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This article previously appeared in the Journal of Alternative Dispute Resolution in Employment, Volume 2, Issue 3, Fall 2000.
All parties typically feel confused and wounded as these cases unfold. Plaintiffs feel deep uncertainty as to both what their future holds and how their psychiatric conditions will affect their career opportunities. Defendants, too, typically feel a wound: the inconsistency between their usual sense of themselves as "good people" and the fact that they may have violated significant state and federal laws.
Plaintiffs and defendants alike benefit from the clear choices generated in the mediation of psychiatric disability claims. Mediation affords the unique opportunity to examine, in a cool-headed environment, how the situation must look to each side and how it might look to an impartial observer such as a judge or jury. The empowered decision-making that flows from the mediation process may provide the best opportunity for closure that the legal system can provide.
Why, then, are these cases so hard to mediate?
When mediators get together to talk shop, a clear consensus usually emerges. Employment disputes take more hours and more feet of intestinal fortitude than most other types of disputes involved in civil litigation. Of those, statutory discrimination claims often are the most intense. And, among those, psychiatric disability claims often are among the very most draining.1
The reasons are sometimes obvious and sometimes subtle. Sometimes they play out more dramatically on the plaintiff's side of the aisle and sometimes on the defense side. Sometimes, there's nothing more for a mediator to do than to acknowledge the phenomenon that is occurring and to let time take its course. Sometimes, though, a more proactive stance pays off. The following list identifies popular candidates for the "Top 10" reasons why psychiatric disability cases are hard to mediate-and what, if anything, a mediator might consider doing when these problems arise.
1. Plaintiffs' monetary damages are generally low
Plaintiffs alleging psychiatric disabilities are no different than plaintiffs generally. Many of them believe that their claims are worth grand amounts of money based on the personal suffering they have endured and the importance of the public policy that their claims seek to vindicate. For most defendants, though, the touchstone of reasonableness in evaluating settlement value is different. Most defendants begin with an analysis of the hardest of "hard dollar" damages, lost wages. In my experience, this analysis generally does not yield a large number, for two basic reasons.
First, in most of the psychiatric disability cases I have mediated, plaintiffs were not employed in senior level executive positions or other jobs that commanded high compensation. Plaintiffs' own projections of lost income, therefore, rarely support the large demands with which they often open the negotiations. When defendants subject plaintiffs' claims to a present value discount and a requirement of reasonable efforts at mitigation, the number falls still farther.
Second, many plaintiffs assert that they gave up an otherwise-secure job at another company to come to work for the defendant. Defendants, however, are quick to turn this assertion to their own advantage. Many defendant-employers can point to a difference between what they paid the plaintiff and what the plaintiff earned at that previous job. The first amount is often much higher than the second. Defendants then assert that the higher amount they paid the plaintiff was somehow or other a "mistake" or an "aberration." According to this argument, the lost wages analysis therefore should be based on the plaintiff's' lost opportunity in coming to work for the defendant employer-in other words, a lost earnings analysis based on the pay scale at the former, lower-wage job. This approach, too, drives down the defense analysis of hard-dollar damages.
Would a judge or jury accept this second, more aggressive argument? Maybe. Do defendants articulate this second argument in mediations? Whenever it fits the facts. Does the possibility that a trier of fact could be persuaded affect the defendant's' analysis of settlement value, even if only just a little bit? Absolutely. It's hard to get a defendant to pay big money to a plaintiff who did not earn a big salary.
Mediator's approach. What can a mediator do about this? There are many possibilities. Most mediators begin by working with the plaintiff's side to explain -for better or worse-how the situation actually appears to the defense and how the defense actually will act on its perceptions. From that point, the conversation can take many directions. Plaintiffs and their counsel usually work in numerous and ingenious ways to add dimensions to their damage claims so that defendants can no longer claim that an analysis of lost wages is the only determinant of settlement value. This tactic presents its own challenges, as discussed below. At other times, plaintiffs must simply acknowledge the fact that the defense sees the situation in a very different way and decide whether to settle on the terms being offered, or risk the hazards and rewards of the trial and appeal process.
2. Causation of "emotional distress" damages often is hard to prove
When plaintiffs do attempt to alter defendants' perceptions of the settlement value of the case, one likely approach is to emphasize the plaintiff's emotional distress damages. Ironically, in psychiatric disability cases, this gambit faces an unexpected obstacle: the difficulty of proving causation.
Defendants often ask such plaintiffs how they can prove that the defendant's allegedly wrongful conduct-as opposed to the preexisting psychiatric disability-caused the emotional distress, need for therapy or medication, or other elements of damage alleged by the plaintiff? Ironically, the greater the plaintiff's need for the protection of these anti-discrimination laws (in general, the greater the disability), the harder it is for the plaintiff to prove "marginal" psychiatric damage. Without extensive expert analysis (involving costs that such cases may not warrant), the defendant's question may be tough to answer.
Mediator's approach. The appropriate mediation response? Again, ultimately, the challenge is for plaintiff and counsel to answer. The mediator begins by working with plaintiff's side to facilitate an understanding of exactly how the situation appears from the defense perspective. The mediator next helps plaintiff's side clarify whether further responses to defendant's position are appropriate and "ring true," and then helps deliver those messages. Or, the mediator instead may help plaintiff's side acknowledge that, in the absence of further responses, limited settlement or litigation options may be available. Finally, the mediator helps plaintiff's side choose intelligently among the options and accepts whatever informed decision plaintiff's side may reach.
3. Plaintiffs' counsel sometimes find that clients present unique challenges
Dealing effectively with clients who have psychiatric difficulties presents special challenges for their attorneys. These clients can behave differently than other clients with whom counsel may be more accustomed to dealing. More than once, I have seen plaintiff's counsel become frustrated, impatient-even angry-with clients in these circumstances. Sometimes it's fatigue. Sometimes, the plaintiff has not brought enough medication to get through a longer-than-expected mediation day, and the plaintiff's behavior changes as the evening wears on. Sometimes, it's just the challenge more-or-less inherent in dealing with plaintiffs who have certain mental or emotional conditions.
Frustrated counsel can have inappropriate responses. I have seen plaintiff's counsel threaten to quit if a settlement recommendation is not taken, threaten to make a plaintiff stay, or express anger in numerous other less-than-constructive ways. Sometimes, counsel becomes so frustrated that the mediator, in essence, must take over the lawyering role entirely, with the mediator doing most of the talking to the plaintiff, and counsel remaining largely silent.
Mediator's approach. The response? In general, to remind plaintiff's counsel to be patient and thoughtful. It does counsel little good to jeopardize the relationship with a client through impatience and temper, whether the effects are limited to that day or go beyond.
The next steps can be many and varied, depending on the circumstances at hand. Some of them are explored in the following paragraphs. It all starts, though, with the mediator (who maybe frustrated him- or herself) and plaintiff's counsel working together. Both must keep cool and figure out just what it is the plaintiff needs to get through the always-stressful and unaccustomed situation of making important decisions about the lawsuit.
4. Appropriate support people may be absent
In virtually every mediation, each party has somebody outside the room who is relevant to the negotiation: somebody with whom, in the ordinary course, the party will end up discussing the settlement. Without input and some degree of consent from this "Somebody," a settlement is difficult to reach. In most cases, the party fears that the absent Somebody, if not involved in the negotiation, will respond to news of a deal with, "You agreed to... WHAT????" rather than, "I'm so happy you have put this behind you." This fear is a common obstacle to settlement.
Nowhere is this fear felt more strongly than in psychiatric disability cases. Persons with disabilities often rely, sometimes strongly, on support people to help them make important decisions of many types. Without the participation of support people, plaintiffs often have difficulty making the "fish or cut bait" decisions that are mediation's goal. The absence of these support people is, many times, a cause of the behavior described above that so aggravates plaintiff's counsel.
Mediator's approach. Counsel, and mediators as well, often are reluctant to involve support people in any mediation, including the mediation of psychiatric disability cases. Counsel may question whether the presence of support people puts the attorney-client privilege in jeopardy. This concern, however, is rarely a problem. Generally, counsel can analogize the support person to a translator or other person reasonably necessary for the attorney-client consultation to take place, and thereby keep the privilege intact. Mediators also can ask support persons to sign mediation confidentiality agreements, making them parties to the mediation (although not parties to the lawsuit) and thereby maintain applicable privileges for confidential mediation communications.
In truth, confidentiality concerns generally are not the prime reasons that counsel and mediators sometimes are reluctant to include support persons. More often, counsel and mediators are concerned that the complexity of the negotiation will increase exponentially with the addition of participants. Every person at the mediation stands in some relationship to every other person there. The mediator and counsel have to be attuned and attentive to every one of those relationships. The initial response of the mediator, therefore, might be that the mediation would go more smoothly if fewer people attend.
The counterintuitive approach, though, often is more sound. Yes, it is true that the presence of support people can make for a "messier" mediation. Lots of additional communication channels have to be kept clear. The mediation takes longer, with more fine-tuning and checking-in necessary. It means more and harder work for the mediator, counsel, and everyone else involved. The presence of support people can be lousy. But there's only one thing worse than having them there-having them absent. For without their participation, progress can come much more slowly, often not at all.
When a changed position can receive the blessing of support persons at the mediation itself, a party well may feel the courage that the support person's encouragement is designed to engender. Progress can be made. And the participants eliminate much of the risk that an absent support person will encourage a party later to undo the progress made in the mediation.
At a minimum, counsel should encourage clients to maintain reasonable telephone contact with support persons who may be absent. These support persons usually are well intentioned and want the best for their relatives and friends. But if they are not physically present and have not been regularly informed about the negotiation's progress, they are poorly equipped to judge whether particular agreements are or are not appropriate. On the other hand, if adequately informed about the negotiation's progress, the support person is less likely, at day's end, to toss in the monkey wrench.
5. Counsel and clients differ in their risk tolerance
At a recent continuing legal education program in Los Angeles on the mediation of employment disputes, a questioner from the audience who specializes in representing plaintiffs asked, "Why do so many employment cases settle for less than they are worth?" Puzzled, the panelist responded, "If the offer is for less than the case is worth, in your view, then why do you agree to settle?" The questioner's retort: "Well, the client was convinced that it was the most the defense was willing to offer, and the client wanted to see it over with."
Clients generally have less of an appetite than their lawyers for the stresses and strains of litigation. Sure, they want justice, but they also want "to see it over with." The lawyer just goes on to the next case. The client generally gets to go on with life, unobstructed by the diversion of the lawsuit. So it is often at a relatively low temperature that clients can't stand the heat and want to get out of the kitchen.
In my experience, this distinction is clear, especially in litigation over psychiatric disability claims. These plaintiffs are rarely "tough as nails." They are less well equipped than many other plaintiffs to deal with the inherent stress of litigation. Lawyers need to keep this in mind in evaluating what a case is "worth"-to this particular plaintiff -and in advising this particular plaintiff whether and when to settle.
Mediator's response. Simply put, the same case may have different settlement values to different plaintiffs, based largely on their attitude toward and tolerance for the risks, stresses, delays, and expenses of further litigation. In cases involving psychiatric disability claims, those tolerances-and correspondingly the settlement values of the cases to these particular plaintiffs-may be lower. There's nothing "right" or "wrong" about it, and lawyers just have to recognize that it is so if they are to deliver the best client service.
In one particularly poignant case from a few months back, after 10 hours of mediation, a defendant employer had offered $60,000 to settle a psychiatric disability claim. Pursuant to subpoena, the employer had received the files of the plaintiff's treating psychotherapist just the week before. These documents contained lots of intimate, embarrassing details of the plaintiff's sex life. The documents also covered other matters that the plaintiff was not at all enthusiastic about seeing made part of a public record or even discussed at the therapist's then-upcoming deposition.
Sitting at the table, staring blankly at cold pizza and crying intermittently, the plaintiff told her lawyer that she wanted to take the deal. The lawyer then called his partner at home, and the cell phone seemed to explode in his hands. "This case is worth $75,000! Take not a penny less!" I could hear the absent lawyer shout as his partner had to pull the phone away from his ear. The lawyer in the room looked at me in desperation, and I took the phone and stepped into another room.
"Look, Jim," I said, "If this was another plaintiff in another kind of case, I could see your point entirely. But, Jim, this plaintiff is just not up to it. She doesn't want to litigate any more. She doesn't want her therapist's deposition taken next week. You know what's in those notes, and so do I. From a lawyer's perspective, the case may well be 'worth' $75,000. But to your client, it's worth $60,000. She's willing to spend the other $15,000 to bury her therapist's deposition. She's sitting here crying, your partner Fred has recommended the deal to you, and they're practically begging you for your blessing. Your client is fragile. Please listen to what she and Fred are telling you."
Jim asked me whether I was convinced that $60,000 was the most the defense was going to offer that day, and whether his client was really crying. My honest answers were yes and yes.
Fifteen minutes later, the case settled for $60,000. I felt great about what I had done as mediator.
6. Counsel and client may be mismatched
Many personal injury attorneys have expanded their practices, at least in part, to employment litigation. The migration usually begins with common law wrongful termination cases and then expands to include statutory discrimination claims as well. With each step, there is a risk that counsel's practice will get ahead of counsel's knowledge of the increasingly technical and specialized field of employment law. Counsel may not be appropriately matched to the case. This phenomenon, of course, makes it challenging for counsel to evaluate the case and advise the client appropriately.
Mediator's approach. Here, the most effective tool at the mediator's disposal is usually the defense counsel. When I sense that plaintiff and defense counsel's views of the merits resemble ships passing in the night, I often request an "attorneys-only" caucus, outside the presence of both clients. In that caucus, I generally start by observing how remarkable it is that two lawyers can evaluate the same case so differently. I then invite them to have the most elevated discussion they can regarding the causes of the distance between them.
When one lawyer (and it is not always plaintiff's counsel) simply is not adequately informed about the law, the "attorneys-only" caucus allows that lawyer to be shown the light without losing face in front of his or her client. The discussion usually consists of a rather academic exposition of the law by the more knowledgeable counsel and a lot of questions from the one whose knowledge is less. A lawyer who is smart-even if not terribly well-informed-is usually smart enough to recognize the situation for what it is and then to set about working with the mediator to break the bad news to his or her client.
7. Defendants are in denial
It is not only Clint Eastwood who seems to have trouble believing how broadly federal and state anti-discrimination laws sweep. The Americans with Disabilities Act and its state counterparts really do provide extensive coverage and remedies. These statutes really do cover psychiatric disabilities and other "invisible" conditions as well as the physical conditions more conventionally associated with the term "disability." These realities often are difficult to make apparent to defendants, particularly those employers that are small and may not have a dedicated internal human resources or legal department.
Mediator's approach. When this happens, an "attorneys-only" caucus generally is not called for. It is not, after all, the defendant's counsel who doesn't get it. It is the defendant him- or herself, often an entrepreneur or technical person, not steeped in law or legal culture, who has little patience for legal formalities.
Rather, an appropriate tactic is to caucus with the defendant and defense counsel. In this caucus, defense counsel generally will take the laboring oar, and lay out the facts and law to the client, in excruciating detail. As mediator, I support this conversation, sometimes by doing nothing more than paying close attention to counsel's comments and nodding or verbalizing agreement with particularly important points.
When a lawyer sits in private with a client, it's too easy for the client to avoid bad news. "Yes, but you're such a good lawyer, I'm sure you'll figure out a way to deal with all this. The other side is a bunch of liars, after all." In one way or another, that's the problematic response with which counsel must deal when alone with the client. It's tough to break through that denial.
It's altogether different when there's a stranger-the mediator-in the room, particularly when the mediator has some familiarity with the law and can support the lawyer's advice from an independent perspective. The client has to deal with the conversation on all its merits, even the ugly side of the facts. Most clients will not be dismissive or otherwise disrespectful toward their lawyer in the presence of a stranger. Often we add value just by being there, even if we say very little in these "wake up and smell the coffee" conversations.
8. Clients are not prepared to listen to a "both barrels" opening
Lots of mediations begin with, or at some point include, "The Grand Conversation," with all parties and counsel sitting in the same room and everybody having an opportunity to say their piece, more or less without interruption. Lawyers usually take their opportunity to set forth, in one way or another, the strengths of their position and the weaknesses of the other side's position.
Experts differ over just how aggressive or adversarial these attorney openings should be. Sometimes, though, the opening will be "both-barrels" aggressive. Some lawyers think, for reasons good or bad, that this is the way to go. This is particularly so, in my experience, on the plaintiff's side. If defense counsel has not prepared the defendant for this possibility, then this tactic may unnecessarily take on a "kiss-of-death" quality in the defendant's mind.
Mediator's approach. To deal with this situation, a stitch in time truly does save nine. The best remedy lies in sound preparation. Defense counsel should alert clients in advance that plaintiff's counsel may use this tactic, and that it is not necessarily a bad thing. The reason? The intended audience for this blustering is generally not the defense side at all, but rather, the plaintiff.
Most plaintiffs are not institutional or on-going clients for their lawyers. It's a one-shot representation. The representation usually began with statements of lofty aspirations for the outcome of the case. At the mediation day's end, it may well be a different story. Plaintiff's counsel has legitimate fears of criticism from clients because "the case did not turn out the way you said it would"-or at least not the way the plaintiff thought counsel said it would. And, without a history or representation by counsel, it's hard for the client to realize that counsel is an effective advisor, even when urging settlement rather than trial.
To inoculate against potential criticism at day's end that "you are not on my side any more," plaintiff's counsel often quite rationally begins the day a little blustery. Plaintiff's counsel wants to show the clients that he or she is still the true champion of the cause. Indeed, a blustery opening often gives plaintiff's counsel more credibility at day's end, when the message becomes, "this is the best deal available, maybe we should take it."
Defense counsel would be well advised to prepare clients for these possibilities and to explain that the defense is likely not the intended target of plaintiff's counsel's barrage. Once they understand the contours and complexities of the plaintiff-counsel relationship, defense-side clients are more likely to show the patience necessary to allow the mediator to iron out the situation on the plaintiff's side in private caucus.
9. "Interest-based negotiation" often generates seriously mismatched negotiations
In "Mediation School," we are taught ad nauseam about "interest-based negotiation" and the idyllic collaborative beauty that it entails.
In practice, it rarely works-especially not in psychiatric disability cases.
The plaintiff comes to the negotiation with real, serious, and legitimate interests: finding another job, obtaining health insurance, and affording expensive psychotherapy or needed medication. Plaintiffs often come to the mediation looking to the pending lawsuit as the engine for satisfaction of these pressing needs.
Unfortunately, defendants generally have no interest in these things. As for another job, defendant employers almost never want to re-employ people who have once sued them. Indeed, one of the clauses in written settlement agreements that defendants almost always require provides that plaintiff never will seek nor undertake employment with defendant company or any of its affiliated or related entities. As for employment with another employer, state law in California and elsewhere may dissuade defendants from giving any reference to future employers that includes anything other than dates of employment, titles, and sometimes, salary history. As for future health care, extension of COBRA benefits or other provisions for health insurance are cumbersome and costly, and provide short-term benefits at best.
No, defendants generally are there to determine how many dollars the plaintiff will grudgingly accept for a release of claims and then to decide whether the price is one they are willing-equally grudgingly-to pay. Whether it satisfies the plaintiff's other interests is something generally impossible to get defendants to discuss.
The solution? See below...
10. Insist on a discussion of plaintiff's interests anyway
Many defendants in settlement negotiations are simply unshakeable in their refusal to consider what's going on in plaintiff's life. Instead, they're looking at the risks, delays, and costs of further litigation, and asking whether they want to buy those off at the price being asked.
In order to convince plaintiff of this reality, though, it's often necessary to go through the exercise. The questions have to be asked-in some mediations over and over again. Sometimes the questions have to be asked by counsel, by the mediator, and even by the plaintiff, and often in each other's presence. It can take hours. Eventually, though, the mediation of these disability claims gets down to the number of dollars necessary for the defendant to buy, and the plaintiff to sell, a release of claims. When the parties are convinced that the other has moved as far as they can be forced to go that day, these cases generally settle.
Are these settlements aesthetically pleasing to mediators? Sometimes, sometimes not. The absence of interest-based, integrative bargaining leaves me, and many other mediators, frustrated at times. But there comes a point at which mediators must respect the parties' desire for finality and put it ahead of what may be the mediator's own personal need for integrative solutions, personal transformation, or mediations of some other sort.
Plaintiffs and defendants both often value closure and certainty of outcome above all else. If we respect our clients' wishes and provide the benefits they demand, then we have performed a valuable service indeed to forward the important public policies against employment discrimination.
1 The perspectives in this article are based on my experiences mediating numerous litigated disputes involving claims of psychiatric disabilities, and on anecdotes and war stories that my mediator colleagues and I have informally shared in a variety of circumstances. Undoubtedly, there are many, many ways to respond to each of the challenges presented in this article. The ones I have listed are simply a few of my favorites-the ones I have found to be most effective in general. I would be interested to know whether other mediators would place other challenges on their lists of "Top 10," and what other responses and interventions other mediators have found to be effective.
Mr. Kichaven also has a distinguished record of service to the bar and the larger community. He is the first full-time mediator to serve as a trustee of the Los Angeles County Bar Association, and also serves as chair-elect of the ADR Committee in the ABA’s Tort Trial and Insurance Practice Section (TIPS), and as a director of the Southern California Mediation Association. He has previously served on the Council of the ABA’s Section of Dispute Resolution and as chair of the Los Angeles County Bar’s ADR Section.
In addition, Mr. Kichaven is an adjunct professor at Pepperdine University School of Law and has conducted Advanced as well as Beginning Mediation Training for the ABA, the Los Angeles County Bar, the California Court of Appeals, the U.S. District Court (CD Cal) and many other state and local bar and mediation associations. He is also a Fellow of the International Academy of Mediators. Mr. Kichaven also serves on the Board of Directors of Sinai Temple in Los Angeles and on the National Legal Committee of the American Jewish Committee.
Mr. Kichaven is an honors graduate of the Harvard Law School (JD, cum laude, 1980) and a Phi Beta Kappa graduate of the University of California—Berkeley (AB in Economics, 1977).
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|Leslie Sudak, Goffstown NHemail@example.com 03/23/03|