Entries Tagged as 'Commercial Mediation'

A-Rod, MLB and Games of Chicken

New York Yankees third baseman Alex Rodriguez is no stranger to controversy.  A-Rod, although never positive on a drug test, has admitted to past steroid use and is now being investigated by Major League Baseball for obtaining performance enhancing drugs from Biogenesis.  Milwaukee outfielder Ryan Braun already accepted a 65 game suspension, presumably from his dealings with Biogenesis and its owner Anthony Bosch, and according to reports, several other players will accept 50 or so game suspensions later today or tomorrow.

A-Rod’s case makes for a good study on case analysis and settlement.  Reports indicate that MLB wants to make an example of A-Rod  by giving him a lifetime ban because he allegedly lied to MLB investigators.  A lifetime ban from the game would invalidate his current highest-in-baseball contract with $90 million remaining after this season.  A-Rod always has a right of appeal to an arbitrator or Baseball Commissioner Bud Selig depending on which rule MLB issues the suspension (though the latter is less likely given that MLB issued the suspension in the fist place).  The punishment, absent a deal, is reported to be handed down tomorrow.

So what is each side looking at?  A-Rod has a few choices:

  • Let MLB issue whatever sort of suspension it chooses then appeal.  The appeal could go either way or simply be reduced and an arbitrated ruling is not appealable in Court (with limited exceptions).  So if it is a lifetime ban, A-Rod risks never playing again and losing millions in salary.
  • Cut a deal with MLB, negotiations for which are apparently underway.  Reports say the negotiated deal would be a suspension for the balance of this season and all of next season.  This would cost him about $36 million in salary (his salary declines in the later years of the contract).  He would then try to make a comeback after nearly 2 years off — adding in his injury time — and at the age of 39 when most players are in decline.  But he would still collect the remaining money on his contract, or at least try to.  A-Rod would have some certainty.
  • He could take an injury retirement today before any punishment is handed down.  Presumably, MLB cannot suspend a retired player or invalidate such a contract after the fact.  If they tried, he could appeal or sue.  Reports indicate that A-Rod’s rehab from two hip surgeries have left him a shell of a player.  The Yankees would allegedly be happy that his controversy is gone and most of the balance of the contract would be covered by insurance — and they lose a diminished player earning a high salary.  A-Rod would miss out on a chance for greater glory in the all-time home run standings where he is currently in 5th place, along with millions in potential performance bonuses under his contract.

MLB also has a few choices as well:

  • Issue the lifetime ban and let the appeals process play out.  That could take a long time and it is not clear whether A-Rod could play during the appeal. If baseball loses the appeal, its ability to suspend players without any positive drug test is severely hampered.  On the other hand, if so many players are willing to accept 50 game bans without a positive test, Anthony Bosch’s credibility and Biogenesis’ records (the proofs against the players) must be very good.
  • Cut a deal.  This is probably the best outcome for baseball since it guarantees certainty and meets the interests in suspending all these players (namely game integrity and its perception).

In a mediation, these would be the types of things discussed privately with both sides and we would work towards a deal that works for everyone.  Ultimately the decision is up to A-Rod and MLB, as it is in their direct negotiations.  Most people are risk adverse — they don’t like taking risks.  And most people like certainty.  It will be interesting to see how this plays out.

If you’re in a dispute and can not work things out, mediation is a good way to try and gain a resolution.  Contact me to find out more.

Conservation of Energy in Conversation

Seth Godin has some sage advice today….

Conservation of energy in conversation

If you escalate (cut off in traffic, angry at the gate agent, frustrated at your boss), you’ve just added (negative) energy to a conversation.

If you escalate (high-pitched enthusiasm, a hug, encouraging words), you’ve just added (positive) energy to a conversation.

Once the energy is added, it has to go somewhere. Often, the person you’re engaging with throws it right back, or even increases it. A talented, mature person might take your negative energy and de-escalate it, or even swallow it and permit the conversation to calm down or end. But don’t count on it.

Sure, you can ‘win’ a conversation by overwhelming your opponent with energy they can’t handle. But of course, they’re not your opponent and you don’t really win. Being aware of the energy you add or take from interactions is a sophisticated technique that radically changes the outcomes of the conversations that fill your day. Add the good stuff, absorb the bad stuff and focus on the outcomes, not the bravado.

The Value of a Good Mediator

A question (or sometimes criticism) I often hear about mediation is that the parties could just negotiate the solution out by themselves.  In some cases, this is true.  However, in the majority of cases which reach impasse, a mediator can be very helpful.

Let’s take the recent settlement in the National Hockey League (NHL) player lockout.  While I won’t present all the issue at stake, as background the owners locked out the players union when their last contract expired.  The sides had been talking for about 5 months with little progress and a lot of animosity built up.  The season was on the verge of complete cancellation.

Enter super sports mediator Scot L. Beckenbaugh, deputy director for the Federal Mediation and Conciliation Service (FMCS).  Beckenbaugh had already helped with resolving other recent sport related labor impasses (National Football League referees and National Basketball Association players).  Both sides in the NHL dispute credit Beckenbaugh’s persistence in leading them to a settlement.  Beckenbaugh essentially kept caucusing (shuttle diplomacy) with the sides until they were able to sit across from each other and finalize a deal (or at least the framework).

Here’s the most insightful quote about how the mediator helped the process from Winninpeg Jets defenseman Ron Hainsey (emphasis mine):

“Scot was great for a number of reasons. When it got to points where you didn’t know what to do next – or you had an idea but you didn’t know if it might upset the other side – you could go to him and talk to him about it and there was a way to work your ideas through a third party who was able to really help the process.

If you need assistance with a dispute, please contact me.

Unattractive? Ugly? Maybe you should settle your lawsuit…

A recently published study by Cornell University indicated that “ugly” or unattractive people who are defendants in criminal trials are 22% more likely to be found guilty and are given longer sentences on average (22 months longer) than attractive people.  The scientists conducting the study tried to look at why this occurs.  Study co-author Justin Gunnell said:

Information processing can proceed through two pathways, a rational one and an experiential one. The former is characterized by an emphasis on analysis, fact and logical argument, whereas the latter is characterized by emotional and personal experience.  Our hypothesis was that if we identify the two groups, then the experiential people are more likely to focus on extralegal factors, which shouldn’t have any bearing on the legal process.  Attractiveness was the variable we used.

The study confirmed what it referred to as an “unattractive harshness effect.”  Jurors who processed information in more of an “experiential” manner were the ones who gave longer sentences and were more likely to convict.

Psychologists and sociologists have long known of the advantages which more attractive people have:  they are more likely to be hired and are generally paid more than less attractive people.  Hollywood is practically defined by attractiveness.

Most lawyers will say that the outcome of many trials hinges on how well the jurors or judge “like” the litigants, lawyers and witnesses who appear in front of them.  The trier of fact gives credibility or believes who they think is more attractive.

As I’ve indicated many times, settling a lawsuit or divorce matter is almost always in the best interests of all parties due to the unknowns of trial.  Part of the unknown results from human biases, some of which were detailed in this study.  We all like to think of a trial as “justice” but the reality sometimes is that it is a popularity or beauty contest.

If you would like to consider mediation to resolve your lawsuit or divorce, please feel free to contact me to discuss your situation further.

See a Real Mediation in Action

Most of my regular readers know I almost never have “war stories” of my mediations on this blog.  The primary reason why is confidentiality.  When my clients enter a mediation, they have an absolute expectation that what is said in the mediation room stays in the mediation room.  They do not expect their dirty laundry to be aired over the internet, even if carefully camouflaged by changing or omitting the names of the parties.  This level of confidentiality also makes it harder to market mediation.  How can I easily explain mediation by example?  There are plenty of law and court based television shows, but almost no mediation shows.

The Maryland Mediation and Conflict Resolution Office (MACRO) does an excellent job of marketing mediation.  To this end, they have produced an excellent video on different types of mediation.  The mediations feature actual disputants who have waived their confidentiality privilege and touch on different areas of mediation (commercial/business cases, divorce, family, community and peer [students in school]).  The common misconception about mediation is everything sitting around a campfire singing Kumbaya and wondering why we can’t all get along.  While most mediations are civil, the reality, as you can see in the video, is that mediations often involve difficult discussions, difficult decisions and facing the issues directly with your adversary.  The results of the process are usually a better relationship — even if it means ending it on better terms.

The video is in .wmv format and can be viewed by clicking here.

Please contact me to find out is mediation is right to resolve your divorce, family and elder issues or commercial dispute.

An Apology or Slap in the Face?

I have written before about the power and effectiveness of a sincere apology to help resolve a dispute. Now from West Virginia, a completely different way to resolve a dispute: a slap.

Stewart Altmeyer, a prosecutor in Kanawha County, was suspended without pay for one month for agreeing to drop a larceny charge in exchange for allowing the alleged victim to slap the defendant.

In a mediation, I (or most of my colleagues) do not allow violence to be the outcome of any mediation.

Are Judges and Juries like Referees and Umpires? Are Referees and Umpires Fair? Why lawsuits are crapshoots.

Analogies between a finder of fact (a judge or jury) and referees or umpires (the arbiter of a game’s rules) are often made.  It is open to debate whether the analogy firmly holds.  However, it is often interesting to discuss whether any “neutral” decider of an outcome (game rules or rules of law) have biases.

When a party enters the courthouse or arbitration room, each party expects (and hopes) that the person(s) making the decision as to who is “right” is being impartial and fair. It is certainly open to debate how to define fair, which is usually in the eye of the beholder.  Each time I went through arbitration training (to be a private judge), the class is asked to perform an exercise.  The class is broken up into groups of three people.  One person plays the arbitrator, one person the complainant and the other the respondent.  Each group is given the same exact fact pattern and the parties make their cases.  After a specified period of time, the arbitrator makes their ruling which is turned into the person running the training.  Every single time I’ve done the exercise, the distribution of rulings in the room fall out from one  end of the possible spectrum to the other with everything in between.

Why?  Everyone had the same exact case to argue.  Shouldn’t “justice” be consistent?  In reality, several things happen.  First, not every party presents the case the same exact way.  Some people are more effective than others, just as some lawyers are better skilled than others. In a real case, anyone who speaks (lawyers, witnesses) can have good and bad days.  Trials are performances.  Second, every single human being has biases.  We grow up with things we like or don’t like.  We have all had good and bad experiences with things, people and scenarios.  These create the filters through which we see the world.  There is also a theory many attorneys ascribe to which states that whomever the jury or arbitrators likes better in terms of attorneys and litigants will win the case. Likability trumps “rightness”.

Getting back to the sports (referee) analogy, there have been some recent studies showing bias in referees.  And I am not referring to the Tim Donaghys of the world who seek personal gain from their on-the-court rulings.  In the Netherlands, two professors discovered that soccer (the other football) referees are more likely to call ambiguous fouls on taller players.  A study out of England showed that referees favored home teams in their calls, especially in disciplinary sanctions (yellow and red cards).  From the world of Tae Kwon Do, referees tend to award more points to competitors wearing red uniforms.

In the U.S., college basketball referees tend to also favor the home team by calling fewer fouls.  The college refs also try to level the playing field for the teams by issuing “make up” calls, calling more fouls on the team in the lead, and trying to even up the number of fouls between the teams regardless of the aggressiveness of the level of play of each team.  A 2007 study also found that white NBA referees tend to call more fouls on black players than white players.

Even just looking at the games you watch, do you agree with each decision the referee or umpire makes regarding your team?  How about instant replay, the analogy of an appeal in court?  Does the referee get it right even when they have a TV with 20 angles and slow motion to look at each play?  Sometimes not.

So what does all of this tell you?  Try to resolve the case without having someone else decide it for you.  That’s what mediation helps the parties accomplish.  The outcome is on your terms and is unaffected by the biases of others.

Please contact me if you would like to further discuss how mediation can help facilitate a resolution to your lawsuit, divorce or family dispute.

Tips on Making Foreclosure Mediation Productive

I have written previously about how homeowners and lenders can use the court’s foreclosure mediation program to help resolve a foreclosure matter.  Here are a few tips on how homeowners can use the mediation process more effectively:

  • Get into the process as early as possible.  Waiting until the morning of the sheriff’s sale is probably too late.  Since the bank will not accept payments while the loan is in arrears, the amount in arrears can drastically increase.  If the homeowner is not saving this money, they will be unable to address the arrears, making a modification impossible.
  • Be prepared.  Have all of the documents which have been requested by the bank.  You are trying to prove you are eligible for a loan modification of some sort.  Not having the proper documentation will not help your case.
  • Show the lender you can be responsible in trial payments.  Banks will often set up a trial payment plan so that the homeowner can prove financial responsibility to the bank.  Make sure you can make the payments as agreed to.  If you don’t, you will be unlikely to ever be given another chance.  Send any payments by a service which can be tracked (i.e. certified mail, priority mail, Fedex, etc.).
  • Be aware that not all homeowners will be able to save their homes.  There are other alternatives for those homeowners rather than going through foreclosure.  The lender may allow you to stay in the home through the end of the school year.  They may be willing to offer cash for the keys.

Remember, the mediation is your one chance to get the bank to discuss solutions for you.  Take advantage of that moment.

Get A Settlement Done And On The Record Before It Is Too Late

The plaintiff and defendant in a New York medical malpractice lawsuit has come to a putative settlement agreement just before the jury rendered a verdict.  The parties failed to get the settlement on the record prior to the jury verdict and the settlement was invalidated and the verdict upheld.

In 1996, plaintiff Mahmoud Diarassouba underwent surgery to repair a chronic condition in his left knee.  Shortly thereafter, he experienced pain and discomfort in his right knee which he blamed on the surgeon and anesthesiologist for improperly repositioning the right leg during the long operation.  The condition became chronic.  In 2003, a jury found in his favor for $1.5 million.  The verdict was thrown out due to improper admission of some testimony and a retrial ordered.  The case was tried again in 2007 and while the jury deliberated, plaintiff’s counsel advised the defense counsel his client would accept a $150,000 settlement.  Defense counsel agreed.

Moments later, the judge informed the parties that they jury had a verdict awaiting them.  Plaintiff’s counsel asked the judge if the settlement could be read into the record prior to the jury verdict being read.  The judge replied in the negative.  “Once I have a verdict, I take the verdict, and then the parties are free to do what they agreed to,” the judge said. “An agreement is an agreement, counsel.”  Defense counsel remained silent. The verdict rendered by the jury was for $1.45 million.  The defense then moved to enforce the settlement which the judge granted.  Plaintiff appealed.

Last week, the appellate court ruled that the settlement was invalid.  They found that there was no written, agreed to settlement as required by the court rules.  Neither was it placed on the record in open court.  Further appeals are expected.

I have frequently advocated for my clients to settle early in litigation.  Many cases settle on the courthouse steps.  Waiting until the last possible moments to settle is not a wise course of action, as this case illustrates.  Thirteen years later, the parties in this case do not have any resolution.

Would you take less than 30%? Most Would Not.

Part of being an effective mediator is having a good understanding about how people make decisions.  After all, a mediator is assisting people in making decisions.  We all like to think we are making rational decisions.  However, that is not always the case (despite our best efforts to the contrary).

Professor Daniel Ariely (Duke University and MIT) conducts extensive research on human behavior and has written a fabulous book on this topic, Predictably Irrational.  He looks at how free! really isn’t free and how morality disappears when we’re emotionally (or sexually) aroused.

In game theory, there is a game called the Ultimatum Game.  One person is given an allotment of money, say $1000, and is told to offer a certain portion of it to another person.  If the other person accepts, they both get that amount of money.  If the second person declines, neither party gets the money.  Rationally, the second person should accept anything offered to them as any dollar they receive is more than they had previously. Studies done by Professor Ariely and his collegues have shown that most people will not accept less than 30% of the total pot.

There are a number of theories as to why the second player would act seemingly irrationally.  One is that the second player is making a “fairness” judgment:  it’s not fair that the first player is getting more than 70% of the money thus they should get nothing (while the first player gets nothing either).  Another is that the second player is setting themselves up for a better payout just in case there is a second round of the game (while there is no guarantee that there will be).

To test this further, the experimenters went to a bar where they were likely to find drunken (and hence “more rational” people who focus more on short term goals, versus the longer term goal of a better second round).  They found that most drunks would turn down deals for less than 50% of the money.

There is an interesting parallel to negotiations (and mediation discussions).  Parties to a negotiation often will get lost in the emotions of the conflict and instead of seeing their own best interests are taken care of, they become more interested in “hurting” the other party even though it hurts them as well.  If fighting over a fixed pot of money, anchoring (the first offer made by each side) becomes that much more important.