A Loss For Mediation Confidentiality (9/02/08) Phyllis Pollack
An interesting decision was issued the other week by the Second District of the California Court of Appeal on mediation confidentiality. Reading it left me with the impression that the appellate panel was result oriented or using “legal realism” rather than simply applying the governing law to the facts to lead it to the logical, mechanical and deliberative conclusion. (“formalist approach”.) (See “Blinking On The Bench: How Judges Decide Cases” – February 28, 2008 blog.)
In the Estate of Thottam(Case No. B196933 – August 13, 2008), three siblings engaged in mediation to determine how to distribute the estate and certain assets from a trust created by their mother, Thresiamma Thottam. The siblings were co-trustees and beneficiaries of the trust.
At the commencement of the mediation, the siblings signed a mediation and facilitation confidentiality agreement by which, in part, they agreed that:
“all matters discussed, agreed to, admitted to, or resulting from” the mediation would “(1) be kept confidential, and not disclosed to any outside person (excluding spouses), (2) shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and (3) shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.” (Id. at 3.)
All three siblings and the mediator signed the agreement.
During the mediation, a chart was prepared containing three columns. Along the left-hand side margin each asset was listed – be it real estate or otherwise. Across the top were three columns; one for each sibling, identified by his/her first initial. As the negotiations progressed, the chart was then filled in to show which sibling received which asset. At the end of the session, each sibling signed and dated the top of the chart in the column bearing his/her initial and also initialed each entry in the column.
Well . . . as may be expected, when one of the siblings – Peter – sought to draft a more formal agreement to memorialize the chart, he was met with resistance. Eventually, the matter ended up in litigation (and eventually at trial).
During a deposition, Peter sought to use the chart to which his sister Elizabeth, the deponent, objected urging that mediation confidentiality precluded its use. The then trial judge agreed with Peter, finding that mediation confidentiality did not apply to the chart.
But, it was another judge who actually tried the case. When Peter sought to use the chart during trial, Elizabeth again objected based on mediation confidentiality. This time, the judge agreed with Elizabeth ruling that it was inadmissible. Unlike the previous judge, the trial judge did not accept the argument that any mediation confidentiality was waived pursuant to the provision in the agreement stating that confidentiality would apply “. . . except as may be necessary to enforce any agreements resulting from the Meeting.” (Emphasis added.)
Given the recent pronouncement of the California Supreme Court that once again strictly enforced mediation confidentiality and applied it quite broadly - in Simmons v. Ghaderi (August 8, 2008 blog) - one might well speculate that the appellate court panel would agree with the trial judge. Surprisingly, it did not – it reversed and remanded.
The appellate panel determined that the agreement between the siblings that all matters discussed or agreed to in mediation “(2) shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting”) was an enforceable agreement even though made prior to any settlement being reached. The appellate court decided that California Evidence Code §1123(c) requires neither that the express agreement in writing permitting disclosure be contained in the settlement agreement itself nor that it even be made at or after the time the settlement agreement is entered into. According to this appellate panel, there is no timing requirement in terms of allowing disclosure vis-à-vis entering into a settlement as a result of mediation.
Consequently, the appellate court determined that Peter should have been able to use the chart at trial to prove his case. As the chart was crucial to his case, he suffered a miscarriage of justice and a different result would have been probable had this error not occurred. That is, without the use of the chart, Peter lost at trial; if he could have used the chart, he probably would have won. Thus, the appellate court reversed and remanded for a new trial. Peter would now have his “day in court.”
As I said, this is a strange decision: it places more importance or a higher priority on Peter having his “day in court” and “fairness” to Peter than on mediation confidentiality. The appellate court makes this a priority even in the face of the Supreme Court’s recent (July 21, 2008) recognition in Simmons v. Ghaderithat “the legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process. . . .” (Id. at 22.)
Courts sure are strange and unpredictable! But I am not telling you anything new. I won’t be surprised if this decision is appealed and/or engenders more litigation. This is why it is always better to settle!
. . . Just something to think about.
What Can You Do if Someone Breaches a Mediation Confidentiality Agreement? (9/02/08) Victoria Pynchon
I've recently been covering mediation confidentiality from an attorney's point of view. Because my statistics page reminds me that clients also read this blog, I sometimes direct posts to the people with the problem -- clients.
This morning I notice that someone landed on my site seekingan answer to this question:
What can you do if your HOA Board member breaks the mediation confidentiality agreement.
The lawyerlike answer to this question is -- "it depends upon what the agreement says."
But let's assume the question is covered by California law.
The Scope and Effect of Mediation Confidentiality in the Hands of Clients
Nearly every mediator begins every mediation session by explaining how and why information exchanged in mediations is confidential. I know from my community mediation work that the people usually want to know something lawyers rarely ask -- whether they'll be able to discuss what happened in the mediation with friends or family.
In the absence of a more restrictive agreement among the parties, under California law today, the answer is "yes, they can."
What's confidential? The California Evidence Code (section 1119) says that everythng said or done during a mediation is confidential
cannot be "discovered," i.e., you cannot be compelled to disclose those communications in answers to interrogatories, in deposition testimony and the like.
Those are the only restrictions on the disclosure of confidences exchanged in a mediation held in California in the absence of a more restrictive agreement. Unless a California court broadens the scope of mediation confidentiality, an HOA Board Member who runs around the complex or neighborhood talking about who said what during a mediation is not "breaking" (breaching) the California's protections for mediation confidences.
The Parties Can and Do, However, Agree to Limit the Communication of Mediation Confidences to the Participants in the Mediation.
A contract is an agreement that creates private law governing the parties' relationship with one another. If you enter into a Confidentiality Agreement in mediation, you should understand that you are creating obligations that bind you as well as rights that protect you. A google search turned up Confidentiality Agreements that provide remedies for their breach. This one for instance provides two poential consequences for breach:
any party to the agreement is entitled to ask the court to stop (enjoin) any other party from disclosing confidential communications; and,
the party who wrongfully discloses mediation confidences will be liable in damages (including the expense hiring attorneys) for any damages caused by his or her breach of the confidentiality agreement.
The California-based ADR Services has a similar term in its Confidentiality Agreement (here).
Failure to obey an Injunction can be enforced by contempt, but this remedy is expensive, would require multiple trips to the courthouse, is difficult to obtain and would not likely make up for the harm caused by disclosure. The second remedy - damages -- would require you to file a lawsuit and your monetary losses are highly unlikely to be worth the expense of litigation.
Here's another Confidentiality Agreement that expressly incorporates the provisions of the California Evidence Code. This agreement prevents the parties from:
disclos[ing confidential information] to anyone [who is] not involved in any existing litigation, or any litigation that may arise, concerning the subject matter of this mediation session . . . .
The term "involved in . . . litigation . . . concerning the subject matter of this mediation" is broad and ill-defined. All homeowners might be said to be "involved in" the litigation subject of the mediation. If you read the contract language broadly, you might convince your HOA Board member that talking about the medaition around the condominium complex or in the neighborhood violates the Confidentiality Agreement.
There's nothing in this agreement, however, that states what the consequences of breach might be. Nevertheless, if you suffered monetary harm as the result of the breach, you might well be able to file suit for damages in a breach of contract action. Off the top of my head, I can't think of any harm that might flow from the Board Member's indiscretions that would cause sufficient economic harm to justify the cost of a lawsuit.
The commercial ADR panel on which I serve, Judicate West, makes a form Confidentiality Agreement available to the parties (here) which merely restates the controlling principles of confidentiality law in the State of California. In light of the recent Thottam opinion in California, I would hesitate before asking parties to sign any agreement that:
expands the scope of confidentiality beyond that provided by the Evidence Code, while at the same time,
carves out an exception for the enforcement of the agreement.
For my analysis of that opinion and the problems it creates for mediators drafting confidentiality agreements, click here and here.
California Courts Let You Have it Your Way: Arbitrate and Appeal the Award (9/02/08) Victoria Pynchon
(while we're walking down memory lane anyway, "Have It Your Way" from 1976)
When I ask litigators why they don't choose arbitration over litigation before unpredictable judges in a crowded court, their answer invariably is "because I can't appeal the ruling." We cling to appellate review even though we appeal fewer cases than we try -- which is a very small percentage of our case load as it is.
Not surprising, however, we litigators, as Max Kennerly recently noted, tend to be risk-averse, not risk-embracing (h/t Blawg Review # 174). To give up that one last chance for our client to be vindicated and for us to be triumphant is generally just too much for us.
Now we can have our arbitration cake and and follow it up with appellate ice cream. Yesterday, the California Supreme Court in Cable Connection, Inc. v. DirecTV held that arbitrating parties' agreement to seek appellate review of legal errors is enforceable in California State Courts despite its uneforceability in federal court. As the Supreme Court explained:
Analysis Finds Parties Generally Err in Rejecting Settlement for Trial (8/27/08) Keith Seat
A study of civil lawsuits over the last 40 years indicates that parties often make poor decisions when passing up settlements prior to trial, and that such mistakes are becoming more common. In only 15% of cases did both sides make the right decision to go to trial, with the verdict falling between what the plaintiff demanded and the defendant offered. Plaintiffs were wrong to proceed to trial 61% of the time, with an average loss of $43,000 in recent years. Defendants were only wrong 24% of the time, but their average loss was $1.1 million. The advocate’s years of experience, rank of law school and size of firm were less related to bad decisions than the type of case. Errors tended to be made by plaintiffs in cases where contingency fees are common, and by defendants where insurance coverage is generally unavailable. The study, said to be the largest ever of its type, is forthcoming in the Journal of Empirical Legal Studies.
Personal Injury Settlement in Mediation Sets County Record (8/27/08) Keith Seat
A $6 million global settlement in a one-day mediation resolved the legal claims of a 9-year-old boy who was blinded from serious craniofacial injuries in an all terrain vehicle accident. The agreed payment is believed to be the largest settlement or verdict in Fayette County, Pennsylvania. Details reported about the accident and claims came from the plaintiffs’ mediation memorandum.
High profile Californian mediators Jeff Krivis and Mariam Zadeh have given their First Mediation website a makeover here to celebrate opening in the Carmel/Monterey area in addition to their L.A. office - thank goodness they have kept their little man with the umbrella on the tight rope!
Anything written by Jeff is must read material so keep an eye out for new articles here.
And Jeff, be sure not to leave your new blog empty for too long.
New Riverside Superior Court Mediation Program to Pay Mediators for their Work (8/24/08) Victoria Pynchon
JAMMED RIVERSIDE COURT WILL COMPEL MEDIATION
By Greg Katz
RIVERSIDE - The first thing Riverside County Superior Court Judge Michael B. Donner told a courtroom packed with trial-ready lawyers on a recent Monday was good morning.
Soon after, he added: "I will tell you, I have no open courtrooms for trial, as I did last Monday."
Such is the weekly ritual in Riverside's civil courts, where justice is routinely delayed in the county often called one of the most backlogged in the state. . . . . . .
Soon, the court plans to try another technique: court-ordered mediation.
According to the court's ADR programs director, Barrie Roberts, the court plans to introduce court-ordered mediations and a mediator panel to handle the cases in January.
The court has opted in to a state law that allows judges to order cases into mediation when $50,000 or less is in dispute, Roberts said. She added that parties also can use court mediators voluntarily when the amount in dispute is higher.
Similar systems are in place in Los Angeles and a handful of other counties.
"The impetus is to encourage the best type of dispute resolution," regardless of which type it is, Roberts said. "It's not just settling cases. It's deeper than that. It's what serves the parties best."
Roberts, a former legal aid attorney who studied at Pepperdine University School of Law's Straus Institute for Dispute Resolution, said the panel will start with around 40 neutrals, who will receive training in November from Pepperdine's faculty.
"We're starting small and really high quality," Roberts said.
When the judges order mediations, the court will pay mediators $150 for their first three hours of work. When parties volunteer to use the court's mediator panel, mediators will negotiate their rates with the parties, she said. [theFee Request is here]
The funds will come directly from the court's budget, Riverside Presiding Judge Richard T. Fields said.
"Early resolution is just really critical because we have a limited number of trial courtrooms," Fields said.
For years, the court's main option to help settle cases was Elwood Rich, a retired judge who juggles concurrent settlement conferences in the main hallway of Riverside's century-old courthouse. Rich's settlement conferences have become such an institution that a painting of him now overlooks the court's entrance, only a few feet from the hallway benches where he usually conducts business.
Recently, as it became clear that the sheer quantity of litigants awaiting trial on Monday mornings was too much for Rich alone, the court recruited well-known local lawyers as "volunteer settlement officers" for last-minute Monday settlement conferences.
"It was nothing [against] Judge Rich, of course, there just was not enough resources to handle all those lawyers and cases," said Riverside attorney Michael Marlatt of Thompson & Colegate, who helped set up the volunteer program. . . . .
The Los Angeles Mediation Community Welcomes Judge Alexander Williams, III (8/24/08) Victoria Pynchon
Judge Alexander Williams' retirement from the bench and entry into private neutral practice with ADR Services is good news for the legal community. I co-mediated dozens of cases with the Judge while I was earning my LL.M from the Straus Institute and have spent many hours discussing the nuances of mediation practice with him. Once known for his temper (and the bow tie he appears to have forgotten to wear in the photo at right) the Judge has learned the rewards of patience.
Always one of the Los Angeles Superior Court's most charming and articulate bench officers, Williams is now also among the most calm and canny settlement officers available in a town fairly crawling with mediators. Couple his bench strength with an Ivy League intelligence and unusual depth of knowledge of mediation theory and practice, and you have one of the new go-to guys on the block.
An excerpt from the Daily Journal's article on Judge Williams below with a link if you're a subscriber to read the entire article.
Retired Judge's New Mantra: 'Deal or Ordeal'
By Greg Katz
LOS ANGELES - Superior Court Judge Alexander H. Williams III is about to take his first job ever in the private sector. He will step down from the bench Sept. 15 and join Century City's ADR Services as a mediator.
Williams started his law career in the U.S. Navy's Judge Advocate General's Corps in 1969, worked as an assistant U.S. attorney from 1975 to 1984, and then was appointed to the bench by Gov. George Deukmejian.
Even earlier than that, he worked briefly as a police officer in his native Virginia.
"My very first day on the job, I wrecked a police car on a railroad track," a catastrophe that made the front page of a local newspaper, he said with a laugh.
His dispute resolution career isn't likely to be a trainwreck, though.
Once known for his fiery temper - "I used to be a judge beating up on parties," he told the Daily Journal in 2004 - Williams long since has reversed that reputation.
After studying mediation at Pepperdine University's Straus Institute for Dispute Resolution 10 years ago, Williams began to settle nearly all the cases in his courtroom. His skill and advocacy for dispute resolution won him the Southern California Mediation Association's Peacemaker of the Year award in 2003.
Malpractice Alert: Is it a Settlement Conference or a Mediation? (8/24/08) Victoria Pynchon
Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived (Simmons v. Ghaderi) like most privileges, including the near-sacred attorney-client privilege. You cannot be estopped from relying upon it. (Eisendrath). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code section 1123 (Fair v. Bahktiari).
"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding,
Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith.
Why indeed?
If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish them despite their training in the field. Nor have California's Courts been of any real assistance.
Though it may make no difference to counsel or the parties whether the process by which they seek to settle litigation is a mediation or a settlement conference, the application of California's Rules of Evidence to mediations has significant potential economic consequences -- consequences so serious that mediator and litigator malpractice actions are surely looming on the horizon.
The Parade of Mediation Horribles
What type of misbehavior can occur in a mediation? Here are just a few examples:
one party can make a misrepresentation of material fact upon which the other relies in entering into a settlement agreement;
as Pasich notes, an insurance carrier can act in bad faith;
one mediating party could tortiously interfere with a third-party's contract or prospective economic advantage;
the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a hearing to determine whether it was made in good faith (terminating the non-settling defendants' right to seek indemnity and contribution from the settling defendants)
even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected. If they're mediating, these proceedings can neither be the subject of discovery nor introduced as evidence.
Given the adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?
Not so much.
In Jeld-Wen, the appellate court forbade trial courts from compelling parties to mediate (and precluded them from requiring payment to the mediator) because mediation is voluntary. Raising form over substance, the Court concluded that trial courts could accomplish the goal of compelling settlement conferences (mediations in disguise) by appointing a referee-neutral under California Code of Civil Procedure section 639.
The differences between the two proceedings in substance? You couldn't name them by reading the California Evidence Code. It defines mediation as “a process in which a neutral person ... facilitate[s] communication between the disputants to assist them in reaching a mutually acceptable agreement.” Evidence Code section 1115(a)
So the Judge who chooses waterboarding as a means to settle the case isn't mediating. Thanks for clearing that up.
We expressly decline to consider or clarify any differences that might exist between a mediation and voluntary settlement conference. ( Foxgate Homeowners' Assn. v. Bramalea California, Inc. . . . .) Therefore, our decision should not be construed as holding that all voluntary settlement conferences are mediations which are subject to the rules concerning the conduct of mediation proceedings.
The most recent wrinkle in mediation confidentiality comes to us from the Second District Court of Appeal in Estate of Thottam. In Thottam, the Court held that an exception to an exclusion contained in a mediation confidentiality agreement expanded the scope of the confidentiality protections and then eliminated those protections when one party attempted to enforce the resulting settlement agreement. The Court accomplished this sleight of hand by finding an express waiver of confidentiality in the exception to the expanded confidentiality protections and/or by supplementing the parties' non-compliant mediated settlement agreement with the terms of the Confidentiality Agreement itself. If that's unclear, a full explanation of Thottam can be found here, here and here ("the big print giveth and the small print taketh away.").
What to Do, What to Do
When the law is uncertain and the terrain dangerous, there are generally two paths for attorneys to follow: (1) follow the statutory requirements to the letter; or (2) make up your own law (recognizing the dangers posed by the Thottam opinion).
If you want your settlement discussions to be unburdened by strict mediation confidentiality provisions, you can ask the Court to appoint your "mediator" as a referee under section 639 and call the ensuing discussions a settlement conference. Under those circumstances, your referee-assisted settlement discussions should be controlled only by Evidence Code section 1152. /** To put both belt and suspenders on it, expressly agree that the negotiations are meant to be protected only by section 1152 and not by sections 1115 et seq. And for heaven's sake don't use the word "mediation."
If you want the protections of mediation confidentiality, all well and good. But you must:
memorialize your agreement in strict compliance with the requirements of Evidence Code section 1123(c) */
make the accuracy of statements upon which your client relied conditions precedent to the enforcement of the agreement or, at a minimum, include them in WHEREAS clauses; and,
if you feel you must enter into a confidentiality agreement, limit its provisions to a recitation of the parties' intent to be bound by the requirements of Evidence Code section 1115 et seq. This should protect you against unanticipated interpretations of Confidentiality Agreement language that differs from the Code.
Are we clear now? Crystal!
___________________________
*/ A written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure, by provisions of this chapter if the agreement is signed by the settling parties and any of the following conditions are satisfied:
(a) The agreement provides that it is admissible or subject to disclosure, or words to that effect.
(b) The agreement provides that it is enforceable or binding or words to that effect.
(c) All parties to the agreement expressly agree in writing, or orally in accordance with Section 1118, to its disclosure.
(d) The agreement is used to show fraud, duress, or illegality that is relevant to an issue in dispute.
Note that "words to that effect" pretty much means "those precise words" according to the Supreme Court's decison in Fair v. Bahktiari
**/ Section 1152, protecting communications during settlement negotiations is actually extremely limited, making "offer[s] to compromise and, statements made during an effort to negotiate a compromise of a disputes claim are inadmissible in evidence to prove liability.
Settlement is Better than Trial (8/18/08) Jan Frankel Schau I read a fascinating article in last week's New York Times about the benefits of settlement over trial in litigated cases. I've re-published the whole thing here for you to read--but basically it suggests that after studying 600 cases where settlement was discussed, but the attorneys or their clients decided to "go for it" in most instances the results were not as good as they would have gotten at the settlements offered. Interestingly, there was a huge disparity between Plaintiff's "getting it wrong" and Defendants. On average, Plaintiff's would have done better by $43,000 per case had they taken the settlement offered, whereas Defendants would have saved $1.1 million on average! It certainly gives both sides a hearty incentive to give serious consideration to letting a good mediator take a crack at settling every case: or at least giving the realtiy test to your clients before proceeding to trial.
P.S.: I'm pleased to inform readers that the author of the study, Randall Kiser will be in Los Angeles at the upcoming Southern California Mediation Association's Annual Conference on The Brain and how Neuroscience affects Conflict Resolution. The conference will be on November 5, 2008 at Pepperdine's Straus Institute's Malibu Campus. If you'd like more information, send me an e-mail and I'll make sure you get an invitation.
By JONATHAN D. GLATER Published: August 7, 2008/The New York Times Note to victims of accidents, medical malpractice, broken contracts and the like: When you sue, make a deal. Avoid a trial, Randall Kiser advises.
That is the clear lesson of a soon-to-be-released study of civil lawsuits that has found that most of the plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer.
“The lesson for plaintiffs is, in the vast majority of cases, they are perceiving the defendant’s offer to be half a loaf when in fact it is an entire loaf or more,” said Randall L. Kiser, a co-author of the study and principal analyst at DecisionSet, a consulting firm that advises clients on litigation decisions.
Defendants made the wrong decision by proceeding to trial far less often, in 24 percent of cases, according to the study; plaintiffs were wrong in 61 percent of cases. In just 15 percent of cases, both sides were right to go to trial — meaning that the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered.
The vast majority of cases do settle — from 80 to 92 percent by some estimates, Mr. Kiser said — and there is no way to know whether either side in those cases could have done better at trial. But the findings, based on a study of 2,054 cases that went to trial from 2002 to 2005, raise provocative questions about how lawyers and clients make decisions, the quality of legal advice and lawyers’ motives.
Critics of the profession have long argued that lawyers have an incentive to try to collect fees that are contingent on winning in court or simply to bill for all the hours required to prepare and go to trial.
“What I would want them to look at was whether or not the lawyers had a strong financial incentive to go to trial,” said Cristina C. Arguedas, a criminal defense lawyer in Berkeley, Calif., when told of the study. “I’m not suggesting the answer, because I don’t know, but that would be my question.”
The study, which is to be published in the September issue of the Journal of Empirical Legal Studies, does not directly answer Ms. Arguedas, but it does find that the mistakes were made more often in cases in which lawyers are typically paid a share of whatever is won at trial.
On average, getting it wrong cost plaintiffs at about $43,000; the total could be more because information on legal costs was not available in every case. For defendants, who were less often wrong about going to trial, the cost was much greater: $1.1 million.
“Most of the time, one of the parties has made some kind of miscalculation or mistake,” said Jeffrey J. Rachlinski, a law professor at Cornell who has studied how lawyers and clients decide to go to trial and who is co-editor of the journal. “The interesting thing about it is the errors the defendants make are much more costly.”
The study’s authors have analyzed some data from New York and, after a review of 554 state court trials in 2005, have found parties to lawsuits making the wrong decision at comparable rates.
The findings suggest that lawyers may not be explaining the odds to their clients — or that clients are not listening to their lawyers.
“It’s entirely possible that the attorneys are not giving adequate advice,” said Mr. Kiser, who is also a lawyer but is not practicing. “An attorney could advise a client that they have a strong defense to enforcement of a contract, but that is not the same thing as forecasting what the likely outcome at trial would be.”
As part of the study, which is the biggest of its kind to date, the authors surveyed trial outcomes over 40 years until 2004. They found that over time, poor decisions to go to trial have actually become more frequent.
“It’s peculiar if any field is not improving its performance over a 40-year period,” Mr. Kiser said. “That’s a troubling finding.”
Law schools do not teach how to handicap trials, nor do they help develop the important skill of telling a client that a case is not a winner. Clients do not like to hear such news.
“Most clients think they are completely right,” Michael Shepard, a lawyer at Heller Ehrman in San Francisco. A good lawyer has to be able to tell clients that a judge or jury might see them differently, he continued. “Part of it is judgment and part of it is diplomacy.”
Several lawyers were dismissive of the study, noting that the statistics mean nothing when contemplating a particular case, with its specific facts and legal issues, before a specific judge. They stressed the importance of a lawyer’s experience.
But the study tried to account for that possibility and found that factors like the years of experience, rank of a lawyer’s law school and the size of a law firm were less helpful in predicting the decision to go to trial. More significant was the type of case.
For example, poor decisions by plaintiffs to go to trial “are associated with cases in which contingency fee arrangements are common,” according to the report. “On the defense side, high error rates are noted in cases where insurance coverage is generally unavailable.”
The findings are consistent with research on human behavior and responses to risk, said Martin A. Asher, an economist at the University of Pennsylvania and a co-author. For example, psychologists have found that people are more averse to taking a risk when they are expecting to gain something, and more willing to take a risk when they have something to lose.
“If you approach a class of students and say, I’ll either write you a check for $200, or we can flip a coin and I will pay you nothing or $500,” most students will take the $200 rather than risk getting nothing, Mr. Asher said.
But reverse the situation, so that students have to write the check, and they will choose to flip the coin, risking a bigger loss because they hope to pay nothing at all, he continued. “They’ll take the gamble.”
The third co-author of the study was Blakeley B. McShane, a graduate student at the Wharton School of the University of Pennsylvania
Mediation Joint Sessions: Are You Missing the Boat? (8/18/08) Nancy Hudgins
Most mediations have a component of caucusing, where the mediator and one side will sit down together to discuss the case. Some parties and some mediators will negotiate in caucus during the entire mediation.
I’m going to suggest that you could be missing the boat by caucusing. We could start the laundry posts I've recently completed on persuasion:
It’s very difficult to use these persuasive negotiation skills to your client’s advantage when you are sitting in a room with your client and not sitting in a room with the other side. Not to mention the fact that you’ve ceded most of your power to the mediator, who is conducting the shuttle diplomacy. (Admit it. Don’t you cringe a little bit for the legal profession when you see a lawyer for the other side sitting reading a newspaper during the caucus phase of a mediation? Wouldn’t you at least want to keep your head in the game?)
In addition to not using the skills above, you and your client are missing out on a crucial part of any negotiation: information gathering. When the other side is doing the talking, you can look for and listen for nonverbal clues and verbal leaks. Mediators rarely leak like the other side because they are neutral and not emotionally attached to the information.
The challenge is in the joint session. Hone your persuasion and negotiation skills and rise to the challenge. Try staying in the joint session as long as possible. Impress your client by your skill at negotiation, not your small talk in caucus while the mediator is talking to the other side.
Pass Court, Go Directly to Mediation (8/18/08) Victoria Pynchon
This just in from Sydney, Australia.
I imagine the results are as good or better here in the States, particularly in Los Angeles where mediation practice is both broad and deep.
DE FACTO couples disputing about property after splitting up, and siblings fighting over their parents' wills, are increasingly using mediation rather than dragging their battles through the court system.
The latest figures show that NSW Supreme Court registrars had done as many mediations in the first half of this year as they had done in total last year as people realised they could sort out their disputes on their own terms, in privacy, rather than in front of a judge, the Attorney-General, John Hatzistergos, said.
Most disputes were resolved without going any further, freeing up courts and judges for other matters, he said. "It is very encouraging that so far this year 59 per cent of the mediation sessions have concluded with the litigants resolving their dispute," Mr Hatzistergos said.
Before further discussing the problems created by the Thottam holding,I'm providing a "brief" of the case about which I ranted and raved earlier here today.
THE FACTS:
A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
"shall be kept confidential and not disclosed to any outside person . . . ;
"shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
"shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”
One of the parties contended that a chart drawn up and signed by the parties during the mediation,
was sufficiently certain to be enforced according to its terms; and,
was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
THE RULES:
Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
"the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
"(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
PROCEEDINGS IN THE TRIAL COURT
Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
THE APPELLATE DECISION
the appellate court reversed the Probate Court's decision.
THE HOLDINGS
Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
Here, the Confidentiality Agreement satisfied those requirements; and,
The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain.
RATIONALE
Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
the skeletal Settlement Chart was therefore admissible in evidence under that subsection.
This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections thathave been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiariopinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.
Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement. If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.
Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.
As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court. It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels. All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."
Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:
an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).
What to do? Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).
You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding. I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators.
I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.
Do Patent Infringement Litigants WANT an Inefficient Dispute Resolution Process? (8/18/08) Victoria Pynchon
Now that my step-son is no longer my legal assistant (sniff) but an IP litigator with one of the best IP firms in the country (Irell & Manella) he's a source!!
Yesterday I asked him this question: which patent infringement litigants benefit from the inefficiencies of the patent litigation process -- particularly those who are involved in protracted litigation like those lawsuits recently settled by Nokia and Qualcomm.
"Other than parties with frivolous lawsuits," I said, thinking that only marginal (but well-heeled) players might benefit from a system that was procedurally encrusted; unpredictable; costly; and, time consuming.
I've asked Adam to just allow the question to bounce around in his head for awhile as he litigates one of those infringement monsters that the Big Kids litigate. Though he's new to the profession, it's often the young attorneys who see the process in unconventional and innovative ways because they haven't been doing the exact same thing for 25 years. At least that's how it felt to me coming into the profession nearly 30 years ago.
Now I'm asking the same question of my readers -- how do the inefficiencies of patent infringment litigation benefit the parties?
To help prime the pump, I'm passing along without comment this article on the use of litigation to extract license monies from companies making products by one that doesn't as reported by the Communications and Technology Blog on Rates Technology Inc. Excerpt below.
Rates Technologies has sued Nortel, Sharp Electronics and others. Apparently in 1998 the Wall Street Journal quoted Mr. Weinberger in an article titled "Payoff Pending," on December 7, 1998:
In the end, Mr. Marshall might have to sue some company for patent infringement -- and do so successfully -- before the industry takes his rights seriously. Mr. Marshall "had better be prepared to spend more than $1 million on prosecution, because that's what would be required," says Gerald J. Weinberger, president of Rates technology Inc., a Hauppauge, N.Y., company that says it has gone to court six times to prosecute patents in the telecommunications field. Mr. Weinberger says an aggressive stance in court is crucial to any enterprise based on patent licensing. "You don't get any licensees unless the parties become convinced that you will litigate," he says
Jerry Weinberger [of RTI told] . . . . me that [h]e has agreements in place with 76 large companies such as Huawei Technologies, Lucent, and Cisco at this time. He says the larger companies understand how intellectual property rights work in the US while the smaller ones usually don't.
The following are statements from an e-mail from Jerry Weinburger:
When an infringer will not discuss their alleged patent infringement with RTI, there is little else that RTI can do except to pursue its remedies for the (willful) infringements in a court of competent jurisdiction. The remedies which RTI then seeks include damages, treble damages, a permanent injunction against further making, using, selling, offering for sale, and importing of the infringing products and services for the remaining lives of the Patents, payment of RTI's legal fees, and a product recall of all examples of those infringing items.
Although infringement is based upon a specific evaluation of a company's product(s) the '085 and '769 patents generally apply to hybrid cellphones, gateways, IP Phones, IP PBX's, edge routers, core routers, PC computers, ITSPs, and VoIP products, services and technologies, among several other telecommunications products, services and technologies.
Companies who decide to be covered under RTI Covenant Not Sue ("CNS") agreements are making a combined business and patent determination. The larger companies are easier to deal with, because they have many in house patent attorneys, and they do not feel that they are being roughed- they are making an informed business decision. Smaller companies tend to not respect the intellectual property of others. All makers, users, sellers, and importers are responsible for an infringement, and infringement is determined based upon direct, induced and contributory infringement; all allowing for interpretation of the Patents claims under the Doctrine of Equivalents.
In total [RTI has] agreements in place with 700-800 companies and have litigated 25 times in 15 years. . . . . Occasionally [says Weinberger] smaller companies want to negotiate and/or sue. Litigation he says costs about 2 million dollars.
So how does it work? Generally his company contacts your company and shows you their patents. Your company then checks with its patent attorneys to see what infringes and what doesn't. If you want to be covered, you pay a one-time fee based on five tiers -- according to highest parent companies' worldwide sales... They do not deviate from these tiers. In exchange you get a covenant protecting you from a lawsuit.
Mediation Confidentiality in New York? Not According to Hauzinger Decision
This decision concerns the unsuccessful attempt of a mediator to quash the subpoena issued by defendant for the mediator's appearance and papers at a deposition in this divorce action. Should this decision stand, mediators in New York and elsewhere plainly must promote clear and binding confidentiality legislation. The New York court ignores the parties' contractual agreement for confidentiality in favor of unbridled litigation. This decision highlights how private mediation has now come to be viewed, at least in New York, as a cog in the judicial machinery. The failure to recognize the value of mediation and critical importance of protecting parties' and mediators' expectations of confidentiality is troubling at best. This case should be a wake up call for mediators to defend the critical qualities, including effective confidentiality agreements, necessary for successful mediation.
Mediation Confidentiality and Enforceable Settlements: Deal or No Deal? Karin S. Hobbs How do attorneys ensure confidentiality of the mediation process, protect their clients from motions to enforce and enter into binding deals in mediation. This article discusses the critical importance of mediation confidentiality, the application of the Uniform Mediation Act, and offers practical suggestions for attorneys to use to avoid court action regarding mediated settlement agreements.
Some New Thoughts about Mediation Confidentiality Jeff Kichaven Several of my recent columns have criticized the "absolute confidentiality" rules of the California Evidence Code which govern mediation in this state. In this column, I intend to move the discussion forward by describing some thoughts and ideas regarding how we might improve on the current rules.
Are You Settled? Maybe Not . . . Michael Young What the “Tingler” and a Contaminated Property Can Teach You About the Enforceability of Mediated Settlement Agreements in California.
Absolute Confidentiality—Is It Wise? Jeff Kichaven In California and elsewhere, it is said that confidentiality is key to the success of the mediation process. But is it really? Does it instead protect the parties from claims in tort? It is important to review state legislation and case law to determine what protections are available to the mediator and those involved in mediation, and then assess whether these are counterproductive.
Rojas v. Superior Court: The Battle of Two Opposing Public Policies Eric van Ginkel The Rojas case represents the dilemma that arises when two public policies collide. On the one hand is the established, strong public policy in the United States that requires the parties to disclose all relevant evidence. On the other hand is the newer but equally strong public policy supporting the confidentiality of conciliation so that the process can be as safe as possible.
They Say It’s About Dollars, But It’s Often About Emotion: How to Use Mediation To Restore Business Judgment To Business Disputes Max Factor III Business executives are supposed to be creatures of logic, carefully weighing costs and benefits. Yet some mediations fail even when there are several sensible alternatives, any of which would offer the disputants as good or a better a result than each of them would expect from other likely outcomes of the dispute.
Puzzling as their behavior may seem, business partners may sometimes reject settling a dispute, preferring instead to have a litigated result imposed upon them by a third party such as a Judge, Jury or Arbitrator. There are four common reasons for this seemingly illogical behavior. Each reason relates to very recognizable human emotions and perceptions.
The Lessons of Rojas: Let's Play Ball Elizabeth Moreno Legal commentators are claiming that the new California Supreme Court opinion of Rojas v. Superior Court (July 13, 2004), where the court held that everything disclosed in mediation has a veil of ‘absolute confidentiality’, will cause litigants to disclose their weaknesses then hide behind this veil of ‘absolute confidentiality’ during the post-mediation discovery process and at trial. The legal commentators are claiming that the Rojas decision will kill mediation. These commentators’ theories are out of the ball park.
Rojas v The Supreme Court Of California The Supreme Court of California The full opinion of this important case that deals with the question of confidentiality in mediation is available online. Citing the importance of preserving the mediation privilege,the Supreme Court of California reversed the appeal court's ruling, and held that photographs and witness statements prepared for mediation are
privileged.
This just in from Sydney, Australia. 
UPDATE: See the 
Now that my step-son is no longer my legal assistant (sniff) but an IP litigator with one of the best IP firms in the country (