-top beerfest and revenge-filled parade is a non-starter.

A perceptive mediator as well as lawyer-participants representing clients will appreciate, and act on, unreasonable expectations of a client before the mediation. Demanding that students, however questionable their academic profiles and misdemeanors, leave college gives the Deltas a “nothing to lose” mentality. The extreme positions ensure an extreme response and fight instead of negotiations. Mediation requires compromise and the compromise will lead to an agreed upon settlement somewhere between the extremes. The unreasonable expectations and demands of some parties need to be addressed head on in order to direct these parties toward a realistic settlement range.

I am confident that there exist other and better mediation-movie candidates. For each example, mediation can alter the dynamics of conflict, turning them into opportunities to difuse a situation or possibly resolve the dispute. Of course, movies then would be far from exciting, regardless of the excitement for ADR processes each mediator would most definitely bring to the table!

Why Can’t We Settle Some Types of Cases?

Freshly minted lawyers will rarely, if ever, crack open a legal case reporter. They will not have to search for the most up-to-date supplement or “pocket part” for reporters to ensure that legal research includes the most recent decisions. These new attorneys will never spend hours in the “stacks” of row upon row of reported decision books. Legal research, as with every walk of life, evolved with computer technology. More information now is available with a few keystrokes at your desk than in any law library.

One such development in this regard is the daily electronic reporting of judicial decisions. Paper Advance Sheets announcing recent legal decisions or developments used to be published monthly or weekly. We no longer need to wait even 24 hours to receive this data. It appears in our e-mail accounts each morning as a service of bar associations or other professional organizations.

When we lived in the paper society, I would carve out time to review Advance Sheets. When a few stacked up addressing different topics, they would serve as a physical reminder that attention would be required. Upon the transition to the more frequent tendering of electronic information, I confess that I found it easier to ignore this potentially vital data. Once the e-mail was moved to its proper electronic folder, it could fall into the “out of sight, out of mind” category.

In an effort to change my approach and develop a routine to more regularly review these documents, I challenged myself for the first six months of 2018 to review, each day, the reported decisions and opinions in the TBA Reports. Tennessee attorneys will know this daily publication issued by the Tennessee Bar Association which includes the prior day’s decisions from Tennessee state trial and appellate courts as well as other legal developments such as ethics rulings and rule changes. Most state bar associations publish similar works with the same frequency. While I was not 100% successful with the daily review, I did remain fairly punctual. Hopefully, this new “routine” will stick.

With this more regular review, my mediator’s eye discovered an intriguing dynamic. I found that two types of civil cases proceeded to court disposition much more often than other types of cases. First, an explanation of how this conclusion presented itself. I sought to identify any such trends as mediator efforts could be focused in these areas. I eliminated criminal reported cases. I also did not include family law matters as they present unique issues oft-times necessitating court disposition and require specialized mediator skills. Finally, I eliminated from consideration worker’s compensation cases as there exists fairly unique administrative and legal processes which encourage appeals in these cases. What should remain would be the bulk of civil litigation: contract, torts, labor and employment, environmental, intellectual property and property law.

Based on observation and not a formal scientific study, I found a disproportionate number of reported decisions addressed dissolution of private businesses (mostly family owned businesses) and contested probate matters. Dissolution of private business cases and probate actions are sent to mediation as frequently as all other civil cases.

Why do parties litigate these types of cases to conclusion in courts when the vast majority of civil cases resolve short of dispositive motions or trial? What unique facts and circumstances, if any, explain this situation? What steps can and should courts and mediators take to assist litigants in such matters to discover settlement alternatives?

The following reasons, alone or in combination, may begin to explain why business dissolution and contested probate cases settle less frequently than other matters.

1. Emotionally Charged Clients

Privately held business disputes often place long term partners, friends and family members against each other. All parties believe that they have been wronged. Relationships have been destroyed and any trust has been lost. Dissolution of a long-standing business is akin to splitting up a family with significant entanglement of business and personal lives.

Contested probate matters place family members and extended family members directly in conflict. They can frequently involve children of a prior marriage against step parents where relations already have been strained. These litigants bring long standing emotional baggage with them into a process where they may still be grieving. Somehow, they each believe that only they know and understand the final and true wishes of the deceased.

In either type of dispute, litigants may yield otherwise rational decision making to emotionally driven choices based on hurt feelings, greed, or revenge. Even experienced attorneys who routinely represent clients in such matters may not be able to break through the emotional pieces which could cloud judgment.

2. Emotionally Charged Legal Issues

The legal issues to be decided in dissolution and probate cases could also be emotional for litigants. The dispassionate allocation of assets and liabilities from a balance sheet may become quite complex where litigants retain emotional ties to the property divided. These legal determinations represent the end of an enterprise or possibly the last decisions to be made regarding the deceased. Litigants may simply not be prepared for finality. Alternatively, the legal issues could also relate to control over future handling of affairs or business decisions. Again, the absence of trust or sense of rejection may bring emotional challenges in accepting these results. While such matters represent necessary legal determinations, addressing them might only be accomplished through emotionally charged thought processes.

3. Fact Specific and Fact Intensive Analysis

The legal determinations required to be addressed in probate and dissolution of business cases would be plain to the lawyers. Nonetheless, each case of this type is necessarily, incredibly fact dependent. If these matters reach litigation, it can be assumed that each party brings very different versions of the facts. The parties most probably do not even agree upon which facts will be important to decide the issues. As a consequence, no party will be well set up to secure summary judgment or other dispositive relief prior to trial.

When viewed within this framework, it is understandable that these type of cases remain quite contentious. The personalities, issues to be decided, and inability to accept adverse positions prior to a full trial combine to preclude resolution. Yet, courts, mediators, and legal practitioners address challenging cases all the time and still find the ability to routinely reach settlement. Divorce cases present similar or even greater emotional issues and those cases quite often reach an agreed upon resolution structure. Complex business cases present tremendous entanglements of relationships and those cases quite often reach settlement.

Perhaps one key difference presented in dissolution of privately held business and contested probate cases is that they often present simultaneous challenges in the areas of business concerns and emotional issues. The parties might require a mediator well trained and skilled to assist in both these areas. Many family law mediators might be well equipped in regularly addressing the emotional aspects, but perhaps do not often encounter the complex business issues. Similarly, business law mediators who regularly address civil cases involving contracts and property law issues may be lacking the skills to meaningfully address the emotional challenges.

A cautionary note for practitioners is to carefully consider the proper mediator best positioned to assist given the complexities of the case presented. Invest the time to find the mediator who can handle both sides of the equation in these cases. A cautionary note for courts which may assign mediators to such cases is to work closely with the local bar associations to identify those mediators with the requisite training, experience and skill sets to work with litigants in these complex cases. A cautionary note for mediators is to candidly evaluate our own skills and determine if we are a correct fit for the particular assignment (We never want to turn away business, but we do want the litigants to succeed in mediation!).

Neither Snow Nor Rain Nor Crying Baby. . .

The United States Postal Service (the “Post Office”) boasts a rich and proud history — deservedly so. From its origins in 1775 with Benjamin Franklin as the first Postmaster General, the Post Office has faithfully served the United States and its citizens since the inception of the country. Franklin’s vision of the Post Office as a reliable, efficient, and affordable resource for communication has been achieved. Even with the current fiscal questions, the Post Office strives to live up to its unofficial motto: “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds”. Even if those appointed rounds included sending babies and children through the mail — with appropriate postage, of course.

Yes. The Post Office accepted and delivered children between 1913 and 1920. A little history provides perspective and a little armchair psychology fills in the “How could that possibly happen?” reaction.

The Post Office initially limited itself to the delivery of letters and small parcels. Larger packages and goods were left to private delivery services. Such private services flourished in the 1800s. In the early 1900s, the Post Office finally recognized the value of expanding its well-established, efficient delivery network. The Post Office understood the need to serve rural communities which were ignored by the delivery services. The Post Office placed together this network and need to create Parcel Post.

Parcel Post operations began on January 1, 1913 with the Post Office then offering to deliver larger packages through the mail. Thereafter, it took but a few weeks for someone to mail a baby through Parcel Post. Jesse and Mathilda Beagle mailed their 8 month old son, James, to his grandmother, Louia Beagle. Postage cost 15 cents and the Beagle parents, as responsible as they were, insured the package for $50. The Post Office mail carrier, Vernon Lytle, reported the package as “well wrapped” and ready for mailing. James was mailed between two towns in Ohio. Further details such as the time between pick up and delivery, where postage was placed on the baby, and whether anyone fed or cared for the baby are not known.

In 1914, the mailing of 4 year old Charlotte May Pierstorff through Parcel Post gained national attention. The Pierstorffs mailed their daughter via train to the grandparent’s house 73 miles away. Postage was less expensive than a train ticket. The Pierstorff story became so popular that it was made into the children’s book, Mailing May.

Contrary to the legend embodied in the book, little Miss Pierstorff was probably treated quite well on her Parcel Post journey. Pierstorff’s cousin worked as a mail clerk for the railway and accompanied Charlotte May on the trip. Charlotte May did not ride inside canvas mail bags.

In 1915, Maude Smith, a 30 pound three year old girl was mailed by train through Parcel Post between two towns in Kentucky. A shipping tag was sewn to the girl’s pink dress which included thirty three cents in stamps and a delivery address. The girl reportedly had some candy and an apple for the journey. The Postmaster at the delivery station responded to the Postmaster at the origin station with the following: “Dear Sir – baby received 8:15, Carny, KY., by postmaster in person. I doubt the legality of the sending, but it was put on train and I must deliver and report.”

Post Office Historian, Jenny Lynch, noted that the Baby James Beagle story from 1913 garnished some headlines “probably because it was so cute.” While it may be a cute story, adjectives such as disturbing, irresponsible and neglectful also come to mind when parents mail babies and children. In fairness, Historian Lynch explained that in underserved rural communities, mail carriers were trusted servants upon which all relied. Even with great trust in Post Office employees, the Postmaster General officially stopped the practice of mailing children on June 13, 1920.

With this new service and form of communication in Parcel Post, it took people merely weeks to “push the envelope” with the Post Office program. I am confident that Ben Franklin did not envision a Post Office which would serve as a child delivery service. I am further fairly certain that the Post Office did not intend its Parcel Post service to become a child care program for anyone who could afford postage. Children sent through the mail appears as a classic unintended consequence of introduction of Parcel Post. Eventually, the Post Office formally halted the practice.

I stumbled upon the children through mail history when reflecting on the recent testimony of Facebook’s CEO before Congress. Zuckerberg testified about unintended consequences of misuse of private information and misuse of the Facebook platform for political gain. For this article, we can place to the side any politics associated with the Facebook testimony as well as the CEO’s need for a booster cushion on his chair for his testimony. As with Parcel Post, customers sought to take a new service in directions never intended. Zuckerberg left the clear impression that Facebook plans never included serving as a vehicle for extreme viewpoints or use by a foreign nation to influence the U.S. political processes. Facebook was a communication tool with an evolving process to make money from the volume of users and communications. As Facebook’s influence and scale became global, the unintended consequences became equally grand in nature.

It matters not if it was Facebook, Twitter, the forgotten MySpace, or the yet to be identified replacement of them all: The point remains that once people get hold of these communication services, they will seek to use them for their own means. A brief internet search disclosed the challenges and unintended consequences of the Post Office introducing Parcel Post. This drama of sending children through the mail was quite public. Yet, Facebook executives, engineers, designers, and great technical minds completely missed these obvious lessons from the past. I leave for others to determine whether Facebook genuinely ran into “unintended consequences” or whether the Facebook business model placed greater emphasis on securing subscribers and advertisers.

We apparently have not learned the lessons from James Beagle, Charlotte May Pierstorff or Maude Smith. We know, and need not assume, that there exist parents who would slap stamps on their kids and tender them to post carriers. We know, and need not assume, that Facebook and similar sites could be hijacked by extremists, foreign nations or others with improper motives. Unlike the James Beagle story being considered “cute” a century later, no one should ever categorize Russia medling in American political processes as “charming”, “cute”, or “adorable” regardless where you fall in the political spectrum. With the amazing reach and influence of technology today, much more is at stake when we ignore lessons we should have learned long ago.

Note: The Post Office motto of “Neither snow nor rain . . .” actually originated in “The Persian Wars” by Herodotus (Book 8, Paragraph 98). Herodotus, a Greek historian, attested to the valor of the wartime Persian messangers with this phrase.

A Case for Opening Statements in Mediation

The Giant Panda. The Blue Whale. The American Bald Eagle. The Initial Joint Session in Mediation. Yes. These are all endangered or threatened species. As a mediator, I sometimes feel as though I have a better chance of a Snow Leopard sighting than witnessing more initial mediation opening statements. How did this core mediation element get on the path toward extinction? More importantly, does it matter?

Prior to any mediation, I confer with the parties’ lawyers regarding the “need” and merits of an initial joint session with presentations. Most frequently, each party opines that an initial joint session would be of little value. I routinely hear the following:

* The parties know the positions, so let’s get right to the bargaining;
* Not our first rodeo and we know the process;
* We do not need to listen to each other’s summary judgment arguments; and
* The parties are already far apart and a joint session may create more distance between them.

This list can go on. As mediation has become a staple element in the litigation process over the past few decades, many litigators now feel fairly comfortable in the mediation process. To so many of these practitioners, the opening statement is viewed as a waste of time or with downside risk of further entrenching parties in their positions.

As a mediator, I should celebrate this initial agreement among counsel. Complete agreement on a process issue can build momentum for other agreements along the journey, right? Yet, I cannot help but think that these lawyers seek to avoid the initial joint session more out of habit and routine than after careful consideration in each case.

As explained below, numerous potential benefits remain with an initial joint session. Please note, I appreciate that, at times, initial joint sessions could and should be avoided. For instance, where the parties have already conducted settlement conferences or prior mediations, there may be greater utility in proceeding directly to the caucus stage. Emotional issues, threats or other safety concerns may mandate that the parties remain separated.

For other cases, an initial joint session could be a useful tool in advancing the parties toward resolution. Consider the following factors in any analysis of the need for opening statements at an initial joint session. Please appreciate that this list is not intended to be comprehensive. The particular facts, circumstances and dynamics of each individual case should be evaluated.

An opening statement at an initial joint mediation session:

1. Sets the Tone. Parties will advance opposing positions and will fight to “win” in court. This adverse relationship can be recast into a positive tone to cooperatively seek resolution during mediation. Parties can remind each other that shields and swords can be left by the door during mediation. If settlement is not achieved, the litigation weapons can again be picked up.

2. Humanizes the Process. Introductions and initial discussions place together faces and names. I am no psychologist, but I can tell that there is a difference when parties initially engage each other directly. There appears to be greater respect for both participants and positions where these brief relationships are established. It is easier to dismiss points and positions from the faceless “them” and “the other side” of opponents who are strangers. Once the relationships are established, parties generally more carefully consider positions advanced.

3. Allows Direct Messaging. The litigation process unavoidably results in lawyering of messages and filtering of information for clients. There are virtually no opportunities to directly engage an adversary except settlement efforts. The initial joint session provides the forum for such direct messages. Messaging, quite often, includes clues or direct statements of what is needed by one party for resolution. If parties miss the message, the well-trained mediator will ensure that the message gets received.

4. Permits Evaluation of Opposing Counsel and Parties. Opening statements can function as a mini preview of the trial. When I spent years as a party representative in mediations, I possessed a general game plan. I knew where the bidding would commence and track on my side of the equation. I remained disciplined to stick with that plan while keeping an open mind. The one factor which most altered that analysis was the opening statement session. In that brief time, I would evaluate opposing counsel in action. I could see how the adversary responded and acted in these circumstances. Would these individuals play well before a court? Would they be likable before a jury? Can they convincingly tell their story? The risk calculus for each case necessarily changed based on these observations.

5. Allows a Voice to Be Heard. A number of litigants initiate a case in order to be heard. Some mediation participants, recognizing that the mediation amounts to their “day in court”, need to tell their story in order to proceed to resolution.

The initial joint session in mediation will not settle the case. It can set the stage and tone for the entire mediation process. It does allow unfiltered insight into an adversary’s thinking. It does provide the opportunity to send clear signals. It further provides the mediator with additional tools to use during the mediation caucus sessions. In sum, the initial joint session in mediation represents a small investment of time which could reap substantial dividends in reaching resolution. Carefully evaluate the merits and potential benefits before you skip the next initial joint session in mediation.

“Know When to Fold ‘Em” – Lessons from the Bill Cosby Trial

The high profile Bill Cosby re-trial just concluded with Cosby found guilty of all sexual assault charges. Given the prospect of a lengthy appeal while he remains on house arrest, his advanced age, and being legally blind, it remains unclear whether Cosby will ever serve jail time. The real question for legal strategists is how Cosby’s lawyers ever allowed this set of facts to go to a jury — even with Cosby’s fame and a hung jury in the first trial.

Foremost, disclaimers. When there is a poor result for a client, it is easy to second guess the lawyers and their decisions. We were not privy to deals, or lack of deals, with prosecutors. We do not know about instructions from the client even if they ran afoul of legal advice. We do not know the dynamics in the courtroom or among the players. We can evaluate the public record of the trial and consider post-trial statements by the jurors. We should not rush to condemn the lawyers or their decisions without such vital information.

Background and trial set up. The Commonwealth of Pennsylvania accused Cosby of giving Andrea Constand an intoxicant without her consent, sexually assaulting Constand without her consent, and sexually assaulting Constand while she was unconscious. Cosby previously paid Constand $3.38 million in a prior civil settlement. In addition to this criminal proceeding, Cosby is a defendant in a series of civil lawsuits filed by women who allege similar, and identical, facts of being drugged and sexually assaulted by Cosby. These other women seek monetary damages based on defamation and similar theories.

Heading into the criminal trial, Cosby’s defense team knew that Constand would testify against Cosby and that the prosecution intended to call five other women who would each testify that Cosby drugged and sexually assaulted them in a fashion similar to Constand. The $3.38 million settlement between Cosby and Constand would come into evidence. Further, Cosby had already given a deposition in one of the civil cases in which he admitted that he gave women intoxicating drugs. That sworn testimony and admission would be presented to the jury in the criminal case.

Cosby’s lawyers were also aware of the cultural shift between the first hung jury trial and the re-trial. The stories involving Harvey Weinstein and many other abusers came to light before the re-trial. The #MeToo era was upon us and inescapable for any defendant such as Cosby. In light of these dynamics, Cosby stood accused of intoxicating women to the point of losing consciousness and then sexually assaulting them. Yet, Cosby’s team proceeded to trial.

What mitigating facts were on Cosby’s side? Cosby had been a high profile comedian an actor for decades. His work on Fat Albert and The Cosby Show was admired by the whole country. In fact, in the 1980s, on The Cosby Show, Cosby was the “Dad” children wanted and fathers wanted to be. The trial was set in the Philadelphia area — Cosby’s hometown and location of his alma mater, Temple University. Cosby’s works which have helped both Philadelphia and Temple University would be well known to the jurors. Cosby has been involved in well publicized efforts to assist young black and disadvantaged men to become better family members and fathers. Cosby possessed local ties and, up to the point of this trial, a solid reputation as an actor who helped others throughout his career.

As to the women who would testify against him, Cosby’s team could attempt to show bias in their testimony as they were motivated to win their civil lawsuits against Cosby. Also, these alleged actions took place decades ago, as early as the 1970s, but the witnesses had never previously come forward. Memories could be challenged.

As to the damaging Cosby deposition testimony from the pending civil case, I have no idea what Cosby’s lawyers were thinking. That testimony would be presented to the jury in the criminal case. In it, Cosby admitted to drugging women to the point that the women would be incapable of offering consent to sex. Notably, the plaintiff in the civil case from which this deposition testimony arose, was 15 years old when Cosby provided her with the intoxicant.

This testimony would flow directly from the tongue of Cosby himself. Cosby was under oath in providing the statements. The testimony would go far to establish a pattern of conduct for a key element the prosecution needed to prove. More critically, the nature of the testimony would transcend the simple issue of proof and confirm Cosby as some type of predator.

In a post-trial interview, one juror noted that this deposition testimony doomed Cosby. Cosby presented no credible explanation or justification for drugging women. What purpose could be served in drugging women while on “dates”? Did Cosby want to hear the women slur their speech? Did Cosby want to ensure that each woman received a peaceful rest with the aid of the intoxicant? The jury understood well that the only rational explanation of administering drugs was to allow Cosby to have sexual relations with the women without their consent.

In virtually every litigation, lawyers confront “good” and “bad” facts. For the most part, determining a fact as good or bad is based on perception. The reality is that we operate in shades of gray and rarely are “facts” absolutely good or bad.

Then, at times, lawyers are forced to confront facts or circumstances that are catastrophically bad. Such events are usually not up for much debate and leave little to interpretation. More fundamentally, these circumstances threaten to become the key or critical issue in a trial and not in a positive sense. All other claims and defenses may be rendered moot once this information comes to light.

For Cosby, once his testimony came in wherein he admitted to drugging women, he transformed to a predator. His previous reputation meant little. His charitable works were rendered moot. He went from Cos the beloved local hero to Defendant Cosby the molester. Maybe under the circumstances there was little Cosby’s defense team could have done.

What about civil cases where a lawyer has a catastrophically bad fact or circumstance? For each point discussed below, the advocate-lawyer has ready assistance in the form of neutrals. Step one is a candid realization and admission of such terribly bad facts. These facts need not be explosive as the Cosby testimony and could even be strategic in nature. For instance, a case may be venued in a rural area with a jury pool which is homogeneous on societal, racial and religious issues. The lead and necessary witness for a client is a Chinese national engineer with a name few Americans can pronounce who speaks English poorly with a harsh Asian accent. Potential local prejudices must be factored in any analysis. The lawyer may determine that the case can be defended well, but impossible to win in this jurisdiction under these circumstances.

Whether through Early Neutral Evaluation, mediation or other ADR process, solicit input from the neutral on these matters. The neutral is trained to identify risks and challenges. The neutral might note additional concerns not previously evaluated.

The next step may be a difficult, but essential, frank discussion with the client regarding the challenging fact or issue. Consequences of proceeding must be made plain. The client may not want to hear that a fully defensible case needs to be settled due to potential prejudices (where courts are supposed to be fair and justice blind).

Lawyers can turn to neutrals on these client expectation and reality check situations. The client may be more willing to listen to new positions, even if adverse, if voiced by a neutral, disinterested party. The lawyer may need a face saving method to convey the case altering news and can use the neutral.

Once the reality of the effect of the catastrophic bad facts are acknowledged, the settlement path may become fairly obvious. The assistance of neutrals on resolution strategies will be explored in other articles. The current focus remains on navigating the “Cosby syndrome” and then how to alter the trajectory of the case. In civil litigation, lawyers can create opportunities to avoid catastrophic bad facts, but they first need to be identified even if to do so requires swallowing a little professional pride to admit that a case is about to crater. There is help with neutrals – use them.

Mediation Conduct: The Art of Flexibility

Virtually all commercial litigation matters proceed through mediation or some other ADR process. Most courts now include such ADR mandates as part of their standard case management orders. The vast majority of cases resolve at or through mediation. Accordingly, this series of articles reviews the fundamentals of mediation as the process remains so critical for a successful litigation. For less experienced practitioners, practical tips may assist your development. For veteran lawyers, reminders will assist in keeping focus on the vital methods and processes.

Earlier works in this series addressed preparation for mediation sessions. This article dives deeper into conduct and approaches during mediation with an emphasis on the need for flexibility. Future articles will focus on challenges in formulating settlements and ensuring finality through mediation.

Remember that Mediation Is Not Litigation.

A basic reminder of the differences between litigation and mediation will assist your mediation approach. Litigation is an adversarial process by design. Attorneys, most especially litigators, are professionally trained and skilled adversaries. Ethical mandates compel us to zealously advocate within the bounds of the law on behalf of our clients. Rules of civil procedure, court rules, and all litigation processes have been designed around this professional adversity. The goal is to win.

In contrast, mediation is a voluntary process with rules and protections to foster the free sharing of information and concerns in an effort to achieve a mutually agreeable solution. The entire mediation process remains confidential to encourage this candid exchange of information and positions. The goal is to achieve resolution acceptable for all.

Practitioners need to remind themselves of the inherent and fundamental differences between litigation and mediation. I often need to remind lawyers — more so than client representatives — that mediation requires leaving swords and shields at the door. The litigation weapons can be picked up for all remaining battles if the mediation does not succeed. This caution does not mean that lawyers should no longer be advocates in mediation. At certain points in any mediation, advocacy needs to yield to cooperation in order to achieve settlement.

Compromise Is Not a Four Letter Word.

Mediation is a settlement negotiation on steroids. Any negotiation requires both give and take. Inherent in the process is compromise. Both practitioner and client must not merely appreciate, but also embrace the concept of compromise at mediation.

Compromise can be presented and achieved in various forms on a variety of issues: it is not simply lowering demands and increasing offers. For instance, one party may consider issuance of a joint press release essential in settlement. To agree to such a term, the opposing party may insist on new training for all parties’ sales teams. The key remains to think broadly and beyond financial terms for issues on which parties can compromise. With compromise resulting in success in some areas, it can often spill over to the more difficult issues.

At times, lawyers opine that compromise would signal weakness in a position or resolve. Alternatively, participants fear that presentation of a compromised position would set an unacceptable floor or ceiling for future negotiations. Be creative with offers to avoid such concerns. Present conditional or bracketed offers. Use the mediator to “suggest” the next round of offers. If no progress is achieved, the parties can retreat to their last “formal” position. These “conditional compromises” eliminate much of the concern or risk presented by participants.

Message Your Offers.

Each round of negotiations presents an opportunity to send direct and indirect messages to the adversary. The monetary value alone could send the message. Yet, in other instances, a message forwarded with a proposal could be more important than any dollar value. Messages could address timing needs for resolution, financial limitations, internal difficulties one party confronts on settlement, challenges in dealing with third parties such as insurers or indemnitors, etc. Including a message with a proposal better ensures that the adversary will begin to appreciate and more fairly consider the points presented.

There may be issues beyond the confines of litigation which an adversary may not appreciate but present very real concerns for one party. A lawsuit being resolved and concluded during a particular fiscal quarter or year may be significant for one party. A message that there would be less flexibility if the lawsuit continues into next year not so subtly advises that the time for settlement is now. Alternatively, the message could be blunt: “Settlement in this quarter allows us to offer more money than if the case drags on”.

Similarly, a party may need resolution now to be able to fund other, unrelated endeavors or even to simply end the distraction of continued litigation. An appropriate message could signal a willingness to compromise now to achieve finality, but that such a position would be difficult to replicate in the future.

Do Not Be Constrained by Legal Claims.

In court, relief will be limited to available legal remedies. In mediation, no such limitation applies. As a mediator, I often hear from participants that part of a proposal is beyond the legal relief available in court. As such, it will not be given consideration. An example of such routinely requested relief is that the one party contribute toward payment of counsel fees of an adversary where no statute or court rule authorizes such relief. All parties need to be reminded that in mediation, all such requests are fair points in negotiations. Indeed, the same party objecting to payment of counsel fees for an adversary is the party demanding confidentiality of any settlement, as well as indemnities and releases addressing all claims since the beginning of time. All such relief remains unavailable through court while in play in mediation.

Determining the nature of relief in mediation presents one of the greatest opportunities to craft a meaningful settlement. Business relationships can be modified, renewed, or terminated with agreement of the parties. Injunctive type relief which guides future conduct of the parties can be tailored to address needs. The limitation is your own creativity.

If a lawyer is aware that relief beyond the confines of legal claims will be at issue, serious consideration should be given to raising the concepts before the mediation. The adverse party may need different decision makers available to address the requests. The adverse party requires a fair opportunity to value any such proposal. If not raised timely, the ability to include such relief may be thwarted.

Pivot.

Lawyers well know that when they have the facts, pound the facts; when they have the law, pound the law; when they have neither, pound the table. Lawyers in mediation are excellent in seizing on the strengths of their cases. They will anchor positions and offers in that one favorable document, snippet of testimony, expert theory, or precedent. That piece of evidence or case law, to these lawyers, justifies little to no movement in positions by their clients.

For so many of these lawyers, they simply do not know how to move on from this comfort zone and positions of perceived strength. These lawyers must learn to pivot from such critical points to the next phase of negotiations. Absent this pivot, the adversary (and even the mediator) will eventually respond that the point has been carefully considered and valued in any risk calculus. New, different, or additional points will need to be presented if further compromise is desired. Do not become the broken record stuck on the one point, however powerful that point may be perceived.

In pivoting from such a critical point, the proponent should not lose sight of it. The point or argument can be still be referenced for further leverage as part of additional negotiations. However, it must become part of something else, in this case resolution. Use the above-described tools of messaging and compromise to achieve the pivot. “Our statute limitations defense remains clear and, we believe, dispositive. Nonetheless, it benefits us all to place the costs and expense of this case behind us, so we can offer . . .”. The critical point gets reinforced and the participant transitions toward resolution discussions.

These tips and tools are not mutually exclusive. The list is not exhaustive, but rather illustrative of the need to think outside of the litigation box. There is no formula for the timing of use of these techniques. The common element remains flexibility in the mediation participants to address issues as they arise and to respond in a manner which keeps the process moving toward a solution. The mediator should guide the parties in the process and will be using these tools as well. If used properly, these techniques will result in the parties being closer to an acceptable resolution.

Don’t “Walk on By”

The Masters golf tournament with its annual hoopla and green jacket just concluded. I admit it. I am NOT a golf fan. Perhaps I am missing the “golf gene” as I find watching golf dreadfully boring (playing golf is no treat either, but that is more due to a chronic slice). With the Masters, however, I came across a human interest story related to one golfer which intrigued me. This story involved the most personable professional golfer of all time.

Who is the most personable golfer? “Lefty” Phil Mickelson with his legions of fans? The Golden Bear Jack Nicklaus? Relative newcomers Rory McIlroy and Jordan Spieth? Party boy John Daly? Showman Lee Trevino? All good choices, but not even close. Arnold Palmer was above and beyond them all. He had his own Army. Arny’s Army would follow Palmer on his battles on each golf course while they adored him.

What separated Arnold Palmer from all other amazingly successful and likable golfers? When younger golfers sought career advice from Palmer, he would not remark on putting stances or club grips. Palmer stressed the importance of positive relations with people. As to the Army of fans, Palmer stated “Never walk by anyone. No one likes to feel like they are invisible, and don’t matter.”

This advice, from the golfer who had an entire Army of fans following him on every golf course. Take the time to acknowledge people. Take the simple step to let them know that they are seen. Appreciate these folks. Palmer understood that if these few moments or even minutes were not taken, then these fans would feel unimportant. And what are fans other than fellow human beings. Arny’s Army did not amass elsewhere and march out to Palmer. It grew one person at a time, and Palmer tried to acknowledge each one of them along the journey.

Based on my own golf course experiences, I understand what Palmer sought to accomplish. When we were 13 and 14 years old, a buddy and I caddied at an exclusive private golf club. Admittedly, we did so in order to be able to hack around on Caddy Day once a week. Always on the first hole for each loop, the golfers would dutifully ask our names and inquire where we went to school. For the next 17 holes, it would be “Caddy, get the flag”, “Caddy, how many yards to the green?”, Caddy, . . .”, “Caddy, . . .”. The golfers would not remember our names by the second hole. We were invisible, unless, of course, we messed up.

In mediation, we can learn well from Arnold Palmer’s advice. “Never walk by anyone” easily translates to never summarily dismiss adversaries or their positions. If parties are advancing particular facts, issues or arguments, they are usually doing so with genuine intent to move the process forward and not merely to waste everyone’s time.

As a mediator, I often hear parties immediately react in declaring an adversaries’ position as irrelevant or stating that a position will not even be considered. As a practitioner, be careful not to let the positions being advanced to walk right past you.

Mediation participants advance positions for numerous reasons. One side could fully appreciate that an opponent will reject a certain version of events. Yet, these points are still stressed to remind all that, like them or not, these facts will be presented to a judge and jury. Alternatively, the points are stressed to illustrate that the proponent is fully prepared to proceed with a solid grasp on the facts of record. Or, these points are stressed to show that summary judgment or other dispositive relief will not be available to the adverse party.

Fair consideration of any or all of these reasons should spur any party to more carefully evaluate the risk and jeopardy of proceeding with litigation. I am not suggesting that agreement needs to be reached on merits of arguments. I am not even suggesting that arguments and positions need to be accepted. Rather, attempt to understand why positions are being advanced. Listen for any messages or clues being conveyed in points presented.

When I served as the party representative in so many mediations, I found it fairly easy to come up with the next point, argument, position or offer to advance. However, I found it more challenging to correctly “message” the point being made. If I could get the mediator to pass along a particular message together with the position, I could better ensure that my points would not be “invisible, and didn’t matter” to the other side. I sought to force consideration of the points I presented and not allow an adversary to merely walk by my position.

As a practitioner, use messaging with offers in mediation. As importantly, use the mediator in this process. The mediator best understands the dynamics in each room. Solicit input from the mediator on particular proposed messages and how they will be received. In some instances, the message may need not be anything more than:

“I see your point” (You are not invisible)

or

“We understand and have carefully considered your argument” (We did not walk by you).

You will not end up with your own army of fans. Nonetheless, you can better ensure that your points and positions will receive proper consideration. With this process, you will more readily learn more about your adversaries’ positions and better direct the negotiations. In that way, your mediation has a better chance of success and you can make Arnold Palmer proud.

P.S. Apologies to Dionne Warwick for borrowing her song as the title to this article. Warwick still performed the best (and original) version of Walk on By in 1964. Since then, at least 62 versions have been recorded by a variety of artists.