In this podcast, JAMS neutrals Hon. Wynne S. Carvill (Ret.) and Robin H. Gise, Esq., explore the factors that contribute to a successful mediation and the pitfalls that can impede the dispute resolution process. To start, they share their thoughts on the importance of timing and the exchange of information to help support the flow of mediation and then discuss the importance of managing unrealistic expectations and articulating proper risk assessment. Judge Carvill and Ms. Gise also exchange views on common assumptions made—sometimes incorrectly— by parties about mediation and the counteroffer process. The neutrals conclude with high-level insights on the “bigger picture” of the mediation process and avenues for moving the focal point away from just the desired dollar amount.
JAMS - Podcast - Why Cases Don’t Settle in Mediation and How to Improve Your Chances topic.
[00:00:00] Moderator: Welcome to this podcast from JAMS. In this episode, we're here to talk about some of the most common challenges parties face in settling their disputes in mediation, and strategies for overcoming them. With us are two JAMS neutrals, Judge Wynne Carvill, who served on the superior court in Alameda County, California, from 2003 to 2019, and Robin Gise, a former litigator who's been mediating disputes for more than a decade. Thank you both for joining us. Judge Carvill, let's start with the timing of a mediation. How can it affect resolution?
[00:00:34] Judge Carvill: Well, there are mediations—sometimes before a case has been filed and other times as late as the eve of trial—and whichever the situation, I often hear counsel indicate that there's some piece of information that is unknown that would be helpful if they knew it. And I always remind them that settlement is a risk reduction, risk liquidation process. And so, there will always be unknowns. However, to try to limit that problem in advance of mediations, I often ask counsel, “What do you need to know in order to make this effective?” And very often, those telephone calls before the formal session result in informal discovery between the parties. I think the counsel should—when they set up a mediation, when they agree with each other that they’re going to do mediation—they should discuss what kind of informal exchange would make the mediation more productive. I think that's very important.
[00:01:40] Moderator: Hey, Robin, what's been your experience? What do you do to ensure parties overcome any perceived timing problems?
[00:01:47] Robin Gise: Like Judge Carvill, I also recommend that parties try to exchange whatever information they need in order to have the mediation be productive, but other things that I do when a mediation is happening—either before the case has been filed or very early in the case before there's been discovery—is I encourage them to exchange their pre-mediation statements or at least the parts that address the facts and legal arguments. It's amazing to me sometimes how little the parties really know about each other's positions. I also might encourage plaintiffs to share damage calculations. And these are things that they may not ordinarily be required to exchange, but especially in a case like dealing with wage and hour issues, I find this really helps move the ball much more quickly. You know, in most cases, parties are going to be relying on me to convey their point of view and their message to the other side. So, if they can exchange their pre-mediation statements, that’s a way for them to communicate with each other directly.
[00:02:52] Moderator: Mm-hmm.
[00:02:52] Robin Gise: On the opposite end, in mediations that are occurring shortly before a trial, you have the opposite problem. The parties have been living with their arguments for so long and are so invested in their positions that it makes it very difficult for them to hear the other side’s perspective. In cases like that, I will encourage them to really focus on assessing their risks at trial.
[00:03:14] Moderator: Another perennial settlement obstacle, of course, in mediation is unrealistic expectations. Judge Carvill, what causes those expectations, and how do they affect the likelihood of a settlement?
[00:03:27] Judge Carvill: Well, it's human nature to hear what you want to hear and see what you want to see. And when people look at the evidence and consider the law, there's a confirmation bias that sets in, and people have a hard time placing themselves in the other shoes and honestly assess risk. And, if you don't assess risk, which requires you to look at the other size position without confirmation bias, you're going to inflate your own expectations and most dangerously inflate your client's expectations. That becomes a real obstacle in settlement. Very often in settlement, I try to find out—there's almost always unrealistic expectations—but I try to find out is it the lawyer, the client or both? Sometimes you have a lawyer who needs to have more realistic expectations and perspectives. And that's delicate because you don't want to embarrass the lawyer in front of the client. Other times, it's the client and the lawyer who actually wants to recruit you to help to lower the client's expectations. And I always try to figure out whose expectations are the biggest obstacle, because that will affect how I handle the mediation. Is it a lawyer problem, or is it a client problem, or is it both?
[00:04:57] Moderator: So, finding the source of those unrealistic expectations. Robin, how about you? How do you address those unrealistic expectations or when parties take polarizing positions?
[00:05:08] Robin Gise: First of all, I can't think of a mediation where this has not happened, you know, and that I think what it can lead to is sort of a problem getting out of the gate in a mediation when each side, you know, one side starts very high and the other side is inclined to start very low. It makes it very, very hard to proceed from those polarized positions and settlement negotiations. One thing I do is I first try to convey to each party a sense of how the other side is looking at the dispute. Even though they disagree, they can hear through me how the other side is looking at it. And that's, you know, something I do after spending a lot of time listening to each of them. I try to avoid, if I can—and it doesn't always work—the sort of reflexive very high first demand and very low first offer, and try to encourage parties to play their own game and assess their own risk rather than to [make] an outrageous demand of $10 million. Oh, I'm going to put down, you know, $10,000. But think about where do they think—put themselves in the other side's shoes—and what do you think a reasonable demand from them knowing what they know would be? And how would you respond to that? Because if you make a very, very low offer, how are they going to respond? And at times, I really—it does work. And you can get sort of more principled opening positions rather than the extremes. And that can help, you know, avoid starting off in two different universes.
[00:06:41] Moderator: And, Judge Carvill, you mentioned that sometimes it's the attorneys, sometimes it's the lawyers, sometimes it's both. If it is the client that has unrealistic expectations, what can attorneys do about that? What can they do to address those expectations? Is it conversations before mediation? How do they go—how should they go about that?
[00:07:02] Judge Carvill: Well, they definitely need to expose their client to the concept of risk. Virtually no lawyer is going to guarantee success. Lawyers need to learn how they can talk about risk to their client without, on the other hand, undermining their client's confidence in them. And I think that's the dilemma many lawyers have. They want to appear to be a vigorous advocate for their client, and yet they also need to be a counselor and assess risk for their client. And the latter, it helps in the advanced telephone conversations to let the mediator know if the client has unrealistic expectations and enlist the mediator's assistance in that. If I know that the lawyer wants my assistance, I may handle the discussion somewhat differently. I still need to establish trust with the client, but I will try to shift as soon as possible into the concept of risk assessment. And there are various ways I can do that, but it helps if I know that the lawyer wants me to do that, and when I do it, I will not be undermining the lawyer. Because if you undermine the client's confidence in his or her lawyer, that can be counterproductive.
[00:08:26] Robin Gise: When you do have a situation where the lawyer has really tried to enlist you in helping manage their client, you're not going to speak to the client usually outside of the presence of their lawyer, but you can kind of affirm what the lawyer has been saying so that if the client is getting advice from the lawyer, that maybe they're not thinking about the value of a claim in a way that the lawyer thinks is, you know, defensible. You can sort of bolster what the lawyer is saying by having you as the outside neutral, affirm the attorney's positions, and I find that it gives the client confidence that they have a good lawyer because the mediator is basically agreeing with them on a point. But yes, the lawyer-attorney dynamic is very sensitive and one that you really need to get to the root of in these situations.
[00:09:21] Moderator: Judge Carvill, what assumptions do parties make about the process of mediation that can make it hard to settle disputes?
[00:09:28] Judge Carvill: Too often, lawyers approach mediation as almost a warmup session for the trial. They give you in the statement a trial brief, and their opening comments are almost like a trial argument, and that's not mediation. You need to in mediation get away from the trial mode and start talking about what are the issues in each side's perspective in a way that is not combative, but, where possible, looking for ways to compromise.
[00:10:05] Moderator: And, Robin, what's been your experience about those assumptions parties make about the process that can make it hard to settle?
[00:10:12] Robin Gise: I think parties often believe that the mediator can change the other side's mind about a critical legal issue. And, you know, they make their argument either in a mediation statement or in a private session with me with as much vehemence as they can. And this usually has the opposite effect. The other side is not coming to mediation to have their mind changed about their legal claims. In fact, it makes them more defensive and brings up their own arguments and makes them dig in more. That's, you know, a challenge. I think it's a misperception that, you know, the mediator is somehow going to change—the mediator can talk to each side about, you know, evaluating relative risks of a legal claim. But nobody is just going to snap and say, “Oh, of course. You're right.” Another thing that makes cases hard to settle is when a party comes in with a very high demand and doesn't move very much—or a very low offer and doesn't move very much—they think that it makes the other side think that they’re very confident and that it somehow strengthens their position. I mean, on the one hand, I’m all for an aspirational first offer, but if you’re not really seeing any movement from the other side, you may need to move. Movement begets movement, and that’s another thing that parties don’t understand. They sort of want to know, well, why don’t they just put their best number on the table? And I have to tell them it just doesn’t work like that when you’re at this very high number.
[00:11:38] Moderator: And, Judge Carvill, I assume you have experience trying to educate folks on the offer/counteroffer process.
[00:11:45] Judge Carvill: Yes. And I'd like to comment on what lawyers should do in preparing for mediation. I think lawyers—although I like them to start with realistic demands and offers—they should anticipate that there may be an unrealistic demand or unrealistic offer, and they need to strategize how that's going to be broken. Are they going to be the first party to make a substantial move? Are they going to do a bracket? What would their bracket be? Or is it to their advantage to have the mediator raise the issue of bracket or the other side propose a bracket? I find that very often parties haven't really thought about how we are going to get off these extremes and who's going to make the first move and how it is going to be done. Those decisions, I think, are often made on the fly rather than discussed in advance with the client.
[00:12:49] Moderator: Robin, do you want to jump in on that one?
[00:12:51] Robin Gise: Sure. It would be great if—if more lawyers thought—or at least I could perceive them to have considered these things strategically before going into negotiation. I think another—the problem that I see sometimes is when settlement discussions have already occurred and obviously failed before the mediation. One, it's amazing to me how much miscommunication [there] is as to who made the last offer and whose turn it is to move and what the last offer was. These are things I try to hammer out in my pre-mediation discussions because those can really get things off on [a] bad foot. I also find that parties become anchored to offers or demands made before coming into mediation. And maybe there was different counsel, maybe there was no counsel, and it can be hard in mediation to undo that. Parties also become very attached to their claims and defenses, and they overvalue them or undervalue their risk. So, I think in mediation, giving parties the opportunity to tell their perspective, to tell their story to a neutral but interested listener, you know, who can validate their concerns and emotions—it can help them kind of move past their, you know, stated positions about the matter to thinking about what resolving the dispute could mean for their lives and businesses.
[00:14:10] Moderator: Mm-hmm. And, Robin, I know you are involved in mediating a lot of employment law disputes, where I assume emotions do run high.
[00:14:18] Robin Gise: Absolutely. People spend most of their lives at work.
[00:14:22] Moderator: Mm-hmm.
[00:14:22] Robin Gise: And so, the disputes and—are very attached. Your position at work is often very important to you. And, you know, to have that taken away or to have felt slighted or discriminated against is very emotionally charged. Not to say business disputes aren't charged as well, but I do find in individual cases, you know, emotions typically run very high.
[00:14:45] Moderator: Hmm. And Judge Carvill, we—we've talked a little bit about timing. We've talked about unrealistic expectations. We've talked about sort of the process. We've talked about the preparation. Anything else to add in terms of how lawyers and their clients can be better prepared for some of these challenges?
[00:15:03] Judge Carvill: Well, one thing that I do as a mediator is have each side identify and admit the risks they face, and I ask them—and I'll elicit from the other side's statement, “Do you agree that this is a risk? Is this a risk?”—and try to get them to acknowledge, enlist the risk. Then I go back and say, “Well, what percentage would you assign to that risk? Are you going to guarantee a hundred percent to your client that you're going to win that?” And most lawyers are not going to guarantee anything, right? And so, if you get a list and then you start assigning separate risks to each issue and then go back and aggregate those risks, it can have an effect. I mean, people tend to just say, “Oh, I've got a—I've got 20% risk.” Well, there're five issues, and if they have a 10% risk on each issue, that aggregates more than 20%. And so, it helps to get them to list the risks, identify them, and then if they're overconfident, say, “OK. What’s your risk on this issue, and what's your separate risk on this issue?” And that often is a way of getting them to a more realistic assessment of the case. I think lawyers ought to do that in advance of the mediation, but if they don't, I'm probably going to take them through that process in mediation.
[00:16:37] Moderator: Hmm. Any final thoughts about the process you can take lawyers and clients on to adjust their expectations and expose them to their own risks, Robin?
[00:16:48] Robin Gise: I think it's really important for clients to try to separate their positions from their interests. I mean, they have a legal position: I was wronged or I was treated badly or I was unfairly fired or that employee was terrible and should have been fired or whatever their position is. And then really try to think about what their interest is in the lawsuit—why they brought the lawsuit, what they're trying to get at, what harm they're trying to right—because sometimes there are things in the mediation that have to be discussed that aren't really germane to the legal claims. And it sounds counterintuitive, but there's sort of—you have to talk about that stuff to get to the stuff that you need to settle the case. And I think by honing in too early on the money can really backfire if you haven't had each side—given each side an opportunity to consider, you know, what their underlying interests are, why they brought the lawsuit, what their interest is in defending the lawsuit. That's something that I really do emphasize in my cases and I think hopefully makes the settlement negotiation easier if they've had the opportunity to think about what they're trying to get out of this.
[00:18:03] Judge Carvill: Hmm. I agree with Robin that it is unfortunate when it gets down to simply going back and forth with a dollar number, and it's often useful to figure out ways you can break that dynamic. I often ask people to bring a draft term sheet, for example, and look at the term sheet. There may be other terms, other than money, that are important, and it's valuable to get those non-monetary issues surfaced early. And it's a way to get people off, you know, just going back and forth in dollars. You can change the dimension that you're negotiating and then come back to the dollars. So, it's a real mistake to just focus on the dollars and then at the end try to memorialize it, and you find out that confidentiality is a big issue, or what's the liquidated damages if confidentiality is breached or, you know, there are all sorts of collateral issues that can really bog things down if they're put off to the end. And yet, during the mediation, if they’re early enough, they can help you get off this, just trading back and forth in dollars.
[00:19:23] Moderator: Well, Judge Carvill, I think we'll give you the last word. Robin, Judge Carvill, thank you so much for your insights on this important topic. You've been listening to a podcast from JAMS, the world's largest private alternative dispute resolution provider. Our guests have been Judge Wynne Carvill and Robin Gise of JAMS. For more information about JAMS, please visit www.jamsadr.com. Thank you for listening to this podcast from JAMS.
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