On April 18, 2018, the Daily Journal published my article comparing the forces of destruction and creation in the 856-year history of Notre Dame to similar forces in the cycles of litigation and mediation, and in the ways that advocates participate in the processes. Click here for the online version or download the PDF version.
Parties and lawyers involved in mediation – and to a large degree mediators themselves – often pay lip service to the theory of self-determination that underlies the process. In fact, many cases demand (and most lawyers hope for) a mediator who can “beat up” both sides to hammer out a deal.
I am continually uplifted by the wisdom parties often demonstrate if given the chance to participate meaningfully in the mediation process. In the United States, parties often play little or no role in mediation; they sit there silently, glad not to have to say anything, and relieved that their lawyers can do all the talking for them. Usually I encourage the lawyers and parties to engage in a joint session, and usually I face strong opposition to that part of the process. The joint session develops useful information and provides the opportunity for the clients to preview their opponents and the lawyers, and get impressions of how the stories will play in court.
Usually everyone is pleasantly surprised at how useful a joint session turns out to be. But not every case is the “usual” case. In fact, every case should be treated as unique, and so mediation must be tailored to the situation. That means that sometimes, the process is re-ordered or a joint session takes a different form.
Take the example of a recent international business case I mediated, involving allegations of breach of fiduciary duty, misappropriation of trade secrets, wage and hour issues, and defamation. The manager who had been fired had worked with the company for over 10 years. It was a family owned business, and the owner entrusted the operation of the company to this young protégé. The mutual allegations of mismanagement, unfair competition, fuzzy accounting, and under-the-table dealing would be daunting to prove. The parties and lawyers decided to mediate six weeks before trial.
The lawyers agreed to exchange briefs simultaneously in advance. (That rarely happens, until everyone actually arrives at the mediation, when most seem to hand over their briefs without worry.) Not only did that save tons of time, but in this case, it got the parties thinking about what lay at the heart of the lawsuit and what they really wanted.
The parties struggled to assign a monetary value to the case, highlighting what everyone had come to realize were the key issues – personal disappointment, possible financial devastation, and above all, a sense of betrayal. I received entirely mutual, yet independent, requests for the two principal parties to meet one-on-one.
The meeting lasted three hours. The lawyers, other parties, and I sat around trying hard to create value with the time. I asked one of the attorneys to start drafting a settlement agreement. I was very optimistic
that the principals were developing a solution. I was sure they were looking for reconciliation, not money, even though the legal and factual issues involved money.
I was wrong.
The principals emerged from their meeting with no deal and as much mistrust as they had at the beginning. But – apparently having gathered as much information as possible insofar as they had not even spoken in over a year – they were ready to start exchanging financial settlement offers. That was progress.
The mediation went late. We finally had agreement on a settlement number, but the deal nearly fell apart over the payment terms. More mistrust. Finally, the deal was struck. I could tell that both parties had learned enough about the other – and more importantly – about themselves, that the deal that had been reached reflected a genuine desire to wipe the slate clean, learn from mistakes made, and move on.
This was a paradigm case of mediation setting the stage for the parties to take control of the outcome of their dispute and to clarify and define the future of their relationship..
What did the parties pay for that day? A process that allowed intractable parties to meet in a confidential setting in which their discussions could not be used against them, to gather information of mutual benefit, to reflect on a longstanding personal and professional relationship, and to settle all disputes between them. I think that’s a lot of value.
In 2010, when I opened my mediation practice, I was excited about selecting a logo to help “brand” my business. I was transitioning from what was principally a litigation practice to the business of helping parties make peace. At the printing shop, the owner placed before me a GIANT book of symbols; it was probably three inches thick. While I fanned through the pages, one caught my eye:
I couldn’t take my eyes off of it. It seemed to represent everything that I confront, manage, and strive for in mediation: paths that diverge yet come together, a central core, opposing images and tracks, balance, equality, closure, beautiful symmetry, simple elements, complex interactions, and even a gift. To me, the gift is one of resolution and peace.
Fast forward seven years. Recently, I was returning to Los Angeles from Baltimore, where I had a special visit with my family. I rarely speak to those sitting next to me, but for some reason – most likely the really FUN Southwest flight attendant who had a gift for creating Moscow Mules with airplane-galley ingredients – I met a very special woman, a senior advisor at the U.S. Department of Health and Human Services. This lady took one look at the logo on my card and exclaimed how similar it is to a number of West African “Adinkra” symbols she intends to use with her team.
So off I went to the internet, of course, to look at the various symbols that might resemble my logo.
As explained by Mawuna Remarque Koutonin, “Adinkra are visual symbols, originally created by the Ashanti of Ghana and the Gyaman of Cote d’Ivoire in West Africa. They represent concepts or aphorisms, and are extensively used in fabrics, pottery, logos and advertising. The symbols have a decorative function but also represent objects that encapsulate evocative messages that convey traditional wisdom, aspects of life or the environment.” 
When I saw the following four symbols, and their meanings, I was amazed. Take a look:
Mpatapo – “‘knot of pacification/reconciliation’ – symbol of reconciliation, peacemaking and pacification. Mpatapo represents the bond or knot that binds parties in a dispute to a peaceful, harmonious reconciliation. It is a symbol of peacemaking after strife.”
Dwennimmen – “‘ram’s horns’ – symbol of humility together with strength. The ram will fight fiercely against an adversary, but it also submits humbly to slaughter, emphasizing that even the strong need to be humble.”
Nkyimu – “the crossed divisions made on adinkra cloth before stamping – symbol of skillfulness, precision. Before adinkra cloth is stamped with the symbols, the artisan blocks off the cloth with lines in a rectangular grid using a broad-tooth comb. This preparation is symbolic of the exacting technique which results in the highest quality product.”
Kuronti ne Akwamu (two councils of state) – “Democracy, sharing ideas, taking council”
Now I ask you, could I have chosen a better symbol for the work I do in business mediation, at least from the point of view of certain West African nations?
The framework, Kuronti ne Akwamu, involves sharing ideas, standing on equal footing, and collecting advice, wisdom, and collective guidance. The mediation process is the framework for collaborative efforts to share ideas and solutions.
I would contend that Knyimu (the crossed divisions) stands for the importance of thorough preparation so that the attorneys, the parties, and the mediator can take a skillful, precise approach to achieve a high quality outcome of the dispute.
Dwennimmen (the ram’s horns) demonstrates what happens in mediation as opposed to litigation. While litigators will fight fiercely in the courtroom or arbitration context, in mediation, combining that strength with enough respect and humility to listen so as to imagine another’s point of view opens the door to sharing ideas and exploring solutions.
Mtatapo, the knot of reconciliation and pacification, is the endgame and the Adinkra symbol most strongly reflected in my logo. It is the symbol of the agreement resolving the dispute, the achievement of peace. This is a symbol of an important accomplishment.
Was all this a coincidence? I certainly had never heard of Adinkra symbols, nor had I ever seen any when I developed my logo seven years ago. I think there are certain images that evoke the feelings driving people’s dreams and goals. Images inspire. Images draw you in, often in ways that words cannot.
The work of mediation is a true art in itself. The mediator must create and safeguard a process in which all parties can fairly “have their day in court” on equal footing, allow demonstration of well-prepared, even “ferocious” (though polite) advocacy, educate and encourage the participants to see the tangible value of listening to understand their opponent’s point of view, engage the parties diplomatically, and seek solutions that will achieve resolution and peace.
This is what I do, with all the energy and passion that I have.
Last week I attended a memorial service for a 61-year-old businesswoman, wife, and mom. I didn’t know Tamara well, only through my chamber of commerce, but she touched me gently and deeply whenever I saw her. So much about the service, and her, was unforgettable.
It turns out that Tamara was a local icon of sorts, a business leader and visionary grounded with compassion, common sense, and humility. The speakers at the ceremony all hailed her many talents, but the funny thing was that there were so many stories about her fashion sense, or rather, her lack thereof.
As an owner of an in-home care service for seniors, Tamara wore a uniform of sorts – everywhere. Every speaker at the service described her regular outfit – a modest, crisply ironed button-down blue shirt with company logo and ¾ length sleeves, business slacks, and “sensible” shoes. Everyone, from the pastor to her colleagues to her family, couldn’t help but comment on Tamara’s lack of style.
One non-profit director told of dressing as Tamara’s twin for three monthly meetings in a row, but she lamented that her outfit never seemed to quite match up and nobody even noticed the joke.
A community leader could not help associating the color blue with Tamara, mainly due to her uniform.
Her genuinely loving and admiring husband described his wife’s “lack of style” and proudly announced that many times he was the one who ironed those memorable button-down shirts.
Everyone spoke of Tamara’s smile that could melt hearts and light up a room. Everyone spoke of her frankness, strategic thinking, and tireless efforts to help others improve themselves and their businesses. A client told of how Tamara’s touch brought a smile to the face of his wife in the end stages of Alzheimer’s Disease. A businessman laid off after 40 years spoke of how her encouragement helped him find new professional paths. Her oldest daughter marveled both at her spreadsheet-laden to-do e-mails and at her motherly capacity for forgiveness and understanding.
And always, the mourners kept coming back to her style. What is style? Tamara wasn’t fashion-forward, but she most certainly had style. Her clothes were comfortable, neat, and branding-brilliant. Would they have made the fashion magazines? No. But Tamara elevated style to heights fashion may never achieve. Character, determination, commitment, ambition, humility, and passion were all celebrated in a button-down shirt and sensible shoes. Tamara was a style sensation dressed in what most described as downright dowdy.
One day, I hope to have as much style as Tamara did. Tamara, thank you for the inspiration.
Like it or not, the new DOL Final Rule amending the disability claims handling and appeal procedure at 29 C.F.R. §2560.503-1 will work a significant change in the administration of ERISA-covered disability claims. The Department of Labor states that these procedures largely parallel those used for group health benefit claims under the Affordable Care Act. The Rule became effective on January 18, 2017 and applies to all disability claims filed on or after January 1, 2018.
The preamble to the rule – which is an interesting historical overview and summarizes many comments that were submitted in response to the first version of the rule – states:
“Even though fewer private-sector employees participate in disability plans than in group health and other types of plans, disability cases dominate the ERISA litigation landscape today. An empirical study of ERISA employee benefits litigation from 2006 to 2010 concluded that cases involving long-term disability claims accounted for 64.5% of benefits litigation whereas lawsuits involving health care plans and pension plans accounted for only 14.4% and 9.3%, respectively.”
This is pretty old news, and many would object to the fairness of the comparison, but it nevertheless informed the DOL’s decision to move forward. The preamble to the rule describes its major provisions as follows:
(1) Claims and appeals must be adjudicated in a manner designed to ensure independence and impartiality of the persons involved in making the benefit determination;
(2) [B]enefit denial notices must contain a complete discussion of why the plan denied the claim and the standards applied in reaching the decision, including the basis for disagreeing with the views of health care professionals, vocational professionals, or with disability benefit determinations by the Social Security Administration (SSA);
(3) [C]laimants must be given timely notice of their right to access to their entire claim file and other relevant documents and be guaranteed the right to present evidence and testimony in support of their claim during the review process;
(4) [C]laimants must be given notice and a fair opportunity to respond before denials at the appeals stage are based on new or additional evidence or rationales;
(5) [P]lans cannot prohibit a claimant from seeking court review of a claim denial based on a failure to exhaust administrative remedies under the plan if the plan failed to comply with the claims procedure requirements unless the violation was the result of a minor error;
(6) [C]ertain rescissions of coverage are to be treated as adverse benefit determinations triggering the plan’s appeals procedures; and
(7) [R]equired notices and disclosures issued under the claims procedure regulation must be written in a culturally and linguistically appropriate manner.
The DOL has issued a handy Fact Sheet (pdf copy above) providing an overview of the final rule. Also above is the full 28-page commentary concluding with three pages of the actual changes as posted in the Federal Register.
The DOL states in the preamble to the final rule that one of many goals in historical revisions was to reduce litigation. At this time, one goal is to strengthen consumer protection. Will the new rule result in more litigation? Will it increase costs of coverage to employers and consumers? Will the whole thing change again with the new administration and promises to change the Affordable Care Act? Only time will tell.
Life is short. Some short lives are longer than others. Some short lives are full of love, good health, happiness, and fulfillment. Some short lives are troubled by countless struggles, tragedies, and suffering. Of course, most of our short lives are a mix of it all.
I visited Vancouver last week for a mediation conference. Every time I attend this particular conference, my world expands with greater knowledge and insight. The job of a mediator is to help people resolve conflicts. Conflicts are consuming – they eat up valuable chunks of our lives and business. And so we search for solutions that preserve resources and save time.
Which brings me back to my focus on our short lives, and how my first visit to Vancouver will forever influence my perspective on how I use my time and what I value.
Yesterday, I read with great distress the Op-Ed piece written by Judge Michael Stern in the Los Angeles Times. The apparent purpose is to convince California legislators to appropriate more of its budget to the Los Angeles County court system. However, Judge Stern argues that the budget cutbacks have resulted in “a two-tiered judicial system; a speedy private one for the rich and a protracted public forum for the less advantaged.”
Playing the haves-and-have nots card is usually a reliable way to generate passion these days. But the picture Judge Stern has created is faulty – like a trompe l’oeil painting – because it is based on the questionable assumption that an adjudicated result is the only “fair” result and a fuzzy description of dispute resolution options available to the public at large.
I think everyone would probably agree that the Los Angeles County Court system is backed up and vital resources have been lost as a result of budget cuts. I completely disagree that the backup has created a good system for the rich and a bad system for the poor.
“Alternative dispute resolution” traditionally has been viewed as any of a variety of dispute resolution methods that are alternative to the default of filing a lawsuit in court. Most people immediately think of arbitration as the main “alternative.” Mediation is now more commonly considered as well, at least in the United States.
However, there are many “alternatives,” including a hybrid concept that is getting more attention these days, known as “Med-Arb.” In this process, the parties agree to begin with mediation, but if they reach an impasse, will proceed to arbitration conducted by the same neutral who acted as the mediator. On the surface, this seems like a good idea, at least from the parties’ viewpoint. But when you start to think about it, in California at least, the process can be fraught with risk, especially for the mediator/arbitrator hired to do the job.
“Binding mediation” is another term for “mediation-arbitration.” For example, the parties can agree that if they reach impasse, then the mediator – who then effectively becomes arbitrator – can decide on a final settlement amount within an agreed-upon range. (There are lots of options here.) If a “binding mediation” provision of an agreement is not sufficiently clear and detailed, then it will not be enforced. Lindsay v. Lewandowski (2006) 139 Cal. App. 4th 1618, 1620-1625.
However, if the agreement demonstrates that the parties agreed to a “binding mediation” process that is clearly defined, and a constitutionally and statutorily permissible method of resolving their dispute without trial, it will be enforced. Bowers v. Raymond J. Lucia Cos., Inc. (2012) 206 Cal. App. 4th 724, 728-737. The mediation agreement and subsequent mediation award will be enforced as a settlement under Code of Civil Procedure Section 664.6, not as an arbitration award.
Normally, we mediators encourage as much creativity as possible in working with parties to find solutions through their own self-determination. The more they “own” the solution to the dispute, the more durable and sustainable it will be.
At its philosophical heart, the concept of “med-arb” is inherently contradictory, nullifying the voluntary nature of mediation. Essentially, the parties are saying, “We’ll do our best, but if we can’t agree, then we’ll let you, the mediator, decide how we should settle our dispute.” It may seem like a rush to give up.
It’s always about the attorneys’ fees, and who pays for them when legal disputes arise, isn’t it? Many statutory schemes are designed to treat negotiation and mediation as the primary mechanism to resolve disputes. The approach keeps costs down, and it also achieves quick resolution in many kinds of disputes, including those involving condominiums and other common interest developments. In California, these entities and their members depend on the dispute resolution provisions of the Davis-Stirling Common Interest Development Act, Civil Code §§ 5850-5985 (“Act”).
Last week I attended a fascinating seminar for adult children of aging parents given by my colleague Carlos Arcos, Esq., an elder care planning attorney. The need for this kind of advance planning became powerfully obvious in light of the countless legal issues, public benefits issues, insurance issues, real estate questions, and financial risks associated with natural decline and death in today’s world. Planning for your own care or care for a family member or friend when your health declines or you become physically or mentally incompetent to care for yourself can make the difference between preserving assets and losing everything.
Families are not always harmonious. This is one area in which the grass always seems greener in someone else’s family. Most families have some degree of discord, and money often brings out the worst in people. Family members often harbor lifetimes of resentment that tends to surface when aging parents need expensive or time-consuming care, when they may disagree about their competence, or when they die and leave assets in proportions their heirs consider to be unfair.
There are many factors that go into the selection of a mediator. In addition to objective qualifications such as track record and experience, there are personal qualities that can make a crucial difference between an effective mediation and a disappointing one.
I’ve spent a lot of time with other mediators lately. There have been conferences, social events, study groups, the ICC International Commercial Mediation Competition in Paris, partner presentations, and so forth. I’ve discovered a lot about the qualities of great mediators.
You’ve selected your mediator, and the mediation session is scheduled for next month. Preparing for mediation as thoroughly as possible is the key to achieving the best possible outcome. Where to begin?
1. You need a mediation plan. The plan will help you organize your preparation and deepen your understanding of the case. Your plan should consist of:
a. Determining your client’s and your own goals and objectives.
b. Identifying your client’s and your own true interests underlying the goals and objectives.
c. Developing a strategy for achieving those goals and objectives. Distinguish between needs and wants.
d. Considering various approaches at the mediation, both procedurally and substantively.
e. Realistically determining your alternatives if you cannot reach an agreement through mediation.
f. Considering the other party’s and counsel’s likely true interests as well as the other party’s likely alternatives if no agreement is reached.
California litigators know that cases must be brought to trial within five years or face mandatory dismissal. (C.C.P. Section 583.310). Time periods when “prosecution or trial of the action was stayed” or when bringing the action to trial was “impossible, impracticable, or futile” are excluded from the five-year calculation under C.C.P. Section 583.340.
In another decision throwing parties’ efforts to mediate under the wheels of the five-year rule, the California Supreme Court decided that a trial court order striking a trial date and staying the action following the plaintiff’s agreement to the defendants’ request to engage in mediation and complete outstanding discovery did not operate to toll the running of the five-year period. According to the majority, the “mediation stay” did not amount to a sufficiently complete stay or render the prosecution of the case impossible, impracticable, or futile to effect tolling. Gaines v. Fidelity National Title Insurance Company, et al., S215990 (filed 2/25/16)
The ICC International Commercial Mediation Competition in Paris showcased many different approaches to business mediation and negotiation even within the predetermined format and criteria for performance. Even when cultural differences were insignificant, the mediations often turned in unpredictable directions depending on different personalities and negotiation techniques. This was an excellent demonstration of the many permutations of power play.
The ICC Competition Final at the Maison du Barreau was the perfect example of power play at work. The auditorium was huge, the stage bathed in spotlight. Hundreds of spectators anxiously awaited the final match between the University of New South Wales (Australia) and the University of Auckland (New Zealand). There were no significant cultural differences between the teams.
All of the spectators had access to the details of the conflict – a dispute between a celebrity baker and party planner-to-the-stars over a wedding cake disaster that occurred when the industry-changing icing jointly developed by the two slid off of the cake at the party planner’s daughter’s wedding. Both parties’ reputations, businesses, and cash flow were in trouble. Each sought money damages from the other.
The spectators also had access to the confidential information for each side – the juicy details that once revealed, could lead to a variety of solutions that would satisfy both parties’ many needs and interests.
It was like an edge-of-your-seat TV episode. When – and how – would the pivotal facts be revealed? Would there be tears, hugs, a happy dance? Would the two parties move forward with a clever new business plan that would resolve the dispute and lead to new fame and fortune?
The baker was very emotional. His lawyer often held him back, to make sure he didn’t reveal too much too soon. The party planner was stern. His lawyer had a plethora of issues to address. Both sides were slow to rediscover their longstanding trust as partners.
When the principals finally had a private caucus with the mediator, and the mutual resources to permit a creative solution to both sides’ claims were revealed, the baker was deflated. He was confronted with hesitation, a bit of encouragement, and a laundry list of yet-to-be-addressed questions. The mediation was working, and the solution was in sight, but clearly the party planner and his lawyer put up walls that left the baker somewhat frustrated and his lawyer looking for new issues to raise.
Both teams were strikingly talented, and their professional approaches were superb. How else would they have made it to the final round in an international tournament of 66 teams?
But it was a great lesson to negotiators at all levels, novice and expert. Your personality, strategy, approach, and interpersonal initiatives and responses will influence the negotiation process at all stages. You can hold bargaining power, lose it, or balance it as you work toward agreement. Do you want to keep your opponent guessing? Off balance? Or maybe secure? Do you want to drag the negotiation out or speed it up? As a lawyer, are you a deal-killer or a deal-maker? What does your client want you to be?
Negotiation is an adventure. The journey can be unpredictable. You must be prepared to go off the course you planned. There are many roads to “Yes.”
Many of us often get caught up in our own way of doing things. In Southern California mediation practice, while there are often differences in process determined by counsel, party, or mediator preferences, most participants follow a pretty regular road to mediation in the first place. That’s because the prevailing experience at home is that either courts or a contract “force” everyone into mediation, with the effect of allowing all of the players to remain stalwart in their positions, at least at the outset.
Mediation is supposed to be a “win-win” proposition, right? You never think of there being a winner or a loser in the process. In fact, avoiding a “win-lose” outcome is fundamental to the procedure. So how in the world can there be a construct such as an international commercial mediation “competition,” such as the extraordinary event I am currently attending in Paris?
It’s back. That risky zone in which a case can sneak past you and be subject to mandatory dismissal for the plaintiff’s failure to bring it to trial within five years. California Code of Civil Procedure § 583.310. Most of us never thought we would see the return of that pesky problem after the Los Angeles County Superior Court instituted the one-judge-one-case approach that created tremendous efficiencies in case management and got most parties through trial in under two years.
In a case involving an insurer’s dispute of coverage to pay the settlement of a data breach class action, Columbia Casualty Co. v. Cottage Health System, cv 15-03432 DDP (AGRx) (C.D. Cal. 2015), Judge Dean D. Pregerson of the U.S. District Court for the Central District of California granted a Rule 12(b)(6) motion to dismiss for the plaintiff insurer’s failure to comply with the insurance policy’s pre-filing ADR requirement.
The phone rang, and the caller said: “My partner and I have been in business for four years, and I am pouring my heart and soul into making it a success, almost 24 hours a day. She, on the other hand, doesn’t work nearly as hard, can’t supervise any employees without making them either angry or tearful, spends too much money, and then announces she wants more money. I’m going out of my mind. What do I do?”
Mediation works. All businesses seem to know that is true. Most individuals also seem to know that almost every civil case settles before trial, either before or after considerable dollars are spent on lawsuits, discovery, endless pre-trial motions, and the are-you-kidding-it-cost-HOW-much preparation for trial.