Category to place the post in the last group of the blog page and not in the featured posts sections.

Why Your Cases Aren’t Settling

Why aren’t your cases settling? In his book, How to Talk to Strangers, best-selling author Malcolm Gladwell explains that we normally DTT, Default-To-Truth, when we receive communication. When we default to lies instead of to truth, we undermine our ability to get to resolution.

The Litigation Defaults-To-Lies
In almost every facet of our lives, most people take information at face value until something convinces them otherwise. Actually, it’s the only way a society can survive. Unfortunately, though, Gladwell points out, our default to truth lets people like Bernie Madoff, Jerry Sandusky and simultaneous CIA analyst and Cuban spy Ana Belen Montes perpetuate their crimes. Evidence built up, but the people who received the information rationalized it away.

The other end of the spectrum is when a person suspects everyone of being a liar and treats them that way. Gladwell analyzes the 2015 Texas police handling of the Sandra Bland arrest. Officer Brian Encinia habitually stopped motorists on the thinnest, and sometimes manufactured, pretexts as often as multiple times per hour, an off-the-chart frequency rate. He then found reasons to escalate the situation. The “view everyone with suspicion” philosophy of policing originated as a response to crime in a tiny geographic area, but, Gladwell writes, went out of control.
Litigants are often in the default-to-lie camp. When an adjuster was told a claimant’s position on an issue, the immediate reaction without any further information was, “She’s a liar.” Many claims and litigation professionals default to fight every issue, even when that’s a losing argument.

Transparency is the term for another negotiating problem, though it might be better called non-transparency. Transparency assumes that body language reflects what is going on in a person’s mind. An early reaction to remote mediation was an objection to not being able to closely observe someone’s facial expressions and body language. Gladwell documents that we are all very poor at correlating those things, even judges who use observation to set bail and police officers who are trained in assessing facial and body signals.

We humans can have many things going on in our brains at the same time. A facial expression may reflect something going on that has nothing to do with that person’s interaction with us at that moment. What’s more, different cultural groups use and interpret body language differently. The face 91% of Spaniards identified as angry was seen that way by only 7% of people who lived in the Tobriand Islands in the Solomon Sea.

The Lesson

Even when you are sure your evidence unquestionably contradicts your opponent’s position, active listening with an open mind can efficiently lead to settlement. Defaulting to lies does not.

Business Interruption Insurance Coverage- News from the UK

It’s summertime, and temperatures are high. So let’s look at a hot insurance coverage issue: business interruption caused by the coronavirus.

 Do you know about the business interruption insurance coverage test case in progress in the United Kingdom? To create some consistency and avoid a litigation morass, the Financial Conduct Authority (FCA) has brought a test case, something like a declaratory judgment. The FCA regulates the UK financial services industry. Their work includes protecting consumers, stabilizing the financial services industry and promoting competition. Eight insurers have agreed to be bound by the test case decision. Some of those defendants, such as Zurich, Arch, and Royal & Sun Alliance, also do business in the United States. Also bound will be their managing agents and sales brokers and agents. Issues to be considered include what constitutes “property damage” under the policy and the effect of a pollution exclusion, the same issues coming up in lawsuits in the United States.

The outcome will be binding in the UK, but why should United States insurance professionals care?

Of course, the law applicable in the case jurisdiction controls, but this is a public, complex, deliberately considered judicial process interpreting policy language. Therefore, parties can expect other judicial bodies to take notice of it and find the outcome persuasive. To the extent that an insurer’s policy language is substantially similar across various countries, policyholders would reasonably expect their carrier to treat them equally, regardless of geographic location, assuming such an outcome is consistent with local law.
You can follow the proceedings at the test case official website and subscribe to updates.  Trial started on July 20 and at this writing is ongoing.

Align Thoughts, Words & Deeds to Get Results

Having trouble concentrating? Affected by shelter-in-place orders to contain the COVID-19, overlaid with curfews activated by civil unrest following the death of George Floyd? Join the club.

For some cases, nothing is urgent right now. It’s easy to leave those cases on autopilot.

What you focus on is what you get. If what you really want is to avoid the expense and stress that go with delaying case resolution, you need to align these:

Thoughts: Concentrate on one, just one, file and put together an action plan in your mind specifically what you can do right now to bring it to resolution. That may well be mediation. Do you really need that pending deposition when everyone knows pretty much what that witness will say? How about trying to resolve the case now without it?

Words: Document the plan, and communicate it to everyone needed to effect it. Tell your lawyer what you want to happen next. Contact opposing counsel to explain your plan. Set deadlines.

Deeds: Don’t slip back to inaction. Too many so-called action plans are never implemented. Calendar a follow-up date to make sure your plan is moving forward.

People prone to procrastination find that forcing themselves to action on one matter prompts them to tackle another and another. Taking ownership of a situation is challenging. It takes courage. It’s the way to get the result you want.

The Role of Empathy in Settlement

Empathy, the ability to see a situation from a different point of view, is an important negotiation and advocacy skill. You must be able to anticipate and understand your opponent’s position to effectively counter it. Debate trainers assign students to argue the position opposite their personal beliefs to foster this skill.
I’m Fine. To Hell With You
Lately we have seen a stunning lack of empathy in our country. On the same day as a county announced that COVID-19 had become the county’s leading cause of death, one resident yelled, “It’s my body and I want to go to work.” Another defiantly asked, “Why shouldn’t I be able to sit in a restaurant and eat?”

The answer is that many people, perhaps the majority, who are infected with the virus are asymptomatic. COVID-19, unlike collisions, drownings, obesity, heart disease, and cancer, is wildly contagious. There is currently no vaccine and no cure. More than 81,000 Americans have died. Around the world, people are not allowed to work in close quarters or sit in a restaurant because that potentially exposes coworkers, servers and other customers to the contagion. Not everyone reacts to the virus the same way.

Similarly, the television journalist who tweeted that anyone who wants to continue to shelter in place should just stay home lacks any awareness of how most people live. If the boss requires workers to show up or lose their jobs, those workers don’t have the luxury of working from home. There are more people living paycheck-to-paycheck to pay the rent and buy groceries than people pulling in big bucks.

And then there’s the 79-year-old Wisconsin Supreme Court Chief Justice who said “regular folks” were not getting COVID-19. Got that, anyone with a family member in a nursing home?

Negotiators need not have suffered a serious injury or business reversal themselves to empathize with someone who has. Perhaps you have had a personal experience which makes you wonder why your negotiating opponent is apparently so much less resilient that you. Again, not everyone reacts to an event the same way. An inability to concede that these are that person’s feelings, even if you think they are baseless, impedes meaningful settlement discussions.

Resolving COVID-19 Coverage Questions

Unquestionably, the COVID-19 pandemic is hurting a variety of businesses. As soon as the extent of financial loss started to become obvious, insurers started seeing lawsuits.

Does the lockdown trigger business interruption insurance? What about pollution coverage? Special event coverage? Does actual notice of circumstance bring later claims within a claims-made policy period? Have workers sickened by the virus sustained an industrial injury? Can you collect on your completion bond? It could take years for the law to become close to settled on questions like these. Unfortunately, many companies will not be able to survive the litigation process.Mediation can provide a quick resolution. Mediation is an appropriate choice when:

• There is a close question

• Parties wish to avoid the risk of creating a legal precedent

•The economics favor resolution for a reasonable amount now as opposed to an extreme result later

Let’s talk now about the best way for you to bypass the litigation process.

Mediator As Filter

There’s a lot of interest lately in filtering out bad stuff. Of course, we use filters all the time: air filters in the ceilings in our houses, filters to keep the coffee grounds out of our drinks, water filters to improve the stuff that comes from our faucets, filtered cigarettes— well, you get the idea.

Think about this. Your negotiations aren’t leading to resolution because of the absence of a filter. A big part of what a mediator does is filter messages between disputing parties.

Self-Filters Don’t Lead to Resolution
Negotiators shape their message to achieve their goal. They might threaten. They might withhold critical information. Negotiators seldom admit the flaws in their position; they’ve filtered those out to make their case look as strong as possible.

In mediation, parties have the opportunity to let their guard down. One of the most powerful features of mediation is caucusing. In caucus, only one side meets with the mediator. By statute, everything that is said is confidential. The mediator cannot disclose anything unless you authorize that disclosure. She cannot be subpoenaed.

Confidentiality promotes candor. Parties can stop filtering their message and discuss the good and bad points of the case with the mediator. Here’s your chance to discuss the case with a professional neutral who can help parties identify the issues and resolve them.

Reframing
Mediating parties make demands and offers, and the mediator conveys them to the opponent. Part of this process often includes the mediator reframing the message to filter out animosity or extraneous issues. The mediator is using her own filters to enhance the likelihood of settlement. This focuses the parties’ attention on what is important for settling the case.

Posturing
Even in caucus, some attorneys will grandstand in an attempt to assure the client of their support, no matter how unreasonable the client’s position.  An experienced mediator understands the dynamic and how to use it to resolve the case.

Maybe you think your opponent is the biggest jerk in the world. In mediation, the mediator can filter out that attitude to get your case settled.

Quid Pro Quo in Negotiation

We’ve heard a lot about quid pro quo lately. But it’s not necessarily a bad thing.

Quid pro quo is Latin for “this for that.” This is what negotiation is all about. In fact, the exchange of something of value, legally termed “consideration”, is a requirement for a contract to be valid. Settlement agreements are contracts.

A good negotiator always seeks quid pro quo. Don’t give away something unless you get something in return. In mediation, parties take turns lowering demands and increasing offers until we reach settlement.

The exception to this rule is if you were legally obligated to do something. Then it is improper to seek compensation for it. For example, an employer is legally required to pay the ordinary and customary medical expenses of an employee who suffers a work-related injury. In an ongoing case, it would be an improper quid pro quo to ask the injured worker for anything of value in return. The thing of value might be money or an agreement to do something in an unrelated context the worker would not otherwise do. That could include sexual favors.

Parties can enter into any contract which is not illegal. Hiring a hit man to kill your enemy is not a legal contract, no matter the agreed amount of compensation.

What About Leverage?
Leverage is different from quid pro quo. A party has leverage in negotiation when that party has the better alternative to a deal. How badly does the negotiator need the deal? For example, an individual who needs money for basic living expenses is likely to accept a settlement of less than full value in order to expedite closure.

In litigation, each party is negotiating to obtain a quid pro quo, a certain amount of money now in exchange for a release of the claim. When one party is in the better position to wait out the full life of the claim, that party has leverage. Frequently that is the insurance company/defendant. However, many insurers are anxious to close “old dog” claims. In that situation, the claimant has leverage and can demand more to settle. Uncertainty about how future events, such as medical treatment, can affect the value of the claim, giving one party more leverage than the other.

Quid pro quo is the very basis of settlement—so long as each side is getting value beyond what the other party was already obligated to do.

Hello 2020

New Law on Settlement Agreements

A new California law effective January 1, 2020 governs settlement agreement language regarding employment dismissals and rehires. An employer and employee can still agree that a settlement includes termination of employment, but the agreement cannot include language that the person is barred from re-employment.

The legislative history of AB749 shows that the motive behind the law was to prevent situations where a sexual harasser remains employed by a company, but the victim can’t get back or hang on to a job. Here’s the language:

“An agreement to settle an employment dispute shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim. . .”

The law specifically allows termination of a current relationship. Also, the law explicitly states that an employer need not re-hire someone when “the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault” or ”there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship.”

If It’s Not a Sexual Harassment Case?
This law applies to all claims brought by an employee against an employer in any forum, including mediation, arbitration or other internal process. When an injured worker has not returned to work for years, their employment status in certain situations could still be technically “employed.” To clarify that the injured employee cannot access employee benefits, a settlement agreement may include language defining the date of termination of employment or might specify that the employee is resigning.

I have helped create a settlement where status as an employee was reinstated for a minimal amount of time with the proviso that the employee was resigning on a specific date. I have also helped create settlement agreements where the employee was paid as an independent contractor for a limited period.  This will be more difficult now after passage of AB5, also going into effect on January 1, 2020, which tightens the definition of who is an independent contractor.

Settle, Settle, Settle

It’s almost always better to settle than to keep pouring money into litigation. A trained settlement professional can help you negotiate the best result.

JOY TO THE WORLD – LAW PARTNERS’ YEAR-END MEETING

Joy to The world! Year-end has come,
Accounting has totaled the fees.
Let ev’ry heart
prepare him room
And all of the partners sing
And all of the partners sing
And all, all of the partners sing

Joy to the world! The year was good,
And now divide the spoils.
Misters Fields and Floods have a fight.
Misses Rock and Hill watch in fright,
Repeating the annual scene
Repeating the annual scene
Repeating, repeating the annual scene

At last there’s an end, some truth, no grace
Each one their worth to prove
The glories of righteous hours
The rain made with superpowers
And all go home with a check
And all go home with a check
And all, all go home with a check

Happy Holidays!