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Traditional thinking focuses on a trial as the means of arriving at a resolution of a civil dispute. Hard work and thorough preparation are understood to be essential before a trial, and the outcome of any trial is usually influenced to some degree, or a great degree, by the extent and quality of the preparation.
However, very few parties receive the benefits of the resolution of their dispute through a contested hearing or trial. A negotiated settlement is almost always the process that ends the dispute and determines what each party to the dispute gains for all the time and effort and expense incurred. These negotiations take place within the parameters of litigation, litigation is the normal alternative to a settlement agreement, but the negotiated agreement is almost always the conclusion. Not all disputes are evaluated and resolved in the context of active litigation, but in all disputes the parties have an alternative to a negotiated agreement. A negotiated agreement must satisfy two basic tenants: (1) the agreement has to be preferable to the alternatives available, and (2) the agreement must provide to all parties something that satisfies the interests and objectives of each.
Mediation has become the process by which the parties to the dispute focus their negotiations over hours or days and arrive at a conclusion. The mediator’s role is to provide order and direction to what has usually been sporadic negotiations at odd and random points in time. The mediator assists the parties in evaluating options and alternatives and helps craft an agreement which all parties to the dispute accept as giving all participants something of value and satisfies to some extent each participants interests and objectives.
A successful settlement can be described as an outcome that accomplishes a party’s goals sufficiently to make agreement to the settlement preferable to the alternative, usually a trial or hearing. The more thoroughly the party’s interests and objectives are satisfied, the greater the level of success. Achieving a successful outcome through mediation is as much the result of preparation and planning as is the successful jury verdict. Counting on luck or chance to deliver an agreement that provides the client the results desired, almost always result in failure.
The intent of this program is to provide the Panels thoughts and observations about the importance of preparation, and a means of organizing and managing the information and issues involved, so that the goals, interests and objectives of the client can be more fully realized.
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The content of the course will be presented in a continuous panel discussion focused on the topics outlined hereinafter. The hope is that the discussion will be principally fueled through the participation of the audience.
1:00 P.M. – 2:00 P.M.
Four Keys to Winning in Mediation
This portion of the session consists of an insightful discussion from our panel of mediators regarding their experiences as to what makes mediation successful for both the attorney and the client. Hear their thoughts, comments, and advice on topics ranging from planning and preparation to presentation and much-needed patience, all of which could mean the difference between “winning” and “losing” in mediation.
2:00 P.M. – 2:10 P.M.
BREAK
2:10 P.M.
– 4:00 P.M.
This portion of the session will focus on an “outline” suggesting that preparation for mediation, which in essence is a focused negotiation managed by the mediator, should center around 7 considerations that all negotiations involve one way or the other. By being better prepared, and more persuasive, as to these 7 considerations, the ultimate agreement reached can be more beneficial to the party that best manages the facts and circumstances at issue in the dispute.
1. ALTERNATIVES
A trial is where the jury or judge decides the dispute and hands the parties the outcome. At mediation all parties participate and the outcome is by mutual agreement. A settlement agreement is reached only when a resolution is presented that all parties can say yes to. The first step in the process is to fairly evaluate the alternatives to a deal, both as to your party and the other party. A fair evaluation of the consequences of failing to reach a settlement is an essential first step in evaluating the settlement options offered. Getting the other side to reconsider their alternatives can favorably influence the outcome.
2. INTERESTS
Parties take positions and make demands. These demands and positions are usually driven by their interest in having the demand or position accepted. Understanding the interests that create the demands and
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positions of both your side and the opposition will greatly aid in assessing and deciding about the substance of any settlement proposed.
3. LEGITIMACY
Positions, demands and interests are persuasive when supported by legitimate criteria. In a negotiation, the other parties positions can be undermined, and its demands reduced, by showing a lack of legitimate support. Being prepared to support your own positions as legitimate and credible affirms the value of the positions taken.
4. COMMUNICATIONS
Clear and effective communications are more persuasive and effective.
The clarity with which positions are presented often determines the credibility the other party gives to the position. An additional benefit of effective, positive and productive communications, is the opportunity for emotions to be expressed, and put aside and reduce or eliminate antagonism as an impediment to negotiations.
5. OPTIONS
At the beginning of every mediation there is no consensus on the content of an agreement. As discussions develop and alternatives, positions and the support for positions are identified, options must be identified. Optional terms and conditions can move the discussions to resolution, and the effective presentation and structure of options can move the discussion favorably to your side.
6. COMMITMENTS
The structure of the eventual settlement is derived from turning options and suggestions that appeal to both sides to commitments that solve the problem in whole or in part. Commitments are best made later, after the parties have explored and defined the other elements.
7. RELATIONSHIPS
Relationships have no direct connection to the substance of the ultimate agreement. However, the manner and method by which parties deal with each other can have a significant impact on the process and the ability to persuade the other party to come to a settlement.
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SUMMARY AND CONCLUSION
The parties in a dispute usually listen to objective and persuasive data and positions, despite the antagonisms and emotion that often comes to the mediation with the parties. Parties are usually willing to listen to the other side, and the mediator, if equipped with useful information, can assist both parties in an effort to change the evaluation of the dispute given by the other side.
Preparation, focused on the proper considerations, using useful and persuasive information, can influence the thought processes and evaluation of the other side, and can produce an agreement that better satisfies the interests of your client.
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Mr. Brown is a native of McCormick, South Carolina, and is a graduate of Furman University
(1973) and the USC School of Law (1976) where he was selected to the Editorial Board of the
South Carolina Law Review. Mr. Brown has been in private practice in Columbia, South Carolina since graduation with a concentration on civil litigation and dispute resolution. His civil litigation experience has been related to commercial litigation with an extensive concentration on construction disputes and project planning and contract negotiation. He has been involved in the negotiation and management of residential, industrial, commercial and medical projects of a combined value exceeding $1 billion dollars. His trial experience includes over 100 matters tried with the majority being arbitration proceedings. He also routinely serves as an arbiter singly or as part of a panel. Approximately 20 years ago, Mr. Brown began serving as a mediator, primarily in relation to Construction claims and other related Civil matters, and regularly serves as a mediator in matters many involving multiple parties and claims. Mr. Brown is a member of Nexsen Pruet
LLC.
Richard is a graduate of The Citadel and the University Of South Carolina School Of Law. He was admitted to the South Carolina Bar in 1990 and currently maintains a solo practice devoted exclusively to dispute resolution. He has served on the Supreme Court Commission on ADR, the
South Carolina Bar Resolution of Fee Disputes Board, and the South Carolina Bar Dispute
Resolution Section Council. He is also a member of the National Academy of Distinguished
Neutrals, and has conducted approximately 1,600 mediation conferences.
Judge Lisa A. Kinon was born October 4, 1958 in Columbia, South Carolina. Her parents are James and Alice Allen. She married Samuel C. Kinon in Dillon, South Carolina and they have two children.
She received two bachelor degrees from the University of South Carolina in 1980 in Business
Management and Business Marketing. She received her juris doctorate degree in 1985 from the University of South Carolina Law School. While at the University of South Carolina Law School she received the
American Jurisprudence Award in Evidence.
She entered private practice after Law School and joined the firm of Hearn, Brittain and Martin,
PA in 1987. As an attorney she concentrated her practice in the area of trial litigation primarily in family law. She was elected to the position of Family Court Judge for the Fifteenth Judicial Circuit in May of 1995 and has served continuously in that position. She was elected to replace Kaye G. Hearn who was elected to the Court of Appeals.
Judge Kinon has been a member of the South Carolina Bar Association, Horry County Bar
Association, and the American Bar Association. She has also served as a member of the South Carolina Bar
House of Delegates, the South Carolina Board of Governors, and as a member of the Supreme Court
Commission on Grievances and Discipline.
She has also received the University of South Carolina School of Law "Compleat Lawyer" award
- silver award in 1994. She received the South Carolina Bar Pro Bono service award in 1992. Judge Kinon was also certified as a Family Court Mediator in 1994.
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Eric, a Tar Heel through and through, graduated from UNC in 1986 and the UNC School of Law in 1989.
Having tried close to 100 cases to jury verdict, Eric used to consider himself a litigator who did some mediation. However, after 1700 mediations he realized his practiced had evolved to the point that the opposite was true and he left big firm life. In his new partnership at Wilson
& Englebardt, LLC, Eric concentrates his practice almost solely on mediation.
Eric has been on the SC Bar Dispute Resolution Council for two years, and serves as its representative in the Bar House of Delegates. He has also served on the Board of the Upstate
Community Mediation Center and is on the Bar’s Fee Disputes Board. He is currently listed in both Best Lawyers and Super Lawyers for his skills in Dispute Resolution and Litigation.
Eric is married to US Bankruptcy Court Judge Beth Burris, and they have three children, a son in law, and 2 dogs. They don’t necessarily love them in that order on any particular day.
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Some common statements we often hear about the mediation process are that “you can’t win your case in mediation” or “the best settlement is where everyone leaves unhappy”. Are these assumptions correct? One can definitely argue that mediation does produce winners (and losers) and parties do leave happy – possibly more often than you may think.
The disconnect may lie in how one defines “winning”. If winning means meeting all of a client’s pre-mediation expectations, then yes, it is rare that a party wins at mediation. However, if
“winning” is defined as taking advantage of the process to get the client the absolute best possible result short of trial, then we often see winners and losers every day. Often, if the parties approach the process not necessarily to get their case resolved on their own terms, but instead to use the process to get their opponent to present them with its best possible proposal short of trial, one can then make an informed decision to accept or reject without regret or later remorse.
While one has little control over decisions made by his or her adversaries, attorneys can control their own actions and decisions. So, what are some keys that often give you the best chance of
“winning” in mediation? Here are four suggestions:
Planning – Attorneys who treat mediation as an afterthought often rush into the process without time to properly prepare. How often have you waited until just before the deadline or trial to raise the issue of mediation with your adversary? You know what happens – scrambling to find a mediator, scheduling nightmares, and undue stress. Mediation is now just as much a part of litigation as pleadings, interrogatories, and depositions. Consider scheduling your mediation at the beginning of the case, even if the date is months away. Lawyers complain that our court system gives us no certainty in scheduling – here one has absolute control over setting a date certain mediation conference from day one. It is one less thing to worry about, gives the parties a date to look forward to, and frees you up to spend your time more wisely. Also, if you plan early, you will have the ability to choose the right mediator for your client’s case. Wait until later, and the calendar will often determine your mediator.
Preparation – Although most attorneys are somewhat or fully prepared for mediation, a considerable number of attorneys are often totally unprepared for mediation. So, who consistently wins? Correct, the ones that are thoroughly prepared ensure their clients get the best possible deal at mediation. Here’s some advice on preparation. First, prepare your client. Meet in advance and explain the process in detail. Keep expectations in check and make sure everyone keeps an open mind. Most of all, discuss your negotiation strategy in detail – don’t wait until the conference to try to manage expectations or prepare strategy – it’s often too late then. Second, prepare your opponent. Make sure your adversary has all information necessary to evaluate your position well in advance of the mediation conference. No one likes surprises, and your opponent will appreciate
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your courtesies. Also, make sure you have discussed logistics – namely who will be attending and whether they are the decision-makers with full authority. Third, prepare the mediator. Regardless of the complexity of the case, the mediator needs at least a basic understanding of the issues in dispute, the persons who will be attending, and any intangibles. Finally, prepare yourself. Know your client, know your facts and law, and know your negotiation strategy. As the late Chief Justice
Ness used to post on the board in his class at law school class each day – “Be Prepared”. If you haven’t prepared for what could be one of the most important days in your client’s life, your chances of winning will be greatly diminished, and you will have done your client a disservice.
Mediation may seem easy and informal, but it is just as important to your client as your opening statement to the jury in a courtroom full of people – be prepared.
Presentation – Those who win at mediation are the ones who present their case in a succinct, respectful, and compelling manner. This does not mean a fifty-slide PowerPoint. Proper presentation means knowing your audience, when to be tough and when to be gentle, and most importantly, making sure your opponent knows you’re prepared, confident, and ready for trial.
Most people subscribe to the theory that an attorney who makes a lousy presentation at mediation will most likely make a lousy presentation at trial. Your goal is to show your opponent that you know your case from top to bottom, have a credible and logical theory, and can make a persuasive case to the judge or jury. While the law and facts are important – your opponent is likely most persuaded by how you and your client present yourselves. Show your skills and spend time on your presentation. Have your evidence ready and let them see you’re prepared to go to the next level if necessary. Do that and you have your best chance at winning.
Patience – Finally, winners are patient. Impulse buyers pay too much; impatient attorneys or clients settle their cases on unfavorable terms. Didn’t set aside unlimited time? Have another appointment to make? Don’t like waiting? Got other things on your mind? Not a fan of mediation? If so, be prepared to lose. The best negotiators are those who are calm, patient, nonargumentative, and are prepared to take advantage of their adversary’s impatience. As the old saying goes, “pack a lunch” if you want to win at mediation.
Planning, Preparation, Presentation, and Patience – practice these and you’ll give your clients their best chance of winning at mediation.
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JOEL LEVINE
The author is a full-time alternative dispute resolution practitioner based in Florida.
After mediating hundreds of cases in all different fields and parts of the country over 18 years, I've reached a few conclusions about mediation that might be helpful to trial lawyers and that I've boiled down to seven deadly sins. Just as avoiding religious sins may not guarantee a place in heaven, avoiding my mediation sins can't guarantee a favorable settlement. But they might at least lower the odds of selfinflicted wounds.
Before laying out the sins, two caveats: First, let me say that my style of mediation is rather intensely proactive, and this article reflects the views of one who believes counsel, parties, and mediators must actively persuade each other in order to achieve their desired goals. Mediation theory is replete with references to "facilitation" and "party empowerment." While I don't diminish these characterizations, I truly believe participants in mediation are more concerned with results than process, and the road map that follows will lead you to that destination.
Second, I should also say that much, though not all, of my advice is specific to mediation with private mediators chosen by the parties. This issue of LITIGATION features an article by a magistrate judge about how to handle settlement conferences with the court. Unlike court-ordered settlement conferences with judges, mediation with private mediators presents greater opportunities for influence by the parties. Parties can select the mediator with the best style and subject matter background possible for their specific case. As lawyers with mediation practices to promote, private mediators often go the extra mile to bring about a settlement, while judges necessarily have less time and much more on their plates. Lawyers won't refer or rehire mediators who aren't all in, whereas judges have the ultimate job security. In private mediation, parties can be less guarded and don't have to worry about things they say or do somehow bleeding into later rulings from the court, as hard as judges may consciously try to prevent that from happening. Clients are often present and more involved in mediation than in courtordered settlement conferences. All of these differences color somewhat how lawyers should approach the two different processes.
Those disclaimers out of the way, the seven deadly sins:
1. Not Preparing
Without conducting an extensive statistical study, I'd guess that something like 85 percent of all cases settle in mediation. Yet, many attorneys who meticulously prepare for trial come relatively unprepared to mediations. Perhaps the traditional deadly sin of sloth is the culprit. Or maybe parties are trying to keep costs down. Thrift is often a virtue, but skimping on preparation for mediation can keep the results down as well.
First, when preparing, master the law. Advocates often quote it at mediation. Sometimes they're right on point, sometimes their view of the current legal framework is debatable, and sometimes they're more akin to Aesop. I've found one side's adept use of statutes or cases that disprove "the law" presented as gospel by the other side (but without backup) is quite effective.
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I recently mediated a case in which a defendant was reluctant to offer an amount sufficient to settle. He relied on an appellate decision that was generally on point, but his adversary produced a different decision rendered only seven days before the mediation with a similar fact pattern and contrary result.
Factoring in the cost of an appeal to the state's supreme court to resolve the conflicting appellate court decisions, the defendant increased its offer to an amount acceptable to the plaintiff. In another case-an employment dispute in which the plaintiff sought $1 million in compensatory damages-the company produced several cases holding that $150,000 was the upper limit for noneconomic damages and was available only in the most extreme situations involving clear proof of serious physical and psychological trauma. After agreeing on back pay and attorney fees, the amount allocated for consequential damages in the settlement was within the much lower range prescribed by the courts. In other words, come prepared to cover the governing statutes, rules, and precedents.
Then there are the facts. I'm always impressed when counsel hands me email, affidavits, deposition testimony, or other concrete evidence that the argument I'm delivering from the other side has more holes than Pebble Beach. Proactive mediators use all the ammunition parties will allow, so why not stock the armory?
Yes, I know you might want to save things for trial. But be- cause so few cases actually go to trial and mediation might be your last, best chance of producing a tolerable result, rethink the balance between using what you have at mediation and waiting to surprise the other side at trial. Remember that the other side probably already knows about it, and the trial may never happen anyway. The statistics say it probably won't.
Finally, understand your expert reports. Great trial lawyers know as much about the subject matter, economics, and calculations in their reports as the experts do. But for some reason, less capable attorneys sometimes decide to present expert reports at mediation without the ability to defend them or answer basic questions asked by the mediator or opposing counsel. The entire purpose of offering the report is defeated. In one case, I asked a well-regarded attorney some questions about assumptions used to derive various damage models and was told that he was going to rely on his expert (absent from the mediation, of course) when the time came. I asked why he was presenting the report to me if he couldn't explain its conclusions. My question was innocent-I simply wondered what I could do to help when the other side asked the same questions I was asking. He then surprised me by saying, "What are you trying to do--embarrass me in front of my client?" You can guess whether I responded or merely thought: "No, you're doing a good job of that yourself."
Whether born of sloth or pride, lack of preparation contaminates all aspects of mediation. Given your duty as an advocate to ethically obtain the best results for clients and the number of cases that will be resolved at mediation, it would seem obvious that you should thoroughly prepare for the day before it inevitably arrives.
2. Choosing the Wrong Mediator
Mediation styles vary. Personalities vary. Compatibility varies. Cases vary. Fees vary. And as prospectuses prepared for investors state, results vary. This is why everyone has a bad mediator story.
"He missed a critical point." "She communicated our position incorrectly." "He was too aggressive . . . passive . . . blasé . . . offensive . . . smarmy . . . sycophantic . . . distracted . . . unfocused . . . critical . . . uncritical . . . naive . . . accepting…argumentative…un-mediatorial (one of my favorites)…insulting…arrogant…inflexible…. (fill in the pejorative blank.]
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This isn’t surprising—not everyone wants the same thing, and not every mediator can supply it.
Mediators have different approaches, though the best try to adjust their styles to fit the circumstances of the case. They range from strongly proactive, evaluative, judgmental, and assertive to passive transformative – asking few questions and allowing the parties to lead in every aspect of the process.
Similarly, some mediators have substantial legal experience while others don’t. Some have substantial backgrounds in commerce and business, while others are generalists. Some have conducted many mediations and enjoy excellent reputations in the community; others are tyros and relatively unknown.
Ask yourself what type of mediator you want in your specific situation. Do you want someone who will battle with the other side, dissecting their weaknesses? Can you tolerate it when the mediator exposes yours? Or do you want someone non-confrontational to calm the contentious waters?
Many mediators use the traditional facilitative, non-judgmental method. Some organizations, like the
U.S. Postal Service, require mediators to exclusively use the "transformative" style of mediation. This approach eschews direction, judgment, evaluation, and opinion, and it encourages the parties to take charge of the process.
Still, attorneys typically tell me they prefer proactive and evaluative mediators rather than traditionalists whose passive goal is to simply get people to talk to each other without interjecting themselves into the dialogue. Perhaps it depends on whether you are mediating a one-off situation where the parties will never see each other again. An assertive mediator who settles a case despite a host of bruised feelings might be more appropriate in "kiss goodbye" scenarios than in ongoing situations pitting employers against employees, husbands against wives, or business partners against business partners. Of course, nothing prevents a proactive mediator from settling a one-off case without a scorched-earth approach.
If you do select a proactive mediator in hopes she will clearly pinpoint weaknesses in the opposing party’s case, don't attack her when she does the same to yours. Many pro­ active mediators know they're doing a good job when each side accuses them of favoring the other.
Styles vary a great deal too. One mediator goes around the room asking everyone to talk about themselves for a couple of minutes. Some litigators have told me this was a colossal waste of time.
Others said it humanizes people and creates an environment conducive for settlement. Some mediators book half days and tell you that if you haven't settled by 1:00 p.m., it's over. I've heard both that this is ineffective because negotiations ripen at their own pace and settlements are lost when everyone has to leave prematurely, and that the artificially imposed pressure moves people along and accelerates a process that would otherwise just waste lots of time.
Using retired judges brings prestige and authority to the table. Many are very effective, and some even might dare tell how the case will come out if you don’t settle. Of course, no one can predict the outcome of a case, but you might prefer a mediator who offers an opinion. Along the same lines, some maintain that a mediator need not have significant experience in the subject matter of the dispute. But in my experience, parties seem more at ease with a mediator knowledgeable in the relevant field or fields.
While not everyone agrees with me, I'd suggest choosing a creative, proactive mediator who has an understanding of the mediation process and a track record of bringing people together in various settings. It's helpful but not necessary if the mediator has mediated lots of cases. What counts is a
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flexible, intelligent person able to handle a wide range of situations. Look for someone with subject matter experience who is also fair and just.
You might not think "fair and just" matter much in a mediator. After all, the mediator isn’t the decision maker in what is quintessentially a consensual, self-determinative process. But consider this: A time comes in most mediations when the parties approach the final number. The paying party wants to be certain it pays the absolute minimum it can get away with, and the payee wants to be certain it is receiving the absolute maximum possible. At this point, counsel often look to the mediator to wrap things up and rely on the mediator to bring the parties to the ultimate amount. If your mediator is knowledgeable in the area, experienced in negotiations and settlements, and, perhaps most importantly of all, a fair and just person, the parties will feel more comfortable with the settlement sum. While the cynical essence of most good settlements is that everyone goes away unhappy, I like to think that, in most of the cases I mediate, the parties are, if not ecstatic, at least satisfied that a fair resolution was reached.
The bottom line: Mediators are different, have different personalities and temperaments, and work with different attorneys in different ways. Ask yourself what you wish to accomplish at the mediation and what you think is the best way of achieving that is; then choose the best mediator for the job. And choose one who leaves a settlement with joy and an impasse with abject dejection. The mediator should care as much or more about your matter as you do.
3. Not Preparing the Mediator
The benefit of preparing a proactive mediator is incalculable. Mediators aren't arbitrators or judges, and they don't render decisions. But they do influence the ultimate outcome, very subtly at times. The more the mediator understands your positions and the weaknesses of the opposing side, the more persuasive the mediator can be presenting your views.
A well-prepared mediator can jump-start the process and bring comfort to all participants because he understands the case. This will save a great deal of time-particularly in cases with complicated factual and legal situations. Some cases are settled by restructuring financial obligations, and a creative mediator equipped by the parties to thoroughly review the situation in advance can analyze the impact of various formulae, payment terms, collateral, interest, guaranties, fees, and other components of a settlement. The mediator can help restructure businesses; leases; calculations of earnings before interest, tax, and amortization; disability payouts; fair use agreements; license terms; reimbursements; outsourcing; coverage and allocations; structured settlements; franchise reinstatements; and a wide variety of resolution mechanisms. But no matter how bright or experienced the mediator, you significantly limit the mediator's ability to digest information, synthesize the necessary material, and assist you if you present him with situations for the first time at the mediation session.
Most mediators will give you an opportunity to speak to them in advance of the mediation. Not enough attorneys take advantage of this. Mediation summaries or statements that discuss matters not obvious from the documents or pleadings are also very helpful. Not only will the mediator gain insight into your view of the history and present posture of the case, she will use your summary as a checklist of points to challenge the other side. Although mediation statements are confidential, it's most helpful if you allow the mediator to use it in conversations with your adversary.
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Mediators are neutral, but they're also human and will inevitably be affected by the facts and law presented to them. There's nothing wrong with legitimately influencing the mediator. After all, the mediator is, in a way, your spokesperson in the caucus room. Consider providing the mediator questions to ask the other side. My openings include a brief review of the case and questions I'd like addressed.
These are neutrally presented; emanate from the law and the facts provided me; and would be, I assume, more or less the same questions a judge or jury would ask.
Would your client prefer to resolve this matter and continue a relationship with the other side? Do you fear showing weakness if you broach the subject of such an ongoing relationship? Ask the mediator to suggest "on his own" the possibility of resolving this unfortunate dispute and reestablishing a relationship going forward. Before we start, I often privately ask parties if they would like to continue a productive relationship. Yet, many other mediators don't approach reconciliation unless counsel suggests it in their mediation statements or pre-mediation phone conferences.
The permutations are endless, but it's axiomatic that a well- prepared mediator will do better than one showing up tabula rasa. So help the mediator help you.
4. Not Preparing the Client
Ugh, more preparation. Boning up on the case as counsel and working with the mediator aren't enough.
Most clients need it too. Some are very familiar with litigation and the mediation process. Many are not.
Explain it to them.
First offers are often the biggest shocks to mediation novices. In a case that should settle for $1 million, the plaintiff demands $15 million and the defendant counters with $10,000-each morally outraged at the "bad faith" of the other. Yes, I know you're smiling right now-I certainly am as I write this-but what's commonplace for us can often alienate and polarize parties. While good mediators have ways of shortcutting to the nub, the Turkish bazaar process of protracted bargaining toward a settlement is often anathema to first-timers unless they've been filled in on what's coming.
The second biggest shock to parties is when a neutral mediator begins disassembling their case and lauding the merits of the opposition. Please, as a favor to the brotherhood and sisterhood of mediators, let your clients know what to expect from the mediation process. Make them understand that the same process is occurring in reverse across the hall. This doesn't mean clients should disregard the mediator's observations; it's just that they should understand that a good proactive mediator is an equal opportunity offender.
Explain the world of mediation so that your client is comfortable from the start. It will make progress easier and certainly lower your client’s blood pressure.
5. Not Asking the Mediator for Help
This mediation foible might most resemble the deadly sin of pride. It always amazes me how the very best trial lawyers will ask for my help at various times during the mediation process while neophytes trying to impress will often attempt to appear omniscient. I recently conducted a four-party/four-law firm construction mediation with multiple counter- and cross-claims. Three groups asked me to structure settlements among them, but one side was uncooperative. After protracted negotiations and
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wasted hours caused by the maverick attorney's refusal to participate in the normal give-and-take of the group's dynamic, I have little doubt his client sought other counsel for future matters.
A good mediator can help restructure a severance or suggest payment terms for a buyout or escalators in a ground lease. If you choose an attorney with extensive business or legal experience in a particular area, you can ask the mediator to help you. I think I'd feel underutilized if all I did was carry messages and numbers back and forth between caucus rooms. Not all mediators can recommend that prepayments first be applied to principal rather than monthly installments, or that the license fee on
Brazilian nuts be reduced to $0.02 per dozen, or that a buyer suspicious of a seller's rent roll nevertheless close on a shopping center with the seller leasing (back) 20 percent of the center with a right to sublease. But many can suggest these structures and more-whatever you need-if you’d only ask.
Best of all, doing this won't embarrass you in front of your client. In fact you can score points with your client by letting on that the reason you chose this mediator was because he was knowledgeable in this area and can help you frame proposals as well as evaluate whether the bad guys' ideas are fair. It takes strength and confidence to ask for help, as most clients will appreciate. He who knows all, knows nothing.
6. Insulting Everyone
Now we come to the deadly sin of wrath. For some reason, certain attorneys think it's helpful during their opening to look directly at the opposing party and advise them of their short- comings and questionable birthright. How they think calling someone a crooked son of a you-know-what will be conducive to a mutual settlement is beyond me. I also get a kick out of the lawyer who repeatedly lets the other side know what a good attorney he is-far better than his counterpart sitting across the table, the implication is clear-and how he has never lost a case. There are an infinite number of ways to be offensive, and if your goal is to kill the mediation by creating an environment no reasonable human being would tolerate while maximizing the amount you can charge during the contentious litigation to follow, you are on the right track.
On the other hand, if your goal is to resolve the dispute, the prudent approach is to acknowledge that you're there because both sides have points of varying merit, you appreciate the costs and expenses and unpredictability of litigation, and it would be in everyone's interest to try to fairly resolve your differences. It's OK to add that we are here in the spirit of productive resolution-maybe even conciliation. The purpose of mediation is to explore possibilities of settlement. You believe strongly in your client's case, have tried many cases before, and are obviously fully prepared to go forward if need be.
In other words, during the opening you want to create as collegial an atmosphere as possible while letting the other side know you are capable of going the distance if necessary. If you do create a harmonious atmosphere, there are things you can do later in the mediation that would otherwise have been precluded by earlier offensive behavior. I recently brought one side’s counsel into a caucus with the other side to explain a very complicated set of regulations I didn't fully understand. In the process, both lawyers began explaining things as if we were all on the same team. We rejoined the entire group. I sat quietly and watched the beginnings of a resolution unfold. The key was that the client trusted the attorney for his opponent; thus, the conversation took on a tone of "we have a mutual problem to solve," rather than "your client is trying to screw me." This sense of joint purpose also works among
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attorneys when they treat each other with respect during the mediation. Remember, mediation isn't about you-it's about getting your client out of litigation with as fair a result as possible.
Last, I guess I should also say be nice to the mediator. "Nice," a quality shunned when being offered a blind date, is greatly underrated in real-world interaction. Because mediators can influence the outcome of a settlement-even if only within a narrow range-it never makes sense to alienate people who are trying to help you. Niceness entices.
7. Lack of Clarity
You remember the game of telephone you played when you were a kid. The idea was to form a line of people and whisper a few sentences in the ear of the first person in line. She whispers what you said to the next person, and so on down the line. When the last person repeats what he heard, it differs significantly from the original.
Even communications between two people become muddled in the minds of the listeners. During mediation, I’m often told of a statement "candidly" made by opposing counsel during an unguarded moment, only to learn a few minutes later that the lawyer who supposedly said it has a completely different memory. The person relaying the conversation tells me opposing counsel said his client would take $500,000 to settle the case, but opposing counsel is incensed because "what he actually said" was that his client wouldn’t consider an offer of less than $1.5 million. If I had a peppercorn for every time attorneys recounted differently, I'd have a ton of peppercorns without agreement, it will have to be subject to the approval of the board" the foggiest idea of what to do with them.
Now interpose another ear and mouth, and imagine how im- precise communications can be. Good mediators repeat what they should say before leaving the caucus room and write it down to be doubly sure. Good litigators make certain there is perfect communication, first between them and their clients and then with the mediator.
Three common examples illustrate the point. After six hours of mediation, the defendant made an offer acceptable to the plaintiff. When drafting the settlement, the defendant said for the first time that its offer included everything paid to the plaintiff in the past. Because the defendant had paid the plaintiff
$1million before any dispute arose and then ultimately agreed to settle the case for $1.5 million, the plaintiff naturally believed it was receiving a new $1.5 million, not $1.5 million less that $1 million already paid. In reality the defendant was offering $500,000 to settle, though the plaintiff thought the entire mediation had been working toward $1.5 million. The plaintiff was understandably infuriated, and the mediation cratered.
My second example needs no illustration for anyone who has settled many cases. It's the situation where, all day long, the parties negotiate over a sum of money, and after they agree, the defendant says for the first time: "Well, of course, we can’t pay this all at once." It's one thing to raise installment payments early on or later to try to discount the payment stream with a reduced flat sum upon signing.
But it borders on bad faith to wait until the very end of the mediation to attempt to modify the deal with gradual payments, despite knowing the other side has been negotiating for a lump sum all along.
Not only does this ploy polarize people and create an obstacle to settlement; it seldom works. The recipient's response usually is that if the paying party wants to pay over time, the principal balance will increase and bear interest. Then security comes up, adding several more hours to the mediation. Of
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course, these cases also get settled, but whether through intent and artifice or just sloppy communication, the settlement has unnecessarily been jeopardized.
The third example consists of waiting until the end of the mediation to state that the deal is subject to approval of the board, chief executive officer, executive committee, commission, municipality, wife, spiritual advisor, whomever. In many cases dealing with government, the parties know that getting later approval from some official body or public officer is a prerequisite to completing the deal, but if that isn't obvious, parties should say so at an appropriate time during the mediation. My suggestion is to state it during the opening. Some attorneys believe that if they mention it prematurely, they are signaling too enthusiastic a willingness to compromise. If that's true, waiting until the end could be destructive. "I'm not sure where this will go, but you need to understand that if we do manage to reach an agreement, it will have to be subject to the approval of the board” is a rather benign formulation of the prerequisite.
The more complex the issues, the more precise counsel and the mediator must be. Many settlements involve 5, 10, 20, or more different deal points, and the number of language points in the settlement agreement can exceed 100. But even with more manageable settlements, precision of communication is critical.
Some believe the real seven deadly sins threaten the soul. In mediation, they will threaten what might be a valuable opportunity to resolve the case, to say nothing of saving time and legal fees. Because most of your cases will settle, make the most of mediation by preparing diligently, choosing the right media- tor, asking for help when appropriate, and being collegial and clear. Good, and maybe even divine, consequences will follow. •
Litigation, Vol. 42, No. 2, Winter 2016 pp36-41
©2016 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
18

CLARITY OF EXPRESSION
The Keystone of Successful Advocacy in Dispute Resolution
PAUL MARK SANDLER
The author is a partner with Shapiro Sher Guinot & Sandler, Baltimore.
Clarity of expression is the essence of legal persuasion. Whether in court, arbitration, mediation, or settlement talks, favorable dispute resolution relies on effective communication.
Yet, in the practice of law, we are often confronted with vague and opaque writing and speech. This opacity has many causes, chief among which are lack of preparation, the abandonment of logic, and the failure to mold the message to the audience. Other causes include a misuse of emotion, lazy delivery, careless arrangement, confusing visuals, and the simple failure to recognize when to stop talking.
There are, of course, countless examples of the lack of clarity in the legal profession. For a small sample, consider the following:
1.
Counsel asks a witness in trial: "Do you know Tyra Jackson, and that she is the girlfriend of the defendant?" (See STEPHEN SALTZBURG, TRIAL TACTICS 54 (3d ed. 2012).) If the answer is "yes," to what does "yes" pertain? Knowing the girlfriend? Or that she is the girlfriend of the defendant? Counsel should have delineated the compound question into two separate questions.
2.
During an appellate court oral argument in a case involving a question of jurisdiction, a judge once asked counsel: "Well, how did you get here?" Counsel responded: "I drove from
Baltimore," prompting robust laughter from observers. Replacing "you" with "the case" would have clarified the question sufficiently. (This example calls to mind one of Mark Twain's quips, that "the difference between the almost right word and the right word . . . is the difference between the lightning-bug and the lightning." GEORGE BAINTON, THE ART OF AUTHORSHIP 87-
88 (1890).)
3.
Contracts often neglect to clarify substantive questions. Consider this boilerplate text from a contract under the heading "Dispute Resolution": "The parties hereto agree that before filing any lawsuit in any court they will initiate and complete mediation in an effort to resolve their differences." The contract fails to clarify what would occur if a dispute were to arise between the parties on the last day before the statute of limitations expires. The term "complete mediation" is poorly defined.
These three examples are hardly unusual. They illustrate just how frequently legal communication leads to misunderstanding. We can always do better. Below I describe a variety of practices that can help you sharpen your oral and written communication, in and out of court, arbitration, or mediation. I hope they may be especially useful to young lawyers, but all of us could use a refresher now and then.
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1. Identify a theme . Clear expression is the product of clear thinking. A theme can help you organize your ideas. Whether you are in settlement talks or preparing for mediation, arbitration, or trial, develop a theme and adhere to it. The theme serves as the road map for presentation. It keeps you going straight ahead, avoiding rhetorical detours.
Your general theme will be shaped by particulars. Survey the building blocks of your case: evidence, legal authorities, precedents, public policy, the facts, the adversary. What theme do these various elements suggest? Will that theme help you achieve your goals? Once you have identified a suitable theme, you will be in a much better position to develop coherent, well-organized arguments that advance your cause.
2. Consider the audience . Remember that clarity is measured only by the extent to which your audience understands you. Terms and ideas that are clear to a judge or another attorney may confuse a jury. If you persistently ignore your audience's particular needs, biases, and habits of mind, it may very well decide against you.
Knowing something about psychology and how people make decisions is essential for litigators. In
Thinking, Fast and Slow (Farrar, Straus & Giroux 2011), Daniel Kahneman, a noted figure in economics, suggests a two-system approach to judgment: Step one is an automatic or unconscious response toward a decision based on associated memory; step two involves the cognitive thinking that requires the brain to work.
Understanding these principles is challenging but worth the effort. For example, if you adhere to the view that people form opinions quickly by intuition, you might want to take advantage of the doctrine of primacy by beginning your presentation with your strongest point, rather than building up to it. Primacy embraces the idea that we remember best what we hear or see first.
Hence, clear expression is sometimes referred to as "listener-centered." See JAMES C. MCCROSKEY, AN
INTRODUCTION TO RHETORICAL COMMUNICATION 25 (Allyn & Bacon 1997). To mold the presentation to the listener, it is necessary to understand what elements will most likely influence the listener's decisions. Attitudes and beliefs are two such factors. Attitudes are pre-dispositions to think or behave in a particular way. They are often based on prior experience. A person who has had a bad experience in a hospital, for example, may not like health-care providers. Beliefs, on the other hand, are perceived truths a person applies to a new issue or question; for example, a member of a jury might believe that police are, on the whole, good people who work hard to protect the public. You can speak more clearly and effectively to someone if you know something about your listener's attitudes and beliefs.
There are numerous ways to learn about your audience. You can read about the judge or arbitrator, inquire in the legal community, or, in the case of a jury, arrange focus groups or mock trials.
3. Use logic and formal reasoning.
Sound reasoning clarifies understanding and thus advances your cause. It is difficult to disagree with conclusions arrived at through logic. When developing the reasoning that supports your presentation, consider deduction and induction, the two types of formal reasoning.
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A deductive presentation focuses on a general premise. The reasoning progresses from the general to the specific. If the conclusion follows from a valid premise, without the addition of new information, the reasoning is deductive.
Deductive arguments, or syllogisms, will often strike your audience as undeniable. Imagine you are in mediation and the mediator presses you to advise your client to pay the plaintiff. You respond: "The plaintiff's case is a nuisance. The statute of limitations for the claim is three years; the case was filed five years after the breach of the contract; the case should be dismissed." Is this not as clear as a fire bell in the night?
Another example of deductive presentation includes the use of definition. Here you define a term and illustrate that the conduct of your client falls or does not fall within the term. For example, "Paragraph
24 of this contract reads that amicable resolution includes mandatory mediation. Plaintiff did not seek mediation before filing suit. The case should be dismissed." Again, this airtight syllogism is difficult to refute.
Inductive reasoning, on the other hand, progresses from the specific to the general.
A literary example of induction is Robinson Crusoe's inference from a footprint in the sand that another person is on the island. Other examples include using life expectancy tables to argue the life expectancy of your client or arguing for lost profits based on prior years' experience.
If you try to balance an inference on the back of flimsy specifics, your argument will collapse. For instance, if you base a client's lost profits on only one year's performance, your adversary could claim that you've provided insufficient evidence; the year in question could have been anomalous. Ideally, the facts from which you draw your inference will clearly point your audience to the desired conclusion.
Induction by analogy can also help you communicate clearly. It often comes into play in the application of case law. You may appeal to a judge, for instance, to decide your case based on a decision in a previous case with similar facts.
Causal correlation is a third aspect of induction. You could observe that a group of tourists all became ill after being exposed to a visibly ill tour guide. Thus, you conclude, exposure to the guide caused the group to become sick. An adversary might counter that correlation is not causation. To refute this truism, you will need strong evidence. In the example of the tourists, if only a few of them fell ill and did so after being exposed to a variety of other people, your claim that the guide was to blame will look flimsy. On the other hand, if you can show that all the tourists became sick and were not exposed to other contaminants, you will be on surer footing.
Whether inductive or deductive, sound logic enhances clarity because it takes your listener through the thought process by which you have arrived at the desired conclusion. By taking these steps with you, the listener will more likely grasp their import and feel convinced.
4. Appeal to emotions . Emotion can be conducive to clarity, though it is important not to overdo it and to always be sincere. Convey emotions through body language, expression, voice, and pacing.
Often a situation can be so obvious that it would be counterproductive to pound the table or repeat yourself. In such instances, consider the power of understatement and restraint. When discussing a sad
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event, for example, a skilled advocate may often lower her voice, slow the pace, and clasp her hands in front of her body.
Figurative analogy can also heighten the emotional import of your argument. Whereas induction by analogy requires a comparison between like subjects, figurative analogy involves comparison between unlike subjects.
Many years ago, an illustrious plaintiff's lawyer, Moe Levine, represented a client who had lost both arms. In his closing argument, the attorney stated:
I could spend a good deal of time talking about what the loss of two arms means to a human being, but I thought this would be an affront to you since you are human beings, and all you need do is think about all of the things that you could not do without arms. But I would like to tell you that I went to lunch with my client. You know, he eats like a dog.
MOE LEVINE, THE BEST OF MOE: SUMMATIONS 229 (Condyne/Glanville and Oceana Publications 1983).
Delivered the right way, this single simile can concisely and memorably reveal the plaintiff's degraded condition and arouse pathos in the listener. A successful appeal to emotion clarifies in a way that logic cannot. Emotion provides strong motivation to decide in your favor. It communicates the deeper purpose at a visceral level.
5. Perfect your style . Your style of expression has a tremendous effect on clarity. Using language that is familiar to the audience is a step in the right direction. When steeped in a case concerning an arcane subject, a lawyer may fail to recognize that the terminology could easily confuse a judge or jury.
Daniel Webster, one of America's greatest trial lawyers, once remarked , "In addressing the understanding of the common person, I must use language perfectly intelligible to them. You will therefore, find in my speeches . . . no hard words, no Latin phrases. . . ." LLOYD PAUL STRYKER, THE ART
OF ADVOCACY 56 (Corner Stone Library 1956).
His point is well taken, and Latin phrases are not the only culprit. Overly complex sentences can also trip up your listeners. Here is a needlessly complex sentence: "Let us recognize that the plaintiff, my client
Mrs. David, has indeed labored in all good faith to fix and rectify the relationship in question." A more effective rephrasing: "Mrs. David has worked hard to repair her friendship." Such simplicity and concision will help your listener follow the argument.
When seeking to condense and simplify complexity, consider figurative language. Metaphors and similes convey ideas and sentiments with force: "Seeing his wife with another man was a dagger to his heart."
Another example: "After she was wrongfully indicted, her career went down in flames."
In addition to condensing sentiments, such statements arrest attention. Varying sentence structure can likewise cause your listeners to mark your words. Rather than stating "This case is about the defendant perpetrating a fraud upon the plaintiff," invert the sentence structure to begin on a more forceful note:
"Fraud is what this case is about."
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In rhetoric, such unusual sentence structures are known as "schemes." Repetition is a scheme: "How did you feel after the accident?" "Horrible, horrible, horrible." Parenthesis is another: "Defendant's action, and it is a tragedy , caused the collision." Playing with sentence structure in this way can be conducive to clarity when it helps you emphasize the facts, ideas, and sentiments you want the listener to act on in resolving the dispute at hand.
6. Refine your delivery . When preparing to argue a case, consider the movement, body language, and eye contact you'll use when speaking. If you are arguing that a witness was not wearing her eyeglasses when she claimed to have seen your client committing the crime, you could hold glasses in your hand and point with them to the jury to emphasize the point. This would visually anchor the idea you are conveying.
Body language, however, can just as easily hinder clarity. We often send messages inadvertently by our movements (or lack of movement). Indeed, sometimes your actions may be at cross-purposes with your intent. In the midst of an emotional argument, a careless expression or lack of eye contact can reflect a lack of sincerity. Remember President George H.W. Bush checking his watch during one of the 1992 presidential debates? Similarly, you may suggest to your audience that you disbelieve your client if you never seem to give your client attention.
7. Structure your presentation . Clarity of expression benefits from a balanced arrangement of your presentation. All arguments should have a beginning, middle, and an end. This is true for opening statements, appellate arguments, motion hearings, and even examinations of witnesses.
Developing the substance of your presentation within the various parts of the presentation is an art improved by experience. Consider beginning with the most important point to take advantage of the doctrine of primacy. This doctrine holds that we remember best what we hear first. It is often tactical to arrest the attention of the listener by stating at the very outset the action you want the listener to take:
"We are asking this court to reverse the judgment below because the Jones Company did not exhaust its administrative remedies”. You would only then develop the facts and procedural history.
While crafting the arrangement of your presentation, also consider the "doctrine of recency," which holds that we remember best what we hear last. It is often helpful to conclude your presentation with a major point that you wish the listener to remember. In addition, consider the "doctrine of frequency," which holds that effective repetition helps clarify your message.
The most effective advocates often employ techniques such as "looping" or "incorporation" to have the witness repeat a particularly important point. For example, "Did you see the collision?" "Yes." "When you saw the collision did you obtain a good look at the driver of the blue car?" Here the questioner wants to emphasize that the witness saw the collision as a predicate for other questions. How you craft your presentation using primacy, frequency, and recency is individualistic. What is most important, however, is that you are aware of these doctrines.
Another technique of arrangement is to use topical sentences: "I am now going to address the issue of the statute of limitations." Or when examining a witness: "Mr. Fox, I am now going to ask you some questions about where you were when the murder occurred."
8. Take care of the visuals . While a picture may be worth a thousand words, poor visuals and an overdependence on them can confuse your listeners. When using PowerPoint, be sure you don't crowd
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the slides with too much information. Ideally, your audience will be able to grasp the import of each slide almost immediately. Large lettering, plenty of white space, and vivid imagery all help, as does the effective use of color. Remember that colors have a psychological impact. While color psychology is not for everyone, and opinions vary on whether the color of blue communicates confidence or yellow optimism, it still makes sense to consider how color relates to the nature of the information presented.
Presenters often give in to the temptation to read from their slides. Do this too often and you will bore the audience. Rather than reading from visuals, paraphrase and elaborate on what they show.
Remember that the visuals are integral to your argument. They should be vivid and memorable. Used sparingly, they can do wonders in elucidating even the most complex information.
9. Do not reargue your points . When responding to opposing views, do not reargue points made previously. Instead, identify the topic or issue you wish to refute, then explain why that point is wrong.
Conclude by explaining the correct view of the matter.
When rebutting an adversary, attorneys will sometimes meander and confuse their audience. Such drifting may indicate that the attorney was not prepared to respond to an opposing argument. To avoid such mistakes, anticipate your adversary's moves and rehearse brief, clearly phrased rebuttals.
10. Know when to sit down.
Long-winded talks detract from clarity. Bore your listeners and you risk losing their attention-and their good will.
Each of these 10 pointers underscores the importance of preparation. Clear arguments are rarely spontaneous. While there is a place and time for extemporaneous speaking and improvisation, most attorneys must practice and test their arguments before going to trial. Doing so will help you speak with clarity, the keystone of successful advocacy in dispute resolution. •
Litigation, Vol. 42, No. 2, Winter 2016, pages 43-46
©2016 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
24

Advance Sheet
ROBERT E. SHAPIRO
The author, an associate editor of LITIGATION, is with Barack Ferrazzano Kirschbaum & Nagelberg LLP,
Chicago .
Most litigators are unhappily familiar with the need to do risk assessments. Clients understandably want to know what chance they have of success in a particular case, and they never shrink from asking lawyers to tell them. Litigators dutifully respond by saying the chances are 50-50 (standard in an ordinary case) or 60-40 (a favorable case, but not a sure winner) or 40-60 (unfavorable, but far from hopeless). Seldom do you hear 90-10. Most litigators regard such predictions as foolhardy, unless the case can be lost (or won) only as a result of what might be called the lottery effect, say, the chance of getting socked by an imbecile judge or aided by a runaway jury. Even in those cases, chances of 20-80 are more like it these days, given the complexity of cases, inconsistencies in the judiciary, and a somewhat more questionable jury pool.
All such numbers are mostly nonsense. They have much the same character as weather predictions.
Statisticians will tell you there are ways to ensure a meteorologist stays honest when predicting a 30 percent chance of rain. Apart from such statistical means, however, we all know as laypeople these numbers are designed to ensure that almost no weather prediction can ever turn out wrong, unless the meteorologist is foolhardy enough to say the chance of rain is zero and thunder- storms later prove otherwise. So, too, a litigator can never be faulted for having said the client had a 60 percent chance of winning. A loss conveniently resides in the remaining 40 percent, even if the client may need to be reminded of that once the negative verdict is in.
Risk numbers do have some value, however, in calculating settlement figures. As a defendant you can always take the maximum (or, if you prefer, the reasonably achievable maximum) damages the plaintiff may get and discount them by whatever generous or cheap percentage you believe is a plaintiff’s chance of success. So a prospective $10 million judgment, if all goes right for the plaintiff in a toss-up case, may be worth no more than $5 million, less the time value of money (assuming no prejudgment interest). Your own unrecoverable attorney fees may be added to the figure and, presto, you have a notto-exceed number for settlement purposes.
One reason the numbers are left so vague is that so many unpredictable elements go into litigating.
There is just so much that can go wrong (or right), so much that is unforeseeable. There are surprise emails, careless witnesses, and especially mistaken assumptions. Mark Twain was famous for saying that
"Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn't."
Ordinary assumptions are dangerous in litigation. Possibly the very reason there is litigation in the first place is that someone wrongly assumed events would transpire as they usually do. To put it more simply, paraphrasing Yogi Berra, in litigation you don't know nothin'. There is no end to what can happen.
Fortunately, clients' expectations tend to be reasonable, particularly the expectations of clients used to the litigation drill. What they want when asking for a risk assessment is a review of the presumed facts
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and the law, not which way the vagaries of litigation may cut. In most cases, they seem just as likely to cut for you as against you. Perhaps a closer look at the parties or the facts or a first encounter with the judge may counsel otherwise. The other side's lead witness could be a real sweetheart, bound to be beloved of the jury. Or that jumpy witness on your side may seem unlikely to perform well and may, if you listen closely, cause you to wonder if he's hiding something or is liable to collapse on the witness stand or some such thing. Your 60-40 may then become 50-50 or worse. But most of the time, these matters are not separately considered.
Most transactional lawyers have been blissfully spared the burden of this kind of risk assessment.
Usually, the client has a specific objective in mind: the acquisition or sale of an asset, real property, or a company; the negotiation and documenting of a relationship-to-be; the formation of an entity for tax relief while in compliance with law. In the last example, there may be a prediction regarding the likelihood of avoiding tax. In the negotiation of contracts, there needs to be an assessment of the value of a particular point or provision. The best lawyers have a clear understanding of what's necessary to protect the client and what isn't, giving up the latter but grasping the former tightly.
There is also due diligence. This includes the spotting of risks in an acquisition that need to be highlighted and considered. Those of genuine concern need to be scheduled. Ordinarily, there will also be a negotiation with the other side regarding the allocation of unforeseeable risks. The outcome of that negotiation will appear in the agreement's representations and warranties, with one side or the other maintaining (and thereby taking the risk) that certain things aren't going to happen or that particular problems will not arise.
But what about the transaction itself? Do transactional lawyers have an obligation to advise clients what the risks are of entering into a particular transaction in the first place? It is difficult to think of a case in which that would be obligatory, short of the client proposing something criminal, which calls less for a risk assessment than a firm "no." Lawyers have never understood themselves as being obligated to save their clients from their own foolhardiness. Most clients don't want to hear it either. Tell a client that his decision to do business with a particular party is too parlous an endeavor and you are likely to get an icy stare. They intend to do what they want, and the lawyer who even discreetly suggests that the deal may not be an advantageous one, or very risky, must either have a very close relationship with her client or be willing to be tossed out on her ear.
The distinction would seem to be between legal advice and business advice. The former concerns how to make the transaction the client wants to do as legally sound and risk-free as the lawyer can make it.
The latter concerns the decision to do the transaction at all. Seems simple enough. And not just in theory. Most lawyers know where the line is drawn. This is not to say that a trusted counselor might not venture into the businessperson's realm from time to time. But most clients, too, appreciate that this is not obligatory and beyond the realm of the legal engagement.
There are all kinds of reasons to support this distinction. Like litigators, transactional lawyers cannot be expected to see all that can go wrong, or even right. It is for the businessman to make the financial bet, using his judgment to know whether a transaction is a good one or not. Lawyers document the wager in the best possible way. They cannot be expected to reassess the sense of the deal in the first place, can they?
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Yes, the Seventh Circuit has now said. Speaking through the sometimes controversial Judge Easterbrook, the court has opined that it is imperative, on pain of a later malpractice claim, for deal lawyers to warn clients about the foreseeable risks of the transaction itself.
The case at issue was Peterson v.Katten Muchin Rosenman LLP , 792 F.3d 789 (7th Cir. 2015). There, a couple of investment funds sued the Katten law firm for negligence in connection with documenting transactions the funds had decided to do with entities controlled by one Thomas Petters. The Petters entities supposedly financed some of the inventory of Costco pursuant to paperwork Petters provided, including a Costco undertaking to pay its obligations into a "lockbox" bank account. One of the managers of the funds knew the money was not coming from Costco directly. There was a Petters entity in between, but he lied to his investors about it. In the end, however, he was himself the victim of a bigger fraud: Petters had no relationship with Costco. It was all a Ponzi scheme.
The funds claimed that Katten committed malpractice by not advising the funds of the risk of fraud.
According to the complaint, Katten should have advised there was a chance Petters was not running a real business. Two facts added some force to this claim. Apparently, Katten was told at the outset, in
2002, that no one was to contact Costco, given a supposedly sensitive relationship between Petters and
Costco. Also, when Petters fell behind in payments in 2007, Katten was asked what to do and neglected, so the argument went, to seek new security for the funds' investment.
When the now-defunct funds sued all the professionals, the district court dismissed the complaint against Katten, apparently convinced that a risk assessment of the kind Katten was alleged not to have done was not within the province of the lawyers. In the Seventh Circuit, however, Judge Easterbrook took a different view.
Asserting that the complaint's allegations had to be taken as true, he contended that there was no basis yet to believe that Katten acquitted itself of its obligation warn the funds they were in parlous territory.
But did Katten really have that obligation? Emphatically so, said Judge Easterbrook. Perhaps, he offered, the matter sounds more in the nature of business advice about whether the deal was a good one or bad one, not something within the purview of the lawyers. But, he emphasized, there is no easy distinction between business advice and legal advice. Moreover, it is always in the nature of legal advice, he claimed, to warn of dangers in a transaction, as any competent transactional lawyer (he says) would do.
The client may not wish to hear the advice, let alone accept it, but the risk assessment of "the transaction" itself should be made and given. On the basis of the complaint, no judgment could be made whether Katten had done what a competent lawyer would have done, so the complaint was reinstated and returned to the district court. See id . at 791-93.
This outcome is deceptively simple, not to say simple-minded. It is doubtless true that there is no easy distinction between business and legal advice. The former seems more comprehensive than the latter, which itself seems more in the nature of technical assistance. But lawyers are not like plumbers. They need to exercise judgment. The case was also helped along by its procedural posture. At the pleadings stage, it was difficult to say exactly how much Katten really knew, what real warning signs there were, and even what specifically Katten was asked to do. Complaints with high- flown rhetoric can obscure a
27

host of deficiencies. There had been some hope in the legal community that Bell Atlantic Corp v.
Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal , 556 U.S. 662 (2001), might curtail the problems created by clever pleading, but once you assumed, as Judge Easterbrook did, that the role of transactional lawyers reached into the merits of the transaction, it was not too difficult for the funds to meet the heightened pleading requirements imposed by those cases.
The problem, if there was one, lay in something more fundamental. Judge Easterbrook ruled that lawyers had to warn clients about the risks of the transaction. Note how different this is from the kinds of risk assessment litigators are asked to do. Litigators have a known risk- the lawsuit-and merely opine on chances, one way or the other. Even if they venture into the more likely developments along the way, they are dealing with something concrete. Due diligence for transactional lawyers is also subject to clear limits, ferreting out and scheduling known risks and providing in contractual language for undiscovered ones. A failure to warn is a different kettle of fish altogether. There one has to look beyond the transaction to ponder what else might go wrong.
And what transaction? In the Katten case, was it the mere documentation of the narrow elements of payment and repayment, at one extreme, or the whole relationship of the funds and Petters, or even
Costco, at the other? The risks Judge Easterbrook insisted the lawyers needed to opine on would differ depending how you characterize the engagement. At the narrow extreme, the only risk to be assessed was whether the documentation served the purposes it was designed for, i.e., did it provide for the money to be invested and repaid? At the other end, Katten would be called upon to do extensive due diligence and a detailed risk assessment of all things that could conceivably go wrong. This concerns not merely the possibility that Petters might not be legitimate but also the possibility that Costco itself might go broke or even be corrupt or itself defrauding Petters.
Indeed, at this broad end of the spectrum, there is and can be no end to the possibilities, as Mark
Twain foretold. Assume, for example, that Costco is heavily invested in China. Must the lawyers assess the risk of a devaluation of the Chinese currency? Or how about a political upheaval there? Might not this affect Costco's ability to pay? To say these possibilities are absurd is to say nothing. They remind us that there is no such thing as a perfect hedge or a sure thing. A lot of people who were engaged in
European commerce in 1914 thought a total continental war was impossible too. Or, to take a simpler example, stock market analyses in 1998 did not take into consideration the possibility of Russian sovereign debt default. It was just assumed it would never happen. But it did, causing losses for many.
And who foresaw the collapse of Lehman Brothers in 2008?
Judge Easterbrook, to be fair, would likely never expect the lawyers to have foreseen and advised of the risk of those events. It is only what a reasonably diligent lawyer would be expected to foresee. But the parade of horribles should alert us to several problems. First, a failure- to-warn approach raises the danger of looking through the wrong end of the telescope, from the end result back- ward. When events no one conceived of or thought possible occur, it is easy to make them seem foreseeable. Take the simple example of a lawn mower. It likely never occurred to lawn mower manufactures that a user would be so great a knucklehead as to put his hands or feet underneath a switched-on mower. The warning signs that now grace lawn mowers suggest that there was someone just so obtuse, with the manufacturer having been held liable or at least sued for not warning about it. Bad outcomes in
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business transactions may well take on the same characteristics and risks for lawyers who work on them.
Second, even if the engagement is a narrow one, it can, through crafty pleading, be made to look like a broader one. Expand the engagement, or the description of the engagement, and increase the risk, or the liability. Many meritless cases will, on this analysis, get past the pleading stage, as this one did. The pressure for settlement will then ratchet up and result in many spurious claims being paid.
Third, the impact on engagement letters may be significant. Fearful of their duty to warn, lawyers may now try to document carefully exactly what they are being asked to do and what risks they do not wish to take. This hampers the free flow of advice, not necessarily for the benefit of the clients. Or perhaps the more likely outcome is that lawyers will now simply bear the risk, providing commercial clients with a kind of insurance policy against their failed transactions.
This seems unlikely to be a good development. Whereas a businessperson could always fire a lawyer she viewed as an ineffective counselor, she may now be able to sue him too. One also wonders how far the contagion might spread. Will the scope of a litigator's obligation to warn of risk also expand to include the impact of negative publicity from a case or the risk that litigation may prove too costly for the client to sustain? We seem perhaps on the edge of new territory, where lawyers are no longer held to account for the risks they are asked about, with all the careful hedging that permits, but now must also account for an uncertain and perhaps unlimited realm of the failure to foresee what may happen. Be forewarned.
Litigation, Vol. 41, No. 2, Winter, 2016, pages 58-61
©2016 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
29

ROBERT HUGH ELLIS
The author is a senior attorney in the Litigation Group of Dykema Gossett PLLC, Detroit .
A written settlement is arguably the most important document in modern litigation. As fewer and fewer cases go the distance to trial, quite often the execution of a written settlement agreement, rather than a jury verdict, is the event that signals the end of the dispute. After devoting months-perhaps yearstoward a resolution of a case, it is vital that litigators approach the negotiation and finalization of settlements with the same caution and prudence they gave to the underlying dispute. Although the prospect of finally closing out the matter, client expectations, and sometimes pressure from neutral mediators or the court can encourage haste, litigators should resist the temptation and take the extra time to ensure that the settlement they and their clients want is the one they actually get. What follows are a few practical pointers and observations to keep in mind as you prepare your next settlement.
First, make it clear from the beginning that a formal written agreement is required. If you and, more importantly, your client expect that any settlement of your case will require a formal, lengthy settlement agreement, good practice dictates making this fact known early and often. While it is difficult, if not impossible, to identify the contents of a "typical" settlement agreement, it is safe to assume most are intended to be a little more involved than "Defendant will pay $X.XX, and Plaintiff will dismiss the complaint with prejudice ."
While, in some circumstances, that sentence might very well get the job done, often there are plenty of legitimate reasons that additional terms are necessary or desirable. Perhaps you intend the agreement to be enforceable under the law of a specific jurisdiction. Perhaps your client is a sophisticated entity that, over time, has developed a series of settlement requirements and terms that it wants in every case. Perhaps certain obligations in the settlement are contingent on specific triggering events, such as securing financing. Perhaps your client works in a regulated industry and certain terms and specific language must be included in any settlement. Perhaps confidentiality is important. Or, conversely, perhaps disclosure is required by law. Whatever the reason, more often than not, one sentence jotted on the back of a napkin likely is not what your client has in mind when it decides to settle a case.
An attorney should be careful, then, not to inadvertently agree to such a bare-bones settlement arrangement without intending to. How often do parties list two or three key provisions on a term sheet at a mediation, sign it, and indicate that they'll work out the rest of the terms later on'? How often do parties send proposals back and forth via email, reach an understanding of certain terms, and then plan to circulate draft written agreements later'? For example, the following is not an uncommon exchange:
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Plaintiffs' Counsel: Will dismiss for $SOOK, payable to plaintiff and firm.
Defendants' Counsel: Can't do $SOOK. Can do $600K. Dismiss with prejudice.
Plaintiffs' Counsel: OK. Sounds good.
Defendants' Counsel: OK. Will draft something.
The question becomes: What happens when the parties are unable to agree on these additional terms?
What if one party's "standard" language is, for whatever reason, completely unacceptable to the other?
For example, suppose one party's preferred confidentiality language, which it absolutely intends to require as a condition of any resolution, is unacceptable to the other side? Is there an enforceable settlement?
•
•
•
•
Yes, there is a very real risk that there is. See, e.g., Kloian v. Domino's Pizza, LLC , 733 N.W.2d 766 (Mich.
Ct. App. 2006) (enforcing a series of emails as a binding settlement). Obviously, the issue will turn on the facts of each case and the applicable law, but if there arguably is an email making an "offer" and another
"accepting" it, that could be that. You may find yourself in the uncomfortable position of informing your client that it just "settled" a case on terms far different than it intended.
A careful attorney needs to be wary of this trap. No matter what your relationship with opposing counsel, and no matter how clearly the parties intended for the final agreement to contain additional terms and conditions, you cannot simply assume there will be agreement on the additional terms you intend to include in the final settlement. If these terms whatever they may be are an absolute requirement, then you should say so. Consider specifying the following in your written discussions of proposed settlement terms:
• that all discussions and correspondence are for negotiation purposes only; that you lack authority to enter into any final, binding agreement on behalf of your client; that there is no agreement until the ink is dry on a formal and totally final settlement; that the execution of a separate, formal contract is a material term of any settlement and that there is no settlement without one; and that other material terms exist and that your client will not agree to any settlement without agreement on those as well.
While you may catch the occasional bit of grief from opposing counsel for highlighting something he considers obvious, that's a small price to pay for creating a paper trail illustrating that you need a separate, formal written agreement with additional terms signed by your client before the matter is resolved. The alternative is to risk having to tell your client that you just unknowingly settled its case for only a fraction of the terms it requires.
Second, add contingency plans to avoid subsequent disputes. A settlement is intended to create finality.
It should represent the end of the dispute and can often be the culmination of the expenditure of significant time and money. While your mediators will stress the old adage that a good settlement is one neither side is completely happy with, at least one thing the parties agree on is their mutual desire to just be done with it. But what happens when one party fails to perform? Do the parties now need to mount up again, enter another lawsuit, and litigate the breach? Or what if the settlement is complex and involves a series of obligations, each of which is a condition precedent to another? Is the entire deal undone? Whenever possible, you should attempt to include a framework for what will happen if things fall apart so you can avoid-or at least narrow-the matters at issue.
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Some Potential Examples
Here's an example: You represent a plaintiff minority share- holder in an oppression suit concerning a closely held corporation. After one year of hotly contested litigation, the parties elect to settle the case through an agreement under which the defendant agrees to buy out your client within 30 days of the entry of an order dismissing the claims against him. You draft an agreement, the parties sign, and your client dismisses her claims with prejudice. Thirty days later, however, the majority shareholder's counsel calls and says his client's financing has fallen through. He can't buy your client out yet, but he's still looking for alternative financing. A month goes by. Then another. Then another. It becomes painfully clear the defendant is not going to be able to perform. Meanwhile, your client, in reliance on the agreement, has already performed her obligations and dismissed the case.
Your client is not without options, of course. The defendant failed to perform under the settlement agreement, so your client can bring a breach of contract claim. But this will probably require the initiation of yet another lawsuit, increased costs for your client, and possibly complex valuation issues surrounding the damages caused by the defendant's failure to purchase your client's interest.
Alternatively, your client could attempt to re-open the original case and argue that the settlement should be rescinded or perhaps declared void, but even if that approach is successful, your client now faces the prospect of litigating the very same claims she thought she had resolved.
Here's another example: Your client sells rare books, and he agrees to sell a 17th-century edition of Don
Quixote to a collector. Before Don Quixote is pulled from the inventory, however, one of your client's employees sells it to someone else. The collector sues, seeking specific performance and demanding your client sell him a 17th-century Don Quixote at the agreed-upon price. As there aren't many 400year-old copies of Don Quixote floating around, the collector agrees to dismiss the litigation if your client will instead sell him an 1865 edition of Alice's Adventures in Wonderland at a $30,000 discount.
Your client agrees. The collector dismisses his claims; your client sets Alice's Adventures in Wonderland aside and waits for the collector's wire. It never comes. The collector is never heard from again. The claims against your client have been dismissed, your client is stuck holding an extremely valuable book, and he's not certain of what-if anything-he can do with it. Does he need to set Alice's Adventures in
Wonderland aside for the collector and, if so, for how long? Suppose he sells it but the collector comes calling a few weeks later? The settlement is completely silent on what to do in these situations. Your client is left to take his chances by selling the book to someone else or possibly file a declaratory action to determine the rights and obligations of the parties.
To the extent possible, you should try to foresee these types of situations and attempt to include solutions for them in the agreement. The more complicated the settlement, the more variables you'll have, and the more variables you have, the more likely something will not work out as intended. Of course, you'll probably never be able to imagine every conceivable way a deal could fall apart, but if you happen to catch and plan for some of the more likely candidates, you could save your clients grief down the road.
For example, in the bookseller case, the bookseller agreed to sell Alice's Adventures in Wonderland to the collector at a $30,000 discount in exchange for the dismissal of the case, but the settlement agreement did not contemplate what would happen if the collector never tendered the money. One possible solution would have been to require the collector to tender the purchase money in 30 days. In the event the collector failed to do so, he would lose any claim to the copy of Alice's Adventures in
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Wonderland, and the bookseller would be free to sell it to someone else as he saw fit. As the purchase of Alice's Adventures in Wonderland at a $30,000 discount would have represented a net benefit of
$30,000 to the collector, the bookseller could then simply tender a check in that amount to the collector. In that event, the collector would obtain the same net benefit ($30,000), the bookseller would still "pay" essentially the same amount (a $30,000 check instead of a $30,000 loss on the book), and, what is most important, the settlement would be completed and the matter finalized. No more uncertainty. Your client has the finality he had hoped to obtain when he agreed to settle in the first instance.
Pocket Consent Judgments
For the minority shareholder, the settlement could have included an alternative form of recovery in the event the defendant fails to buy out your client. For example, the agreement could require the majority shareholder to sell his interest to your client in the event he is unable to complete the purchase. Or the agreement could instead include an aleternative form of recovery for your client in the form of financial compensation. One commonly used option is the execution of a "pocket" consent judgment. In this situation, the parties execute consent judgments entitling one party to a sum certain, plus applicable interest. Typically, the parties sign the document but don't file it with the court. Instead, the beneficiary keeps the judgment set aside-i.e., in the beneficiary's pocket-and files it only if the other party fails to perform its obligations under the settlement. In the example above, the parties could have agreed that, in the event the majority shareholder did not buy the minority shareholder out within 30 days, the minority shareholder would be entitled to file a monetary judgment in a previously agreedupon sum with the court. Obviously, collecting on a monetary judgment has its own sets of challengesparticularly against a defendant who has just shown that he lacks the creditworthiness to obtain financing-but at the very least, it provides a clear, finite end to the underlying dispute. There is no need to reopen the case. There is no need to litigate the damages caused by any breach. Your clients already have their judgment, and this, usually, is not something that can be appealed.
It should be noted that pocket consent judgments are not without their own risk. The other side may seek to unravel the deal by suggesting the pocket judgment is an unenforceable penalty. For example, assume that there is a simple monetary settlement. The defendant agrees to pay the plaintiff $2 million over the course of several months in exchange for dismissal of the case. The defendant also agrees to execute a $6 million pocket consent judgment, which the plaintiff will enter and collect if the defendant fails to timely pay the $2 million. Note that the consent judgment is three times the size of the amount the plaintiff would receive if the defendant performed as required under the agreement. Of course, that serves as motivation for the defendant to make timely payments.
But a potential issue arises: whether that additional $4 million is intended as a liquidated damages provision compensating the plaintiff for the defendant's breach of the settlement agreement and, if so, whether it will be upheld as such or invalidated as an unenforceable penalty. A few courts have held that similar pocket consent judgments were unenforceable. See Checkers Eight Ltd. P'ship v. Hawkins ,
241 F.3d 558 (7th Cir. 2001); Greentree Fin. Grp., Inc. v. Execute Sports, Inc ., 163 Cal. App. 4th 495, 78
Cal. Rptr. 3d 24 (Cal. Ct. App. 2008). Granted, though, the plaintiffs in Checkers and Greentree both conceded that the consent judgments were intended to be liquidated damages compensating the underlying plaintiffs for the breach of the settlements. Still, such provisions could provide an enterprising party with an arguable basis to seek to avoid a previously agreed consent judgment.
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Thus when including a pocket consent judgment in settlement, you should be cognizant of how you are characterizing it. Returning to the $2 million/$6 million example, rather than structuring the arrangement as a $2 million settlement that increases to $6 million in the event of a breach of the settlement agreement, it may be helpful, if possible, to structure the deal as a settlement for a $6 million judgment that the plaintiff will refrain from entering or collecting on if $2 million is timely paid.
While seemingly a distinction without a difference, in the former circumstance a party could attempt to argue that the extra $4 million is an unenforceable penalty, while in the latter circumstance such an argument is probably unavailable because the breach did not increase the defendant's obligation; instead, it cost the defendant a discount. See Scavenger Sale Inv'rs, L.P. v. Bryant , 288 F.3d 309 (7th Cir.
2002) (distinguishing Checkers and upholding a consent judgment under the "discount" framework). On a practical level, how this sort of deal is structured often depends on outside variables and factors that may mandate one approach over another-but the point is to proceed cautiously and know the potential risks.
There are countless strategies and structures you can use while seeking to bring finality to your settlements. Naturally, you need to be mindful of the fact that every jurisdiction is different and that something acceptable in one may not pass muster in another. But keeping that limitation in mind, the key is to be creative. Try to imagine the various ways in which a deal might fail to come to fruition and see if you can devise an escape route or two. Otherwise both you and your client may end up right back where you started. •
Litigation Vol. 42, No. 2, Winter 2016, pp 27-31
©2016 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
34

CRAIG E. S M IT H
The author is of counsel at Howanski, Meadows & Erdman, LLC, Towson, Maryland, and an adjunct professor at the University of Maryland Law School
Among the beatitudes in his Sermon on the Mount, Jesus says: "Blessed are the peacemakers, for they shall be called the children of God." (Matthew 5:9 (King James ).) This is the praise that should be given to lawyers who settle their cases on a reasonable basis. Unfortunately, reality often is just the opposite.
Lawyers who recommend a sensible settlement may lose the esteem of their clients. They may risk being replaced by more "aggressive" lawyers. They may be viewed by their legal peers as weak and ineffective. They should assume that they will be generally overlooked and underrated by the law firms and legal communities where they practice. The reality is no glory and little praise for the settlement of cases or for those lawyers who achieve them.
And yet for many compelling reasons, family law cases should almost always be settled. Why? Restoring peace and stability to family members is one reason. Litigation, by its nature, is disruptive and destructive to the family and its members. Separation and divorce present difficult challenges to the parties and children, as old living arrangements end and new ones begin. Custody and access to the children must be resolved. Support issues such as alimony and child support must be addressed, as the income available for one household must now be stretched and apportioned between two. The division of marital property and retirement interests must be resolved. One or both parties may begin a relationship with a third person, an eve!].t that often creates animosity on the part of the other spouse.
As a result of these issues and others, there are often strong negative emotions generated by separation and divorce: anger, fear, sadness, and depression. Acrimonious words are often exchanged. Sadly, sometimes there is physical violence. Uncertainty prevails as the parties make demands (often unrealistic) and take adversarial positions. No one knows when or how the disputed issues will be resolved.
Litigation diverts attention away from productive efforts to proceed with the separation of the parties and the development of new living arrangements. Litigation creates uncertainty, with the wounds of the marital conflict still open and painful. Settlement allows wounds to heal. Settlement brings peace and stability for the family and its members or, at least, greater opportunity for family members to move on with their lives. This is the primary reason why settlements are good for the family members.
What about the effects of litigation on the children?
One respected judge says that she cannot remember any custody litigation that did not have some negative impact on the very children whose best interest was supposed to be the paramount goal of the court and the parties. Members of the
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mental health community are uniform in their view that children of divorce experience a high risk of trauma, confusion, fear, and negative feelings about themselves during the course of a contested custody proceeding. Children usually become aware of disputes between their parents, even when parents try to insulate them from involvement. Practitioners recognize that many clients consciously or unconsciously draw their children into their disputes, complaining directly to their children about the other parent, using their children as messengers, or talking about the other parent with third parties while a child is present.
A settlement does not guarantee a better outcome for the children of divorce, but it is surely better than ongoing and destructive litigation. It has been suggested that with two adequate parents, a decision about custody based on the flip of a coin may result in a better outcome for the child than ongoing custody litigation, where parents attack and criticize each other to gain an advantage in the contested custody proceeding.
Professionals generally agree that it's best for each parent to have reasonable access to the children, except in cases of physical or sexual abuse. Recognition of this view should be the starting point for the consideration of custody issues in just about every case.
Let's not forget the effects of litigation on the family law lawyer. Family law is a difficult practice area.
Members of the family law bar observe “burnout” in their colleagues and sometimes in their own personal lives. High stress and high performance expectations exact a toll on the human body and mind, even with very experienced attorneys. Mental health professionals tell us that "compassion fatigue" can occur with lawyers as a result of an endless number of clients with real needs no conscientious lawyer could possibly satisfy, no matter how hard she tries or how many hours she works. Of course, the client's needs come first. But common sense suggests that lawyers also benefit when everyone works cooperatively to resolve issues by settlement rather than litigation.
Need more reasons to settle a family law case?
How about the fact that a settlement offers more opportunities for creative solutions of disputes and problems arising as a result of the separation and divorce? In Maryland, for example, a divorce court has no authority to require a spouse to provide life insurance coverage for the benefit of a child or for a former spouse receiving alimony. However, nothing in Maryland law precludes the parties from providing for this as part of a settlement. Similarly, parties can agree on provisions in a settlement that constitute or allow mutually favorable estate and tax planning. Contributions to the cost of college, not subject to the court's authority, may be agreed upon and made enforceable by settlement.
Settlements can also reduce legal fees and the costs of litigation. Litigation is expensive, and family law disputes are no exception. In cases with wealthy clients, the parties may be able to afford the high cost of litigation, but for most clients, most of the time, the fees and costs are devastating. Parties often must use funds intended for other purposes, such as college, retirement, or emergencies, to pay legal fees and costs. With a settlement, the legal fees and other expenses of litigation come to an end. Clients are always pleased when they are no longer receiving a monthly legal bill.
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Obstacles to Settlement
Don't get me wrong. Despite the advantages of settlement, many potential obstacles face the lawyer who expects a new case to settle at some point. For example, lawyers know that divorce cases are very likely to settle, but the new client usually is not aware of this reality. A client may be skeptical or resistant when the lawyer, just engaged to provide representation, begins to talk about a settlement. It is a testament to the skill, experience, and courage of the family law bar that almost all family law cases eventually settle despite the obstacles.
In most cases, the opposing lawyer will be a significant factor in any effort to achieve a settlement. The opposing lawyer is the formal representative of the other party but is frequently an excellent source of useful information about the case, particularly the weaknesses of your client's position and the strengths of his. Your own client may be reluctant or unwilling to tell you about the flaws in the case or may not even be aware of them, but the opposing lawyer will usually be only too happy to tell you the negatives about your client's conduct.
If the opposing lawyer is reasonable, it will be easier for you and your client to be reasonable, and the path to a mutually acceptable resolution may come into focus after financial disclosure occurs. In cases in which the opposing lawyer is unreasonable or inaccessible, a lawyer who wants to settle the case needs to develop a plan that forces the opposing lawyer to confront the reality of the case and understand the benefits of a settlement for the lawyer's client. Sadly, some attorneys steadfastly refuse to engage in meaningful settlement discussions, even when encouraged by the court.
Your treatment of opposing counsel may significantly affect when and how a settlement occurs. Civility is important and is often reciprocated. Courteous and professional dealings promote settlement. Views of the case may converge as the underlying facts and circumstances are developed through discovery and investigation. When that occurs, a reasonable settlement be- comes more and more likely.
Client expectations present yet another potential stumbling block. Clients want to "win." This often includes a desire to defeat (or even destroy) the person who was once the beloved spouse and the mother or father of the client's children. Sometimes it helps to remind clients that if an effort to destroy a spouse succeeds (for example, by public criticism of a professional's conduct or ethics), it may reduce the earnings otherwise available for alimony and child support. It may also help to remind clients that the results of a divorce proceeding will play out over the years that follow, at graduations and weddings of children and in access to grandchildren, so that attacks on the other spouse may prove ill-advised over the long run.
All clients want to win, and many believe they are entitled to win and so never doubt the judge will award them what they want and deserve at trial. When this kind of client hears the word "settlement," her initial reaction may be that it sounds more like a loss than a win. The client may believe that advice to settle reflects the lawyer's lack of confidence in the case or an unwillingness to "fight" for the client, as her knight in shining armor. It may seem inconsistent with what happens in TV dramas, movies, books, and other fictional accounts, where the worthy (or innocent) parties, with truth on their side, invariably succeed in the end.
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The lawyer knows that TV dramas are not reality, but many clients do not. Your client may expect you to overcome all obstacles and hurdles because the client's cause is just . When you raise the advisability of a settlement as an alternative to the risks and uncertainties of trial, clients may feel that you are ready to abandon them in favor of the opponent.
One wise settlement judge says that in almost every divorce case, each party bears some significant part of the responsibility for the failure of the marriage. For many clients, this is a difficult concept to grasp or accept, and some will not accept it. Most clients are not objective about their case, and some never achieve any reasonable perspective. One major responsibility of the lawyer is to be objective and to advise clients how the case is likely to, be viewed and decided by a judge. This includes the unpredictability of how a judge will decide the issues in a case. Many clients see their divorce or custody case as black and white, with their position faultless and their spouse's claims utterly without merit. The lawyer must explain to the client why the case will probably be seen by the trial judge in some shade of gray.
Some lawyers are reluctant to tell their clients that their expectations are unrealistic. Sometimes clients will not "hear" the lawyer or accept the lawyer's accurate analysis of the case, believing they know better or that their lawyer is just plain wrong. In those situations, it can help to involve a settlement judge, a mediator, a close relative of the client, or a consulting lawyer. Confirmation of the lawyer's views and advice by a respected person who can speak with authority may persuade the client to accept the lawyer's advice. .
The old shibboleth that making a settlement proposal demonstrates weakness should be disregarded by the modern-day family law lawyer. Making the first offer at times may be more difficult than responding to an offer from the opponent, but the fact of a first offer is only an indicator of weakness if the lawyer allows it to be so. Many lawyers have obtained satisfactory settlements by ignoring this advice and presenting a well-considered proposal that advances the negotiation of a settlement .
One lawyer in my jurisdiction, when he wishes to settle a case, calls the opposing lawyer to suggest settlement terms, saying that the dispute should be settled before the parties exhaust their financial resources with large legal fees and expenses. He then calls back every day or so and actively pursues settlement. These vigorous efforts to settle the case often succeed.
Why Trial, Not Settlement?
Another obstacle is that lawyers, for many reasons, often prepare for trials instead of preparing for settlements. Practitioners know that the vast majority of their cases will settle, so one might logically suppose that experienced lawyers would focus most of their time and effort on the settlement of their cases rather than on litigation and trial, but this is not the case. From the time that a lawsuit is filed, most lawyers, most of the time, proceed as though every family law case will eventually be tried, not settled.
The reasons for this are many and very understandable. One is that law schools focus on the trial and the trial process, not settlement. Law students may have few courses where they are required to study
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the theory or practical skills of settlement. Instead, they will take courses in civil procedure, evidence, trial advocacy, and other trial-oriented subjects and skills. Continuing legal education for practicing lawyers provides many courses about trial skills but far fewer about settlement. Part of the rea- son for the imbalance is probably the existence of specific rules and many reported cases governing evidence and procedure, while there are no "rules" of settlement and only a limited number of cases that explore settlement methods or techniques.
Yet another reason is that cases decided by appellate courts are circulated among practitioners, law libraries, law students, and others, while settlements of family law cases are rarely if ever reported anywhere, and the details of most settlements are unknown. Also, because settlement discussions are typically privileged, they are rarely mentioned or analyzed in decided cases or in news reports. Thus, while trials are public and open to the press, and the issues arising in trials are discussed in appellate opinions read by lawyers, a lawyer typically has only personal experience to rely on for knowledge about settlements.
Nor do settlements provide much entertainment. A trial is exciting and dramatic for the lawyer and client, and sometimes the public. Settlements are not. A trial is a public event, occurring in a public courtroom, with witnesses, experts, testimony, cross-examination, and oral argument, while settlements occur quietly out of the public eye in private law offices and conference rooms. Another reason for the attention on trials rather than settlements is the legal profession's historic lionizing of trial lawyers, with famous ones remembered and renowned for their skills and victories in the courtroom. By contrast, settlements are detail oriented, often tedious, with provisions only a lawyer can understand or care about. This is why the news media, including the newly established legal news media, hype public trials but give short shrift to private settlements except to mark their occurrence in high-profile cases.
Under these circumstances, it is completely understandable that family law settlements and the lawyers who achieve them receive little recognition from their peers or the public. Nonetheless, the preparation of family law disputes for settlement is paramount. Family law lawyers typically develop a game plan for litigation, complete with lists of possible witnesses, key documents, and so on. As a matter of logic, preparing a plan for settlement should be just as important, arguably more so given that the vast majority of cases settle. What does the lawyer need to find out and do to achieve a settlement? In many cases, it is obvious at the scheduling conference or the settlement conference that opposing counsel have given little or no thought to a settlement. Sometimes, the lawyers have never even talked about one, with each party waiting for the other to initiate discussions or with one or both lawyers too busy with other matters.
Efforts spent on discovery can improve the client's settlement posture in family law cases. Financial data are often the most important information needed to evaluate the settlement of alimony, child support, and property issues. Nonfinancial information may be critical in child custody disputes. In pro- pounding written discovery, the lawyer will usually have the same questions and request the same documents for both trial and settlement preparation; nevertheless, the lawyer should consider whether there are questions or documents of particular use in the consideration of a settlement.
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When responding to discovery requests, conventional wisdom encourages carefully crafted nonanswers. This approach is usually counterproductive to the primary goal of a favorable settlement. In other words, if you want the best possible settlement resolution, it's usually a good idea to make a full and persuasive presentation of your case in discovery responses. These responses, viewed as an annoying and time-consuming chore by many lawyers, should instead be treated as a golden opportunity to present the case in a logical and convincing way, as a means to move toward a favorable settlement.
For example, many lawyers keep their answers to the opposing party's interrogatories short and limited, if not completely uninformative. The goal is to provide a smaller target for cross-examination and sometimes to save the client's most favorable information until trial, when it can be used to surprise and overwhelm the opponent. In fact, taking this approach means that a lawyer's most favorable evidence may never be presented to the other side because the case will likely settle before the information is presented at trial. If the goal is a favorable settlement, it is a sound strategy to reveal the strength and depth of your position in answers to interrogatories.
What about depositions? Most authorities on depositions advise parties (and witnesses employed or controlled by parties) to give short, minimal, barely responsive answers. The conventional advice is to answer each question briefly, on the most narrowly plausible basis, to provide a minimum amount of information as a means to avoid the risk of creating discrepancies that can be exploited by the opponent in cross-examination and the risk of providing information the opponent can use to pursue yet more information. But if you have favorable testimony, or a good "story" to tell, the adoption of a minimalist approach surrenders an opportunity to present the strong points of your client's position. A wellprepared party (or witness) who provides thoughtful and complete answers may help position a party for a favorable settlement, with no real harm if settlement does not occur and the case goes to trial. This unorthodox approach was detailed recently in this magazine. See Kenneth R. Berman, Reinventing
Witness Preparation, 41 LITIG., No. 4, (Summer 2015), at 20.
How to Encourage Settlement
So, what can and should be done to encourage settlements? First, acknowledge their importance. Given that almost all judges, academics, and practitioners believe settlements are good and should be encouraged, bar associations and leaders of the bar should encourage courts and lawyers to consider and explore them in every case. Settlements should be applauded, and practitioners known for their skill in achieving them in difficult cases should be accorded recognition similar to that given to those known for their trial skills. Practices that impede settlement, including the lack of civility, should be discouraged.
We should refer cases to lawyers who achieve reasonable settlements by reasonable means. One discouraging aspect of referrals is the frequently stated preference for a lawyer who is "aggressive," not one who is "cautious," "competent," or "capable." Those who seek aggressive lawyers appear to be looking for someone who will do more than seek a reasonable resolution: They appear to want someone who will try to get more than a fair share for the client. Do referring attorneys really prefer a lawyer who
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will fan the flames of anger on the part of clients, encourage litigation, and increase the legal fees? In most family law disputes, clients would be well advised to select realistic and capable lawyers, not warriors who will create greater conflict and greater expense.
Law schools can help promote settlements too. They may never offer courses on settlements and trials in true proportion to their occurrence, say 95% of the curriculum devoted to settlements and 5 percent to trials. But it would make sense for law schools and bar associations to provide a greater emplansis on settlement, particularly in family law disputes, and to establish courses that focus on methods to resolve these disputes.
Courts can play a major role in encouraging settlement of family law disputes. Court rules and schedules should facilitate settlements by establishing opportunities for settlement conferences or mediation.
Sometimes the initial reluctance to discuss settlement is nothing more than bravado or a lack of imagination about the possibility of settlement or the failure of busy lawyers to raise or explore the possibility of settlement with their clients until the eleventh hour.
Settlements are good. Because they occur or can occur in almost all family law cases, lawyers should give careful consideration to the means and methods by which they may be achieved. No doubt, a settlement will rarely have the same excitement and suspense as a trial. So if a lawyer wants glory, fame, or wealth, the decision to practice in the field of family law should probably be reexamined. But for those who do not mind the challenge of difficult and emotional issues, and for those who find meaning in working with clients who need legal advice at a time of personal crisis, the practice of family law-and the settlement of family law disputes-remains rewarding and honorable . •
©2016 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Litigation l Vol. 42, No 2. Winter 2016 pages 31-33
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