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The Role of Empathy in Settlement

Empathy, the ability to see a situation from a different point of view, is an important negotiation and advocacy skill. You must be able to anticipate and understand your opponent’s position to effectively counter it. Debate trainers assign students to argue the position opposite their personal beliefs to foster this skill.
I’m Fine. To Hell With You
Lately we have seen a stunning lack of empathy in our country. On the same day as a county announced that COVID-19 had become the county’s leading cause of death, one resident yelled, “It’s my body and I want to go to work.” Another defiantly asked, “Why shouldn’t I be able to sit in a restaurant and eat?”

The answer is that many people, perhaps the majority, who are infected with the virus are asymptomatic. COVID-19, unlike collisions, drownings, obesity, heart disease, and cancer, is wildly contagious. There is currently no vaccine and no cure. More than 81,000 Americans have died. Around the world, people are not allowed to work in close quarters or sit in a restaurant because that potentially exposes coworkers, servers and other customers to the contagion. Not everyone reacts to the virus the same way.

Similarly, the television journalist who tweeted that anyone who wants to continue to shelter in place should just stay home lacks any awareness of how most people live. If the boss requires workers to show up or lose their jobs, those workers don’t have the luxury of working from home. There are more people living paycheck-to-paycheck to pay the rent and buy groceries than people pulling in big bucks.

And then there’s the 79-year-old Wisconsin Supreme Court Chief Justice who said “regular folks” were not getting COVID-19. Got that, anyone with a family member in a nursing home?

Negotiators need not have suffered a serious injury or business reversal themselves to empathize with someone who has. Perhaps you have had a personal experience which makes you wonder why your negotiating opponent is apparently so much less resilient that you. Again, not everyone reacts to an event the same way. An inability to concede that these are that person’s feelings, even if you think they are baseless, impedes meaningful settlement discussions.

Mediator As Filter

There’s a lot of interest lately in filtering out bad stuff. Of course, we use filters all the time: air filters in the ceilings in our houses, filters to keep the coffee grounds out of our drinks, water filters to improve the stuff that comes from our faucets, filtered cigarettes— well, you get the idea.

Think about this. Your negotiations aren’t leading to resolution because of the absence of a filter. A big part of what a mediator does is filter messages between disputing parties.

Self-Filters Don’t Lead to Resolution
Negotiators shape their message to achieve their goal. They might threaten. They might withhold critical information. Negotiators seldom admit the flaws in their position; they’ve filtered those out to make their case look as strong as possible.

In mediation, parties have the opportunity to let their guard down. One of the most powerful features of mediation is caucusing. In caucus, only one side meets with the mediator. By statute, everything that is said is confidential. The mediator cannot disclose anything unless you authorize that disclosure. She cannot be subpoenaed.

Confidentiality promotes candor. Parties can stop filtering their message and discuss the good and bad points of the case with the mediator. Here’s your chance to discuss the case with a professional neutral who can help parties identify the issues and resolve them.

Reframing
Mediating parties make demands and offers, and the mediator conveys them to the opponent. Part of this process often includes the mediator reframing the message to filter out animosity or extraneous issues. The mediator is using her own filters to enhance the likelihood of settlement. This focuses the parties’ attention on what is important for settling the case.

Posturing
Even in caucus, some attorneys will grandstand in an attempt to assure the client of their support, no matter how unreasonable the client’s position.  An experienced mediator understands the dynamic and how to use it to resolve the case.

Maybe you think your opponent is the biggest jerk in the world. In mediation, the mediator can filter out that attitude to get your case settled.

Mediation During the COVID-19 Shutdown

Mediation Is Critical Right Now
Courts are closed. Attorneys and claims professionals are working from home as best they can. But disputes continue. If an employer is responsible for a claimant’s medical care, delivering that care during a “Shelter in Place” order is a challenge. How a dispute is handled now can determine how the case will proceed in the long term.

Because courts are closed, litigating parties should make an extra effort to resolve disputes through negotiation. However, when they are unable to do so, agreeing to mediate is the best alternative. Issues subject to mediation can include conflicts usually resolved by motion, discovery disputes or entire cases. You can contact your mediator of choice by phone or text at 310/889-8165 or by email. She will take it from there.

Two mediation options are available during the shutdown.

Mediation by Video
Your mediator can conduct a mediation while everyone remains at home through several applications, including Free Conference Call, Zoom, or Legaler. This can happen quickly– as soon as parties agree on a time and electronically send the mediator their mediation statements so she knows the basic outlines of the dispute.

Scheduling an In-Person Mediation
If parties insist on an in-person mediation, the time to schedule that is now.

Once courts and mediation venues re-open, scheduling will be a mad dash to secure an available time. Cases already on the court’s calendar for a future date have first priority, pushing litigants with disputes cresting now further back.

In contrast, cases with a date already on the mediator’s  calendar will get first chance for any other date if circumstances allow an earlier date or must be further delayed.

You may be feeling frustrated as you see the conflicts mounting in your email inbox. There is a solution available right now: mediation.

Quid Pro Quo in Negotiation

We’ve heard a lot about quid pro quo lately. But it’s not necessarily a bad thing.

Quid pro quo is Latin for “this for that.” This is what negotiation is all about. In fact, the exchange of something of value, legally termed “consideration”, is a requirement for a contract to be valid. Settlement agreements are contracts.

A good negotiator always seeks quid pro quo. Don’t give away something unless you get something in return. In mediation, parties take turns lowering demands and increasing offers until we reach settlement.

The exception to this rule is if you were legally obligated to do something. Then it is improper to seek compensation for it. For example, an employer is legally required to pay the ordinary and customary medical expenses of an employee who suffers a work-related injury. In an ongoing case, it would be an improper quid pro quo to ask the injured worker for anything of value in return. The thing of value might be money or an agreement to do something in an unrelated context the worker would not otherwise do. That could include sexual favors.

Parties can enter into any contract which is not illegal. Hiring a hit man to kill your enemy is not a legal contract, no matter the agreed amount of compensation.

What About Leverage?
Leverage is different from quid pro quo. A party has leverage in negotiation when that party has the better alternative to a deal. How badly does the negotiator need the deal? For example, an individual who needs money for basic living expenses is likely to accept a settlement of less than full value in order to expedite closure.

In litigation, each party is negotiating to obtain a quid pro quo, a certain amount of money now in exchange for a release of the claim. When one party is in the better position to wait out the full life of the claim, that party has leverage. Frequently that is the insurance company/defendant. However, many insurers are anxious to close “old dog” claims. In that situation, the claimant has leverage and can demand more to settle. Uncertainty about how future events, such as medical treatment, can affect the value of the claim, giving one party more leverage than the other.

Quid pro quo is the very basis of settlement—so long as each side is getting value beyond what the other party was already obligated to do.

Peace on Earth, Good Will to Men

You’re sure to hear this phrase repeatedly in December. What are you doing to make it happen?

Most readers of this message are professionals charged with managing disputes. You may spend a considerable amount of time strategizing how to annul the opposing party’s claims. That’s appropriate. It’s your job. But what practically every party involved in a conflict really wants is peace. Settling parties often say they are compromising in order to get peace.

It’s also your job to achieve the optimal result in a cost-efficient manner. Mediation is a way to achieve that outcome. A trained professional neutral will work with all parties to achieve their own bit of peace– not just at holiday season, but all year round.

HAPPY HOLIDAYS

Mediation Opening Statements

Times have changed. In the past, mediators would open a mediation by asking for opening statements from lawyers for each party. Problem was, though, these were typically so inflammatory that a meeting which was supposed to be about resolution started with animosity. Sometimes one side walked out right then, before the real mediation even started.
 That’s why I have never invited opening statements at the start of a mediation.

Lawyers no longer want opening statements either. I have even had lawyers ask that there be no opening joint session with all parties present. Rather, they wanted to work with me only in caucus, one side meeting with the mediator,  keeping every communication confidential. The lawyers wanted to avoid the hostility which previously permeated the parties’ dealings.

Unless there is strong objection, I start mediations in a joint session. I introduce myself and go over logistics: important stuff such as where are the bathrooms and how we will handle meal breaks.

I also assure everyone that nothing bad can happen. The parties control the outcome, and there can be no result they did not agree to.

Everything that happens in mediation is confidential and cannot be used against anyone in a different civil forum. To emphasize that rule, while we are still in the opening joint session every person present signs a confidentiality agreement.

Then we typically break up into caucus.

The only person who has made an opening statement is me, the mediator. 

Evaluating the Denied Workers Comp Claim

I recently mediated a partially denied claim where the attorney for the injured worker had no idea what the value of the future medical costs might be. It was an old dog claim, and treaters had been deposed multiple times.

When a printout provides historic data, it’s pretty easy to project future expenses. Sure, parties might disagree about the credibility of treaters’ recommendations or the likely cost of future expenses. They might debate the effect of inflation vs. drugs going generic. But parties can compromise on those things. There are ways to prepare for contingencies in a Compromise & Release. An experienced mediator can help you.

Perhaps this issue is in the NSS category. On the other hand, I see so many parties come to mediation unprepared, I’m taking the time to spell it out.

Discovery Is How You Find Out Things
The Principal Treating Physician (PTP) submitted a report recommending expensive future surgeries and treatment. The PTP was deposed—multiple times. Experts for the employer were deposed and of course said that the need for those procedures was non-industrial. Did anyone ask those experts what such a surgery or treatment might cost?

There’s This Thing Called the Internet
As an experiment, I Googled “cost of fusion surgery los angeles”.  I also Googled “how much does Medicare pay for fusion surgery los angeles.”

I didn’t spend a lot of time on this, but I did browse:
https://www.healthcarebluebook.com/page_ProcedureDetails.aspx?cftId=22&g=SpinalFusion+(lumbar)
https://www.beckersspine.com/spine/item/35786-spinal-fusion-price-in-30-largest-us-cities.html
https://health.costhelper.com/back-surgery.html

Mediation participants often bring in printouts from various websites showing medication costs.

A person might want to argue about the numbers shown on these pages. For one, it isn’t clear that Worker’s Comp wouldn’t get it cheaper. In other words, the value to the employer is different than the value to the injured worker.

Also, many injured workers have Medicare or Medi-Cal (Medicaid) coverage. This means they have lots of room to negotiate.

Informed negotiators negotiate. Uninformed ones throw out numbers without support. You could be using a number that’s too high or too low. When your position lacks credibility, the case is unlikely to settle.

Claims Organizations Have Data
Claims organizations are in the business of paying for medical treatment. Claims professionals see bills for the same procedures again and again. They set reserves based on data. Ask for that data from your client or your opponent. If you are the Applicant’s Attorney, the worst that can happen is that they refuse. That says a lot, too.

No Excuses
There’s no excuse for coming to mediation while clueless about the value of the case. You should repeatedly re-evaluate throughout the case’s pendency. Preparation and good faith negotiation can end cases earlier, saving everyone time, money and stress.

A Mediation Story

The claim was decades old; indemnity was supposedly fully paid. The carrier hadn’t paid a medical bill in years. The applicant had dismissed her attorney, but continued to pursue the claim.

The carrier wanted the claim off the books, so they called me. Without prompting, the adjuster disclosed his authority limit to me in an email.

The applicant, the carrier’s hearing rep, and I met for mediation.

While there was no question the applicant was disabled, the dispute was whether the disability was industrial. Thankfully, the applicant had a very good alternate form of medical insurance which had been providing and continued to provide full coverage.

I spent time with the parties separately, allowing each of them to vent about how they had been taken advantage of by the other. Issues were raised, demands and offers exchanged. While remaining neutral, I empathized with both parties, discussing pros and cons. Finally, the hearing rep made what he said was an offer of his full authority.  I showed him my print-out of the email which showed authority for an additional $15,000. 

He stared at me.  “I have to make a call.” 

“Let’s make it together,” I said.

We got on the phone to the adjuster who said the hearing rep was correct. “Mike” (not the real name), I said, “Are you able to take a look at your email to me of [the email date]?”

“Yes, I see it.”

“That says your authority is $15,000 more.”

“Oh, I didn’t have that authority. I never had that authority.” 

I did NOT say, “Then why did you tell me that’s what you had?”

Instead, I went to the room where the applicant was waiting and put the hearing rep’s offer on the table.

“I have to call my spouse.” I left the room to give her some privacy.

After a little while, the applicant told me her spouse said the offer was an absolute non-starter.

The hearing rep stated he had to leave for another commitment, and the mediation adjourned without resolution.

A few days later, the applicant called me to ask if the offer was still open.  I said I would check.

The case settled by Compromise & Release for the amount of the hearing rep’s offer.

The Lesson

Parties sometimes need time to process everything that happened at mediation. They may have learned about new issues or gained new insights about the basis for the opponent’s position. People often have a negative kneejerk reaction to a demand or offer. After some time to cool down, they may be able to understand a different point of view, even if they don’t agree with it.

Think about why this case settled. What did the applicant gain by being able to talk about the claim with the mediator? What do you think happened between her and her spouse once she got home? What can you conclude about pre-mediation communication between the adjuster and the hearing rep, between the adjuster and the applicant?

How important is it to have everyone who will participate in making the settlement decision attend the mediation?

New Mediation Disclosure Law

Effective January 1, 2019, California attorneys must provide a written mediation disclosure statement to clients or face potential disciplinary consequences.

What Does the New Law Do?
The disclosure does not protect clients so much as inform them about mediation confidentiality. Under changes to the Evidence Code, attorneys must have clients sign off on a mediation disclosure form as soon as reasonably possible before the client agrees to participate in mediation. If the attorney is hired after the client has agreed to mediate, the attorney must get the client’s sign-off as soon as reasonably possible after being retained. If the client signed off on a disclosure with prior counsel, new counsel should get another acknowledgement naming the current attorney. All clients should sign it.

The disclosure must be on a single page not attached to any other document and must be printed in the preferred language of the client in at least 12-point font. It must include the names of the attorney and the client and be signed and dated by the attorney and the client.

The law specifically contemplates an “attorney disciplinary proceeding to determine whether the attorney has complied with Section 1129.”

Unh-Unh, Not Me
What if the Evidence Code doesn’t apply to your practice area? You work in administrative law, such as Workers Compensation, or limit your practice to federal court.

Even if you never handle a case with a state civil court aspect nor a federal case with diversity jurisdiction, observing the new rule is the safe choice.That this amendment passed at all started with concerns about legal malpractice suits founded on communications within the mediation process. Legal malpractice suits are filed in state court or rely on diversity jurisdiction using state rules. Mediation confidentiality rules apply to all types of practice.

What Does the Disclosure Do—And Not Do?
The disclosure lays out the basics of the mediation disclosure rules, i.e., an almost total evidentiary exclusion of communications. This includes legal advice provided to a client during the mediation. Absence of the client’s signature or that the client did not receive the form is not a ground for invalidating a settlement agreement.

The “safe harbor” disclosure form in Evidence Code 1129 assures clients they can still sue for malpractice or report misconduct to the State Bar, just not using any evidence relating to a mediation.

How To Comply
Attorneys who regularly mediate should consider obtaining the disclosure at the beginning of the representation. The safe harbor form doesn’t limit the disclosure to a single case. Nonetheless, attorneys working on multiple cases under an ongoing or tripartite relationship may wish to add language to make it clear that the client is executing a blanket sign-off.

Litigation Status Reports from the Confederate States of America

THINGS ARE GOING GREAT – LET’S KEEP FIGHTING

The fall of Atlanta “is not a calamity that endangers our cause.”
Montgomery, Alabama Advertiser, September 1864

 

“No former period of the war has contained such elements of encouragement for the South as the present.”
Richmond, Virginia Examiner, February 1865, 60 days before the surrender at Appomattox

 

Many clients receive litigation status reports that parallel the unfounded optimism in the South in the final months of the U.S. Civil War. People who try to settle cases often see litigants with that same willful refusal to recognize a failing battle effort. Parties and lawyers who have been living with a case for a long time may delude themselves about their chances of winning.

 

Lawyers in the Front Line
Typically, the lawyer is the front-line soldier with the best ability to assess how things are going. The client expects reliable status reports and guidance in choosing the best course for the litigation. Corporate and insurance clients usually require reports to include an evaluation.Clients want a lawyer who believes in their case. And lawyers have a duty both to the client and the legal system to represent the client “zealously within the bounds of the law.” But sometimes lawyers prepare status reports which mislead clients to pursue expensive and futile choices.Some lawyers seem to think they are litigation superheroes who can’t be beat. Dig deeper and you will find they settle most of their cases, but at what cost? The justification that the client would have gotten a worse deal without the lawyer’s extreme tactics may not be sound.Many lawyers are like animals burrowing a tunnel who never stick out their head to see where they are. They have a playbook they think they need to follow before even considering settlement. It seems like there is always one more report, one more deposition, one more motion they have to have.Lawyers also fear telling clients the unvarnished truth about their cases because the lawyers want to keep the gig. I’ve seen cases where it is the third lawyer on the case on each side. In one instance, the lawyer told me that both prior lawyers had counseled that the opponent’s settlement proposal was reasonable; each was fired. The current lawyer said, “You and I both know those lawyers were right, and they were fired. I am going to try the case.”
Those battles at Lookout Mountain and Missionary Ridge? According to the Mobile Register, union casualties were “ten times greater than ours.” In fact Confederacy casualties numbered 6,687 to the Union’s 5,815.
 
Psychological Reasons for Unfounded Optimism
There are psychological reasons why people refuse to settle. For example, people need to justify past expenditures, known as “sunk costs.” So they feel the need to keep fighting, even when settlement is the best way to stop that drain. Another is reactive devaluation, where people refuse to credit information from the opponent which conflicts with the belief system they have created for themselves.When litigation status reports only offer a choice among battle plans, clients may not realize settlement could be their best option.

Pass the Buck to the Mediator

Mediation is a good way to get the most belligerent parties to talk about settlement. Opposing sides don’t even have to sit together. Caucus sessions take place among the mediator and representatives of a single side. Nothing said in caucus gets repeated elsewhere without the party’s permission, so caucus is a safe place to discuss the weaknesses of a case as well as its merits.The mediator is a professional neutral. Parties can get the opinion of someone who comes to the case without preconception. This is closest to what could happen in court. The mediator can ask pertinent questions and bring the parties to partial or full agreement.When parties can’t bring themselves to agree, the mediator can suggest a mediator’s proposal to close the case. This allows everyone to save face and does not damage the attorney-client relationship.If you are creating or receiving litigation status reports that don’t consider mediation, an essential part of the plan may be missing. Mediation offers a timely, cost-effective way to end whatever war you’re fighting.