Mediation Comes to Michigan-Something Else to Learn!
Just when you thought, “Finally, after all of these years of practicing law I can actually start being a lawyer,” the powers that be come up with ADR–yet something else to practice! On August 1, 2000, the Michigan Supreme Court Michigan adopted MCR 2.410 and 411 making ADR a formal part of our civil justice system for resolving disputes. On that day, Michigan joined the almost universal move by State legislatures and judiciaries and the Federal government in making ADR part of the legal establishment. The meaning of these new Rules for Michigan lawyers it that virtually all civil cases will be subject to some form of ADR process . In most cases, the ADR process of choice will be mediation-real mediation that is and not MCR 2.403–what the rest of the country calls “Michigan Mediation” now renamed “case evaluation” under the new ADR amendments. Catching on to the new vocabulary will be easy compared to the new advocacy skills that even, and especially, the most experienced litigators will need to learn. This article will provide a few tidbits of advice, from the mediator’s viewpoint, about how to succeed under our new mediation process.
Mediation-New Rules and New Roles
Lawyer advocacy in mediation is different than lawyer advocacy in litigation. For example, in mediation it is important for the client to be able to speak, discuss the case and directly participate in the settlement negotiations. In litigation, the lawyer does all of the talking-and the last thing a lawyer wants is the client speaking unless the “speech” is carefully scripted. Furthermore, in litigation, the aggressive go-for-the-jugular adversarialism approach is generally considered a “good” thing. In mediation, the least effective tactic is to start off asking the opposing lawyer, in the presence of the parties, how he/she likes having a crook for a client! Yet, another contrast is that the thorough and extensive preparation is necessary for real mediation. This is not the experience of most Michigan lawyers where preparing for “mediation” has meant readiness to be the first to interpret during the 15-30 minute session or reading the file for the first time while waiting for the case to be called.
“Winning” in 2.411 mediation is also a different kind of victory and requires a new set of skills. Success is based upon both the lawyer’s and client’s ability to persuade the opposition to make its very best and last offer through persuasion, communication and a perceived commitment to proceed to trial if the case cannot be settled. To obtain this desired offer, it is absolutely essential that both lawyer and client be able to
In mediation, the “why” of the dispute and “how” of the resolution take front and center stage once the legal positioning is exhausted-which may take only a few minutes or several hours. Once the parties are at the mediation table, the pristine nature of the legal arguments and truckloads of evidence are there to serve one purpose and one purpose only: To fully inform each side of what lies ahead so that what can be done in the present makes sense. Determining whether the opposition’s last and best offer makes sense is a decision that is not made by a third party-judge, jury, or case evaluator-but by the lawyer and client. In mediation, the power to control one’s destiny is preserved for and reserved to the actual client-litigant. The client’s exercise of that decision-making power is guided by the lawyer acting more as a counselor-at- law rather than a combatant-at-law. To “win” at mediation, therefore, requires developing some new lawyer talents and retooling traditional abilities into effective mediation advocacy skills.
Skills Useful for Mediation (and for Litigation if the Case Doesn’t Settle)
There are often many doors through which the parties can enter to reach settlement. The doors are closed and locked, however, at the moment the parties and their counsel pull up their chairs to the mediation table-they are at impasse or they wouldn’t be there in the first place. The following are among the keys that can be used to unlock the doors to a mediated settlement:
1. Know Your Client
Understand why the client came to you and what the client needs. If you can determine the motivation and the needs, then you can intelligently and realistically discern the appropriate legal theories and remedies. Know what is important to your client. More frequently than one would imagine, mediation reveals that the lawyer has one view of the client’s most important interests and the client has an entirely different view. The opposing counsel, as well as the mediator, will most likely be able to detect such a divergent situation. The mediator will try to help client and lawyer resolve the difference; the opposition will try to exploit it.
2. Inform Your Client About ADR/Mediation Processes
Most clients have a completely fictional idea of how the legal process works let alone what happens at mediation. It is critical, therefore, that the client be educated about some very important concepts like: What a “day in court” is like; the fact that only a fraction of cases ever go to trial; the reality that the case will be resolved by some form of settlement process; the importance of investigating and preparing for both the client’s case and the opposition’s; the importance of making a realistic assessment for settlement and trial purposes and what factors will be considerations for whether to settle or to try the case. Clients often have unrealistic views of a case’s value or what can be achieved in the legal process. Lawyers sometimes assess the case differently at the beginning of a client relationship then at a more mature phase of the dispute. These views should be discussed and differences resolved before coming to the mediation table. Lawyer and client need to be of a common mind when trying to achieve a mediated settlement.
3. Know the Facts of Your Case
Know the facts of the case-what is important and what is not and what is disputed and what isn’t. Parties and counsel entering the mediation session unaware of what they agree or disagree upon or what is important to the case and what isn’t can be frustrated by the exercise required at the session to figure this out. The mediation can be greatly expedited when parties and their counsel have prepared the facts that are critical and disputed/undisputed versus those facts that are merely background or ancillary. Be prepared to substantiate your factual assertions with evidence. Given liberal discovery rules, the likelihood that some critical fact will have been missed is slim. If you have a fact that is critical to “winning” your case, and you believe the opposition is unaware of it, and you refuse to disclose it at the mediation, don’t be shocked if your opposition fails to make the offer you want. There is nothing wrong with conducting some discovery at mediation-just don’t go there expecting to do it all.
4. Know the Law of Your Case
A mediation can turn totally ineffective when an applicable statute or case is missed or misapplied. The ability to obtain the opposition’s last best offer absolutely requires that all legal claims have been identified and the strong ones separated from the not-so-strong ones. Advance your strongest legal position and be able to fully support, debate and explain contrary authority. Understand why your best position is the best contrast to another legal position that would be great for another case-but not this one. Advocate the case in front of you, not a hypothetical one; be specific and not vague. Remember the opposition is no dummy and if you think they are, then you have not adequately prepared! And you certainly won’t get the best offer they are prepared to make.
5. Know Your Remedies/Defenses
Mediation is an opportunity to obtain a realistic remedy for your client’s problem or to demonstrate the substantiality of your defense. The law may provide a variety of remedies or defenses only some, or one, of which are/is applicable to your case. Advocate the remedy/defense that most closely tracks the facts and your client’s needs and interests. A well-advocated remedy/defense is not merely a pristine legal theory but is practical and realistic. Comparison verdicts or similar settled/dismissed disputes can be of value provided the opposition knows about them, has had a chance to study them and is convinced that they may be applicable. Be aware of the strengths and limitations of the defenses to the claim and arguments why the remedy/defense, otherwise potentially applicable to your case, is rejected or minimized because of the particular nuances in your case. Correspondingly, having a pending motion for summary disposition may be a persuasive; don’t mediate if your client would rather have or needs the motion decided first.
6. Know Your Best Alternatives to a Negotiated Settlement (BATNA)
Knowing where you can go and what can be or needs to be done if the case doesn’t settle frees up decision-making for the mediation. This entails asking several questions and getting realistic answers: What is “a win/a loss” at trial for your case? How long and how expensive it will be to proceed with remaining court procedures and trial? What are the possible outcomes of a trial and possible appeals? What are the consequences of the possible outcomes and the client’s options for each of those possible outcomes? What else is going on in the client’s life or business that materially effect a decision to settle or go to trial?
7. Select the Right Mediator for the Case
The on-going debate is whether to select a mediator steeped in substantive knowledge of the case or go for one skilled in the process of effective dispute resolution. Generally, lawyers experienced in mediation advocacy believe that the most important characteristics of a mediator are the ability to be persistent, creative and to bring the parties to closure over the dispute. Most experienced mediators will say that the they don’t need to be experts in the field because the lawyers will brief them on the applicable law, industry practices, terminology and other key components of the case. Therefore, when deciding on a mediator, keep in mind that the mediator is not deciding the case but present to assist the parties and counsel in examining the issues and exploring solutions. If subject matter expertise seems to be absolutely necessary, consider whether another ADR process is more appropriate-like arbitration.
8. Provide a Meaningful Mediation Summary
An effective mediation summary is much different from a case evaluation summary. Certainly, it is important to advocate the law and facts of your case in the most favorable light and to identify the weaknesses of your opposition’s best arguments. However, it is understanding and addressing the “below the water line” stuff that often makes the difference in obtaining the resolution you want let alone getting any resolution at all. Be able to
If you have information felt to be too confidential to disclose to the other side in your summary, provide the information to the mediator on a confidential “mediator’s eyes only” basis until the time you are prepared, if at all, to disclose it to the other side. As the neutral, the mediator can be helpful having this confidential information even if it is not shared with the other side.
9. Partial Settlement of Issues May Lead to Full Resolution
A primary goal of mediation is full settlement of the case. However, many times mediation serves to clear the path towards full settlement by resolving peripheral matters, reaching agreements to set aside certain issues until the main claims are addressed, making stipulations for interim measures and defining and scheduling steps aimed at breaking logjams and moving ahead towards reconciliation. Mediation also presents a unique opportunity to hear both sides of the issues side-by-side-a comparison not available through traditional discovery or litigation procedures.
10. Familiarize Yourself with the Negotiation and Mediation Process
Study, read, take a course, do what you need to do to become familiar with the ADR framework for resolving disputes. Negotiating at a judicial settlement conference is different. Negotiating between lawyers, only, is different. Arbitrating and litigating a case is very different. Learn what makes a good mediator good and what promotes success at a mediation. Remember that what distinguishes mediation from most other dispute resolution processes is that you and your client have direct input into and control the outcome of the resolution-it is a voluntary process and not something that imposed upon you by an outside decision-maker.
Mediating the Technology Case-The Technology Environment
If the technology and “dot-com” is teaching us anything it is that technology changes rapidly and that impediments to that change often have undesirable consequences. This basic reality effects developers, purveyors and users of everything from telecommunications, computers, software and hi-tech manufacturing to air traffic control, ATM’s and “911” dispatch systems. Underlying this reality is that technology disputes tend to be uniquely interdependent and can effect everyone up-stream and down-stream in a transaction. If the software copyright holder objects to the use of its software by a distributor as beyond the scope of its license agreement, the bank that obtains the software from the distributor and uses it to run its ATM’s will be subjected to interruption of its daily operations and the customer may find that no cash is available from the ATM (at 8 PM on the way to the movie theatre). In a confidential joint technology development agreement, the inadvertent disclosure of the technology by a departing employee may result in a business opportunity being lost to a foreign manufacturer who comes to market with the unique application or product first. An investment transaction involving the purchase of stock is delayed because of a computer malfunction. The investor sees his/her investment loss as the fault of the stock brokerage and sues for damages. Pick a situation and the possibility that technology is involved is pretty good.
Mediating the Technology Case-Special Considerations
While the same general principles apply to mediating technology cases as in any case, a number of special considerations make these cases a class apart. Representative of these unique considerations is the following:
Confidentiality. Communications occurring during the mediation process are confidential and cannot be disclosed or used outside of the mediation in all cases. In technology disputes, the need for confidentiality is often heightened due to the trade secret nature of the disputed subject matter. Consequently, it is advisable for the parties and mediator to consider a mediation agreement that provides for special handling of the confidential material. Similarly, individual party representatives taking part in the mediation should be required to sign addenda to the agreement confirming the limited use and disclosure of the confidential subject matter.
Experts and Objective Standards. A common barrier to settlement in technology cases is that the parties offer differing interpretations over the meaning of technical terms from the same facts. This kind of conflict may be only a preliminary level of dispute preventing the parties from addressing more substantial issues. One mechanism for overcoming this problem is for the parties to mediate a common standard against which the more substantial issue will be measured. The mediator working with the parties to agree upon a common technical expert can do this or standard whose assessment, opinion or authority will be acceptable to everyone. In the case of the expert, the individual is retained, signs the confidentiality agreement, examines the material, meets with the parties and mediator, gives his assessment and the parties move on to the next set of issues. In the case of a standard, the parties negotiate agreement on the standard and proceed to use it as a common authority for applying the facts or the law.
On-going Relationships. Disputes of this kind have the potential for disrupting existing business relationships between the parties and relationships with third parties doing business with them. It is often the case that the contesting parties have devoted substantial time, effort and resources to developing a technology or an application upon which they become mutually dependent or upon which their respective customers or suppliers rely. In the traditional litigation environment, an injunction remedy is frequently considered as an initial tool for restoring a party to its rights. On the other hand, such a remedy can have extremely disruptive impacts upon the business partners and third parties. It may be that the law support an injunction but at the same time have the undesirable result disrupting the business relationships to such a degree that no subsequent effort to restore them would be successful.
Effective use of mediation can result in affording the contesting parties the opportunity to immediately and confidentiality resolve their dispute. The parties can meet, address their dispute and with the assistance of the mediator develop creative mechanisms for preserving their investment and/or the advantages enjoyed from the relationship while they work to resolve the legal issues threatening to divide them. Such an approach can also result in avoiding disruption with third party relationships that, in turn, often have the unintended result of instigating separate legal proceedings by the third parties against the chief antagonists.
Confusing International Litigation Forums
Unquestionably, international commerce is commerce in technology either as the means for conveying the technology or because it is, itself, the technology. Given the diversity of national forums that exist around the world, technology disputes are especially susceptible to the nuances of these forums. Differing laws, languages, customs, distances and time zones all contribute adding confusion and complications to the resolution of cross-border disputes. Mediation offers a common denominator to unite resolution of such claims. Mediation is a flexible tool that permits the parties to minimize the confusion and complications attendant to addressing conflicts on an international scale by traditional litigation means. Mediation’s flexible nature also allows the parties to design informal proceedings and avoids the burden and tension that detailed and inflexible rules of procedure produce. This by itself can facilitate a solution. Cultural differences can be addressed around the conference table and accommodations reached that would be impossible to obtain in the courtroom. Similarly, a mediation provision in a technology agreement can avoid forum shopping, minimize the risk of multiple proceedings in competing foreign forums with potentially inconsistent results. Moreover, the parties can devise solutions to enforceability by agreement thereby avoiding further uncertainty even after a supposedly binding decision has been reached.
Achieving simplicity in what seems to be an ever-complicating world is an on-going objective both for lawyers and clients, alike. While technology offers us the promise of simplicity, it creates, at the same time, greater interdependence and reliance upon each other. When the inevitable dispute arises, swift, certain, reliable and creative solutions become both the objectives and absolute necessities. Achieving resolution according to these requirements demands the availability of flexible and responsive conflict resolution tools and processes. Traditional litigation retains its importance as a dispute resolution mechanism. It is, however, no longer the only or even the mechanism of choice. The advent of ADR, in particular mediation, as a popular approach to conflict resolution can be traced directly to need for a response to match the times in which we live. Lawyers adapt with the times-because we respond to the needs of our clients and because we provide crucial leadership in virtually every aspect of society. Learning and employing effective mediation advocacy is yet another way to provide relevant service to our clients and to vital leadership to the world.
Kluwer Arbitration BlogFor those of us in the arbitration world, the closing ceremony which took place on 12 August 2012 not only marked the end of the London Olympic Games....By Elizabeth Kantor