Teddy Snyder

Tag: mediation

  • 50 SHADES OF NEGOTIATION GREY

    No, this post doesn’t qualify as erotica. It’s about the ability to see nuance. Most cases are not black-and-white, no-doubt-about-it, situations. Rather, there are shades of grey. If this were an open-and-shut case, chances are that claim would not be in dispute.
    It’s Part of Empathy
    Being able to see all the facets of an issue enhances your ability to negotiate a settlement. You can best meet your opponent’s arguments if you take the time to put yourself in that person’s shoes long enough to figure out what those arguments are. Then you can best meet them.

    While it is appropriate to research all the facts and law that help predict an outcome,  when researchers choose to dismiss negative findings, they will not be able to constructively negotiate. Only interpreting findings as favorable, a mindset known as confirmation bias, prolongs conflict.

    When initial research reveals negative information, the impulse may be to just keep digging. This attitude manifests itself in the actions of litigators who, for example, keep designating treaters and experts in the hope that somebody will back up their position. An analogy might be to a company which continually engages in research and development, but never actually brings a product to market. That’s not what success looks like.

    Grey Is Stressful
    Uncertainty generates stress. Parties in mediation sometimes tell me how relieved they are that the dispute is over, even when they got a result they see as unfavorable.

    Settlement isn’t about who’s right and who’s wrong. It’s about showing everyone that concluding the dispute is in their own self-interest. Mediation is the place to do that.

  • SETTLEMENT AND THE BOTTOM LINE

    The offer on the table was a good one, but the attorney thought there was hope for something better. Then I took the attorney through the “what if’s.”

    Expenses Matter
    How much will it cost to bring this case to trial? What about experts’ fees? I asked the attorney to create two financial statements, one that showed the net financial result now versus the likely result after more litigation. Viewed in the most favorable light, more litigation produced the same financial benefit in the end. And if the result was not so favorable, prolonging the stress and financial outlay would have a negative financial result.

    Attorney’s Fees
    It costs money to run a law office. In a contingent fee practice, there is a lot of outgo before the reward comes in. When an attorney’s resources are at capacity, the choice is to turn away business or expand staff and space, thereby increasing the cost of running the office.

    I asked the lawyer what his hourly fee would be if he kept litigating. “I’m on contingency. It’s the same.” “No,” I explained, “when your fee is contingent, the longer you work, the lower your hourly rate.”

    For what appeared to be an ego-driven motive, not only was this attorney determined to keep fighting the client’s case for no foreseeable financial benefit, he was undermining his own financial stake in the matter.

    Part of my job as mediator is helping parties, adjusters, and their lawyers see the full range of issues and possible results.

  • SIBLING HATE

    A Minnesota appellate case shows how damaging intra-family business disputes can be.

    The four Lund siblings had inherited equal shares of a trust holding a chain of grocery stores. The oldest sibling sued to force a buy-out of her shares on the ground that she had a reasonable expectation of financial independence and liquidity. She alleged breach of fiduciary duty, unfairly prejudicial conduct, and civil conspiracy. Defendants, including her CEO/brother, claimed that the requested buy-out elevated one sibling’s interests over the others’ and would force the company to take on debt to finance the buy-out. The court threw out some of the claims, but the case continued on the unfairly prejudicial conduct and equitable relief claims.

    The sibs could not agree on a buy-out price, so a trial ensued during which the opposing expert’s valuations were about sixty million dollars apart. In Solomon-like fashion, the court picked a number roughly halfway in between.

    But they weren’t done yet. Both sides appealed. The appellate court largely upheld the trial court, except that the trial court had denied the defendant’s claim that they be reimbursed their $800,000 in legal fees from the trust property. Ruling that the lower court had employed an incorrect standard, that issue was remanded for further proceedings. The Minnesota Supreme Court recently declined review.

    The Real Cost
    After five years of litigation, the plaintiff won her case. If the defense spent $800,000 in legal fees, the plaintiff probably spent a similar amount, perhaps more—a lot more—if the fee agreement included a contingency kicker.

    Undoubtedly, the litigation created friction among the siblings, the full extent of which the public is unlikely to learn. This kind of animosity affects younger generations, too, and ravages family gatherings.

    The judge ordered and the parties agreed to mediation. Obviously, it didn’t take. During the trial, the judge implored the parties to settle, quoting the New Testament and philosopher Reinhold Niebuhr.

    Mediation offered an escape from the costs, animosity and stress of litigation. As these harms escalate, parties who previously rejected settlement may revise their view of what they really need. A benefit of mediation is that parties can agree to solutions, such as family counseling, that a judge is powerless to require.

    The Lesson
    There is no limit on how often parties can come to mediation. If the first mediation was unsuccessful, a second–or third–one may produce results as parties get new information and adjust their views. Mediation can occur while an appeal is pending. At this point, the parties know the full extent of the evidence and the likely outcome. Cases resolve in appellate mediation more often than not. Mediation can limit the damage to the family and its business.

  • ONE THING LIARS ARE REALLY GOOD AT

    While not every liar is really good at lying, many are. In fact, they are so good, that the trier of fact—be that jury or judge—often find them to be credible, more credible than your evidence.

    Humans are actually poor judges of each other’s honesty. While we think we can look someone in the eye or study their body language, statistically these clues are worthless. As mentioned in another post, author Malcolm Gladwell in his book How to Talk to Strangers demonstrates how bad we are at interpreting each other’s thoughts based on observable clues.

    Good liars will swear an oath to tell the truth and then brazenly lie. The trier of fact’s ability to judge a witness’ honesty is unreliable. When cases turn on s/he said—s/he said situations, going to trial is a big gamble.

    Mediation is the better choice.

  • 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.

  • A Real Life Lesson Why It’s Almost Always Better To Settle

    LaQuan Tremell Taylor’s injuries were horrific. The 27-year-old veteran, was robbed, carjacked, and shot in the parking lot of a Kroger grocery store in Atlanta, Georgia. After three weeks in a coma, roughly a year in the hospital, multiple surgeries, and millions of dollars of treatment, plaintiff’s spinal cord injury left him a partial paraplegic with scars over his entire body and continuing pain. Kroger was the primary defendant in his suit for the store’s negligent failure to maintain adequate security.
    Kroger’s insurance stacked thusly:
    $3,000,000 self-insured retention (SIR)
    $2,000,00 ACE American Insurance Company.
    $25,000,000 Starr Surplus Lines Insurance Company
    $25,000,000 Great American Insurance Company Of New York
    Excess above Great American: XL Insurance America and Chubb Group of Insurance CompaniesPlaintiff’s pre-trial demands were within Starr’s coverage limit. But Starr refused to settle. The final judgment exceeded 61 million dollars. It appears that Starr did not attempt to mediate a settlement until after judgment was enteredNotwithstanding its ill-advised choice, Starr refused to pay more than its policy limit to satisfy the judgment. Great American settled the case and on February 11, 2021 sued Starr for reimbursement. The complaint for declaratory judgment alleges that Starr had acted in bad faith and was “stubbornly litigious.” Great American has asked for reimbursement of its settlement contribution plus attorney fees and expenses.

    I see many cases that, like the Taylor case, clearly have the potential to “blow up.” Cases settle when parties are willing to spend the necessary time in good faith mediation and make reasonable settlement proposals. When parties are “stubbornly litigious”, the results can be disastrous.

    And Then There’s . . .
    In workers compensation cases, being “stubbornly litigious” can mean denying requested medical treatment. Often, though, alternative treatments end up being more expensive in the long run. Patients who cannot get treatment through the usual process sometimes end up in emergency rooms, incurring a much larger bill.
     

    Authorizing a quick, “expensive” treatment can lead to early claim closure and a less costly claim overall. Sometimes the injured worker ends up undergoing the procedure which was originally requested anyway. And don’t forget the administrative expenses of utilization and bill review.Patients aren’t doctors. Patients are not writing the Requests for Authorization. Almost every patient will prefer conservative treatment to life-threatening surgery. Sure, there are malingerers and patients who exaggerate their pain in the hope of scoring heavy-duty medication or just gaining attention. And, yes, some doctors overtreat to increase their fees. Independent doctors, claims personnel, and defense attorneys have heightened their awareness of those patterns.

    Don’t lose sight of the forest for the trees. Like Starr Surplus Insurance, a “stubbornly litigious” stance can end up costing you more in the end.