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National Academy of Distinguished Neutrals – MdMediators.org

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The National Academy of Distinguished Neutrals is pleased to announce the launch of its Maryland Chapter – the “Maryland Academy of Mediators & Arbitrators” (MAMA) – online at www.MDMediators.org. 

Just 8 attorneys and former judges have been recognized as Charter Members of the Maryland Chapter, including most of the state’s most widely-accepted ADR professionals. The MD Chapter has an appointed Executive Committee which includes 3 leading local ADR practitioners: Jonathan Marks (Bethesda), Judge Steven I. Platt (Annapolis) and Sean Rogers (Leonardtown). 

Include the availability of the following neutrals:

 All Maryland Calendar Members



Non-Calendar Members:

The Academy’s new website is designed to “make life easier” for local attorneys, counsel, adjusters and legal support staff. www.MDMediators.org allows firms to quickly find a suitable neutral by identifying preferred practice criteria or dispute types, navigating straight to a roster of trusted local mediators and arbitrators. A majority of the Academy’s members also publish their availability calendars online for the benefit of clients. This allows the selection of a neutral and the scheduling of appointments to be greatly expedited for all parties involved. 

MDMediators.org is connected to the Academy’s national www.NADN.org database, already in wide use by attorneys across more than 30 state bars, including Alabama, Arizona, California, Colorado, Florida, Georgia, Louisiana, Mississippi, New York, New Jersey, the Carolinas, Tennesse & Texas.

In 2013, NADN was named Neutrals Database Partner to the national defense bar association (DRI) and the national plaintiffs bar (AAJ, formerly ATLA), providing these association’s 40,000+ litigators with vetted biographies of the nation’s top-rated mediators and arbitrators, via the DRI and AAJ websites. Only ADR professionals widely respected by local defense and plaintiff firms are invited to submit bio materials for review by NADN and state committees. 

“We’re delighted to welcome these top-rated neutrals to form the Maryland Chapter of the Academy,” commented Darren Lee, Executive Director of NADN. “We’re confident that the NADN database will prove as useful to litigation firms in Maryland as it has to other state bar communities in recent years.”

The National Academy of Distinguished Neutrals (NADN) is an association whose membership consists of mediators and arbitrators distinguished by their hands-on experience in the field of civil and commercial conflict resolution. As of June 2014, the association has over 900 top-tier ADR attorneys and judges confirmed as members in each of the 50 states, making it the largest free online roster of vetted civil mediators and arbitrators in the nation. Membership to the Academy is by invitation-only, with a strict peer-nomination vote and extensive client-interview vetting procedure, intended to ensure that only the top 5-10% of civil ADR practitioners in each state are invited to join the association. For more info, please see www.NADN.org/about

For further info regarding the National Academy of Distinguished Neutrals, please contact Rose-Anne Raies (roseanne@nadn.org) or visit www.NADN.org/about

THE NATIONAL ACADEMY OF DISTINGUISHED NEUTRALS 104 Churchill Way, W. Palm Beach FL 33411 • Tel: (813) 600-5678 • Fax: (866) 257-4698 • www.NADN.org

In-Depth Biographies and Calendars Now Available At www.MDMEDIATORS.org

National Member Directory online at www.NADN.org/directory

USING EVALUATIONS IN MEDIATION

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USING EVALUATIONS IN MEDIATION 

Dwight Golann [1] and Marjorie Corman Aaron [2]

 

  1. Introduction

Evaluation is a controversial issue. Some mediation theorists believe that the technique has no place in “true” mediation, a purely facilitative process in which parties are left free to make their own judgments about the merits of a case without interference from the mediator. [3] We hold a different view. Evaluation is a legitimate weapon in the mediator’s arsenal, one that can be either effective or explosive depending on how and when it is used.

 

  1. Evaluation Defined

What is evaluation? It is a process in which a neutral expresses an opinion as to the likely outcome or value of a legal claim or defense were it to be adjudicated. Evaluation can focus on either a single issue or on the overall result in a case. It can be expressed in ranges (“the damages could range from $25,000 to $75,000”); numeric probabilities (“40% chance”); or as a precise number (“a $100,000 case”). An evaluation can be expressed with certainty (“The plaintiff will win … “) or studied vagueness (” I have some doubts about… “). Evaluation is sometimes hard to distinguish from “reality testing.” Almost all mediators are willing to reality test-that is, to question disputants about the strengths and weaknesses of their cases. In this role, a mediator acts as a devil’s advocate, pushing the disputants to become more realistic without completely revealing his or her personal opinion about the merits. However, as mediators become more and more familiar with the facts and arguments, it is almost inevitable that they will form views about how a court would rule on a case. Parties, not expecting mediators to be potted-plants, are aware that the judgment-formation process is going on.

 

Mediators may be less successful than they think at hiding their opinions about the merits. Reality testing is a spectrum in which the line between mere testing and evaluation is not always clear. For example, a phrase such as “What are your thoughts on the causation issue?” is unlikely to be controversial. But such commonly-asked questions as “Do you think there’s a problem on causation?,” “What would you say in response to their argument on causation?,” “Don’t you have a causation problem here?” or “You don’t think that’s an issue?” are increasingly likely to be interpreted as evaluative opinions. Even if the language used by a mediator is scrupulously neutral, his or her feelings about the strength of an argument may well show unconsciously in facial expressions and body language. It is likely that litigants perceive evaluation going on in many situations where a mediator would describe behavior as “reality testing.” The fact that evaluative input of this nature is common in mediation makes it important for mediators to understand how to do an evaluation properly, and for lawyers to know when to request that such techniques be applied.

 

III. Benefits and Dangers 

Like most other tactics, evaluation has both potential benefits anddangers. In the case of evaluation, however, both the risks and the advantages are relatively large.

.

  1. Benefits

An evaluator’s primary goal is to change litigants’ assessments of the strength of their adjudication alternatives. Often both sides in a legal dispute honestly believe that they are likely to win in court. Mediators find that when parties put their predictions in terms of percentages, their forecasts often total 150% or more; that is, each side thinks that it has a much better than even chance of prevailing. Given these clashing predictions, it is not surprising that even good faith negotiations often reach impasse. The causes of such misjudgments are complex. Psychologists have demonstrated, for example, that people tend to form perceptions of situations quickly, then unconsciously ignore any information that contradicts their view, a phenomenon called selective perception. People’s judgments are also influenced by their roles in litigation, an effect known as advocacy distortion. For example, in an experiment at Harvard Law School, students were given identical files describing an auto accident, then asked to evaluate the plaintiff’s chance of winning in court. Those assigned the role of lawyer for the accident victim assessed her chances of prevailing at a mean of 65%. By contrast, students who were given the same case file, but told that they represented the defendant insurance company gave the plaintiff only a 48% chance. Similar discrepancies appeared in the students’ estimates of the damages the plaintiff would recover if she won: “plaintiffs” placed the damages at a mean of $264,000, while “defendants” projected only $188,000. Harvard Business School students asked to carry out the same study showed very similar biases. These kinds of advocacy distortions are nearly universal. [4]

 

 

 

 

Evaluation can cut through litigants’ misjudgments about the merits of a case. When disputants hear that a neutral person, after studying the facts and listening to the arguments, disagrees with their predictions of victory, they are motivated to look again at the case and ask what the evaluator has seen that they have not. Evaluation can thus help disputants overcome the impact of selective perception, advocacy bias and other factors that distort parties’ assessment of the merits. An evaluation can also satisfy psychological needs. It may give litigants the emotional experience of having a day in court, in which they can present their arguments to a neutral person. If bargainers realize that concessions are necessary, but do not want to move from entrenched positions without having a rationale, an opinion can provide the necessary psychological cover. Similarly, insurance adjusters, government officials, and others who must answer to supervisors and constituencies outside the mediation, often welcome an evaluation because they can use it to deflect after-the-fact criticism of their decision to settle. Finally, evaluations can help to resolve internal disagreements within a bargaining team, for instance by assisting a litigator who sees serious risks in a case persuade an unrealistic client of the need to settle.

 

 

  1. Dangers

Unfortunately, evaluations pose dangers that may outweigh their benefits. First, an evaluation may freeze the bargaining process. Once the parties to a mediation know that an evaluation is coming, they are likely to stop negotiating: After all, why confront painful decisions about concessions when the neutral will soon vindicate one’s position? But once the evaluation is given, it may be treated as a “take it or leave it” offer. After a respected outsider has stated the “right” or “fair” result in a case, it is very hard for a defendant to offer more, or a plaintiff to accept  less, than the number the evaluator has set. The strength of this “take it or leave it” effect is inversely proportional to the confidence of the negotiators in themselves and in the evaluator. The more concerned a bargainer is about being second-guessed by a client or supervisor, the less willing he or she will be to accept a result less favorable than the evaluation.

 

Equally significant is the potential impact of an evaluation on the mediator’s credibility with the litigants. A neutral’s greatest asset in bringing about a settlement is the rapport and confidence that he or she develops with the parties and their counsel. As long as litigants see the mediator as an honest, neutral and competent facilitator of the process, they are willing to listen to tough questions, accept coaching about their bargaining tactics, and consider settlement recommendations that require painful compromises.

 

If, however, a mediator delivers an evaluation too quickly or in the wrong way, the “losers” in the evaluation are likely to react badly. A party, its lawyer, or both may decide that the neutral has “gone over to the other side.” Perhaps, they think, the neutral has been duped by clever arguments, or seduced by promises of future business. Indeed, if the evaluator disagrees with both sides, as is quite possible, everyone can be left angry. Once this happens, even the most innocent comment or gesture by the mediator will be filtered through feelings of suspicion and antagonism. A badly-done evaluation can destroy the mediator’s power to influence the losers, and perhaps everyone, in a case.

 

There are less dramatic dangers as well. Evaluators focus on the legal merits and may fail to address less obvious barriers which may be frustrating a settlement. If the problem, for example, is that a key decision maker in any settlement is not at the bargaining table, an evaluation is unlikely to uncover the issue. If the obstacle is a party’s unresolved feelings of grief, a lawyer’s anger, or other strong emotions, an evaluation, with its emphasis on legally-relevant facts, will not deal with it. In general, evaluation does not address the hidden issues that often drive lawsuits. More seriously, evaluation tends to hide these issues because it focuses the disputants solely on the legal merits of the case. Evaluation, in other words, often “solves” the wrong problem and, by doing so, obscures serious hidden causes of impasse.

 

All this said, the right kind of evaluation, done at the right point and handled in the right way, can be the ingredient that breaks a seemingly hopeless deadlock.

 

  1. How to Give an Effective Evaluation

 

  1. Whether to Evaluate

 

Our basic advice about whether to evaluate is “only if necessary.” Unless required to break an impasse, evaluation’s inherent risks, make it unwise. The fundamental diagnostic questions that a mediator should ask in every dispute are the following:

  • What obstacles are preventing the parties from settling this dispute themselves?
  • What meditative strategies are most likely to overcome these barriers and bring about a settlement?

 

In most cases, the barriers that are frustrating agreement, such as procrastination, the need to vent arguments and emotions, poorly conducted positional bargaining, lack of information or hidden psychological issues, do not relate to the parties’ view of the merits. Specific meditative strategies are available to address these issues, [5]making evaluation inappropriate.

 

In some situations, however, even after other barriers have been diagnosed and treated, the major obstacle to settlement remains the parties’ (or their lawyers’) inability or refusal to accurately assess the value of their trial alternative. Even pointed reality testing has not (or is unlikely to) overcome the effects of selective perception, advocacy bias and other psychological forces that distort litigants’ perceptions. [6] In such situations, a mediator’s only remaining options may be either to conduct an evaluation or admit defeat. If evaluation is the BATL (Best Alternative to Litigating), [7] there’s no harm in the attempt.

 

 

  1. When to Evaluate

As should be clear from this discussion, we believe in delaying an evaluation until as late in the mediation process as possible. Waiting serves several important purposes. First, it allows the mediator to explore fully the other possible obstacles to settlement. If, for example, a key issue in a dispute is a party’s need to express grief over a loss or anger at a business partner, deferring an evaluation allows the mediator to discover the issue and work on it. This kind of exploration is much more difficult after an evaluative “verdict” has been handed down. For a discussion of these and other barriers and specific strategies to address them,

 

Even if the problem is limited to the legal merits, it does not follow that an evaluation is always required. The cause of the parties’ differing assessments of the merits may be that one side lacks key information; if so, a mediator’s initial response should be to arrange a data exchange. It: instead, the problem is that one side fears that a settlement would create a precedent, a neutral should focus on confidentiality guarantees. In our experience, it is usually possible to solve many merits-related problems without the need for an explicit evaluation by the mediator.

 

A second reason not to evaluate quickly is that a mediator will have more time to build and strengthen the parties’ trust. As the process goes forward, parties and lawyers get to know the mediator much better on both a professional and a personal level. In formal sessions, the participants are able to watch the mediator in action and observe how he or she handles challenges. During informal conversations and telephone contacts, the parties and counsel begin to get to know the mediator as a person. In this way, an effective mediator can gradually build up the disputants’ trust and confidence. The mediator can then draw on this reserve to cushion the shock of an unwelcome opinion on the merits. Also, the mediator will have the opportunity to learn more about the parties in order to phrase his or her evaluation in terms that will be most palatable to the audience.

 

In addition, when a mediator prefaces the evaluation with questions and discussion of the merits, the parties often become more realistic about their cases, narrowing the scope of any opinion that the mediator must offer. The litigants may also realize that weaknesses in their case which they had hoped to keep hidden are in fact apparent to the other side. Finally, the disputants see that the mediator has heard them out and is seriously grappling with the facts and arguments they raise. The participants also learn that the mediator is raising their strongest arguments with their adversaries. As the mediation progresses, then, the disputants appreciate both that the mediator is giving them a fair hearing and has “done the homework.” They are able to come to terms with the fact that the holes in their case are known.

 

There is one final “when” issue: Should a mediator obtain the consent of the parties before going forward with an evaluation? At one level, this is an issue of contract. Some mediation agreements require neutrals to get the assent of all parties before offering an evaluation, while other forms leave the issue to the mediator’s discretion. [8] A mediator owes participants the obligation to discuss process issues. But if, after this is done, the parties choose to remain in the mediation, it is best that the neutral retain the discretion to evaluate if necessary to stimulate a settlement.

 

Our overall advice about when to give an evaluation is this: Evaluate as late in the process as possible. As a rule of thumb, never do so until at least the first round of caucuses is completed. Only consider evaluating after you have had a reasonable chance to diagnose and treat other obstacles to agreement, using less risky tactics such as reality testing, and have talked with the disputants about your intentions. In our view, evaluation should usually be the final and almost never the first, arrow in a mediator’s quiver.  

 

  1. What Standard to Apply?

The most common standard used in evaluations is one of prediction: The neutral attempts to forecast how an arbitrator, judge, or jury would resolve certain issues or the entire case, if the party opted for a binding decision.

 

This predictive standard may seem self-evident, but in practice it is not. Mediators sometimes focus on how they personally would decide a case. This is irrelevant, however, since neutrals rarely serve as judges in their own unsuccessful mediation’s. [9] This standard is also dangerous because it puts the mediator into the position of personally rejecting one or both parties’ arguments, making it even more likely that they will come to view him or her as an enemy.

 

Another standard mediators sometimes apply is: “What will it take to settle this case?” In other words, given the negotiation dynamic, what package of terms is likely to be minimally acceptable to everyone in the dispute? If, for instance, one side is stubbornly unrealistic about the likely court outcome, a “What will it take’)” opinion might bend the proposed terms toward that view in order to secure agreement that is easier for parties to accept.

 

Although there is nothing inherently wrong with this approach, a serious problem arises when disputants think that they are hearing a pure merits-based evaluation but instead receive a “What will it take?” recommendation. For a mediator to offer a settlement recommendation under the guise of a legal evaluation is both unethical and capable of creating serious practical problems when parties discover that they have been misled.

 

Evaluators should give their best “straight” prediction of how the likely decision maker would resolve an issue or case. However, when the litigants explicitly agree to receive a settlement recommendation rather than a merits evaluation, then a “What will it take?” opinion is appropriate.

 

 

  1. Structuring the Evaluation 

 

The first issue for a mediator to consider is whether he or she will perform the evaluation, or suggest a person outside the process. There are many advantages to an outsider’s evaluation. First, it distances the mediator from the process, greatly reducing the risk that a disappointed disputant will hold the results against the mediator. Second, the mediator and lawyers can select an evaluator with the credentials most likely to impress the parties, without concern about balancing evaluative credentials with facilitative skills. If, for example, the parties would be most swayed by a prediction from an eminent jurist, they can retain a former chief justice without worrying about whether he or she knows how to mediate.

 

A third advantage of going outside is that it allows the mediator to focus energies on a single role: that of facilitator. Fourth, it solves the nagging issue of what a mediator who also evaluates should do with any information that may have been disclosed on a confidential basis in caucuses. [10]

 

There are practical difficulties, however, with using an outside evaluator. First, unless the two roles are assigned at the outset, making arrangements for an outsider to come in will usually require adjournment of the process and disrupt its momentum. When parties are allowed to cool off, they may harden their positions. Second, retaining an outsider is more expensive than having the mediator give an opinion, and many cases will not support the cost and delay of additional briefing. Finally, even with the mediator’s assistance, the parties may be unable to agree on who should perform the evaluation. For these reasons, the parties almost always request that the mediator take on the task.

 

  1. Limit the Issues – The next question is how much of the case to evaluate. Novices often assume that an evaluation must cover the entire dispute, but this is not so. The legal issue driving the parties’ impasse may be a relatively narrow one (for instance, will the liquidated damages clause of a contract be enforced?). If so, there is no need to evaluate other issues on which the parties are closer to agreement. Indeed, if the evaluator’s view of those other issues differs from that of the parties, evaluation would stimulate disagreement rather than resolve it. 
  2.  Piggyback Whenever Possible – A corollary to not evaluating issues unnecessarily is to build on the parties’ opinions as much as possible. A plaintiff, for example, may have a realistic take on liability but an inflated view about damages. If so, it is more effective for an evaluator to say that he or she will accept the party’s liability percentage “for argument’s sake,” although perhaps noting mild disagreement with it, then press the evaluator’s opinion about the likely damages. It is easier to change a person’s mind on one issue than two, and an evaluator’s “concession” on one point will often induce disputants to accept his or her views about other, more controversial issues in the case.
  3. Think about Who Needs to be Influenced – One’s tendency is to assume that evaluations are done solely for people in the mediation room. This is often not true. The real cause of an impasse may be a decision maker in a distant city who has not participated in the mediation or felt its impact. Or negotiators may be hesitating out of fear that a decision to compromise will expose them to criticism from supervisors or outside constituencies. If the problem is absent decision makers, the evaluation can often be used as an event to get their attention, and sometimes their actual presence at the scene. There is something about the idea of even a non-binding “verdict” being handed down that brings a case onto the radar screens of persons who have felt too busy to pay attention to it before. If the issue is fear of being second-guessed, and the potential critic cannot be brought to the mediation, it may make sense to put the evaluation in the form of a written opinion that a party can take to his or her constituency or place in a case file. If an evaluation is to be used to convince persons outside the process, the credentials and public reputation of the evaluator become more important than his or her personal qualities. In such circumstances, a mediator will not be able to use the trust he or she has built up during the proceeding to sell the result, and may want to select a third person whose resume will impress an absent decision maker.

Example: A mediator was working on a dispute between a government loan agency and a borrower who had defaulted on his mortgage. As the mediation went forward, it became clear that the loan foreclosure had been handled badly by the original lender, making it difficult now for the agency, which had inherited the loan, to collect on it. Still, the agency refused to settle the case. In caucus, the agency disclosed that it needed a letter from the mediator evaluating the case and endorsing the result in order to settle. The agency was not willing to have the letter shown to the borrower; instead, it would be used by the agency to convince a review board to approve the deal. The borrower’s counsel agreed to these terms, the mediator wrote the letter, and the case was settled.

D .Choices in Effective Format – Before undertaking an evaluation, consider what format will maximize its contribution to a settlement:

  • What data will the evaluator receive? For example, will the parties rely on existing documents or prepare special briefs? Note that special briefing is more likely to be necessary if an outsider is brought in to do the evaluation.
  • Do the parties need the feeling of having a “day in court”? Will the evaluation have more weight if they are allowed to make formal arguments? If so, consider conducting the process in a “moot court” format.
  • Should the opinion be delivered in caucuses or during a joint session? If it is delivered to the disputants in each others’ presence, the losers may feel humiliated; creating anger that will disrupt the process. If, on the other hand, the evaluation is presented in separate caucuses, the disputants may suspect that the evaluator is delivering different opinions to the two sides.

 

We rarely ask for special briefing because it would usually require adjourning the process. We also avoid “moot courts,” because to hold, one risks elevating the importance of an evaluation from impasse breaking tool to final pronouncement in a case. We also strongly favor delivering evaluations in caucus. This is not in order to deliver different legal analysis or numerical evaluations to each side. Rather, it is because evaluating in caucus allows us to use phrasing and arguments calculated  to help the listeners to accept our opinion. In caucus one can, for example, piggyback one’s views on bits of confidential information that party has shared. The mediator-evaluator could, for instance, concede that an opposing witness might be lying as that party has been arguing but go on to say that the witness has a demeanor that would impress a jury. Evaluating in caucus allows us to more frankly acknowledge strengths in each side’s arguments, and build on that foundation to deal with more controversial issues.

 

The problem of demonstrating that the evaluator is delivering the samc opinion in each caucus is a real one. It can be addressed, for example, by writing a bullet point form of the evaluation on a flip chart or notepad and carrying it from one caucus room to another. Putting the opinion in writing has the extra benefit of giving visual reinforcement to unwelcome news and reduces opportunities for the parties to engage in “selective perception” of the evaluation.

  1. Consider Language, Culture and Commonality –A mediator’s choice of language, tone and cultural referents in presenting an evaluation will greatly influence its impact on the parties. One’s individual and cultural background is what it is. But a bit of chameleon ship in style and manner can increase the persuasiveness of the opinion, particularly when its content is critical. If, for example, one party (whose team may include a lawyer, expert and several client representatives) is informal, given to slang and colorful metaphor, it may be effective to use that style in their caucus. If the other party is more formal, deliberate and analytical, the mediator will do well to choose a tone and language likely to resonate with that group. In short, this advice on choice of style and manner is “When in Rome … ,” particularly when the substance of the message is relatively unfavorable. This is another reason to present evaluations in private caucuses with each side.
  2. Be Empathetic –Acknowledge the listening party’s concerns and arguments and why a result you see as likely or possibly may seem unfair or surreal. Predictions are not pronouncements of right and wrong; you can actively listen to and reflect or empathize with a party’s feelings and responses.
  3. Emphasize Differences in Perspective –It is sometimes difficult for disputants to accept that someone who has the same information as they do nevertheless disagrees strongly with their judgments. One defense is to emphasize that in doing an evaluation, you are not giving your personal opinion about what is a fair resolution, but instead are predicting how other people whom the disputants have never met (a judge or jury) would react.

 

We also note the special advantages of being neutral. Because we are not arguing the case and have no personal stake in its outcome, we are free to think about it from the perspective of an uninvolved person. It is difficult for disputants to admit that their judgment may be distorted by their roles in the case (although they readily see that the condition affects their opponents and perhaps their clients). Our practice is to mention the point but not to stress it heavily.

  1. Distance Yourself from the Opinion –As we have noted, it is very important that the mediator not become personally identified with an unwelcome opinion. One method of doing this is to follow the guidelines set out above: empathize with the problem that this creates, note that you will never sit in judgment on the matter, use the language of prediction, and so on. Another way for mediators to distance themselves is to use the technique known as decision analysis. Decision analysis is a mathematical technique that allows analysts to break down a case into a series of choices and chances (win on summary judgment or not; win or lose at trial; recover a high, medium or low verdict, etc.). The case is then “graphed out” in a way that lets the parties see the possible outcomes in the litigation and weigh the probabilities of each one. Individual choices and chances are then multiplied out, yielding an overall monetary value for the case. Decision analysis allows mediators to talk with disputants in a relatively dispassionate way about what could happen if a dispute is adjudicated. It allows both the neutral and the parties to “let go” of emotional arguments and consider litigation risks in a logical manner. Also, because participants are asked to discuss and estimate the percentage likelihood of success on each issue before calculating its impact on the case’s overall discounted value, they may provide more honest assessments. For this reason, decision analysis can be a constructive vehicle for discussing the parties’ or the mediator’s case evaluation. [11]

 

VII. Conclusion 

Evaluations rarely end cases themselves. Rather, they provide a strong “dose of reality” that helps break down differences in how the parties assess their no-agreement alternatives. Assuming an evaluation is necessary; therefore, mediators need to think in advance about how to use them to promote further negotiations: 1. Is reflection or consultation time needed? In simpler cases where the decision makers are present, a mediator can give an evaluation orally and then ask for a new offer. But when the case is complex, the results shocking to the listeners, or the evaluation calls for an offer outside a negotiator’s authority to settle, an adjournment will probably be needed. 2. What kind of bargaining should occur after the evaluation? Who should make the next concession? Are inventive terms possible that would obscure or cushion one side’s defeat in the evaluation? Should the mediator make a compromise proposal, to some degree influenced by evaluation results? If so, should the proposal be presented as a “mediator’s proposal” basis that allows each side to conceal its willingness to agree unless the other side has assented as welI? [12]

 

(AAA HANDOOK ON MEDIATION, 2010)

Dwight Golann

Professor of Law, Suffolk University Law School

Marjorie Corman Aaron

Professor of Clinical Law and Director, Center for Practice,

University of Cincinnati College of Law

[1] Dwight Golann is a professor of law at Suffolk University Law School in Boston.

He is an active mediator of legal disputes and serves as a distinguished neutral for the

CPR Institute and panels iu Europe and Asia. Professor Golann is the principal author of

MEDIATING LEGAL DISPUTES (2009) and co-author of RESOLVING DISPUTES (2010).

Additional information is available at www.golannadr.com.

 

[2] Marjorie Corman Aaron is a Professor of Clinical Law at the Uuiversity of

Cincinnati College of Law and Director of its Center for Practice. Also a mediator and

arbitrator based in Cincinnati, Ohio, she was formerly Executive Director of the Program

on Negotiation at Harvard Law School and Vice President and Senior Mediator at

Endispute, Inc. Ms. Aaron received a B.A. from Princeton University and a J.D. from

Harvard Law School. She is the co-author of MEDIATING LEGAL DISPUTES (2009), from

which this chapter is drawn.

 

[3] Some commentators believe that for a mediator ever to evaluate raises ethical questions. For example, the Standards of Conduct for Mediators promulgated by the American Arbitration Association and the American Bar Association, state that “A mediator shall conduct the mediation fairly, diligently and in a manner consistent with the

principle of self-determination by the parties.” The ABA/AAA standards do not say explicitly whether or not mediators are allowed to evaluate, but the commentary to them states that “Mixing the role of a mediator and the role of a professional advising a client is problematic … A mediator should, therefore,refrain from providing professional advice” and refers to the option of sending parties outside the process for a “neutral evaluation.” For an interesting discussion of the practice-ot~law issue, see Carrie Menkel-Meadow,  Is Mediation The Practice of Law?; Bruce Meyerson, Lawyers Who Mediate Are Not Practicing Law, 14 ALTERNATIVES 57,74 (June 1996).

 

[4] These findings are consistent with the results of a long series of experiments showing that the roles people adopt in both litigation and non-litigation contexts often impair their ability to analyze data accurately. See, for example, Max. H. Bazerman, Negotiator Judgment: A Critical Look at the Rationality Assumption, 27 AM. BEHAV, SCI. 211,220-22 (1983)

 

[5] For a discussion of these and other barriers and specific strategies to address them, see GOLANN ET AL., MEDIATING LEGAL DISPUTES (2009)

[6] For a discussion of other psychological forces that can distort a litigant’s assessment of the legal merits, and  methods to deal with them other than evaluation see id.

[7] Our apologies to, Roger Fisher and William Ury, the inventors of the concept of Best Alternative to a Negotiated Agreement, or “BATNA.” See R. FISHER, W. URY AND B. PATTON, GETTING TO YES (1991) pp. 97-106.

 

[8] For example, the model agreement developed by the CPR Institute of Dispute Resolution requires that all parties assent before an evaluation can be given, but the standard JAMS agreement leaves the issue to the mediator. The American Arbitration Association has no specific rule on the subject, but as noted in note 3 the ABA/AAAA STANDARDS OF CONDUCT FOR MEDIATORS can be read to define “neutral evaluation” as a process separate from mediation.

 

 

[9] The exception, of course, is the process known as “med-arb,” in which the disputants consent to have the mediator render a binding decision if they cannot reach agreement.

 

 

[10] One possible solution is for the mediator to disclose that his or her assessment rests in part on “secret ammunition” confided by one side. Among other things, this makes it easier for each party to understand the neutrals opinion.

 

 

[11] For an explanation of how decision analysis can be used in mediation, see Marjorie C. Aaron, The Value of Decision Analysis in Mediation Practice, II NEGOTIATION J. 123 (1995); M. C. AARON, Chapter 8 in MEDIATING LEGAL DISPUTES, supra n, 3

 

 

[12] The essence of a “mediator’s proposal” is that the mediator proposes the same package of settlement terms to all sides, but under the ground rule that each side can tell the mediator in confidence whether the package is acceptable. If so, there is a deal. If not, the rejecting party will never learn whether its adversary was willing to compromise. This mediation process. format makes it easier for a party to explore a compromise without endangering its bargaining position if an agreement is not reached.

 

 

by Dwight Golann and Marjorie Corman Aaron – 2010

With online dispute resolution, parties state their case by e-mail and get a prompt decision

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With online dispute resolution, parties state their case by e-mail and get a prompt decision
This article was first published by the Maryland Daily Record
Monty Ahalt believes that most civil cases can be resolved without the parties ever being in the same room or even on the same phone call.

The retired Prince George’s County Circuit Court judge runs VirtualCourthouse.com, a Web site that allows parties to work out their differences online with an arbitrator or mediator. He estimates that about 70 percent of civil cases can be resolved this way, in less time and at a lower cost than traditional litigation.

“That’s a process that takes probably three to four years from the time that dispute first started until it’s concluded, involving many, many man hours, a lot of expense, a lot of time and a lot of repetition, mainly paper repetition,” Ahalt said. “In a vast majority of those disputes, the results are fairly predictable, but the parties don’t realize that.”

Virtual Courthouse is part of a movement toward online dispute resolution, or ODR, of basic alternative dispute resolution cases. The trend includes sites like Cybersettle.com, where a computer, not a person, determines the value of the case, and eBay’s in-house ODR system.

Many lawyers and ADR professionals are enthusiastic about ODR, but some say its utility is limited. Others question whether disputes may be settled fairly without the arbitrator or mediator – the “neutral,” in Virtual Courthouse parlance – seeing the parties.

A new model

Ahalt, 65, began developing Virtual Courthouse in 2001, two years after taking early retirement from the circuit court. He had some experience in Internet business, having helped develop an electronic filing system called JusticeLink that eventually merged with another company and was bought by Lexis-Nexis.

That experience, combined with his time on the bench, including a stint as manager of the civil docket, led him to create Virtual Courthouse. In 2004, after a few years of development, Virtual Courthouse went live.

In the past four years, the site has handled about 1,000 cases – 80 percent of them from Maryland and another 10 percent from the District of Columbia, Ahalt said. Virginia, Delaware and other mid-Atlantic states account for most of the rest.

At first, Ahalt did most of the dispute resolutions himself. Now he is a neutral in less than 20 percent, with his goal to handle only 5 percent of cases.

The ideal case for Virtual Courthouse has only two parties, involves a dispute over money (as opposed to other forms of relief) and is not emotionally charged, he said. Fender-bender lawsuits fit the bill; custody cases and nasty disputes between neighbors do not.

A plaintiff starts the process by registering with Virtual Courthouse, which e-mails the defendant to see if he or she will agree to ODR. If so, the parties pick a neutral from Virtual Courthouse’s list of more than 100 in Maryland and 12 other jurisdictions.

Ahalt lets neutrals list themselves in Virtual Courthouse’s directory for free and doesn’t qualify them in any way; when the parties sign on to use the site, they take responsibility for checking out their neutral, he said.

After choosing a neutral, each party types in a statement of the case and uploads scanned images of any necessary documents, such as doctor’s bills. The neutral then decides what the case is worth.

The process usually takes less than 45 days and Virtual Courthouse’s record for the fastest case resolution is a blistering 15 minutes from start to finish. But that doesn’t mean the neutrals are making slipshod decisions, Ahalt said.

“How long does it take to read that an individual suffered a soft tissue injury in a rear-end automobile accident and went to a chiropractor 15 times and incurred bills of $2,600?” Ahalt asked. “How long does it take a neutral to read that? I mean, there’s no dispute as to who’s responsible. It’s just an issue of how much is reasonable compensation for this individual.”

Time and money

Plaintiff’s lawyer Rick Jaklitsch of the Jaklitsch Law Group in Upper Marlboro said he has used Virtual Courthouse to settle 20 cases. Although his clients tend to get slightly lower awards through Virtual Courthouse than they would if they went to Prince George’s County District Court, they get their money a lot sooner, he said.

Defense lawyer Karen Sussman of Sussman & Simcox Chartered in Gaithersburg, who has participated in Virtual Courthouse as both a neutral and an attorney, said her clients are happy with her when she is able to resolve their cases quickly online.

Virtual Courthouse “probably wouldn’t be recommended for cases with huge stumbling blocks and issues that are time consuming, but it’s a great place for parties to present their arguments when they feel like they want to get something in front of somebody but they don’t want [the] delay and the expense of getting it resolved,” Sussman said. “Even a district court case these days can take months.”

She said her clients like not having to testify and are happy to save money by not paying her to go into court several times.

For online arbitration and mediation decisions and for simple online case evaluations, Virtual Courthouse charges each party a filing fee of $50 and the arbitrator or mediator charges the parties $300 total. Out of that $300, the neutral keeps $250 and pays Virtual Courthouse a $50 administrative fee.

Lawyers can also elect to start online but have an actual hearing in person. About one-quarter of the cases that go through Virtual Courthouse end in a flesh-and-blood mediation or arbitration, Ahalt said.

For more complicated online case evaluations and all face-to-face ADR, the neutral sets the rate. Even in those cases, however, Virtual Courthouse handles the neutral’s billing. Neutrals tend to like that idea, as well as the idea of having all of the case documents online, Ahalt said.

Ahalt said that he won’t rule out someday eliminating the $300 flat fee for completely online cases; he said he may end up having neutrals charge based on how much time a case takes.

As for the attorneys, Jaklitsch said he charges his clients the same 40 percent of the award to settle their case via online arbitration as he does if the case is resolved by in-person arbitration.

Other considerations

Paul Bekman of Salsbury, Clements, Bekman, Marder & Adkins LLC, who handles injury cases for the plaintiff’s side, offered qualified praise for Ahalt and Virtual Courthouse.

“I think that he provides a very valuable service for a particular type of case,” said Bekman, who also does ADR work. “If you were to look at the dockets, there are a lot of cases dealing with … property damage, for example, in … automobile collision cases. What he’s done is he’s been able to create a way to get those cases resolved without clogging up the docket.”

Bekman said Ahalt came to the firm to speak about the benefits of Virtual Courthouse, but that it just was not a fit for the catastrophic injury cases that make up much of the firm’s business.

He said ODR makes sense for a case involving, for example, a car accident resulting in soft-tissue injuries and $3,000 in medical expenses. It would not be helpful, though, in a case where a speeding truck driver hits and impales a motorcyclist, killing him and leaving his wife a widow and his children fatherless.

“This is their life, this was the life of a loved one, and the stakes are high,” Bekman said.

Jaklitsch said deciding which cases to send to Virtual Courthouse is similar to deciding which cases to resolve through face-to-face ADR.

“There’s always a challenge to not settle the home-run case,” Jaklitsch said. Virtual Courthouse, like any arbitration or mediation, is “not the place to be if you’re looking to hit a home run.”

Jaklitsch raised another potential problem with ODR: insurance companies may be resistant. Though he has resolved around 20 cases through Virtual Courthouse, he has initiated about 50. In 30 of them, the insurance companies’ lawyers have declined to participate, instead taking the case to court.

“There is a limited number of carriers on the other side that are agreeing to do this,” Jaklitsch said.

He said insurers should embrace the concept, especially since
Virtual Courthouse’s awards tend to be slightly lower than the district court’s.

Andrew Greenspan, Maryland in-house counsel for Nationwide, said he has heard of Virtual Courthouse but never has used it.

“I’m not sure what the advantage would be other than saving on travel time,” Greenspan said. “Most arbitrators, and myself, prefer the advantage of everyone being present at a location to see and hear the individuals involved. You can refer them to the documents.”

Making it more personal

University of Maryland School of Law professor Roger C. Wolf, director of the school’s Center for Dispute Resolution, said the neutral’s inability to interact personally with the parties is a common criticism of ODR.

“The downside is that the parties aren’t face-to-face and particularly in mediation, one of the real goals is to try and get the people talking to each other and, in many cases, trying to establish some kind of social discourse,” Wolf said.

So much of communication is nonverbal, he said, “and that’s one of the things that a mediator picks up on; so if you’re not able to see the parties involved in mediation, you’re missing a great deal of information.”

Ahalt said face-to-face contact isn’t all it’s cracked up to be.

“The response is, there are certainly many cases where it is helpful for a neutral to see a witness or to see a party,” Ahalt said. “Having said that, there are more cases where it is not helpful.”

He said that minor injuries are generally not visible to a judge, jury or arbitrator, so it doesn’t matter if the decision-maker sees the victim or not. As an example, he cited a recent contractual dispute he resolved through Virtual Courthouse.

“It’s a document case,” Ahalt said. “I needed to look at the documents, read the contract, hear the parties’ arguments, which they could all do in written form, probably better in written form than they do it in oral form. It wouldn’t have helped me in any fashion to see the parties in that case, although you’re correct; many people perceive that it is.”

Also, there are ways to overcome the impersonal nature of ODR, Jaklitsch said. For example, when he has particularly sympathetic victims in a Virtual Courthouse case, he has the clients swear to affidavits explaining how their injuries have affected their lives.

And Ahalt said that although it is not common, Virtual Courthouse can handle video and audio so lawyers can upload footage of clients or witnesses.

Besides, as retired Baltimore City Circuit Court Judge Edward J. Angeletti pointed out, if a simple case unexpectedly turns not-so-simple, the parties are not locked into an online-only resolution.

“If there were a necessity to sit down face-to-face, I would request that the parties do that and if the parties felt it was necessary, they would request it,” said Angeletti, one of the neutrals on Virtual Courthouse.

Comfortable with change

Ahalt attributed some of the uneasiness about Virtual Courthouse and ODR generally to the legal profession’s resistance to change. He said he has traveled around the country speaking to lawyers and judges about the value of resolving cases online.

“The typical reaction is, they look at you and say, ‘Well, yeah, I think that’s the way it’s going to be in the future, but I’m not changing now,’ because change is not a friendly matter for anybody,” he said.

Angeletti said he is beginning to sense that lawyers are starting to get more comfortable with the ODR concept, in no small part because most of Virtual Courthouse’s neutrals are people they already know, at least by reputation.

Ahalt, who marketed his service to neutrals and lawyers alike through the network of contacts he amassed from decades as a member of the bar and 17 years on the bench, is banking on that sort of attitude.

The potential market for Virtual Courthouse, he has determined, is virtually limitless.

“If you go through any method of calculating the number of disputes, it’s millions upon billions, so the market is enormous,” he said

The retired Prince George’s County Circuit Court judge runs VirtualCourthouse.com, a Web site that allows parties to work out their differences online with an arbitrator or mediator. He estimates that about 70 percent of civil cases can be resolved this way, in less time and at a lower cost than traditional litigation.

“That’s a process that takes probably three to four years from the time that dispute first started until it’s concluded, involving many, many man hours, a lot of expense, a lot of time and a lot of repetition, mainly paper repetition,” Ahalt said. “In a vast majority of those disputes, the results are fairly predictable, but the parties don’t realize that.”

by Caryn Tamber Daily Record Legal Affairs Writer – February 1, 2008 5:39 PM