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WINNING ADR FOR PLAINTIFFS BACK TO CURRICULUM VITAE PAGE
by David J. Blair
In the years since leaving the bench I have mediated and arbitrated cases large and small, simple and complex, city and rural, and from professional negligence to dog bites, with some of the finest trial lawyers in the Upper Midwest including many outstanding representatives of the plaintiff’s bar. I still love this work and learn something new every day (many of you are my teachers), but certain successful techniques and strategies are repeated so frequently by excellent lawyers that they have become unwritten rules of effective ADR practice. I offer these mediation and arbitration tips to you in the spirit of “winning ADR for plaintiffs”:
1. Mediation is Negotiation. Which means, of course, that mediation is not trial. Thus, some of your favorite trial techniques will be appropriate for mediation (how do you convince a stubborn jury to take an action beyond its expectations?) but others will not (would you really wish to insult someone whose acquiescence is a key to your client’s success?). As with trial, planning and preparation are keys to success. Prepare your case, educate your client, emphasize strengths and acknowledge weaknesses, know your opponent, anticipate countering arguments, and school the mediator with a good preconference statement of your client’s position.
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2. Change Your Position, Not Your Mind. The world looks different from one side of the table to the other. This is a great truth of negotiation. It prevails at the beginning and equally at the end of every successful mediation. Parties and trial lawyers do not change their minds about the essential fighting issues of the case, but they do and will change their positions in consideration of perceived risks. Thus, mediation advocacy is targeted on enhancing the perception of risk on the other side of the table (the risk of a bad result vs. a good one; a good jury vs. a bad one; a high number vs. a low one; a good break on evidentiary rulings and dispositive motions vs. an adverse one) and not on the much more difficult proposition of actually changing minds. There is some risk on both sides of every contested issue. Negotiation involves the process of adjusting the client’s expectation in response to the reality of risk. Mediation is simply an efficient way to discuss and negotiate on the value of risk.
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3. Settlement Numbers vs. Jury Numbers. What is a settlement number and what is a jury number? This is shorthand language to describe the reality that cases ordinarily will not settle for values which ignore the real risks on both sides of the table. A value which represents a clear win for one party means that the case has been tried and all important risks have been overcome. This is a jury number. On the other hand, a value which represents a fair sharing of risk (according to the risks which actually exist in the case) is a settlement number. Negotiations begin with jury numbers and, if they are to succeed, move inevitably to settlement numbers.
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4. Most Negotiations Are Positional, So Plan Accordingly. Why do negotiators start high (maybe really high!) on one side of the table and start low (“your offer is an insult to my client”) on the other side? This is a matter of caution, expectations, and the mutual search for settlement numbers. Negotiators are cautious because they do not know how the other side intends to bargain and they must reserve “room to move”. There is an expectation, usually shared, that initial numbers will be on the outer limits of reasonableness. The question is, when will one party show a real settlement number and how will that number be perceived by the other side. Further, how will the other side know that a real settlement number and not a negotiating number has been revealed? Negotiation involves the communication of this information through numbers and messages, carefully orchestrated and planned, but with flexibility to accommodate unforeseen developments. Positional negotiations simply reflect this reality.
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5. Stretch Your Opponent In The Context Of His Or Her Objectives. Trial lawyers of necessity become skilled negotiators. Ask a defense lawyer in confidence, “What will it take (not necessarily what will you pay?) to get this case settled?” and the response will often be a remarkably accurate prediction of ultimate settlement value. Ask a plaintiff’s lawyer in confidence, “What does the insurance company want to pay (not necessarily what will you take?) to get this case settled?” and the response will often be a remarkably accurate assessment of typical settlement values in similar cases. Thus, experienced lawyers do indeed know what the other side is likely looking for in settlement value and the objective becomes stretching that initial calculation of value to a more favorable result. To put it another way, there is often a difference between what a payor “wants to pay”, “will pay”, and “might pay” to settle the case. The first number is a preconference assessment of settlement value. The second number is a fall-back position if the first number fails to settle the case but the parties are close enough to be hopeful. The final number is usually a “maybe” position which might be offered to close or compromise a very small difference of opinion.
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6. Get To Real Numbers, Then Get To Best Numbers. Most negotiators have a target number which is intended to be offered at some point to settle the case. The question ought to be, not whether but when? If you have a real or target number in your pocket which is deemed to be reasonably favorable to your client, the only question ought to be when it will be revealed to the other side. This is no time for anger or hurt feelings. Your target number does the client no good until it is face up on the table. Thus, plan to show the number and do so at the most sensible moment. As with any compromise number (if it really is a compromise), the result should be a shifting of risk from your side to the other. Then, if you get a real or target number in return (and the other side should be saying so loud and clear), move on to best numbers and settle the case.
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7. Understand The Real Power On Both Sides Of The Table. All negotiations begin with “a search for the net payor”. That is, if the negotiation is to be successful who will be writing a check to whom? Sometimes this question of identifying the net payor takes many hours and sometimes it is obvious from the beginning, but sooner or later the question has to be answered before anything of a productive nature can happen. I make this perhaps too simple point because payors and payees have power in negotiation which is precisely equal but of totally different sorts. In a voluntary negotiation the ultimate power of the payor is to pick the number. The ultimate power of the payee is to accept or decline the number. These powers are equally balanced, but the difference between them means that plaintiff’s counsel should bargain with the understanding that, in a voluntary process, the owner of the checkbook will indeed pick the settlement number and, accordingly, that plaintiff’s strategy should be targeted upon enhancing the defendant’s number. This means that defendants should be encouraged, cajoled, threatened and persuaded to put down the best number which will ever be offered in the case. Then, and only then, does plaintiff exercise the equal power of acceptance or rejection. The common sense lesson for plaintiff’s counsel is never lose sight of defendant’s numbers in the give and take of negotiation. Plan your strategy and numbers to maximize the defendant’s values. Then, make your choice.
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8. If You Need Help, Ask The Mediator. Mediators are neutral but not passive in the negotiation. Their job is to get the case settled. Thus, ask for help if you need it. Mediators will visit with your client about the reality of expectations, arrange hallway conferences with opposing counsel, carry informal messages which are less than offers but more than hot air, and generally do what needs to be done in furtherance of settlement. Do not ask the mediator to take sides. Let the process work, because it usually does.
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9. Play The Odds. Most cases settle at mediation, not because defendants get a bargain but because it makes sense to buy risk and stop the bleeding. My observation and experience are that, more likely than not, the settlement value produced through mediation will exceed the probable verdict value at trial. This is not always so (your critical role is to know when it is and when it isn’t), but the odds are that verdict value will not exceed mediation value. Play the odds. Take risk only on an informed basis. This will simplify and harmonize your professional life.
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10. Time Is On Your Side. No one knows when a case will settle. In the mediation process, it usually takes time. And time is on your side. The odds favoring a successful settlement increase with the passage of time. Accordingly, avoid if possible an early adjournment of the mediation conference and gear for the long haul. Good settlements take time to brew.
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11. In Arbitration, Understand The Process. Arbitration is a private trial to a private judge (or panel of judges) with bargained rules and no effective right of appeal. Some cases play better to a traditional jury of lay persons, and those cases should be tried at the courthouse unless your client cannot tolerate the strain of a public trial or unless real incentives are offered by the other side to entice you to arbitrate. Discovery is limited or nonexistent in arbitration. Cases move quickly to hearing. All relevant and material evidence is admissible, including hearsay. Rulings are brief. Results tend to be middle of the road. My advice is to consider arbitration only with an organization which has printed rules to give form and fairness to the proceeding. In the alternative, bargain with the other side for specific rules applicable to your case. As with any bench trial, pick your neutral with care.
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12. In Arbitration, Control The Process. Arbitration is entirely a creature of contract. Your client won’t land in arbitration without a prior agreement to do so. This agreement is the opportunity to control the arbitration process in a manner consistent with the case, the amount in controversy and your client’s temperament and resources. So do give thought to procedure, motions, discovery, witnesses, venue, privacy, confidentiality, evidence, arbitrators, hearing date, time for ruling and form of ruling. It is all within your control if you utilize the power of the arbitration agreement to do so. Also, consider the efficacy of a high/low or baseball arbitration format to eliminate or control risk in appropriate cases.
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13. In Arbitration, Be Careful Of Fee Issues. Here follows some straight talk about hiring and paying arbitrators. Of course, this too is a matter to be negotiated by the parties in their arbitration agreement. Most arbitrators have an hourly rate for professional time and travel which should be honored by the parties and which may be confirmed to the neutral. But not all negotiated matters should be disclosed to the neutral. My advice to plaintiff’s counsel is that agreements by the parties to share equally in the compensation of arbitrators should be shared with the neutral and that agreements for such fees to be paid only by the defendants ought never to be shared with the neutral. I am making no assertion about honesty or dishonesty. It simply makes sense to avoid the situation where a neutral arbitrator could feel more obligated to one party than to the other.
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I hope these tips are helpful to you. See you in ADR!
Copyright 2003 Law Office of David J. Blair, P.C.
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