Wednesday, August 26, 2009

Some Considerations to Think About When Picking a Mediator

In my last post, I focused on the considerations to think about in deciding whether to mediate a dispute. This week I want to focus on functions and roles when thinking about selecting a mediator. These include:

Process Facilitator: Setting process ground rules, agendas and meetings; keeping time (sometimes described as the “meeting metronome”); insuring that everyone has the opportunity to speak, etc.

Substantive Evaluator: This role can be both problematic -- it can be easy for the mediator to lose her/his perceived neutrality -- and a powerful aid to resolving the dispute. It is very dependent on the skill and experience of the mediator.

Legitimizer: Mediators are often asked: “What have others done? What are the norms? What are some objective measures?” A settlement based on some sort of “outside” or “objective” measure often makes it easier for parties to agree.

Trainer and Coach: Also a very powerful function when mediators coach parties privately about how to express their views and arguments so others can hear them more effectively. This role is important but not much discussed or understood; mediators often work with parties privately to help them explain their views/positions/demands to the other party without emotional overtone and phrased to also recognize the other party’s legitimate interests.

Problem Explorer: Similar to coaching, mediators often work with parties in joint meetings to explore the full dimensions and implications of a problem and consider possible alternative definitions of the problem.

Reality Tester: A very common technique where the neutral asks parties about their BATNAs – Best Alternatives to a Negotiated Agreement (i.e., “What will happen if you don’t settle this?”)

“Heavy” or “Scapegoat”: Sometimes it falls to the mediator to deliver the bad news. As with many of these techniques, the skill with which mediator performs this task is critical and can enable the parties to continue discussions and achieve settlement despite difficult conversations.

Lawyer or Technical Expert: Sometimes parties find the so-called expert, an experienced attorney or judge, a technical expert or sometimes simply a typical prospective juror helpful. As with all of the techniques, use of this technique is dependent on the mediator’s skill and experience.

Head Banger or “Closer”: In the end, this is the sine qua non of effective negotiations. To reach agreement, the parties have to “close the deal.” Sometimes this is difficult, even after the major issues have been resolved. Mediators can function as the advocate for settlement, keeping parties focused on the ultimate goal and asking parties to consider the alternatives to a negotiated agreement when they – all too often – stray from the path.

More about what to consider when picking a mediator in next week’s blog.

Keywords: mediation, mediator, how to chose a mediator, adr, alternative dispute resolution

Thursday, August 13, 2009

Why Mediate?

Our firm often represents small businesses, individuals and non-profit organizations where we have to weigh the merits of arbitration, mediation and litigation. (My partner Cecilia Jones, in our firm’s Business Law 101 blog reviews some of the considerations savvy business owners must take into account when pursuing debts.)

We encourage those of our clients who seek our advice when negotiating contracts and leases to include a provision that calls for the mediation of disputes between the parties before they deteriorate to the point where the only recourse is arbitration or litigation. Why? Because, given that both arbitration and litigation can be prohibitively expensive and time-consuming, we believe that mediation is often the best approach.

Mediation is becoming the preferred method for resolving most conflicts because it is cost effective, allows parties to retain control and is uniquely flexible regarding the process, the issues under discussion and the possible results.

One of the reasons mediation is so cost-effective is that litigation generally requires extensive discovery as often does arbitration. Mediation, on the other hand, does not, as the mediator can assist the parties’ exchange of relevant but limited information before the first meeting. These costs savings alone can be quite significant.

Mediation is often viewed as appropriate only for small cases but, on the contrary, it is often most useful and productive in the largest and most complex cases, where discovery can otherwise quickly get out of control -- both cost-wise and time-wise.

Complex case mediation (the type I call “Analytical Mediation” – see our web site) generally begins with facilitated limited discovery, often worked out by telephone before the first meeting. During the initial meeting the mediator assists the parties in weeding out secondary and tangential issues, focuses them on the determinative issues, which has the added benefit of narrowing the scope of the discovery necessary to inform the parties and their counsel and move the case to resolution.

Another benefit of mediation –- be it a small matter or a complex case –- is that clients are directly and intimately involved, which allows them to better understand the facts, the law and the other realities in the case; this, in turn, enables them to better understand their settlement options.

It is important to note that mediated settlements are not restricted to the remedies available to the courts, and parties can –- and frequently do –- develop solutions that are unavailable from a court, including business-sensible solutions. In mediation, opposing parties are actively involved and do not communicate solely through counsel.

Because mediation is voluntary and non-binding unless and until a settlement is achieved, there is no guarantee of a successful resolution. There is, however, a guarantee that the parties and their respective counsel will gain a greater understanding of the issues and legal principles involved and will, perhaps most importantly, have the opportunity to see the dispute from the other sides’ point of view.

Next week, I will discuss the importance of selecting the right mediator and the process for doing so.

Keywords: mediation, mediation process, mediation steps, mediation pros, mediation cons, mediation costs

Thursday, August 6, 2009

Liability Limits & the Burlington Northern & Santa Fe Railway Co Case

Last week I wrote about a new case regarding hazardous waste law, the U.S. Supreme Court case Burlington Northern & Santa Fe Railway Co. v. United States (556 U. S. ____ (2009)).

While it will take time for all of the implications of the Burlington Northern case to sort out, some are immediately clear. Because the Court has narrowed the definition of “arranger,” parties are not likely to have “arranger” liability if they only sold product that contributed to the contamination.

The more interesting change flowing out of this decision is the divisibility or apportionment of liability issue.

The Burlington Northern case appears to allow settlement based on “several liability” (i.e. the share of costs attributable to that one party alone) at sites where the shares of liability (and costs) can reasonably be divided based on the facts and circumstances at that site.

This means that at sites where the harm can be apportioned, the government will be responsible for the costs attributable to “orphan shares” -- liability attributable to insolvent or defunct parties -- as responsible parties will have liability only for their divisible portion of the costs.

Burlington Northern seems to allow parties many avenues to limit their liability to their “divisible” or “several” share using “reasonable” apportionment calculations. Prior to this decision the courts restricted divisibility and several settlements to those rare cases were costs were clearly attributable to only one set of parties based on unusual circumstances.

This is a big deal at sites where the parties can establish a “reasonable basis” to apportion liability and there is a potentially large orphan share.

I believe this case will give incentives to PRPs to gather facts related to divisibility to support settlements based on several liability and to propose settlement with the government based on each party’s divisible liability, leaving the government with no one to pay for the costs attributable to the orphan shares.

This could lead to the government paying more for orphan shares than in the past, putting more pressure on Congress to reauthorize the “Superfund” tax, which expired in 1995.

More about Superfund, cost allocation and Superfund taxes in subsequent blogs.

Keywords: cercla, superfund, superfund tax, burlington northern & santa fe railroad v. united states, burlington northern & santa fe railway co vs u.s., burlington northern, santa fe railway co, santa fe rw, arrange liability, prp, potentially responsible party, hazardous waste, hazardous waste law, orphan shares, liability