Moving the Goalposts – How To Craft a Mediator’s Proposal

Alec was recently selected as a Southern California SuperLawyer in the field of Alternative Dispute Resolution.

As a professional mediator, some of my most challenging and, yes, enjoyable moments have come when I’ve been able to go “under the line.” That is to say, I’ve been able to do things to increase the size of the pie that was presented to me when I first entered the room. Perhaps I was able to assist the parties in re-establishing a business relationship that had gone south and ended in litigation. Or maybe I was able to provide a safe haven within which somebody was able to commence the process of grieving.

But these occasions are the exception. In mediations involving commercial, business, contractual, employment, construction and insurance issues, the bottom line is most often dollars and cents. This is referred to as “distributive mediation,” meaning that the size of the pie is predetermined, and the issue is limited to determining what size each claimant’s slice will be. In my practice, I’ve developed a systemic method (sort of) through which I can narrow down my focus as much as possible in order to be able to insert my own proposal in a final effort to close the gap and obtain settlement.

A. The Purpose of the Mediator’s Proposal

In many situations, as the parties make a series of concessions, they reach a point where each demands that the other make the final concession. There may be several reasons for this. Perhaps one of the attorneys is such an alpha personality that it is constitutionally impossible for him/her to settle without having the last word. Perhaps the attorney needs to tell a partner or an adjuster that he/she beat down the plaintiff to the very end. Perhaps a plaintiff’s attorney feels unable to make a further concession in light of the anger his/her client already feels after so many previous moves.

A common solution for this is for the mediator to propose a settlement. When I do this, the terms are simple. I present each side with the same proposal. Each side has the same period of time to respond “yes” or “no.” If I receive two affirmative answers, I congratulate the parties on their settlement. If not, I report that the case didn’t settle. I explain to the parties that the beauty of this mechanism is that each side can take one final leap off the diving board, knowing that, if they don’t do the same thing, the other side will never know that they made the leap. I refer to this as the “double blind blink.” Each side gets the chance to blink outside of the vision of their opponent.

B. The Crux of the Problem

This should be self evident. Suppose that a plaintiff arrives at the mediation with a demand of $500,000 for personal injuries. Then suppose that the defendant arrives, with an adjuster, offering, say, $15,000. As a mediator, what possible number can you possibly choose with any hope that both parties might accept it. The answer? There isn’t any. At least, not at that time. The art that the mediator must master is in reducing the size of the playing field; he/she must move the goalposts closer together, with or without the knowledge of the parties.

C. The Method As I Use It

I really do just two things. First, I assume that there’s always a settlement number. That’s because if the parties had a crystal ball and could predict, with certainty, the litigated outcome of the case, each would settle for that result, minus the cost of achieving it. Thus, the mediator, in an ideal hypothetical, ought to always have the joint cost of litigation as a buffer area within which settlement should always occur. Unfortunately, we don’t have crystal balls, and parties and their attorneys evaluate cases very differently. So the first thing I do is give each party a continuing series of reality checks, playing upon their uncertainties, emphasizing my experience, and creating WATNA’s (Worst Alternative To Negotiated Settlement) that they’ve likely never thought of. But, more importantly, I measure the playing field in several distinct phases. These phases are:

  1. The offer and demand at the outset of the mediation.
  2. The first serious offer and demand from each side.
  3. The bottom line (based upon my impressions) of each side.
  4. What each side thinks their bottom line is.
  5. The number that actually settles the case.

The first three of these ought to be easy for any experienced mediator. After all, the first is handed to you at the outset. The second ought to be available after a caucus or two. By serious offer, I don’t mean serious by an objective standard, but, rather, a number reasonably calculated by the proponent to move toward settlement. The third number is where the mediator’s art kicks in. There’s no way to teach this; each mediation provides another learning experience. A good mediator pays careful attention to everything going on: what is said, what isn’t said, the timing of attorney-client caucuses, intonations, facial expressions and body language, how devil’s advocate arguments are handled, etc.

When I do this, and if I’m on my game, number four should come naturally. Again, based upon hundreds of mediations, I try to intuit what each side actually believes their bottom line to be. Sometimes, a party will tell me their bottom line, but even then, it may only be for publication to me, rather than accurate. The determination of a party’s real bottom line is a subjective one and I have to make that call.

Once I’ve decided on number four, I move on to number five. By this time, the goalposts ought to be a lot, lot closer than they were at the outset of the mediation session. Now comes the hardest judgment. Which side is less likely to accept further pressure? Again, this is a purely subjective call. It has to be based upon every single thing that the mediator has learned during the mediation. The trick is to find the number that will be equally offensive to each side. When the mediator feels comfortable with that number, he/she is ready t make a proposal.

D. How This All Fits In

I don’t like mediator’s proposals! I cannot say that too often. It’s always better if the parties themselves hammer out their own agreement with the assistance of the mediator. However, I believe that the mediator has an inherent conflict of interest. The mediator has, on one hand, an interest in providing the parties with the best possible environment within which they can decide how they want to proceed with their matter, but on the other. the mediator is being paid, presumably, by the hour or the day. It is this conflict that impels me to use the mediator’s proposal. When I realize that a mediator’s proposal is likely to resolve a matter in short order, whereas continued, very tedious, negotiations could go on interminably (often because of non-economic elements), I feel an obligation to offer this tool to the attorneys and/or parties.

My success rate with the mediator’s proposal is extraordinarily high. And that never ceases to amaze me. If you agree with my reasoning, give it a try. If it fails, you can do as I have done, and suggest that the mediation continue.

Exhilaration and Disappointment

Alec was recently selected as a Southern California SuperLawyer in the field of Alternative Dispute Resolution.

This morning, driving toward the University of Southern California campus, a lot of memories passed through my mind. I recalled attending the High School Debate Institute at USC, in the summer of 1965, prior to my senior year, and, as an unknown, being named second speaker, behind Roy Shults. I remembered how the lessons learned their got me to the 1966 state finals in extemporaneous speaking, where I finished 3rd, behind Roy Shults. I recall going to see a professor about something during my sophomore year at UCLA, passing the debate office, and seeing the team list on the blackboard, and there, on the top team, was . . . you guessed it: Roy Shults. Thus began my odyssey into intercollegiate debate, partnered with Roy, during which we reached the highest levels of competition and multiple prestigious awards. Debate provided me with invaluable training in logic, quick thinking and communication that has served me well in every aspect of my life since then.

I bring all of this up because an old debate friend recently sent me a video of last years national championship debate. I was stunned! The debaters were dressed like slobs and spoke so quickly as to be incomprehensible, sounding rather like birds tweeting. Part of me was repelled, but part of me felt guilty. For, you see, in the late 60s, in my prime, I was considered one of the faster talkers on the debate circuit. Not that I was proud of it. I would have rather had Roy’s oratorical skills, which were amazing. But the team needed an infighter, and I was best suited for that job. Several friends from that time keep telling me and others that I was one of the innovators of “spread” debating. If I was, it’s something I deeply regret. What for me was a tactic has apparently become an end all in today’s collegiate debate world. Truth be known, my best debating was done when I raised three or four issues in a ten minute speech, explained each logically, often with no evidence, and sustained each of them.

But today was different. I was heading to SC to be a volunteer judge for the Metro Debate League, a national program designed to teach debate to students at inner city high schools. I was excited. I knew that I was going to find a lot of passion, a lot of enthusiasm. Of course there wouldn’t be a lot of skill, but the purpose of teaching debate is so much broader; debate can instill a love of learning, of discussion, of seeing two sides to an issue. Even the poorest debaters can carry these skills forward throughout their lives.

I entered the room in which I was to judge. Two teams, four typical looking high school kids, each team armed with a computer. The first speaker stood up, introduced herself, and then started reading her speech – – at a mile a minute! She stumbled over every third word, and, in general, was speaking far beyond any rate of speed that was wkthin her reasonable range. All four speakers did this. The debate itself was well done by all, entertaining for me, and a completely exhilarating experience within the vacuum of that room.

But then I went downstairs and spoke with the head of the Los Angeles program and then to the USC debate coach. I asked each of them what the point of debate was if the speakers were incomprehensible (referring to the college level). They had well thought out answers about the need to think quickly, how one of their former debaters won a case before the Supreme Court, etc. But, to use an old debate term, they begged the question. You see, in my day, rapid speaking was a way to shoehorn more “stuff” into a ten minute speech. My instinct still is that the time limit is meant to force you to think through your case, just as court briefing limits force lawyers to refine their arguments. The solution for debaters cannot be to simply jam in the information at such a rate as to lose any relationship to communication; to do so reduces debate to a mechanical activity with no value outside the debate tournament. The skills that these coaches touted can be learned with a more intelligible presentation, which, by the way, is far better training for the next phases of life.

Attorneys can’t do this kind of shoehorning. To do what these debaters do, the lawyer would have to use a 2-point font, single spaced, with margins out to the edge of the page. Imagine how that would play out in a courtroom!!

I say all of this because it reminds me of what I see far too often in mediation. I see participants who arrive with an agenda, hellbent on doing it their way, with no regard to communication skills or persuasive effectiveness. Many are more interested in persuading me so that I can act as their proxy. Like the college debaters, many think that by overwhelming the mediation with evidence, they will somehow gain an advantage. Again, this reflects a serious misunderstanding of the mediation process itself.

Similarly, many mediation participants have a lot of rocks to throw, when a single guided missile may be all that is needed for the opposing party to reevaluate its position. Too often, I have to conjure up that guided missile and present it in caucus. How much better it would be if participants in mediation would stop being advocates wedded to their own positions and, instead, were able to honestly analyze their opponents’ case and figure out what it will take to move their position.

Original Intent v Consistency, and the Constitutional right to privacy

Alec was recently selected as a Southern California SuperLawyer in the field of Alternative Dispute Resolution.

For many years, I’ve been a bit upset about the “original intent” faction of the bar, and, more specifically, the progeny of the Federalist Society, who, as a result of 5 out of 7 of the most recent Presidential terms worth of conservative Republican court nominations, have come to dominate the Federal judiciary. For one thing, I’ve always thought it fantastic that these scholars were so apt at reading the minds of those who lived in a different time and such a different place.

I’ve had meandering thoughts about this area for a long time, but today, I’ve been thinking about how the doctrine of “original intent” seems at odds with the present positions of these conservative judges, particularly those on the U.S. Supreme Court, in at least two areas.

First, consider abortion. To fully evaluate the view of the Founding Fathers about abortion, one need only check out the prevailing social standards as they existed in 1787-91, the time during which the Constitution and the Bill of Rights were drafted and enacted. At that time, laws prohibiting abortion were unheard of; there weren’t any. Lest we assume that Justice Scalia is already retorting: “But nobody would have thought of outlawing a procedure that was so reprehensible that it was unheard of by the good Christian men and women who founded our nation.” Putting Scalia’s other biases aside, that statement, if made, is factually incorrect. Abortion was routine in the late 18th century, done with the assistance of midwives, and not being something that was the topic of conversation among the literati. While families, as a rule, were larger than they are today, a review of the family size of our Presidents, Vice-Presidents, cabinet members and more distinguished members of Congress makes one thing palpably clear: their wives were not in a state of perpetual pregnancy, as were the women in other, much more devout sects. Given the state of birth control during that era, this fact ought to give any thinking person reason to pause. Given the horrific rate of death during childbirth during that era, many of the more educated Americans tried to limit childbirth to children that were desired. Since tubes could not be tied in that bygone era, and vasectomy wasn’t a word, much less a procedure, one can only imagine how busy the midwives were. And, of course, midwifery was a perfectly respectable, actually essential, profession, given that birth routinely occurred at home. Had the Founding Fathers wanted to protect “unborn lives,” they had every opportunity to do so in the Constitution, and again, perhaps more appropriately, in the Bill of Rights. The absence of even a mention of this issue, given how commonplace abortion was, reflects, if anything, an acceptance of the procedure, and, most probably, a view that the government had no place making such personal decisions for any of its citizens.

That neatly segues into the second area, search and seizure. In the aftermath of the Revolution, Americans were quite sensitive to their personal privacy, which had been effectively ignored during the British occupation. Various remnants of this concern remain in the Bill of Rights, such as the entire 3rd Amendment. To my knowledge, nobody has ever suggested applying a balancing test or a “good faith exception” to the quartering of soldiers. However, the 4th Amendment guarantee against unreasonable searches and seizures has a direct antecedent in the British constitutional tradition that a man’s home is his castle. There were no exceptions that I know of at the time of the Founding Fathers. The fact that the 4th Amendment is written in absolute proof stands in corroboration of this. In practice, the 4th Amendment was routinely violated by police actions, especially against the poor and people of color, until the middle of the 20th century. At that time, the Warren court actually consider the breadth of the 4th Amendment and reaffirmed that the scope of government search and seizure was to be stricly limited and subject to the strictest scrutiny. It seems ironic that the very police departments that so opposed these rulings when they were first promulgated are among the strongest supporter of many of these procedures today, after 40 and 50 years in practice. So what’s happened since? Well, since Earl Warren retired, the Court has grown increasingly conservative, and as early as the 1970s began to chip away at the landmark decisions of the Warren court, creating a series of exceptions to the bright line rules. If nothing else, the law was becoming steadily murkier. This was a public works project for criminal defense attorneys! And today, we have a Supreme Court that is in love with allowing the police the widest possible leeway in searches and seizures, creating any exception for which legal justification can be created; exceptions are created rather than holdings outright overturned.

So, I ask these questions. Where did “original intent jurisprudence” go in the abortion argument? And why isn’t anyone standing up for the Founding Fathers’ absolute language in the 4th Amendment? One would expect some consistency from these Justices who so decry “activism” when they disagree with the result. I’m waiting . . .

Making Settlements Last

Alec was recently selected as a Southern California SuperLawyer in the field of Alternative Dispute Resolution.

A settlement is meaningless if it the parties don’t respect it. Parties who don’t respect settlements simply see breach as another cost of doing business, accepting further litigation if they see the overall result to be profitable. An all too common example may occur when a large small vendor is owed money by a large retailer. In a typical scenario, the vendor needs prompt payment to remain healthy and a continuous flow of sales and payments to remain in business. Knowing this, the vendor may choose to “stretch” payments as far out in time as possible, until forced to the bargaining table by a desperate vendor. If the retailer is sufficiently unscrupulous, it may make a small payment at that time and agree to make monthly payments, but insist that in exchange for the monthly payments, the vendor must allow the amount of credit to remain as is. The vendor, back against the wall, often feels that it has no choice but to accept. The agreement in place, the retailer then orders as much product as possible from the vendor over the next few months while making the minimum agreed payments, then never pays another dime. The upshot is that the retailer finds another vendor immediately, and the original vendor can either quietly go out of business or try to finance a lawsuit and deal with the inevitable stalling tactics that will follow. Welcome to the exciting world of business litigation!

These sorts of cases are very tough to mediate for several reasons. First, the playing field is hugely unbalanced; here, the retailer has all the economic strength. Second, the vendor will typically not be aware of the problem until it is likely too late. Third, the retailer clearly does not value a continuing relationship. And fourth, and most importantly, the retailer is not bargaining in good faith.

I use this example to segue into an area where the landscape is very different: divorce mediation. In California, where I practice, divorce is a matter of right. A spouse cannot successfully contest a Petition for Dissolution. There are three general ways in which divorce is accomplished: (1) through negotiation, whether by mediation or collaborative law; (2) through adversarial negotiation and settlement between attorneys; and (3) by court trial. Let’s discuss the issue of spousal support in light of each of these.

Consider a case in which the husband makes a good living and the wife has limited earning capacity in a marriage in excess of twenty years in which there are young children. In a case like this, it would be fair to assume that child support is automatic and that spousal support is highly likely with a long duration, possibly even lifetime.

In a trial setting, a judge will order the support amounts and duration. It is not surprising that many husbands feel “jobbed.” They feel that the judge (especially if the judge is a woman) is unfairly biased towards wives, or that their attorney did a poor job, or that the bad weather that day had something to do with it. Bottom line: the husband feels that he’s being bled dry. Given the customary awards here in Los Angeles, if his attorney hasn’t done a good job of educating his client, the husband is in for a rude awakening. All of this sets the stage for the stereotypical husband who does everything he can to avoid paying the alimony. Unfortunately, the line between the spousal and the child support is too often blurred and the entire matter devolves into a lifetime of orders to show cause, contempt hearings, even jail time, and two very affluent attorneys.

An adversarial settlement is somewhat better, since the husband and wife must agree to the terms of the contract. But even in these cases, there’s a lot of pressure on them to agree. For one thing, the soaring costs of litigating divorce may have placed them in a position of financial exhaustion, where they feel compelled to settle so that there’s something left to divide. And at the same time, each attorney, if he/she is doing his/her job, is putting pressure on their client, through hard reality checks, to accept terms that are anathema to them. While there may be a greater personal investment by the parties in this settlement, there is still a pretty high rate of husbands in the case I’ve outlined who walk out with steam coming out of their ears, itching to get even.

Finally, we have the mediated settlement. In a mediated settlement, both sides are required to be transparent; all information regarding the marital estate must be provided for the mediator to be able to work with the couple. In addition, part of the mediator’s job is to see that the playing field is balanced. The mediator will also ensure that before either party agrees to anything, that party is fully informed of all possibilities and makes the wisest decision in light of the entire picture. In this way, if a party makes a concession, that party will understand why the concession is necessary and what will be gained in return for that concession. Every step of the way, the mediator will empower the parties to make their own decisions and to really agree on how they are going to terminate their marriage. Studies have shown that people who mediate their divorce are far more likely to respect the terms of an agreement that they crafted themselves, albeit with the assistance of a professional.

The lesson to be taken from this is: when parties can invest in the creation of an agreement, they are far more likely to honor that agreement and the settlement made by that agreement is far more likely to endure