mediation vs. litigation Archives

Flexibility Is Key to Success in Mediation

June 13, 2016 by Lester Levy Leave a Comment

“If it bends it’s funny; if it breaks, it isn’t.”

Woody Allen, from Crimes and Misdemeanors

Flexibility is one of the most important attributes we need to develop in life. As Woody Allen reminds us, it is what separates comedy from tragedy; it’s what allows us to continue moving forward, without breaking, through the adversities we face in every day life.

Flexibility is also one of the key attributes of mediation. It is an integral part of what makes mediation a powerful alternative to traditional litigation. In the mediator’s toolkit, there is nothing more essential than the ability to approach each dispute without preconceptions about the best path forward for resolving the conflict.

To illustrate the paramount importance of flexibility in mediation, I want to share with you my recent experience when I was asked to mediate a case between a university, the city and county in which it was located, and concerned groups of citizens. The parties were embroiled in controversy involving the university’s multi-year expansion plan and its potential effects on resources such as water, housing and traffic.

My first step was to meet separately with each party before I convened a joint session with all stakeholders. This is an initial step I frequently find to be useful in multi-party disputes. It allows me to meet and discuss privately with each constituency their respective views on the history of their dealings together, including their inability to come to an agreement among themselves, to identify the impediments to settlement, including views and misconceptions they hold about other parties, to learn what are important elements of a successful negotiation, and to hear their personal ideas on workable settlement structure and content – their wish lists.

In this particular case it soon became apparent that the inability to reach agreement prior to the mediation was due in large part to their inability to communicate clearly and comfortably with one another. Past dealings and strongly held personal viewpoints had interfered with the exchange of proposals, the parties’ respective views on the proposals and parties’ making them, and their ability to respond in ways that propelled negotiations forward, toward settlement.

I decided that establishing a framework for settlement called for separating the present negotiation from past efforts. We accomplished this by starting off with a session aimed at dispelling misconceptions which I had observed, beginning to build trust in the process, and even though it was early in the process, starting to map out the zone of potential agreement. The parties found this to be a hopeful start. [Read more…]

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.

Mediation Can Accelerate Cleanup

March 11, 2016 by Lester Levy Leave a Comment

A recent exposé broadcast on New Jersey public television revealed there may be as many 100,000 unaddressed and leaking underground storage tanks in New Jersey. Many of the tanks contain hazardous materials including petroleum products such as heating oil and gasoline, PCE-used by dry cleaners over many years to clean our clothes-and volatile organic compounds (VOCs), such as “degreasers,” used in many manufacturing businesses. If not contained, these chemicals, which are potentially hazardous to human health and the environment, can threaten the groundwater we drink and use to irrigate our crops.

Many of these tanks have remained in place for decades-either forgotten, because historical users have moved on, or ignored because our current legal and administrative system lacks the resources to investigate and require necessary remedial action at all sites. Cases involving multiple parties and adjoining properties are at the mercy of the judicial and administrative procedural inefficiencies identified above and the “business-as-usual” attitude of the legal professionals handling them. So resolution-and cleanup-are delayed while the contamination at issue continues to migrate or volatize, thereby risking harm to people and the environment.

Mediation provides a way to cut through this backlog. Environmental mediation as an alternative or adjunct to traditional federal or state court litigation has proven to be enormously successful. Unlike immutable judicial rules, mediation procedures and outcomes are not limited to any one statutory scheme-or to any pre-determined set of remedies. Mediation has fewer technical and tactical delays than traditional litigation because its progress is driven entirely by the parties themselves. The federal Environmental Protection Agency, Department of Justice, and their counterpart state environmental agencies, attorneys general and environmental project managers, can join in the mediated discussions even if they are not formally parties to the case. In my experience, the sooner the agencies are involved, the sooner the courts require mediation of cases that will benefit from its use, the faster the case can be resolved to the satisfaction of the parties and the agencies. Streamlining the dispute resolution process can provide a correspondingly huge savings of time and money. And the money that is spent “in process” is focused on resolution and cleanup. [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…]

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…]