Introduction
Prior
to the mid 1990’s, there was little, if any, emphasis on alternative dispute
resolution within the state court system in the state of Tennessee. As of that point in time, a number of states,
for example, Florida, had recognized ADR as a viable component of the litigation
process for a number of years. Rule 31
was adopted by our Supreme Court in 1995.
Prior to that time, we did not have any formalized or organized process
for ADR within this state.
In
accordance with Rule 31, a multi-day civil mediation training course was
outlined and approved and those courses began to be taught in Tennessee in 1996.
Being
somewhat slow to change and set in their ways, many attorneys did not readily
grasp mediation or other ADR concepts, and there was a general lack of
understanding as to why, how, or under what circumstances a mediator, a third
party neutral, an outsider to the litigation, could effectively facilitate a
resolution. Many viewed ADR as yet
another passing fancy, something that would not endure the ages.
However,
it appears that mediation within this state has enjoyed and continues to enjoy considerable
success and popularity, evidence of which comes from resources of the ADR
Commission. As an example, the number of
mediations reported by mediators to the ADR Commission during the last several
years were as follows: 6,176 in 2011;
6,118 in 2012; 5,716 in 2013. Compare
these statistics to information contained within the Annual Report of the
Tennessee Judiciary for the fiscal year 2012-2013. By comparison, there were reported to be,
statewide, 318 jury trials. Based upon
that information in conjunction with the overall picture, we can conclude that
mediation has become and continues to be an extremely important component of
our overall dispute resolution framework.
Although
our courts certainly have the authority and discretion to order mediation, in Tennessee
we continue to view the process largely as one which is voluntary and not court
ordered. In fact, the overwhelming
majority of (non-divorce) mediated cases are mediated voluntarily and without a
court order.
When
mediation is entered into with appropriate preparation, skill, and judgment the
chances of resolution of the matter in dispute are very substantial.
The Strategy and Importance
of Client Involvement in
Dispute Resolution
There
is an insightful recent (January, 2014) Iowa Law Review article entitled “The
Psychology of Procedural Preference: How
Litigants Evaluate Legal Procedures Ex Ante”, 99 Iowa L. Rev. 637. The essential proposition put forward, as
supported by the empirical data, may be in conflict with what some of us, as attorneys,
believe as regards the perception of our clients. While we may rely upon our experiences or
intuition as to what clients prefer, our instincts may be wrong. Do we understand the dispute or the
negotiating objectives from the client’s perspective? What appears to have emerged, through studies
on client (litigant) perception is that:
·
Process is critically important. The need to be heard and understood (and in a
mediation context, the opportunity to be seen, heard, etc., by a third party
neutral) seems to provide the client a heightened level of comfort and a greater
sense of fairness. There is a greater
preference among clients for procedures subjectively deemed by them to be most
fair.
·
There are
differing levels of control clients/litigants are comfortable in yielding to
third parties (judges, juries, arbitrators, mediators).
·
Older folks might be less attracted to third
party control than younger folks.
·
Variables can be important (relationships,
relative strengths or weaknesses of position, whether party is a plaintiff or a
defendant, types of dispute, cultural issues). Here are some of the results of
the study leading to the Iowa Law Review article.
·
Of the dispute resolution procedures evaluated
(examples: bench trial before a judge,
trial before judge and jury, binding arbitration, non-binding arbitration, mediation,
attorneys negotiate with client present, attorneys negotiate without clients
present), the procedures believed by clients to be the most preferable were as
follows: bench trial without jury;
mediation; attorneys negotiate with clients present; Id. pp. 663, 664. No one of these three was statistically
preferred over the other two. Id. pp.
673, 674;
·
Litigants preferred mediation to non-binding
arbitration; Id. p. 664;
·
Preferences for mediation and “attorneys
negotiate with clients present” were essentially the same; Id. p. 665;
·
Non-binding arbitration was preferred over
biding arbitration; Id. p. 665;
·
Litigants preferred to be present with the
attorney while attorney is negotiating;
·
Litigants do tend to prefer non-adjudicative
procedures. Id. p. 674.
So, what is the “take
away?” According to the law review
article:
“Litigants want to be
present for, and have the option to informally participate in the resolution
process. This finding may come as a
surprise to attorneys who assume that they should conduct settlement discussion
on their own. Although there might
sometimes be strategic reasons for excluding litigants from settlement
discussions, lawyers should anticipate a desire on the part of clients to
observe or participate in the discussion themselves, and counsel clients on the
advantages and disadvantages of that option in light of their particular case.” Id. p. 675.
These
observations should give all of us, as legal practitioners, some significant
guidance as to strategies in regard to working with the clients in the arena of
dispute resolution. Importantly, we need
to understand that our clients in varying degrees may not like us. They may not trust lawyers, generally. They do not necessarily like confrontation. They are skeptical about our legal
system. They are uncomfortable. We need to meet with them, spend time with
them, and educate them. We need to
address their concerns and their uncertainties in a meaningful way. We need to design for them and provide a
process that will work well for them.
Types of ADR Proceedings Addressed by Rule
31
Much
has been written about the art and science of negotiation. Negotiation has been referred to as a first
step in attempting to resolve disputes; as the most frequently used method of
dispute resolution; as involving joint responsibility and authority for
decision making; as a voluntary and non-binding process; as a process where
parties communicate in good faith to identify, discuss, and resolve issues; as
a process which would continue as long as progress is made. See, Grenig,
Alternative Dispute Resolution, 3d Ed., 2005 Thompson/West, at p. 25.
Our
Rule 31 describes at least six distinct types of ADR, six different settlement
methods or processes, as follows:
·
Mediation
…. An
informal process in which a neutral person conducts discussions among the disputing
parties designed to enable them to reach a mutually acceptable agreement among
themselves on all or any part of the issues in dispute (Rule 31§2 definitions
(i)).
·
Judicial
Settlement Conference
Trial
courts are authorized to conduct Judicial Settlement Conferences. However, a Judge who participates in a
Judicial Settlement Conference is precluded from presiding over the trial or
any other contested issues in that matter.
(Rule 31, §20)
A “Judicial Settlement Conference” is a
mediation conducted by a judicial officer as set forth in section 20, herein. (Rule 31,§2(g))
·
Non
binding arbitration
These
are authorized to be conducted by trial courts, with the consent of the
parties. A neutral considers facts
an argument and renders a nonbinding decision.
·
Case
Evaluation
These
can be conducted by the courts, with the consent of the parties. Neutrals serving in case evaluations are
subject to the standards of conduct for Rule 31 neutral.
·
Mini
trials may be ordered only with the consent of the parties.
Neutrals
in Mini-Trial are also subject to standards of conduct for Rule 31 neutrals.
·
Summary
Jury Trial
Summary
Jury Trials may be ordered only with the consent of the parties.
Preparation
For The Mediation- The Case And The Timing
·
Do you realistically know enough about your case
(or your opponent’s) to understand the strong and weak points?
·
Has there been sufficient formal discovery, or
informal discovery (exchange of information), such that the lawyers and clients
are not swinging at each other in the dark?
·
Has information been exchanged with sufficient
time for it to be realistically absorbed and evaluated by others?
·
Have the lawyers really talked (verbal
communication, not just exchanges of emails)?
Has there been communication regarding concerns, problems, in the
case(example: medical causation) and have problems been shored up, if possible?
·
Identification and, if possible, elimination of big
surprises for either side!!
·
Consider the elephant in the room (or at some
far away place), the insurance company
a)
Do everything you can to get the claims
professionals to the party. When they
are equally “invested” in the process, the chances of success go up
greatly. But don’t count on getting them
to the party. Maybe you can take the
party to them. How about use of Skype,
GoToMeeting, or other forms of video conferencing?
b)
The old line, “I only have what I have and
cannot get anymore.” This should be the
subject of candid and straight forward dialogue between mediator and counsel
before the mediation, if possible, wherein counsel is strongly urged to involve
the adjuster in a meaningful way. The
mediator’s due diligence should include at least an overture to get on the
phone with counsel and adjuster to urge adjuster’s meaningful involvement.
c)
Despite best efforts to take charge of this
situation, one can be left with less than optimal circumstances. Encourage the attorney who does not bring the
adjuster to offer an explanation to the others (and why it will not/ should not
adversely impact the mediation). The
mediator should not be placed in the position of trying to explain or justify
that circumstance, and could lose credibility, or appear disorganized, by
trying to do so.
d)
Has the case been “round tabled” by the company?
·
Demonstrative Exhibits, Power Point, etc.
(consider: Who is going to see them and when they may have the most effect on
the decision making of the other side)
Preparation For
Mediation- The Client
·
Typically more of a concern for the plaintiff
and plaintiff’s counsel, especially if insurance carrier is involved in the
defense. But, can apply in major way to
certain defendants, as well. (Examples:
limited insurance coverage and potential excess; construction defect cases
where insurance carrier may rely on exclusions as to certain damages, other
“reservation of rights” situations; warring relatives.
·
Managing expectations and encouraging
flexibility and open-mindedness. Prepare
the client for the process, the involvement of the mediator, the concept of
compromise, “acceptance” versus “happiness”.
·
Be a leader.
The client hired you and needs your advice. The client needs your help in
overcoming suspicions and distrust.
·
Encourage your client to act appropriately, as
they are being watched and evaluated by others and how they present themselves
will have an impact on the other side.
Preparation
For Mediation- The Mediator
·
Selecting the mediator. Match the mediator to dispute type and/or
personality of client and/or mediators track record with you or others and/or
whether surroundings are professional and conducive to dignity the process
deserves. If necessary, and you do not
know the mediator, call and interview. Comfort,
trust, style, effectiveness should all be factored into the discussion.
·
Help the mediator be effective. Equip mediator with information sufficient
for mediator to be credible, understanding, and knowledgeable. Point out and warn mediator about client
idiosyncrasies and tendencies. Consider
well-organized, confidential or nonconfidential mediation statement and/or
telephone conference with mediator to candidly discuss the case in detail. Help the mediator “hit the ground running.”
·
Help the mediator design a process, if necessary
unique to your case, that gives the mediation the best chance for success. Consider:
1.
A formal opening versus no opening (the fragile
client; the bully lawyer; devisive issues
2.
Some
people do not feel comfortable in the same room with each other.
3.
Some
people need to vent – a lot.
4.
Complex cases: should mediation be done in
pieces
5.
Teleconferencing or video conferencing of
important players (Skype, Facetime, Go
To Meeting)
6.
Figure
out a way for decision makers to have “skin in the game.”
7.
No paint by the numbers
The Mediation Session and the Challenges
As the
mediation session unfolds, keep in mind that, usually, one or more of the
participants has never been involved in this type of process. The participants may be skeptical, tired,
frustrated, mad at others in the litigation (sometimes, mad at their own
lawyer), obstinate, opinionated, nervous, irrational, indecisive, emotionally
“wedded” to their facts and intentionally oblivious as to other facts. There are important ideas that can be
stressed, by both counsel and the mediator to deal with these typical emotions and
presentations. Participants should be
assured that they are a part (or the most important part) of the
decision-making process. They should be
made comfortable. They should be assured
that no one has the power to make them do anything (other than a judge or jury-
not part of this process). They should
be told to expect frustrations and that they will be given an opportunity to
work through those. They should be
reminded frequently that they are the decision makers, and that, if they cannot
(or will not) decide, others (judge, jury) will decide for them.
The mediator, counsel, and litigants should expect and
anticipate that challenges will occur during every mediation. Challenges can present themselves in various
forms.
·
A litigant, or representative, or counsel who
does not appear to have realistic views as to facts, expectations, potential
outcomes, etc. Strategically, in many
instances, these issues can be addressed by reflective questions, which seek to
find the basis of, or “test” the reliability of such positions, and draw out
the context of the litigant’s position.
Here are some examples of reflective questions:
Q:
Do you believe you may be motivated to see things a certain way?
(Subquestion) Q:
What do you believe those motivations could be?
Q:
What expectations do you come to the table with?
(Subquestion) Q: Do you believe those expectations are
realistic?
(Subquestion) Q: What causes you to believe those
expectations are realistic?
Q:
Do you think you might see things differently if you do not have these
particular motives or expectations?
Q:
Have you talked with others who share (or do not share) your thoughts as
to your expectations or motivations?
(Subquestion) Q: What have the others told you?
Q:
If this case does not settle and has to be tried, do you believe the
decision makers (judge or jury) will share your expectations or your motives?
(Subquestion)
Q: If the answer is “yes” what
causes you to think so?
·
Emotionally charged mediations can occur in
cases where there have been real and serious life-changing events, spousal
claims in wrongful death cases, disputes between siblings (wills, probate,
property disputes), and employment cases.
One should not expect that these types of disputes can always be settled
in one mediation session, and gentle encouragement should be provided to help
the parties understand, appreciate, and work around the strong emotions. Venting has to occur, and sometimes occur
more than once, and this process can take significant time.
·
Organizing and dealing with multiple moving
parts. Mediations involving business
disputes, multiple parties, multiple events or injuries, can be very
challenging, and often lend themselves to phased discussions and more than one
session. Again, process is very important, and sometimes the process itself is
the subject of an initial mediated understanding.
·
Nonproductive negotiation occurs when parties
are (usually due to a flawed strategy) very far apart, far from any reasonable
settlement range, and only willing to move in very small increments. Patience, mixed with messaging, such as
proposed brackets or negotiating ranges can produce progress that may not be
readily apparent. This is where “evaluative”
help and assistance from the mediator can move the process along.
·
The “helper” who may not be informed, may not be
knowledgeable and may not be a benefit to the process. If the helper s not helpful, get him/her out
of the room. It is not the helper’s
case.
·
The person who says “I just want to tell it to a
jury.” This is usually a defense
mechanism and the statement is typically not accurate.
·
Not enough information has been exchanged,
gathered, etc.
·
The big surprise
Judicial
Settlement Conferences
Judicial
Settlement Conferences are authorized by Rule 31, Section 20 of the Rules of
the Supreme Court of Tennessee.
Section 20—Trial court judges are authorized to conduct
judicial settlement conferences.
Settlement conference judges are precluded from presiding over the trial
or any other contested issues in the matter.
[Judicial settlement
conferences can be conducted for cases in another division of circuit court or
circuit court cases outside the home jurisdiction of the settlement judge]
Rule 10, Canon 2, of the
Tennessee Supreme Court Code of Judicial Conduct provides:
Rule 2.6 (B) A judge may encourage settlement of disputed
matters in a proceeding but shall not act in a manner that coerces any party
into settlement. A judge who
participates in a judicial settlement conference shall not preside over the
trial or any other contested issue in that matter.
Comment [2]: If a
judge participates in the settlement of disputes, he or she should be careful
that efforts to further settlement do not undermine any party’s right to be
heard according to law. Among the factors
that a judge should consider when deciding upon appropriate settlement practice
for a case are (1) whether the parties have requested or voluntarily consented
to a certain level of participation by a judge in settlement discussions (2)
whether the parties and their counsel are relatively sophisticated in legal
matters, (3) whether the case will be tried by the judge or a jury, (4) whether
the parties participate with their counsel in settlement discussions, (5)
whether any parties are unrepresented by counsel, and (6) whether the matter is
civil or criminal.
Comment
[3] Information obtained by a judge during a judicial settlement conference is
not subject to the safeguards of the rules of evidence and procedure and may
place the trial judge in an untenable position as to motions for new trial,
judgment notwithstanding the verdict; additurs and remittiturs; credibility
determinations; or other issues in which the judge may not be able to ignore
facts that he or she learned during the settlement proceeding. Therefore it is not appropriate for the same
judge to participate in a judicial settlement conference and, if such
proceeding does not result in the resolution of the matter, to subsequently
preside over the trial of the same matter or participate in any other contested
issue in that matter. [See also Rule
2.11 (A) (6) (e)]
In light of the Rules of
Judicial Conduct, the following guidelines are suggested:
1.
Obtain
written consent of parties
2.
Set up guidelines for confidentiality and other
rules
What cases should consider
judicial settlement
1.
Cases in
which costs are a concern or when the settlement split between the parties does
not justify the expense of a mediator—judicial settlement conferences are not
taxed with the time of the judge.
2.
Cases in which one party or the other has an
unrealistic view of the value of the case and would benefit from the judicial
experience of someone who has seen local juries’ response to certain types of
cases.
3.
Judges can help initiate settlement discussions
: sometimes lawyers or their clients can
perceive the initiation of settlement discussions as a sign of weakness but the
“judge asked us to consider settlement” can help break that impasse
4.
Cases that are far enough into discovery to have
a good evaluation of the case with pending deadlines that will encourage
parties to be realistic based on an impending trial date or discovery cut-off.
5.
Cases in which both parties are willing to
actively participate with clients with full authority present for the
conference.
Proposed
Standing Order for Judicial Settlement Conference (draft for discussion)
1.
Presettlement Conference Demand and
Offer. At least 14 days prior to the
settlement conference, plaintiff’s counsel shall submit a written itemization
of damages and a settlement demand to defense counsel with a brief explanation
of why the settlement demand is appropriate.
No later than seven (7) days prior to the settlement conference, defense
counsel shall submit a written offer to plaintiff’s counsel with a brief
explanation of why their offer is appropriate.
If settlement is not achieved, no later than three(3) business days
before the settlement conference, copies of both letters shall be provided to
the Judge’s Judicial Assistant. Do not
file the letters with the Circuit Court Clerk’s office.
2.
Parties with ultimate settlement authority must
be personally present. Having a client
with authority available by telephone is not an acceptable alternative, except
under the most extenuating circumstances.
The Court will generally set aside three hours for each conference and
it makes it difficult for a party who is not present to appreciate the process
and the reasons which may justify a change in one’s perspective.
3.
Mediation format. The Court will generally use a mediation format:
opening presentations by each side followed by a joint discussion and private
caucusing by the Court with each side.
The court may start with a facilitative approach [aid the parties in
communicating with each other] but reserves the right to move the process to an
evaluative approach [the court makes a settlement recommendation based upon
experience]. The Court encourages all
parties to keep an open mind in order to re-assess previous positions and to
examine creative means for resolving disputes.
4.
Absent good cause, the Court will not permit
parties to raise their demand or lower their offer during a settlement
conference. The parties and counsel will
conduct settlement conference discussions in a civil manner with each party
addressing the other with courtesy and respect.
5.
Parties should be prepared to discuss the
following matters at the Settlement Conference:
a.
Objectives in litigation
b.
Strengths and weaknesses of the case
c.
Understanding of the opposing side’s view of the
case
d.
What are points of agreement or disagreement?
Factual? Legal?
e.
Are there items that must be included in any
settlement, if so, what are they? (The parties are expected to be prepared to
discuss these items at the beginning of the mediation)
f.
Outstanding liens? (The parties are expected to
have lien issues resolved prior to settlement conference or bring a
representative of lien holder to the conference)
6.
Counsel shall provide a copy of this Standing
Order to the client and discuss the point with the client prior to the
settlement conference.
Conclusion
Mediation should not be viewed as a single
point in time. It is a deliberative and
strategic process, which should begin weeks in advance with preparation of the
case, the client, information flow and the mediator. A successful outcome is highly dependant on
each side having and sharing enough information as to strengths and weakness of
their own case and their opposition’s so as to be able, with the mediators
skill, to arrive at a realistic resolution. While the mediator’s functions can
be several and varied his or her overarching function is to put forth optimum
effort to assist clients and their counsel in understanding and appreciating
the effect of issues and facts on the case and, where possible, implement and
encourage strategies designed to maximize the chances of success, and to
encourage a resolution that is a certainty and within the control of the
litigant.