mediation process Archives - Environmental ADR

Environmental Mediation: A New Paradigm for Resolving Multi-Party Disputes

July 6, 2016 by Lester Levy Leave a Comment

Some of you may already have seen a copy of my new ebook, in which I propose a new paradigm for resolving complex, multi-party environmental disputes. It relies on mediation — not as it has been compromised and incorporated into standard litigation procedures — but as a true and superior alternative to litigation.

Why did I write it?

I wrote it because of what is going on in the world today. Because there is an urgent need for a neutral forum and a fair process in which to investigate, discuss and remedy some of the myriad problems that have adversely affected our natural resources and our quality of living. I wrote it because I’ve seen first hand, over the last 25 years, how environmental mediation provides the participants with greater control over their own destinies and a route to achieve settlement outcomes that are more scientifically sound, more cost effective and which can be reached in a more timely fashion compared to tort style legal adjudication, and which are designed to better the environment.

I wrote it to show how mediation provides a unique opportunity to bring together the parties involved in an environmental problem, their representatives, including scientific experts and environmental regulatory agencies, to intelligently assess the conflict, agree on the testing required, agree on the most effective and least costly remedy, and make informed decisions about a fair and equitable allocation of actual costs of investigation and cleanup among the parties.

The e-book describes the general methodology I’ve developed as well as key steps and issues raised along the way, from initiation to final resolution of environment disputes. It includes the presentation of a basic financial model to illustrate the significant financial benefits to be realized through a mediated process instead of proceeding via traditional litigation. I believe strongly that this new paradigm is much better suited to the culture and concerns endemic to environmental regulation and the related dispute resolution needs—current and future. I also believe that many of the ideas discussed here are directly relevant to other types of complex, multi-party commercial disputes, so the potential advantages and benefits of mediation are far from limited to the environmental field. If you are interested in reading it please fill out the form below in order to download a complimentary copy.

Mediation Agreements with Basic Rules Can Increase Chances of Success

May 3, 2016 by Lester Levy Leave a Comment

There are no universal rules governing mediation agreements. Individual ADR providers have policy statements about the conduct of their mediators. State and federal bar associations publish ethical rules for mediators and mediation advocates. But there are no rules mandating specific steps that must be taken during any particular mediation – nothing akin to the stepwise procedural rules, which govern judicial proceedings. Like everything else there are benefits and shortcomings associated with this. I believe that the positives that are created by mediation’s flexibility greatly outweigh the negatives associated with having few procedural rules.

On the plus side, mediations can and should be designed to meet the specific needs of the parties and the dispute. Properly designed, mediations cut to the core of the dispute and resolve it without unnecessary and expensive litigation tactics and discovery.

Recently, however, I have witnessed some trends, which highlight the potential downside resulting from mediation’s lack of strict rules and formal procedure. I have written about these in prior blogs, including attendance without reasonable levels of authority to settle, party specific mediation strategies that mirror litigation tactics – to which mediation is intended to provide an alternative – or treating mediation as merely another procedural step in the litigation process by “going through the motions” and appearing to mediate without any real intent to reach resolution.

Don’t get me wrong. I still don’t think that the practice of mediation would be well served through the creation of a uniform set of rules that would govern each and every mediation. The cure in that case would be worse than the disease. Flexibility, being one of the most potent of mediation assets, would thereby be eliminated – making it much less effective as an alternative to trial and its unyielding set of mandatory procedures.

Instead, I believe, at least in some instances, the parties to a dispute should consider entering into an agreement to mediate, as a preliminary step, in order to establish some basic ground rules and insure a framework that will give mediation the best chance of success. This practice – of entering into a preliminary agreement to mediate — has already been used effectively in at least one area of law, namely couples seeking a collaborative divorce. The primary purpose of entering into such an agreement to mediate is that it binds the parties and their counsel to pursue a negotiated settlement as a preferred and true alternative to litigation. In the context of a collaborative divorce, counsel sign the agreement to mediate and agree not to represent their client in a contested proceeding, in order to insure alignment and commitment to the process of all parties participating in the negotiation. In a number of jurisdictions, this type of agreement has proven to be highly effective in streamlining the process for couples to resolve contentious issues and obtain a legal divorce, substantially reducing the time and cost necessary to do so.

I’m not aware of any instance in which parties to a commercial dispute have entered into this type of agreement to mediate but there’s no practical or legal reason that it wouldn’t prove equally effective in various commercial contexts. I think it would prove particularly valuable if deployed among the parties in conflict, because it provides a framework to bring numerous parties together, notwithstanding their divergent agendas, in the common pursuit of a negotiated resolution. Putting an agreement to mediate in place up front would serve the salutary purpose of binding everyone, including counsel, to give mediation a real chance to work.

As I see it, in a commercial context an up front agreement to mediate would contain a few important covenants that evidence each party’s commitment to the process, such as the following:

1. We are coming to mediation to resolve as much of the conflict as possible. We understand that the process involves a serious effort to negotiate settlement and to consider all rational compromises in order to get there

2. We will bring with us all decision-makers necessary to sign a binding memorandum of agreement, or similarly binding settlement documentation

3. The decision-makers in attendance will have authority to settle. (Note that I have avoided using the phrase “full and complete authority” because it is hard to pin down. It is difficult to know in advance of the mediation the precise authority that will be sufficient to satisfy your opponent. However, compliance with this commitment requires us to make good faith estimate of settlement value and to ensure our ability to make a binding offer based on that estimate before we arrive.)

4. If we are coming to the mediation without the ability to negotiate or without the intention of offering anything of substantial value, we will inform our opponents and the mediator so that no one will be surprised and each party can decide for itself whether proceeding further in mediation makes sense.

5. Finally, counsel agree to pursue mediation as a vehicle to resolve the conflict and not to commence litigation or represent their client in any legal proceeding that may be brought with respect to the pending dispute.

It is the final provision that has proven essential in establishing collaborative divorce as a viable and cost-effective means for resolving the bitter fights over custody and child support. Of course, clients themselves still retain their rights to pursue court action whenever they deem it necessary; however, they must retain other counsel if and when they chose to do so. Consequently, under the agreement to mediate, everyone participating in the mediation, including counsel, will be similarly aligned and incentivized to pursue a negotiated solution as a first and preferred alternative.

As I see it, these types of agreements serve a potentially constructive purpose by creating a proper atmosphere in which mediation will have the best chance of success. It is somewhat akin to the way saloons were operated in the Old West – parties took off their guns and holsters before they sat down to a poker game, in order to prevent disagreement from quickly escalating. Cutting off quick and easy recourse to the courtroom may serve a similarly salubrious purpose – not so much saving lives as saving time and money and ultimately enabling the parties to find workable common ground to resolve their disputes. It’s worth serious consideration, in my view.

ADR Swiftly Compensates Parties in Mass Actions and Toxic Tort Cases

April 20, 2016 by Lester Levy Leave a Comment

We live in a world of ever-growing concern about environmental harm to our health and well-being. As the science of detection improves, so does our awareness of large-scale releases of contaminants into the air, water and soil, which can affect large numbers of people and their property.

For example, high concentrations of lead were found in Flint, Michigan, and shortly thereafter in drinking water systems in New Jersey and New York. Large volumes of natural gas were released into the soils below the homes of residents in a southern California subdivision, which volatized into the air, and remained uncapped for months. A spate of PFOA-contaminated groundwater issues have arisen throughout the Northeastern states; and, of course, we are all familiar with the widespread injuries and property damage caused by hurricanes Sandy and Katrina to tens of thousands of people living in their paths.

In each of these cases, a single event or series of related events caused harm to large numbers of people. Generally, the types of harm suffered-either to persons or to property-are similar in character, but can differ enormously by degree among the affected population. While our judicial systems were neither designed nor are they equipped to handle cases involving thousands of litigants similarly affected-but in vastly differing measures-these matters provide a perfect opportunity to use ADR skills to resolve them intelligently and effectively.

A Solution to a Complex Web of Issues

Mediation and other ADR processes have repeatedly been enormously effective in resolving mass toxic-tort and environmental claims. ADR provides a way to condense many years of expensive court procedures into a precise, cost-effective and efficient process that provides fair and individualized compensation to thousands of people that were affected by an accidental release or other tragic event.

In addition, mediation provides the opportunity to weave together and settle at one time many interrelated disputes that may arise from a single event or contaminated area. For example, one cluster of environmental conflicts may involve civil suits among the private parties seeking an allocation of fault and payment for the cleanup, personal injury and property damage claims arising from the same contamination, regulatory enforcement or penalty actions brought by environmental agencies and attorneys general, and lawsuits between individual parties and insurance companies that issued multiple pollution policies over the years. The outcome of each of these cases may affect the ability of the parties to resolve the other cases. But no one court or administrative body ordinarily exercises jurisdiction over all of them. Mediation, however, provides a single forum where all these cases can be resolved in a coordinated way. It may be achieved through separate agreements but the effect is the same-all moving pieces are brought to rest at a meeting point at the mediator’s conference table. It’s the point where a settlement can be reached that comes closest to meeting the collective best interests of all parties. [Read more…]

Lack of authority leads to failed mediations

April 8, 2016 by Lester Levy 1 Comment

Two recent mediations vie for entry into the pantheon of failed mediations. They both suffered from the similar flaws in which one or more parties appeared with no authority to contribute to a joint financial settlement. Both cases were set up as cost sharing negotiations and were briefed as such . . . or maybe they weren’t . . .

Some background: The first mediation was intended to reach a negotiated allocation among five parties of the cost of remediating groundwater PCE contamination. All parties attended with clients and insurance carrier representatives. In advance of the mediation three parties presented proposed allocations of the cleanup costs to start the negotiations. One of the two remaining parties had consistently argued that it had no responsibility for the commingled plume and on that basis neither provided an allocation nor offered anything more than a “nuisance” payment at the mediation. This was not surprising. The fifth party’s written submission also did not comment on allocation or indicate a willingness to participate financially in the settlement. This raised concerns pre-mediation.

The second case was one in a series of drinking water contamination cases allegedly caused by chemical components in agricultural fertilizer products that were applied in many farming communities over a long period of time. That mediation involved three parties and, similarly, was intended to collectively fund a water treatment system to provide clean drinking water from municipal wells. By all accounts, one of the parties had aggressively pushed for an early mediation and giving this case priority treatment in the trial/mediation queue established by the presiding judge. However, the party that had initiated the mediation unexpectedly came with very limited and only “recommended” settlement authority that was woefully insufficient in light of the facts, seemingly out of step with its actions in championing an early mediation.

Following usual protocol, I received mediation statements from the parties in each of these cases a few days before their scheduled mediation dates; and in both cases my “radar” indicated trouble ahead. I called as many of the parties as I could reach to discuss my concerns. Some held their intentions close to their vests, while others didn’t know what their adversaries intended to do. [Read more…]

A New Paradigm for Solving Complex Environmental Disputes

April 1, 2016 by Lester Levy 1 Comment

We live in a world of ever-growing concern about environmental harm to our health and wellbeing. We are acutely aware of future environmental risk, such as climate change and sea level rise, and diminishing natural resources, such as clean drinking water and the air we breathe. To address the concerns, environmental cases need to be handled more intelligently and more effectively. As environmental problems grow in scale and complexity, we are in need of a new paradigm for resolving them.

We have the tools to make this happen but our dispute resolution models remain stagnant; stuck in the past tense. Unlike rapid and continuous innovation in science, technology, telecommunication and medicine, for example, the “old” ways of environmental dispute resolution – primarily through generic pre-trial procedural mechanisms – is inefficient and overly expensive. The current default reliance on the conventions of traditional tort litigation, where every party retains its own army of lawyers, experts, consultants, lobbyists, etc., is wasteful and often misdirected. Further, current norms were not designed to effectively promote the efficient and orderly identification and remediation of the contamination, or other problem, at issue. More often, they merely move money from one pocket to another without a corresponding increase in environmental improvement and protection.

The status quo ante imposes a high social cost to the extent complex environmental disputes remain unresolved and problems fester. The more time it takes to implement a cleanup, the more expensive the costs of that operation become. In groundwater, for example, the contaminants can continue to migrate laterally and vertically such that larger, more powerful remedial technologies will eventually be required to do the job. Or in the case of drinking water, just think of the high health and social costs imposed on the citizens of Flint Michigan as a result of delay in taking remedial action. Many of these escalating costs, in turn, are ultimately borne by taxpayers, thereby increasing the societal economic costs of pollution and its cleanup. Moreover, the clean up costs are in addition to already extremely expensive litigation-based transactional costs, which multiply each week, as the case remains unresolved. Unfortunately, most environmental cases move through the judicial system like molasses, while the environmental harm at issue tends to migrate and grow. [Read more…]

Mediation is an Alternative Process

March 10, 2016 by Lester Levy 2 Comments

Practitioners in the field of ADR lament that mediation has become increasingly “judicialized” – meaning that it is all too often viewed as just another step on the litigation path toward trial. That was not the prevailing view when I began my mediation practice almost 25 years ago. Mediation was viewed as a uniquely significant settlement opportunity, where the parties came prepared to explore settlement options and to negotiate their way to that end.

There is some unfortunate irony in the reduced role that ADR is granted in the contemporary litigator’s playbook. The litigation mindset is determined to conquer all in its pathway (at least up until the moment of a final verdict). So much so that even ADR, which is positioned as a true alternative pathway, is reduced to being merely another item in the pre-trial preparation check list.

But mediation is not a trial in miniature. The assessment of trial risks – and the costs of winning or losing – can be important factors in evaluating whether to settle and at what value. But mediation has so much more potential than that. Mediation provides a forum in which to explore alternative approaches and remedies, to better understand what is driving the underlying conflict, and the parties themselves exercise control over where and how it ends.

Mediation academics have identified an alternate metric by which to measure success in negotiation. This is referred to as each party’s BATNA. A BATNA is an acronym for considering whether maintaining the conflict, and moving ahead in litigation, is “Better than the Alternative of a Negotiated Agreement.” Practically, what this means is that the disputants should step back from the firing line and assess whether the costs, aggravation(s) and risks of unknown results in litigation present a better course than accepting the offer on the table – or offers that might reasonably be obtained through further negotiation. [Read more…]

An Alternative Approach to Reaching a Settlement in Mediation

February 29, 2016 by Lester Levy Leave a Comment

In this blog, I address a common negotiating practice – and flaw – which many parties adopt in mediation. I offer an alternative approach, which I believe is much more effective in reaching a settlement.

The prevailing orthodoxy is to enter into a settlement negotiation with the plaintiff demanding an amount substantially higher than what it will accept, and the defendant offering substantially less than it is willing to pay. In my experience, this gamesmanship is nothing more than a distraction. It does not advance the ball one iota.

If you don’t ask for what you want, or offer to pay what you think is reasonable, you reduce the chances that the negotiation will be a success.

If you believe, as I do, that most disputes have a discernible range of inherent settlement value, why waste time making proposals, which realistically have no chance of acceptance? Offers and counteroffers can be formulated and delivered near or within the zone of perceived settlement values. These will be appreciated by the recipient as a rational –- and even possibly reasonable – and should result in a response which shares the same characteristics, i.e., is seen as rational and potentially reasonable, in return. [Read more…]

Using ADR to Manage Compensation Schemes with Mass Claimants

February 16, 2016 by Lester Levy 1 Comment

Recent decades have seen a dramatic rise in the use of Alternative Dispute Resolution (ADR) proceedings as a means to evaluate claims and compensate qualified parties in a mass claims settings. These cases can arise from settlements in class or mass actions filed in court or as government-originated programs designed to compensate victims of a military or environmental disaster.

Some examples that I have handled include the settlement and distribution of over $2 billion to low income farmers alleging discriminatory lending practices by the USDA; the distribution of relief to several hundred thousand claimants alleging wage and hour claims against another US governmental agency; the settlement and distribution of compensation to millions of claimants alleging wrongful conduct by a national credit card provider; the review and determination of compensation to class members alleging defective products in a variety of industries; and, of course, the distribution of settlement benefits to thousands people alleging harm from environmental releases into the air, surface- and ground- waters.

While these processes have proven to be very effective in achieving the efficient review and fair payment of claims arising from the same event or a similar type of harm, for the process to be successful, the clients seeking compensation must understand the process and what is expected of them. Transparency is critical to engender trust. Trust, in part, depends upon the design and implementation of procedural safeguards. [Read more…]

What Is the Added Value of the Mediator In Getting Cases Settled?

February 5, 2016 by Lester Levy Leave a Comment

What Is the Added Value of the Mediator In Getting Cases Settled? It is important to note that mediation is a tool that can help in some but not all cases. Lawyers and clients settle cases everyday without the assistance of a mediator. Clearly, mediation is not warranted in those cases and is not intended to replace what lawyers do well on their own. In fact, most cases reach resolution in this way, and that is a very good thing.

However, there are cases where the parties are having difficulty engaging in meaningful settlement dialogues. There are many reasons for this: opposing lawyers or clients may have difficulty communicating with one another, or the parties may have reached and impasse and are unable to overcome it. Whatever the reason, mediation is a cost effective step towards resolution instead of proceeding to long and costly battle in court.

So what does a mediator do and how does he or she do it?

At the outset I must note that in most cases, a mediator has one day, or less, to cover a lot of ground. In contrast to the disputants’ long-term involvement with the case and with each other, a mediator has a relatively short amount of time to develop a relationship of trust with the parties, to master the key facts and law sufficiently to reason with the parties, to grasp the underlying dynamics between the parties, to recognize the impediments to settlement, to identify the “zone of potential agreement” and coach the parties into overcoming the obstacles to getting there and to prepare, offer and consider reasonable settlement proposals and counterproposals that might work. [Read more…]

Why Mediation is Superior to Traditional Litigation: Putting Meat on the Bones

January 18, 2016 by Lester Levy Leave a Comment

I’d like to put some meat on the bones of the cost-saving aspects of environmental mediation. I have argued that environmental mediation, properly executed, provides the opportunity to eliminate costs of duplicate work by multiple parties, while preserving every party’s right to negotiate hard on the merits of the dispute and to reach an agreed-upon allocation of the costs of dealing with the contamination at issue. In this blog, I present a hypothetical situation – based on successful mediations I have conducted – to help the reader understand why I say this.

Consider the following: There are 4 corner gas stations operating at 4 corners of an intersection. A plume of petroleum contamination has migrated down gradient (downstream) in the groundwater and threatens to contaminate nearby drinking wells. The governing environmental regulatory agency has identified each station as a potential contributor to the plume of contamination and has ordered that an investigation be undertaken to see where the contamination is located, how it got there, whether it requires a cleanup and, if so, what technology will be most effective.

Under standard practice, each party (station owner and/or operator) will hire a lawyer and retain an environmental scientist or consultant to perform the necessary investigation. The consultant will investigate levels of contamination in the soil and groundwater beneath the site owned or operated by the party that retained it. Each consultant will also install monitoring wells both above (up gradient) and below (down gradient) its own site to determine a number of things, including the areal extent of the plume, concentration levels throughout the plume, and whether potential off-site sources have contaminated that party’s property (thereby seeking to shift liability to other parties). [Read more…]