Tag Archive for: negotiation

The One Word to Keep Negotiation Going

How do you react when your negotiating opponent says something completely outlandish? Some negotiators walk out. Some blow up, screaming invective. Some stoop to insult. In short, they do everything but negotiate.

Keep negotiating
You can’t reach a negotiated settlement if you’re not negotiating. Sometimes you must react to the nonsense you have just been offered. But how to respond when you are actually biting your tongue?

Wow.

There it is. The single word that keeps you non-committal.

The Perfect Rejoinder
The injured person has spent 20 minutes weepily telling a tale of woe. You may believe the person has problems, but they are unrelated to the cause of action under discussion. Your respectful response: wow.Opposing counsel has just literally laid on the table proof that your side has concealed evidence for more than a year and lied about it in discovery responses. You know you need to round up your team and figure out what has been going on. Your dispassionate response: wow.

Defendant insists that their personnel were nowhere near the alleged incident at the critical time. You have just uncovered video footage that shows this is false, but you are not quite ready to disclose this. Your calm response: wow.

Wow Works Wonders
A startling, emotional, or angry statement could tempt you to respond in kind. But ratcheting up the emotion index can interfere with the parties’ ability to keep things in perspective. While others around you are heating up, staying cool as you observe the dynamic keeps you in control. Wow.

3 Tips for a Successful Mediation

Assessing your case from your side’s point of view is critical. But it won’t get you far if you don’t pay attention to your opponent’s needs as well.

Here are three tips to help you move from conflict to resolution.

  1. Spend time sizing up the case from your opponent’s point of view. They are most likely to see things your way if you can pitch your case to match their needs.
  2. Mediation may be the only opportunity to direct information to the client without the attorney filter. Present information in joint session or through the mediator to appeal to the client.
  3. Assess your litigation budget—and your opponent’s. Look beyond the dollars. Before you head to mediation, draft a plan for discussing the time and energy that will be required as well as the emotional investment.

Every negotiator would love to get everything they want. That’s not likely to happen. Try to fashion a compromise that appeals to the parties’ needs.

3 Logic Skills to Favorably Settle Your Case

Most of the cases I mediate are fact-dependent. The law is settled; it is up to the parties to correctly apply the law to these facts. Yet, lawyers sometimes show up with little understanding of what the relevant law is. When the applicability of statutes and regulations is cloudy, case law provides interpretation. Reconsider how these three logic skills apply to that case you know just needs to be settled before parties spend any more time or money.

Analogize /Extrapolate/Distinguish
Every individual is different; hence, every case is unique in some ways. Legal analysis involves  researching legal precedents to see the similarities to and differences from the facts of this dispute.

If case law favors your position, fashion your arguments to show why the precedent is an analogy for the facts of the present case. Instead of understanding this basic legal skill, I see advocates argue against their client’s interest that there are differences.

To create an analogy, one must extrapolate, i.e., show how the court deciding this case should apply the reasoning of the previously decided case to different facts to rule in favor of the client. This argument requires thoughtful preparation and creativity.

An attorney who argues that a precedent is so different that it has little bearing on the present dispute is distinguishing that precedent. This is an analysis of degrees of difference.

If you dig deep enough, you can probably find cases that could suggest opposite results for your case. Don’t ignore the unfavorable ones. The skillful practitioner will show why the favorable cases are analogous to the one being negotiated and the unfavorable ones should be distinguished.

Remember, you can direct your mediation statement solely to the mediator, and it will remain confidential. Whether in a court memo, a mediation statement, or a demand letter, a reasoned presentation is more persuasive than a bombastic declaration.

How the Inflation Reduction Act Does- and Doesn’t- Affect Your Injury Settlement

The Inflation Reduction Act of 2022 is packed with provisions about tax calculation and collection and climate change. It’s also got provisions worthy of the attention of anyone handling injury cases. Some of these provisions have been widely, but not fully, publicized.

Medical Insurance Premiums
Remember those three ways to evaluate future medical expenses? People who get their health insurance through health exchanges like Covered California were scheduled to see a major rise in premium expense at the end of this year. The Department of Health and Human Services projected that three million people would lose their health insurance coverage. The Inflation Reduction Act continues the subsidies that make premiums under the Affordable Care Act actually affordable through 2025.

2025?, you may say. That’s not very long when computing a person’s lifetime medical expense. True, but it is also true that once a public benefit is entrenched, Congress would find it very difficult to take it away. Skilled negotiators know how to fashion settlements which anticipate these events.

Downward Pressure on Medication Expense
Drug companies’ profits are soaring. One reason is that when Part D coverage became law, the compromise was a ban on Medicare being able to negotiate drug prices with drug companies. This contrasts with the way the Veterans Administration manages their drug costs. Medicare accounts for one-third of all prescription spending in the United States.

While there has been a lot of publicity about the new law granting Medicare negotiation power for the first time, the benefit is more meager than at first glance. First, it doesn’t start until 2026, and even then it’s not a blanket change. It applies to 10 drugs in 2026, 15 in 2027, 30 in 2028 and 40 in 2029 and after. The affected medications are to be chosen from the 100 most expensive pharmaceuticals (50 from Part D, 50 from Part B). What’s more, the drugs subject to price negotiation cannot include conventional drugs that have been approved for marketing for nine years, biotech products with marketing approval for13 years, or “orphan” drugs — those with exclusive FDA approval to treat certain rare conditions. This brings most drugs close to the end of the life of their patent, after which lower-cost generics will become available.

Those of us who have been evaluating future medical expenses for a while have learned not to rely on prescription costs decreasing because the injured person’s current medications are going off-patent. Drug companies are always innovating. Just when it seems like the availability of a generic will reduce ongoing prescription expense, the injured person gains access to a new, better drug with a high price tag.

Other Part D Limits
The Inflation Reduction Act limits out-of-pocket spending by Part D enrollees to $2,000 per year. Premium increases are limited to 6% a year from 2023 through 2030. These limits provide better insurance coverage, but due to the collateral source (civil) and primary payer (WC) rules, won’t change case evaluation without meaningful price reduction. On the other hand, the limitation on how much the injured person will actually have to pay can encourage greater negotiation flexibility.Stay Vigilant
Depending on how the political winds blow, these changes might be just the first step toward changing how Americans pay for healthcare. Or it may take decades before more important changes occur. News reports typically ignore the effect of such laws on dispute negotiations, so you will have to read between the lines and stay alert. Working with a skilled, experienced mediator can help you navigate these shoals.

Focus on the Future

A 2013 market study indicated that 21% of the U.S. population read science fiction. Science fiction films are even more popular.

If we’re so fascinated with speculation about the future, why do we look to the past instead of the future when we negotiate?

Instead of planning for a life without conflict, negotiating parties tend to dwell on issues of the past. For example, fixating on how much money has already been spent (called “sunk costs”) instead of on how much will be saved by settling now, can get in the way of an objective case evaluation.

Litigation creates anxiety. We know that parties are relieved once their disputes are resolved. Redirecting negotiators’ attention to a future without the ongoing investment of time, money and stress can spur settlement. That is true for how your team discusses their position and also how you present your position to your negotiating opponent.

A future without conflict is a better future. Mediation can help you get there. And that’s not science fiction.

New Restrictions on Confidentiality in Settlement Agreements

Effective January 1, 2022, amended California Code of Civil Procedure §1001 expands restrictions on confidentiality clauses in settlement agreements.

Previous law barred such clauses in agreements settling filed civil or administrative actions alleging sexual assault or sexual harassment. Only the identity of the claimant and the amount of the settlement could be protected.

The new provisions expand the prohibition to include

1) acts of workplace harassment or discrimination not based on sex, and

2) acts of harassment or discrimination not based on sex by the owner of a housing accommodation.

WHEN SMALL BUSINESS CO-OWNERS FIGHT

Disputes among co-owners in a closely-held business can arise over a number of issues, such as day-to-day control, compensation, or access to information. Left unresolved, these arguments can fester and eventually destroy the business.

Not only are small business co-owners like a family– they are likely to be members of an actual family. While we know that family-owned small businesses tend to weather management storms better than businesses which lack that link, family dysfunctions can seep into management of the business.

Co-owner mediations can seem more like divorce negotiations than business disputes. A mediator can calm parties’ anger, help resolve the current dispute, and create a plan to manage future disagreements so the business survives.

When you are in the middle of a co-owner dispute maelstrom, call me to discuss whether mediation can help. It’s free and completely private under California’s strict mediation confidentiality laws.

The One Thing You Can Control in Negotiation

Here’s a basic fact of life. People like to feel in control, whether it’s at their workplace, at home, or in a negotiation. But we are seldom in sole control of any of those situations, and that’s how disputes arise and continue. Though the result of a negotiation is not completely under your control, your preparation is.

Start by defining the pivotal issues. There are seldom more than five, usually just one or two. Determine the specific range of results your side needs to bring the matter to conclusion.

Imagine the circumstances from your opponent’s point of view. Be specific. What is the hot button? It’s usually not just money. The emotional or reputational costs as well as the financial drain of drawn-out proceedings may be factors. Many litigants feel they have been disrespected. Sometimes a carefully worded apology goes a long way towards bridging a negotiation gap. What does this person really need?

It Takes More Than Two
Bringing everyone together for mediation shows a serious intent to resolve the dispute. Make sure the real decision-makers are attending. That might be a corporate higher-up like a claims manager, but it might also be a family member.

Using the mediator as a buffer between parties can magnify the effectiveness of your message. Your opponent may have brushed off your arguments before, but will listen to them when they come from the mediator.

You cannot completely control a negotiation. The opposing party could surprise you in a number of ways. Your own client may surprise you. But thorough preparation will help you manage a negotiation. You are the one person you know you can control.

Was King Solomon Right?

Judgment of Solomon – Nicholas Poussin

Pretty much everyone knows the bible story about King Solomon. Two women claimed they were the mother of an infant after a different child had died. Solomon ordered the baby to be split in half and divided between them. One woman agreed; the other would rather abandon her claim. Solomon then knew that the one who put the baby’s welfare ahead of her own interests was the true mother.

Splitting the Baby
Attorneys and claim professionals complain about judges who decide cases where it appears the result does nothing more than equally divide the difference between the parties’ positions. Complaints about “baby-splitters” are loudest when the defendant or employer maintains no money should be awarded at all.

Pay Attention to the Midpoint
In mediation, the parties are in control of the outcome. As mediator, I facilitate the negotiation, gradually narrowing the negotiation gap until the parties can agree on terms to resolve their dispute.

Each demand and offer sends a message. Smart negotiators pay attention to how the midpoint changes with each round of negotiation. Cases do often resolve at the midpoint between the first reasonable settlement proposals.

Some negotiators start with an extreme position intended as an anchor. Anchoring communicates what your ballpark is. However, if the proposal is so unreasonable as to be ridiculous, no one will take it seriously, and the midpoint is not predictive.

Is There Ever A Time to Split the Baby?
When the negotiators’ positions are close, they may agree to split the difference. Often cases settle near but not exactly at the midpoint to avoid the appearance of a baby-split.

Sometimes the parties would accept a compromise at the midpoint, but are unwilling to let the opponent know this because they fear the disclosure would not resolve the dispute. When I see a likely resolution that the parties are not willing to put on the table themselves, I may make a “mediator’s proposal.” My proposal rarely suggests an even split, but like Solomon’s suggested result, it does resolve the dispute.

COVID-19 IS MESSING THIS UP, TOO

HOW CCP 599 HELPS AND HURTS

Due to the pandemic, very few cases are being tried. Reports from the legal community indicate that the absence of an imminent trial date is inducing parties to put off settlement as well.

A History of Procrastination
Lawyers have always seemed to have a reason why it’s too early to settle a case. They need to get another report, look under every rock for new information, research the heck out of every issue whether or not it is pivotal. Traditionally, discovery cut-offs and upcoming trial dates have put up a big stop sign to that process in civil cases. Without that stop sign, some workers compensation cases continue for decades.

Human nature being what it is, litigants tend to wait to the last minute to undertake the tasks necessary to close a case. The global pandemic has aggravated our proclivity to procrastinate.

When do cases settle? Legal and claims professionals have always referred to the ubiquitous last-minute settlements as happening “on the courthouse steps.” As trial dates get pushed further and further back on courts’ calendars, parties put off settlement longer.

CCP 599 Makes Procrastination Easy
When the global pandemic forced courthouses to close their doors, the California legislature recognized the obstacles to litigants’ ability to move their cases forward. The response was Code of Civil Procedure 599. This new section delays most civil litigation deadlines during the official COVID-19 state of emergency and for 180 days thereafter. If a deadline had not passed by March 19, 2020, the continuance or postponement of a trial date extended that deadline. That includes discovery cut-offs and dates for identification of expert witnesses and motions for summary judgment. Notably, the court retains the power to order litigation deadlines. Parties can also agree to self-impose deadlines which would otherwise be suspended.

At the beginning of the pandemic, no one had any idea how long this suspension would last or how we would all learn to conduct much of the court’s business remotely. Still, 599 remains in place. Some lawyers and claims professionals report that the absence of a hard deadline has resulted in fewer settlements.

Blessing or Curse?
In the last year, we have learned to manage litigation pretty well without setting foot in the courthouse. Doctors have resumed seeing patients. The suspension of many hard deadlines provided breathing room while we figured it all out. These are blessings.

On the flip side, cases are backing up. After courthouse life returns to a version of normal, it will take a long time to work through the backup. Once 599 expires, there will be a rush to undertake long-delayed tasks critical to settlement. Things could get kind of crazy, and that’s the curse.

What to Do Now
Before any more time passes, look at those files to see what can be done to set them up for settlement. Almost all mediations are now occurring remotely. Let’s settle those cases promptly, so you can better manage your caseload once the state of emergency is lifted.